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The Failure of the Last Mile

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There was a girl I knew in college (let’s call her Michelle). She spent most of early 2005 planning a fundraising event for a group she founded. She spent months organizing the catering, the entertainment, and the venue. She got RSVP confirmations MONTHS in advance. All told, she spent countless hours planning the event. So why was the turnout only 10% of what she expected?

As you read this, see if you can figure it out.

Why do events fail? Why do we have such a visceral dislike for some companies? How do we surprise and impress people around us? I’ve been thinking about this for a while, and I came up with an idea. I call it The Failure of the Last Mile, and it happens when you neglect the last–and most important–contact with somebody.

In the telecom world, the “last mile” refers to the “final leg of delivering connectivity from a communications provider [like Earthlink] to a customer” (full definition here). In other words, the last mile is the last point of contact to a customer.

You can find last miles everywhere in business and personal life: A restaurant will have a beautiful dining room and expensive cutlery, but if the server is rude, the whole experience is ruined. There’s been a failure of the last mile.

I think understanding this is pretty important, so let me give you a few examples of last-mile failures in business and personal life. See if you can spot anybody you know.

Failures of the last mile in business
A few months ago, one of my friends asked me why I have a category called stories about customer service on this blog. It’s a good question because the other major categories are Saving, Investing, and Personal Entrepreneurship, which all seem pretty different. But I don’t think they are. I think that we can learn a lot from companies’ successes and failures as we’re trying to be more successful ourselves. For example, Amazon’s customer service is almost universally loved because they just treat you right; if your product doesn’t work, they’ll refund you immediately, no questions asked. They understand that no matter how relevant their recommendations are, no matter how optimized their Web site is, the last mile of customer interaction is paramount.

Many other companies don’t get this, so let’s talk about them. They spend a lot of time devising new management practices but, stupidly, they forget about the last mile. In the past, they could get away with this: There was limited competition and, besides, customers didn’t talk to each other.

Things are different today. No matter how complex your infrastructure is or how fast your site is, if you neglect the last mile, you’ll pay for it.

For example, take the DoubleTree Hotel. They’re cool and I like their chocolates on the pillow. Imagine how much money their management team spent improving their hotel over the last few years, with those fancy new beds and furniture (and marketing all the changes, too). But because one clerk failed, they’re regretting it. Yours is a Very Bad Hotel, a Powerpoint presentation documenting their horrendous stay. One of my professors at Stanford showed this to a class full of students. God only knows where else it’s been shown.

Or maybe it’s Best Buy, which heralds its new “customer-centric” strategy. Let’s take a look at some of its recent press:

“Best Buys success is owed to their well-known and highly praised initiative called “customer centricity” which enables it to engage more deeply with customers by empowering employees to deliver products, solutions and services through multiple channels. Best Buy’s “customer centricity” provides the company with an entirely new lens through which the company sees opportunities to increase market share with both existing and new customer segments…” [More]

“If we could build an organization that instead of looking at every human being like they were the same, looked at them as though they were completely individual, we would be in harmony with reality…” [More]

“Customer centricity is an extraordinarily complex capability that will allow us to provide our customers with superior experiences, now and in the future. It requires that we take full advantage of the talent and creativity of every Best Buy employee working in our stores across the country.” [More]

I’m not making this stuff up. But while it’s fun to mock old white guys for using incomprehensible language like this, Best Buy forget the last mile. And not just once or twice, either.

bestbuysux.gif

Enough to start an entire site called BestBuySux.com. Enough to have thousands of customers who write in rants about Best Buy’s service, starting over six years ago. Enough that if you Google “Best Buy,” you get BestBuySux.com in the top results.

When people talk about customer evangelism, this probably isn’t what they had in mind.

And it’s not just Best Buy. Customers rant about Enterprise Rent-a-Car in a site called Enterprise Rent a Car is a Failing Enterprise (also a top 5 Google result). There’s also Delta and many, many others. In fact, there are extremely popular sites like Consumerist.com that are dedicated to simply cataloguing our horrible last-mile experiences with companies. Tagline: “Shoppers bite back.”

Now, every company makes mistakes. Every company hires people who can’t be watched all day long (nor should they be). But I’m arguing that the last mile has a disproportionate impact on customers’ impressions of a company. So it makes sense to spend accordingly to make it right.

Here’s an example of a company that did (from Signals vs. Noise):

typepad-customerservice.gif

Another company that gets it right: Staples.

So, a few days later I called the customer service included with the warranty card, and told them my woes.

The CSR asked for the model number, my name and address.

Okay sir, well be sending you a new seat cushion. Youll receive it in about 7 to 10 business days.

Uh, okay. Thanks!

That was easy.

No proof of order, silly red tape, or transferring of calls. Im pleasantly surprised and confused.

And here’s an example of a company that doesn’t.

[He] told the person behind the register that he had bought coffee yesterday, but had forgotten to bring the card. Could he please have 2 stamps on his card?

Well, you would think the counterman was being asked to part with his car. He argued (quite strenuously, I might add) with the gentleman, informing him that he should have brought his card and that rules were rules. Mr. Buns, after a brief exchange, paid for his pastries and left, stamp-less.

[…]

Lets assume that a cup of coffee is $3 and that each card requires 6 stamps. So, the manager saved $1or did he? Lets review the math

Lets assume that Mr. Sticky Buns buys gas once a month at this particular station, and spends $25 each time. Now, what happens if, because of being denied the benefit of the doubt, he chooses to go across to the station across the street (which, by the way, is quite a bit cheaper)? $1 saved is now costing the gas station $300 in lost business per year.

But, it gets better. Each dissatisfied customer, on average, tells 7 to 10 other people. Lets assume just one of the others Mr. Buns told stops buying gas at this station and had the same spending pattern. $1 saved has now cost $600.

And, now the coup de grace there were three other people who heard this exchange, including myself. Do any of them still patronize the place? I dont and I probably spend about $700 per year in gas, not to mention the occasional bottle of soda. Were now up to at least $1300 all for assuming Mr. Buns was trying to steal 1/3 of a cup of coffee.

Failing the last mile can cost you a lot. Ok, enough about businesses. Let’s talk about Failures of the Last Mile when it comes to regular people like you and me.

The Failure of The Last Mile in regular people (and why Michelle failed)
It’s not just businesses. Regular people have last-mile failures all the time. We forget to follow up. We’re in a bad mood one day, so we meet someone and they think we’re moody forevermore. I see this in a few prime examples.

First, I see it in event planning, whether it’s just dinner out on Friday or a huge conference. Remember Michelle, the girl from the beginning of this? She spent months planning her event (the venue, food, entertainment, etc). She even sent invitations out months in advance and got the RSVPs. But Michelle forgot one thing: She forgot to send a reminder email the day before the event. All that work, only to fail at the last mile. It matters.

I bet you see this in some of your friends. These are the ones with hella drama who think they are always being “misunderstood.” What often happens is that they construct a bunch of stuff in their heads and don’t communicate it at all, and then they’re surprised when people get mad. For example, let’s say you invite your dramatic friend out for whatever. She might think to herself, “Well, I’m not going to go because I don’t think she really likes me, and plus it’s really late at night and I have to get up early.” Unfortunately, she’s a horrible communicator so she never actually tells people this is what she’s thinking. She just doesn’t show up.

You get pissed, of course, because you didn’t see all these internal machinations. You just see your friend standing you up again. Your dramatic friend didn’t explain herself, failing the last mile.

The last mile is what we remember. We know about Dan Rather’s brilliant career, yes, but we remember his resigning in disgrace. And there are tons more examples.

How to eliminate failures of the last mile
Michelle, the event planner, had her priorities all wrong. The most important part of her event was not the flowers or food or whatever–it was the people. And Best Buy’s surly managers spawned a Web site that I’m sure is doing irreparable damage to them.

The point is that, yes, the back-end stuff is really important. Without the food, Michelle’s event probably would have made people grumble. And without logistics, Best Buy wouldn’t have products to sell in the first place.

But we remember the last mile. In fact, look at the definition for the peak-end rule: “…we judge our past experiences almost entirely on how they were at their peak (pleasant or unpleasant) and how they ended. Virtually all other information appears to be discarded, including net pleasantness or unpleasantness and how long the experience lasted.” Combine this with the availability heuristic and you start to see why the last mile is so critical.

Think carefully about what’s important. Is it the food, or is it the people? Probably both, but you need the people to have an event. How do you communicate all the stuff in your head (or in your business)? Think hard, and then do it: Send the extra email the night before, or teach your employees how to be nice, or tell your friends what you’re thinking. It really matters, because we don’t see anything behind the scenes. All we see is what we get.

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33 Comments on "The Failure of the Last Mile"

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mike matlack
mike matlack
10 years 4 months ago

Awesome!

Nathan Whitehead
10 years 4 months ago

So what’s the last mile for bloggers?

Elsindel
10 years 4 months ago
Ramit, I couldn’t agree more. I think that the single most important conclusion here is what you write about communicating our own loose thoughts, assumptions, goals and reasons in whatever we do (at home – with family, at work – with clients and colleagues, and with friends when planning spending time together). The more I speak about what I think about certain event or thing that’s udnergoing the “planning” phase with other people, the more surprised I get how often we understand even single, simple words complet in a completely different way! It results in frustration and inefficiency (best case,… Read more »
K
10 years 4 months ago
Yes, I agree on the last mile bit. In addition, it’s been my personal experience that if folks don’t have money on the line or some other attachment to the event, the odds of them showing up is quite low. In other words, their decision wasn’t really made even with the RSVP because they felt they could (and did) back out with no penalty. This doesn’t have to be a financial penalty. The attachment could be as little as saying that she mentioned Mr. RSVP was attending to So-and-So and So-and-So was excited to meet Mr. RSVP. It is like… Read more »
dustin
10 years 4 months ago
I can explain Best Buy’s serious problems with customer service. They encourage it for certain value-oriented shoppers. I wrote an article about Best Buy’s policies on “Angel & Devil Customers” on my own blog last week. My favorite quote from Gary McWilliams (The Wall Street Journal) was: “Best Buy estimates that as many as 100 million of its 500 million customer visits each year are undesirable. And the 54-year-old chief executive wants to be rid of these customers.” Another memorably quote from the CEO: “Culturally I want to be very careful,” says Mr. Anderson. “The most dangerous image I can… Read more »
Russell Crosswy
10 years 4 months ago

Communication is the hardest problem.

Me
Me
10 years 4 months ago

This is true, to a degree. FOr instance, Dell’s customer service is awful. IBM’s is very good. Yet I continue to buy Dell products because they offer me the most value for my money. It’s a question of value, and although the last mile adds (or subtracts) value at an emphasized rate, it isn’t the bottom line in terms of business. Many value-oriented companies manage to succeed without exemplary customer service.

Adam Bouskila
10 years 4 months ago

Thanks, Ramit.

Monica Gonzalez
Monica Gonzalez
10 years 4 months ago

Nice article, for anyone interested in the Service Revolution topic, I recommend “Best Face Forward” by Rayport and Jaworski

Karmakin
Karmakin
10 years 4 months ago

The problem is, in so many cases, you’re talking about people making the rules who have such a contempt for the average person that they are completly out of touch.

Take any of the chains trying to sell a discount card every time you go there, for example. What should be done, is you put up a sign, giving the message. Having the teller give the message each time is a failure of the last mile. Because it’s the little things that make more antsy about the big things.

footos
footos
10 years 4 months ago

I was enjoying this entry until you said “hella drama”. I completely stopped reading after that. You goofed on the last mile as well.

Ramit Sethi
10 years 4 months ago

It’s a Norcal thing and I will say that until I die.

Josh
Josh
10 years 4 months ago

Great post.

Hawk
Hawk
10 years 4 months ago
I think a really obvious case of “The Last Mile” is outsourcing technical support to somewhere cheap but where the vast majority of people aren’t the native speakers of the language spoken by customers. I sum this up as follows: “when you go, we’re the best company evar, we’re so awesome, we’re awesome totally cheap and cool and you’ll love us… and then someone goes “gee we’ll save x / make y more profit if we give our technical support to guinea pigs trained to growl in human speech” and you flush it down the toilet.” I work in tech… Read more »
Araceli Romo
Araceli Romo
10 years 4 months ago
I handle customer service and even though a client will RSVP to the meeting weeks before. I know that I still have to call him the day before to double confirm that he will be attending. I also want to mention that a lot of people out there have some kind of fear of just saying “I’m not going to be able to make it”, instead they confirm the appointment but still decide to not show up or my favorite; I call to double confirm the appointment and they say “I was just about to call you”. Thanks for the… Read more »
Alexander
10 years 4 months ago

Thank you! I hope chief of ozon.ru will read this article. I’ve waited books from this site almost two months!

Maria Palma
10 years 4 months ago

This is a great post and sums up the essence of what true customer service is.
Companies do need to ask if they’re going that extra mile – it’s the difference between a successful business and a not so successful one.

Customer service is very much related to “being rich”!

~Maria Palma
CustomersAreAlways.com
Online Business Resources

Cap
10 years 4 months ago

FYI for those that care, I did receive the new seat cushion from Staples within 10 business days.

whether it’ll wear out again or not is another story, but eh – props for the service regardless.

Jonathan
10 years 4 months ago

Ramit –

Great post. But, you missed the greatest example of a company that got it. When the Tylenol scare hit in the 80s, what did Johnson and Johnson do? They pulled off every bottle in the country. It was an incredibly difficult decision, but one that showed that the company got it.

FSKarasek - kf6hqc
10 years 4 months ago

Very enjoyable read, I couldn’t agree with you more. To me it is simply common business sense or in one word, courtesy. Some get it, some never will. From business to just as importantly, the way we live our lives, right down to our freeway behavior or even holding the door open for a stranger carrying packages into the post office.

anna
anna
10 years 4 months ago
-Well, you would think the counterman was being asked to part with his car- Most likely because he would have gotten in trouble with his boss. I’ve worked at coffee shops like that, and unfortunately, the person at the “last mile” may have restrictions on him that make it difficult to give the customer what she wants. This is partially because many times customers complain not because they have a legitmate grievance, but because they are trying to get free items, or pay less than what they should for items. At the minimum, it’s a little bit of an entitlement… Read more »
anna
anna
10 years 4 months ago

bleah. I just read the link to the coffee guy post (should have done so earlier.) I concede, the manager was being a brat. But I’ve experienced the situation at my job where a customer just gets unreasonable, which is where the earlier post came from. You don’t have to post this part or the last, if you like. 🙁

anonee
anonee
10 years 4 months ago

I guess it pays to RFTA first.

Ean
10 years 4 months ago

The last mile is as important as the first. It is so easy to forget the little things in life, yet they have such an impact.

Thanks for your insight. (And hella drama? o_O)

dominic
10 years 4 months ago

Starbucks when they tried to charge me 60c for the marshmallow in my sons hot chocolate.

Gautam Valluri
9 years 11 months ago

How did you manage to think of something like this? I Wonder…

Sirish
Sirish
8 years 3 months ago

Wow !, What an Article !

Metallica Rules
Metallica Rules
8 years 3 months ago

I was reading through the article….it’s interesting! Paused for a bit at the “Hella Drama” wording, but moved on. Then saw your Norcal reply to one of the readers who pointed it out.
Sorry buddy, you couldn’t handle “the last mile” yourself.

James
7 years 2 months ago
Howdy. This was a great article. First, I want to handle the whole “hella drama” thing. I suppose there are some who read this blog that are all hifalutin’ and special, and perhaps that’s why they don’t grok idiomatic language, but for me it works. On the other hand, I’m not hiflautin’ at all, being a poorly educated hick from the boonies of the back forty, and so on. Nevertheless, I believe “hella drama” could be looked at like shorthand between, uh, peeps. For example, take a look at these two scenarios, then YOU decide. Scenario 1: Me: What is… Read more »
Kelly
7 years 2 months ago

The biggest problem with communication is the illusion that it has occurred.
– George Bernard Shaw

Trevor Hammond
7 years 1 month ago
Ramit, this is a great article, and hits home for me! I’ve hosted financial education events for years, and relatively speaking, had great success in turnout. But it’s never as good as we hope of course. In recent years, we have turned to more email marketing campaigns and invitations, and in a sense, have become more “hidden” behind the computer. Results? Turnout has suffered. Recently we have been providing in-depth financial workshops based on the coaching curriculum on our website. I hired a marketing & event coordinator who was in charge of following up PERSONALLY by phone…and sure enough, people… Read more »
Ruben
Ruben
1 year 27 days ago

Costco’s customer service is excellent at this– that is, from my observation. And they IMMEDIATELY take back sorts of chewed food and broken Tv’s. At 1st, I was baffled. I asked myself: why would they do that? And then I realized the opportunity cost of denying the request (think lifetime value). My mother pointed that out to me while we went grocery shopping. That’s is coming from a Mexican immigrant. Great article!

Jim Howes
9 months 19 days ago
I love the last mile concept. It shows up in so many areas of life. I recently got an MBA at top-25 school, and it was shocking how often my classmates committed last mile failures. Everyone wanted to be at the table to debate the strategic plan and make sure their ideas were heard, but making the actual presentation and delivering it were afterthoughts. The last mile in taking our work and communicating it to the audience was just ignored. Just developing mindfulness of importance of the last mile will put you head and shoulders above most everyone else in… Read more »
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