Editor's Letter: The Customer Is Always Right

There are two basic facts of life that all residents of Chicago have grudgingly come to accept: the Cubs will never make it to another World Series as long as the team is owned by the Tribune Co., and heavy snow will add to our winter misery.In December, Chicago was socked with a 14-inch blizzard that brought the city to its knees, only to be followed up two days later with a 5-inch uppercut that put residents down for the count. More than 75% of all flights to and from O'Hare International Airport were cancelled on the first day of the storm. Several subway cars and commuter trains derailed, and countless fender-benders piled up on the area's freeways and streets.

The storm was nothing out of the ordinary for long-time residents of the Windy City. Nevertheless, it created havoc for commuters, particularly those who ride Metra commuter trains who were unaccustomed to the number of trains that were either delayed or cancelled outright.

At a press conference announcing Metra's $398 million plan to purchase 300 new stainless steel coaches, Metra Chairman Jeffrey Ladd blamed the railroad's poor performance on the fact that the storm dumped a heavy amount of wet snow in a short period of time. But he didn't stop there. Responding to angry commuters, he said: "For people who thought we didn't do a good job, maybe they should have tried driving and they would have been three to four hours late."

Apparently, Mr. Ladd does not believe Rule No. 1 in business, which is "the customer is always right." Insurance executives can learn a valuable lesson from Mr. Ladd's boorish comment. When a company fails to live up to customers' expectations, the best policy is to accept blame, determine what the problem is, fix it, and move on.

I'm not suggesting that insurance companies are quick to pass the blame for their mistakes onto policyholders. But executives should keep in mind that in today's highly competitive financial services market, companies that provide the best customer service likely will improve their retention rates and revenue growth-two critical bottom-line concerns in a slowing economy.

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