Customers expect mistake-free transactions.
are you waiting for?” my wife asked me.
“For the receipt,” I replied.
“Why bother,” she said.
That snippet of conversation took place at our bank’s drive-through ATM, where
I had pulled in to replenish pocket cash. I was taken aback by her casual
attitude and asked, “Don’t you ever take a receipt when you get cash?”
“Nope,” she said, “the bank never makes a mistake.”
Uh oh. Alarm bells rang. Except after thinking it over it dawned on me that in
probably thousands of ATM transactions that the two of us have made over the
years since these machines turned up everywhere, I can’t recall a single
mistake either in the amount of cash dispensed or in the recordkeeping. Our
checkbook doesn’t always balance with our monthly bank statement, but whenever
it doesn’t inevitably I trace it to a human arithmetic error by one of us. I
can’t recall a single time when our bank failed to record a transaction and for
the correct amount. Maybe some of you out there have stories to tell about
goof-ups by banks and their computers. But my family’s experience suggests
automated banking errors are as hard to find as facial blemishes on Miss
However, if and when they do occur, I bet the reaction from customers is even
more blood curdling than in days of old when we all waited in line for bank
tellers who occasionally miscounted. Our Judeo-Christian ethic makes us
forgiving of human fallibility. But we’ve become spoiled by the wondrous ways
of modern technology, especially in critical applications concerning our lives
and our money. So we expect airplanes never to crash and the computers that
manage our wealth and business transactions to operate flawlessly.
When a thankfully rare airline disaster does occur nowadays, it’s more often
traceable to human error rather than technical failure. Same with business
blunders, which still show up far too often in this distribution industry.
Talk to contractors about their supply houses and it won’t be long before you
hear a litany of gripes about orders gone awry, quotations lost, wrong items
shipped, deliveries to the wrong location, billing errors, returns not credited,
and on and on. Make one little mistake among hundreds of transactions, and
that’s what will be remembered and talked about.
Well, that’s the point. Your customers are just as harried and profit-squeezed
as you are. Mistakes cost them in labor, material, overhead, distraction and
diminished profit. That’s bound to put anyone in a bad mood. Your customers
were more inclined to cut you slack in the olden days when mistakes were made
by human buddies who would make good by taking them to a nice place for lunch
and plying them with ballgame tickets. Now, most transactions are handled over
the phone or online, and they expect the technology used by distributors to
overcome human shortcomings.
On the distributor’s side, mistakes are to profitability what a plane crash is
to on-time arrival. Troubleshooting and making good are almost certain to eat
up whatever profit exists for a given transaction and then some. I recall a
presentation made by Nibco’s Chairman Rex Martin at an ASA Convention several
years ago describing his company’s process improvement program in which they
discovered it took an average ofseven
phone callsby various individuals to correct a mistake in the ordering process. Errors are a
double-edged sword. They waste time and manpower fixing what’s wrong, while at
the same time taking those resources away from more productive activities aimed
at generating sales and dazzling customers.
The “nobody’s perfect” mantra has become increasingly irrelevant in today’s
world. That’s literally true, of course, but competition and technology keep
pushing the performance bar higher. An accuracy rate of 99% means every day you
may be leaving dozens of disgruntled customers trailing steam vapors as they
gripe about your incompetence to everyone who will listen. Perfection may not
be attainable in this life but people in business dare not breathe easily until
that 99% satisfaction rate extends to a bunch of fractional decimals
The good news is that this lesson seems to be taking hold around the industry.
Various distributors have adopted programs to eliminate mistakes via practices
such as repeating verbal orders back to customers, double-checking all
paperwork and better training for everyone in the order processing
If your people are not doing these things, well, that’s a huge mistake unto
No Margin For Error
October 1, 2009