Sep
05
2006Home Depot and LCD Screens - Driving Customer Satisfaction on the Cheap
05
2006
I’ve been doing a LOT of home renovation lately, and because I’m too lazy busy to track down quality independent contractors, I’ve been making most of my major purchases via Home Depot. It’s been a mixed bag. Some jobs were done well, and at least one was a horrible, spectacular failure.
As you may or may not know, when you go to Home Depot and arrange for flooring, cabinets, decks -what have you - you don’t actually get Home Depot employees doing the work. All work is done through subcontractors. You pay Home Depot, and Home Depot pays them when you sign off on the work.
I’ve been told that this is actually a pretty good setup for the consumer. Since Home Depot is a humongous corporation, they can afford to eat the cost of fixing a botched installation now and then. Also, contractors do NOT want to lose their contract with Home Depot, so if they get caught screwing up, they’ll be eager to fix things to please their corporate master.
Lucky me, I am now in the process of finding out if this is actually how things go down. I had Pergo laminate flooring put in by a subcontractor called AAA Carpet of Wilmington, MA. The job was horribly amateurish. The contractors showed up 4 hours late (that is, AFTER the late end of the four hour range given for their arrival), changed crews in the middle of the job (a 5 hour job, not a multi-day job), installed all the transitions wrong, knocked holes in my walls, walked off with over $100 of returnable unused materials, and were, all-around, totally incompetent.
So I wrote a letter (a physical, dead tree letter)to the local Home Depot management and CC’ed the owner of AAA Carpet. The management at Home Depot has been very sympathetic and responsive so far, and the Install Manager of AAA apologized profusely and is sending over a supposedly more qualified “inspector” to figure out how to set things right. IMHO, it is now AAA’s job to just get the damn floor up to par, and then it’s Home Depot’s job to give me a little something for my troubles. Then it’ s up to Home Depot whether or not AAA get paid, and if so, how much. Not my problem. Good.
Anyway, I was talking to a friend of mine who is an accountant. He said that he’s done financial work for several Home Depot subcontractors, and he said he has a pretty good idea of what Home Depot’s subcontracting strategy is:
- Hire the cheapest contractors possible
- Go out of your way to fix the screw-ups
This makes a lot of sense for them, if you think about it. If you send in the cheapest possible subcontractor to do a job, one of four things will happen:
- The contractor will do an OK job - Home Depot just saved a lot of scratch.
- The contractor will do a crappy job, but the customer won’t really care, or won’t bother to complain - this type of customer won’t usually spread the negative word to others.
- The contractor will do a crappy job and the customer will complain. Then, Home Depot gets to spring into action, fix the problem with what amounts to pocket change from their bank accounts, and look like a hero.
Whichever happens, Home Depot wins.
What’s the lesson here? Well, one, it’s always good to have deep pockets. But, aside from that, it shows that you can get away with a mediocre product if you have stellar customer service. Ideally, as a professional, you’d want to provide an always perfect product. This strategy, however, can only be profitable at a very high price. For most customers, for most services, cost is a significant factor. In this case, you simply must lower your quality standards. However, as product quality goes down, customer service quality must rise. Seems pretty simple, but look at Dell’s history as of late. Dell’s aggressive cost cutting simultaneously reduced product quality and customer service quality, as a result their reputation plummeted.
For an interesting study of this delicate quality/service balance, look no further than the LCD monitor industry’s “Dead Pixel Policies”. LCD monitors consist of so many delicate transistors that a perfect screen is nearly impossible to guarantee. So, what do you do? Well, according to this Tom’s Hardware article, no one has quite managed figured this out. What would you do?