As a regular lurker here I find myself in the rare position of being able to post from a professional perspective. I am a UK director of a large, successful subsidiary of a US fortune 500 company. We charge a little above the average for what we supply but we attempt to do so at a higher than average level of service. For our customers I hope that the latter more than offsets the former. In our case the extra service is paid for from our slightly higher margins.
I am clear with my staff that we must earn the loyalty of our customers. That does mean showing empathy and compassion and stepping outside of the rules or procedures once in a while. I know the maths; the cost of losing a profitable customer over his or her lifetime versus the cost of bending a rule: even at a short term cost. I also know the cost of alienating high value customers through short-sighted decisions. I trust my staff to differentiate between the ‘genuine’ (in my experience most customers) and the piss-takers (few, who tend to make themselves obvious). How you make people feel is important.
In the case of profot, in my business I would be despairing that my staff failed to take care of a loyal customer of huge value. Had it reached me I would have bent over backwards to put the situation right. (Juud, your post was depressingly insightful)
Bean-counters take a bit longer to understand this (in my experience). There are plenty of academic papers and case studies out there that seek to demonstrate the bottom-line value that accrues from customer loyalty. For some very transactional and ‘lowest cost’ brands I accept that this doesn’t apply: it just isn’t the business model. However, If I was WW at BA I’d be watching very closely the retention rate and value development in my most profitable customer segments.