Saturday, August 15, 2009

Two corporate errors - and two very different responses

I'm angry with Best Buy, and very happy with Intercontinental Hotels Group (IHG), about mistakes each made this week. It's their responses to the mistakes that are important.

Best Buy's Web site advertised - in error - Samsung 52" HDTV's for $9.99, over $1,600 less than the actual price. An unknown number of customers - certainly dozens, probably scores, possibly hundreds - jumped on the offer and bought them in the brief interval before the mistake was corrected. However, Best Buy subsequently announced it would not honor the erroneous price, pointing to a clause in its Web site terms of use that allows it to back out of such deals. Needless to say, the customers concerned are very disappointed.

IHG took the opposite approach. Its Crowne Plaza Hotel at Padova, near Venice, Italy, erroneously advertised its rooms for an unbelievable one-hundredth of a Euro (about 1½ US cents) per night, instead of its usual rate of up to 150 euros (about US $212.50). The mistake was allegedly made at IHG's offices in Atlanta, GA, not by the hotel itself. About 230 people jumped on the offer, booking an average of about six nights per person, before the error was detected and corrected. However, IHG have - quite rightly, in my opinion - accepted responsibility for the error, and stated that they will honor the bookings at the advertised price. I'm sure that makes those 230 customers very, very happy!

Look at the difference in approach. Both companies made similar mistakes. One chose to slam the door in the face of those who took advantage of it, leaving them (I'm sure) very annoyed and disappointed. The other stood up and acknowledged responsibility, and will honor the deals made in error. Which do you think now has the better reputation among its customers? Who will gain the most from the publicity surrounding both mistakes?

Bad move, Best Buy - and kudos to Intercontinental Hotels Group. Customer service like that should stand you in very good stead in the future.



C said...

This morning Best Buy had a Toshiba 26" HDTV & Toshiba Satellite package listed for $399.98. When you went to the store pickup link it was a Compaq computer. I sent them a little note. It seems to be corrected. So, which is it with them...they keep playing games or have a bunch of incompetents working for them? Whichever it is, that's why I don't shop there.

Anonymous said...

The CrownePlaza/Intercon hotels are absolutely 5 star digs. When I was running around in the ME for five years those were my hotels of choice.
The neat part is that now their Premier Club has a tie-in with Holiday Inn here in the states.

Bob@thenest said...

Just this past week I had an incident at a Best Buy that made me decide I'll never set foot in one ever again. The employee was absolutely, well, I can't think of a word for it. But the MANAGER couldn't have cared less. It is the manager's attitude that made my decision for me. Google "Best Buy complaints" and you'll see a lot of others with similar experiences.

That's 2 I've dumped this week -- Best Buy and AARP.

Let's see, what do I need at Whole Foods. Not usually a shopper there, but I think I'll start.

tomcatshanger said...

HUGE differnce in scale.

The hotel has a very limited number of rooms to rent, Best buy most likley has Thousands of TV's to sell, The hotel is looking at a much smaller loss than Best Buy is, and the Hotel can at least look forward to Room Service and the like as a means to generate even more revenue to help make good the loss, Best Buy has just about zero.

This is like comparing Apples to Rump Roast. Both are food, but they certainly are not a part of the same family.

Old NFO said...

Just two more reasons (1 each) of why I absolutely refuse to walk into a Best Buy, and why I spend a LOT of nights at IHG properties!

dave said...

Tomcatshanger is right. Best Buy has the opportunity to serve untold thousands--maybe millions--of customers to make up its losses. The hotel, however, "has a very limited number of rooms to rent," dramatically hindering its ability to recoup its losses.

Excellent point, tom. Thanks for making it.

Electricfunk said...

Anyone with a few brain cells to rub together knows that 52" tv's do not sell for 9.99. While some people may have honestly been hoping to get a good deal I have a strong feeling that simple avarice was the motivation for many.

While it would be rather magnanimous for Best Buy to honor what is obviously a major "whoopsie" on an employees part or possibly a malicious act by an employee they shouldn't be forced to economically hang themselves.

Dirk said...

Thing is - a hotel room is something that can be rented over and over and over again. A hotel can give away a few nights of a hotel room, and then go rent it out for full price, and come out even, if not ahead.

But when it comes to selling an actual item, it can only be sold once. And Best Buy certainly paid a whole heck of a lot more than $9.99 for it. While I'm not a huge fan of BB, they're certainly in the right on this one. They do have documentation to protect them from things like this. Could have been an honest mistake, could have been a disgruntled, (maybe soon-to-be-ex-) employee trying to hurt the company. To expect them to be bound to sell hundreds of items at a huge loss is ridiculous in the extreme.

What's next - people expecting the government to buy cars for them? Oh. Wait.

Steve said...

I agree with Electricfunk - reasonable people would know that this was a mistake, and are trying to (you could say unethically) force the company to potentially take a huge loss.

The "best" solution in my opinion would have been to contact those who bought the tv, explain the error, and offer a deal. Maybe say for half the price (throw in shipping and set up) as a goodwill gesture. If that falls apart, then Best Buy might offer a token reward ($50) card to folks for their trouble after Best Buy canceled their order.