Refunding Cash Sucks! But You Better Be Doing It.

(Photo: Hard Knock Laughs)Last night we lost $120 on the show.  Sixty of that was in refunds, and 60 was paid out to talent that we called in, but then sent home because we cancelled the show.  We cancelled the show because we didn't have sufficient audience turnout to run it to our standards.  That happens rarely for us, but it happens.

In any case, $120 literally was taken from our pockets, and not inserted into our small business bank account.  It's painful.  BUT I cannot condone any alternative action.  When you come even close to not living up to what you promised the customers, refund them.  Treat them right.

This is how my business partner and I live our lives, and this is how we run Hard Knock Laughs.  We have 1,000's of comment cards handy that praise us and love us.  Half of them rave about the NYC experience that Jeff (the company's creative head, the show's host, and lead ticket salesman) created for them, and even more of our customers outright fall in love with Jeff.  Literally fall in love with him.

That is almost entirely because he has always seen himself as a consumer first, and he pours every ounce of himself out to them, to outperform their expectations.  He's good, and he's faithful to the consumer experience.  This sets us apart in a saturated and competitive industry.

When show producers nickle and dimed comics, we paid premium to our comics.  When other promoters hoodwinked customers (Chris Rock is not going to be at your average NYC comedy club, I promise that promoter is lying to you!) we showed them the real New York City, got them out of Times Square, and left them with a show experience that they will never forget.

A Contrast of Good and Ugly, Learning Something from Nike and Hilton

There are two examples from personal experience that stand out to me.  One is of incredible caring, leading to an excellent consumer experience, like we strive for with Hard Knock Laughs.  And the other is of completely pathetic business practices that leaves a bitter taste in everyone's mouth.  We run decidedly away from that at Hard Knock Laughs.

As a business owner, and with experience in direct sales, I'm a stickler for good business practices.  I'm always impressed by a really good sales presentation, and I'm profoundly observant of how companies treat their customers and maintain their brands.

This threat of losing mindshare isn't obvious about major brands.  I was a recruiter for the U.S. Coast Guard for three years.  One day, at a Big East job fair, hosted in Madison Square Garden, which I was recruiting at, I walked around the other booths between talking to prospects.  I stopped at the Nike booth and talked with one of their marketing directors who was recruiting for other marketing executives. 

Can People Forget Nike?

I was curious and asked how Nike handles their brand marketing, but more specifically, why it was such a pressing matter for them.  It does not seem likely to anyone that major brands like Nike or Coke would drop out of the mind of consumers.  When you think fitness or sports, you invariably think of Nike at some point.  You just do it. (Double points for the double entendre!)

Although he was incredibly comfortable with Nike's mind share, he pointed out that there are definitely threats out there.  Under Armour, for example, seemed to come out of nowhere and put a noticeable dent in Nike's market share.  I had never connected those dots before, and after talking to him I felt silly for even asking, but it firmed up a principle for me that I carry over to all my business now:

• You will never be so big that you can neglect your branding and customer service.  You can be usurped when you start slacking.

The Good: A Stay Turned Around at Hilton

Hilton was another such company that I assumed did not have to work hard to maintain its patronage.  For my wife's 25th birthday, I booked a room at the Hilton Millennium in downtown Manhattan expecting a great stay.  I'd stayed there before.  I'd entertained real estate clients in its lounge before.  I liked it.

When we got there that night, for some reason it was a mess.  There was construction in the lobby, the sky restaurant was closed, AND when I checked into my room, the bed sheets were tossed everywhere, like I had walked into another customer's room or something.  Not the Hilton experience I was expecting.

I called the front counter and told her.  She promptly found me the same size room just one floor below, with the same view, and had a porter run the key up to me.  I was in the new room within minutes.

What was astounding though was how they proceeded next.  Just as I was venting to my wife about how lame all of this was of Hilton, and started crafting the best ever slam tweet to make their expensive faults known to all of the Internet, the room phone rang and a director was on the phone telling me she just heard what happened and she was so sorry. 

She sounded almost mortified that I could have gone through something like this in her hotel!  I began to tell myself in my head that it was only some messy sheets.  No big deal.  (You see where that mental shift is happening?)

She asked, "Is there anything I can do to make it better?"

I thought for a second and said, "Yes, actually.  Can you send a bottle of wine to the room?  It's my wife's birthday."

"I can do that." She replied.  "Would you like a white or red?"

Ten minutes later a cold Chardonnay was knocking on our door.  The entire visit left a lasting impression on me of how top-notch Hilton's customer service is, and now I tell people this story, and not about what a nightmare it might have been.

They cared about the customer experience.  Not just the sale.  And they went out of their way to ensure that me, the customer, was aware of that.  I commend them, and I will only look for Hiltons when I want upscale lodging.  They're worth every dollar you pay them!

The Ugly: Business Wanna-Be's Without A Clue

We work with a lot of people in the stand-up comedy industry.  Some are great, and I will never forget them, and we always try to work with them (Marc Theobald, Wil Sylvince, StandUp NY, Laugh Lounge NYC, just to name a few).  Some are just absolutely horrible though, and I'll save the names.

As a company, over the years we've been stiffed, taken the short end of deals, dealt with crappy customers, partnered with nightmare characters, hell I've even broken up a fist fight between two girls at one of our shows, but one of these negatives represents the slimiest of business uglies ever:  Two-bit, nickel and diming, disrespectful, short-sighted losers.

Worthless business losers in our industry, in any industry, are like a cancer.  I despise them, and I try to do everything I can to carve them out of my relationships.  They all have one thing in common, and this is their downfall. They are short sighted, with little aspiration of ever being great.  They will keep a $15 sale, instead of refunding promptly, and risk 100's of dollars of repeat business.  They don't get it.

One of these chumps used to look at me and my partner with fear filled eyes, shrugging his shoulders, while pointing out that his tickets say "No Refunds," on them.  "I'm sorry man.  They buy it, it says no refund on it right there...I can't refund them."  He was so set on scarcity, that he would hold on to any one dollar in his pocket no matter how much it actually cost him in the long run!

Give Them Their Money Back!

To avoid going on in a spite filled rant, I'll just end here.  Needless to say, we (I, Hard Knock Laughs) do not do business with chumps, and the moment we find out that you're a chump, we make our position very clear and cordially part ways.  We are building a gigantic brand based on excellence in the industry and absolute customer satisfaction.  If we didn't satisfy, if we even marginally satisfied, we give the money back.

Faithfulness to this principle holds you accountable to yourself, to your brand, and it makes you think about the impact of every business decision you make from the standpoint of the consumer.  Will this benefit the consumer?  Will I have to come out of pocket to repay an unsatisfied customer if I take this next action?

Refunding is painful.  Giving back money, digging a knife into your operating income, always hurts.  But you risk your entire business if you are not doing it.  Take care of your customers!  Be a consumer first.