One recent morning, at 10:35, I walked into a local McDonald's and ordered a sausage biscuit. The counter person turned around to look up at the clock. Then she said to me: “Breakfast ends at 10:30.” A little surprised, I told her that it was only a few minutes after that time and couldn't she sell me a biscuit? She just stood there and repeated “We don't serve breakfast after 10:30.”

What logic is there to selling a biscuit at 10:29 a.m. and deliberately not selling that item six minutes later, simply because that is the “rule”? What does McDonald's do with left over sausage biscuits? Wouldn't it be more profitable to sell them? Or is there some sort of sausage biscuit heaven in the sky they all must go to when the clock strikes 10:30?

Now, McDonald's is a much admired, sharp, successful organization, the largest fast food operation in the world. And McDonald's, like all companies, must have policies to make its business run smoothly. And regulations must be set so employees know what the company expects of them. But does common sense go out the window? In this time of fierce competition and much talk of improving customer service, doesn't judgment on a one-to-one basis have a place?

After this experience, I started thinking about the rules and regulations we make as we run our business…rules that seem perfectly logical to us but totally illogical to our customers…rules that may even cause us to lose customers. I discussed this with several business colleagues and friends and every one of them had similar stories to tell, even one storeowner who realized he was guilty, too.

Closing Time at the Cleaners

Jeff, the owner of a men's store, was going on a market trip Sunday and planned to pick up two suits from the cleaners on Saturday afternoon. Knowing the cleaners closed at 5:30, he left his business early in what he thought was time enough to get there. Well, slow moving traffic caused him to arrive at 5:40. The door was locked but he felt he was in luck as he saw the owner's car in the driveway and could see someone moving in the back of the shop. Though he kept loudly knocking on the door and calling to the person inside, there was no response. Jeff made the market trip without those suits, vowing never to trade with that cleaners again.

But this started Jeff thinking about his own store closing time and that he might also be guilty of the same rigid practice. Usually, he locked the doors exactly at the 6 PM closing, then went to the office to tally up. The salespeople left by the back door and he wasn't far behind. So Jeff set a new “rule,” one more customer-friendly. The official store closing time would still be posted as 6 PM. But the door would not actually be locked until 6:15. He felt the additional 15 minutes of time this cost him was worth it.

Contrast this cleaners story with one that Mike, the bell captain at the Hotel Algonquin in New York City, told me about his experience in a new Nordstrom store that had just opened in his New Jersey neighborhood. Mike and his wife were looking around the store and stopped at the customer service counter to ask what time the store closed. The associate smiled and said: “Whenever you're finished shopping, sir.” What a very customer-friendly answer! Mike and his wife felt like royalty. Doesn't Nordstrom have an official closing time? Of course. But apparently you won't get thrown out of the store with bells going off.

Rule: No exceptions to a promotional policy.

A local store was having a promotion: Buy $75. in our fragrance department and receive a complimentary crystal vase. My purchase came to $72.75. I asked if I could have a crystal vase. “Oh, I'm so sorry, but the purchase has to be $75.” When I protested, I was told that “if we make an exception for you with that amount, we would have to do it for everyone who asks.” (So?) I was annoyed with this rigid and unreasonable attitude and since I knew I could find the same brand in at least two other stores in town, I decided to go elsewhere to make my purchase.

Company policy should be to make a decision on a situation based on its own merits, never a blanket rule. Since I obviously felt strongly enough about this to cancel the purchase, wouldn't it have been better to please me by granting my request than to annoy me enough to leave the store? That store lost more than $2.25 that day with its no-exception rule. When the amount is within a few dollars of a promotion, exceptions could be made 1. when the customer specifically asks and 2. as a gesture of goodwill even when the customer does not ask. “Since your purchase is so close,” the salesperson could say, “I'd like to give you a complimentary crystal vase for shopping with us.” Choose to delight the customer at every opportunity you're given.

There is another lesson in this scenario: the power of differentiation. If this store had an exclusive on the fragrance label or something different about the offerings that I could not find anyplace else, they would have had me. They didn't. Whether you sell apparel, lumber, or insurance, the more you differentiate your company from the competition, whether in products or in services, the more you tie your customers to you.

Giving Employees Authority

What rules and regulations in your company have the potential for offending your customers? Certainly, it is necessary to establish policy and regulations to help your business run efficiently. But are these rules so rigid they have no exceptions?

When there is a need for an exception, your employees should not only be authorized but encouraged to use their judgment in each situation. But employees will never bypass company rules, even knowing that doing so would better serve their customer, if they fear criticism or reprisal from management. The fear of management criticism can paralyze your employees. Make sure your associates feel assured they can, and should, make decisions one-by-one to solve a customer's problem.

Involve your employees in the decision making process as much as possible. Why? Because those who are charged with implementing policy must also have a voice in making that policy. The employee handbook of Nordstrom, the Seattle-based store group, consists of a central rule: Rule #1: Use your good judgment in all situations. There are no additional rules.