As a small business, you probably pride yourself on being customer friendly. Even though you might work with large companies as your suppliers and partners, you go the extra mile for your customers when something goes wrong. You make your site search friendly. You put the information on it that customers need. And you stand behind what you sell. Except when that big company partner makes it impossible.

Image representing Microsoft as depicted in Cr...

Image via CrunchBase

And that's the problem. As a small business, you must be extremely careful about the big companies you work with, because sometimes you can't paper over their big company ways. And when that happens, you get hurt. You can lose business and you can lose your good reputation.

All this was brought to mind from a purchase we made not long ago, buying a refurbished Microsoft Xbox 360 from a small business online. Now, you might say to yourself--there's your mistake, buying some crappy refurbished model instead of a new one--but we frequently buy refurbished technology and have never had a problem. The site we purchased from was well done, clearly explained everything, provided a manufacturer's warranty, and seemed entirely reputable. I still think that small business is entirely reputable, so I am not naming them in what might appear to be a negative story.

The problem wasn't the small business. We searched for Xbox 360s and that site came up near the top of the list. We checked them out several different ways and they came up clean. The site looked good and the purchase experience was easy and we received the console quickly. Everything worked.

We had a minor problem that we called Microsoft about and they cheerfully verified our warranty was in force and sent us a replacement part for free. My son is happily playing with his Xbox and it's another happy story about a small business that helps out consumers by selling refurbished units and a large business that services its customers.

But you know the story doesn't end there, because that would be the most boring blog post of all time. Instead, the Xbox suddenly starts throwing the dreaded E73 and E74 errors, so we followed the troubleshooting procedures and were informed by the Microsoft support site that we needed to get the unit repaired, and we could do that online.

Except we couldn't. We dutifully followed the instructions to register with Xbox Live to report our "Xbox dead." We put in the serial number and pressed the "Request a repair" button, but it always provided an error message telling me that the service is temporarily unavailable. (It's been temprarily unavailable for over a week now, which makes you wonder what a permanent outage would look like.)

So, I got on the phone and requested the repair and the technician verified that we were covered and promised to send us an empty box (and Xbox box, I guess) for us to return the unit to be fixed, which takes four business days. After five business days went by with no box, I called back and was told that we were ineligible for service (the technician actually said we were "illegible" for service, but I decided not to squawk about how neat my handwriting can be) because we had viloated the terms and conditions.

I won't take you through the literally hours of phone calls with technicians and supervisors that ensued. There was a multitude of times that I was told that they had no record or only a partial record of my last call, that the person I talked to the last time was mistaken--all the usual big company support crap. But the bottom line is that Microsoft had banned our console from service, voided the warranty, because they claimed that we violated their terms of service. They refused to say how or when we had done this, and claimed that it could have been something the previous owner did.

I know, I know, none of this makes any sense. If the previous owner had done it, you'd think they would have known about when we had the minor repair done months ago, but they were unmoved by such logic. They even have a page posted on their Web site that explains that there is no appeal process for console bans. So, even if they make a mistake, you're screwed. That is really their official policy. The support technicians won't talk to you about it and their online forums have a policy that any posts about console bans are deleted without response.

So, at this point, I thought that this must be some weird situation that rarely happens. Hardly. I found similar stories of people banned here and here. Now, for all I know, Microsoft has never made an error in banning someone before they banned us. But because they won't tell us why we were banned, I have no trust in their process. They know why they banned us, but they just won't tell us. And they won't tell us why they won't tell us.

The moral of the story for small businesses is that you must choose your partners carefully. The small business did everything right, but Microsoft ruined the customer experience. I know enough about business to place the blame where it is due, so I am not running around online giving this poor small business bad reviews. But someone else might. And I can totally understand why. Microsoft threw the small business under the bus, intimating that it was because we purchased a refurbished console that all of this happened.

But that isn't so. What's really true is that Microsoft has a set of policies designed to protect Microsoft, rather than its customers. The refurbished story is just a ruse trotted out in this situation. The truth is that Microsoft does not tell people why they were banned, what they did, or when it happened. And they don't have any process to appeal if Microsoft makes an error. That is a set of policies that no small business can live with, if they want to safeguard their reputation of caring for customers.

And sad to say, I won't ever buy a refurbished Microsoft product again. We're going to buy a brand-spanking-new Xbox 360 because we don't want to punish our son by throwing away his Christmas present. It kills me to do this, because I am giving more money to Microsoft, precisely the company that is at fault in this entire mess. I'd rather say I'll never buy a Microsoft product again, but I know I will.

I am hoping that if enough people speak out, that Microsoft will change its ridiculously secretive policies and enter the age of open information. If Microsoft has such iron-clad evidence that something was done to void the warranty, they could present that evidence, but they refuse.

So, small businesses get hurt because their sales drop off and their reputations are endangered, all because they are working with a big company that has policies they'd never adopt with their own customers. Beware the partners you keep, because they will end up reflecting on you in ways that you can't control. Being in the refurbishing business is perfectly fine, as long as you can count on your partners to stand behind the products that you sell. If you can't, then it's your business that will likely take the fall.

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February 23, 2010





Mike is an expert in search marketing, search technology, social media, publishing, text analytics, and web metrics, who regularly makes speaking appearances.

Mike's previous appearances include Text Analytics World, Rutgers Business School, SEMRush webinar, ClickZ Live.

Mike also founded and writes for Biznology, is the co-author of Outside-In Marketing (with James Mathewson) and the best-selling Search Engine Marketing, Inc. (now in its 3rd edition, and sole author of Do It Wrong Quickly, named by the Miami Herald as one of the 11 best business books of 2007.






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