When I speak at conferences about customer service strategies, I often hear managers discuss how hard it is to recruit and retain good frontline employees. Too many managers mistakenly assume the only way to keep people is to bite the bullet and pay more in salaries, benefits, and perks.

When it comes to dealing with dissatisfied customers, most business owners and managers believe that money back guarantees and/or exchange policies will fix the problem. Lousy strategy. Money back guarantees and exchanges may fix the problem, but they do nothing to fix the relationship. Policies don’t fix relationships—people do.