On the open road, the rules are clear: Stop at red lights. Yield to pedestrians. Wear your seat belt. But sometimes the rules aren’t so cut and dried, especially in the pool and spa industry.

Chuck Schilling knows this firsthand. “We have many rules written down, and we’ve probably broken every one of them,” says the customer-service manager at HornerXpress in Fort Lauderdale, Fla. “It’s OK to bend the rules. It’s written in our employee manuals, actually. It’s about what’s necessary to do the right thing for our customers.”

As consolidation in the distribution sector continues to increase, customer satisfaction is becoming more important. Each company must differentiate itself by providing superior service from its competitors. “Now, more so than five years ago, there are more choices as to where to source your parts,” says Tim Loomis, sales and marketing manager at Spa Parts Plus in Prescott Valley, Ariz.

“Customer service becomes an important part of deciding who to go with,” he adds.

That’s exactly why bending the rules comes in handy. Accepting a return without a receipt or delivering to an alternate location — despite what the rule book may say — can endear a customer to a company for a lifetime.

“Rules are in place to maintain some order and keep things fair, but those rules should not be used to dictate a customer’s behavior,” says Ann Thomas, senior consultant at Performance Research Associates Inc., a Minneapolis-based company that publishes the Knock Your Socks Off book series.

Here, we look at the five steps that can help distributors — and any business owner — determine when and how to bend, and even break, the rules.

1. Differentiate between “red” and “blue” rules.

Managers must maintain a set of procedures to help their businesses run smoothly. But some rules need to be more strictly enforced than others. Thomas calls these “red” rules.

“Red rules are ones that cannot be bent or broken,” she says. “They protect the public safety, or they have severe consequences if they’re not followed.”

Some rules “are simply habits and customs with hardened arteries — systems that grow inflexible with age and take on a rigidity never intended,” according to the PRA consultants in Delivering Knock Your Socks Off Service (AMACOM, 2005). These rules, which are called “blue,” can be re-evaluated.

“Blue rules are designed to be those that smooth operations,” Thomas says. “Breaking or bending a blue rule might not have any dire or deadly consequences.”

When Thomas consults with companies on how they can improve their customer service, she often begins by helping managers identify their red and blue rules.

Keep in mind that what is a red rule in one organization might well be a blue one elsewhere.

For instance, Phil Gelhaus says credit rules at his company are set in stone. “If somebody has gone beyond our absolute wall, they’re not going to get their product,” says the president of General Pool & Spa Supply in Rancho Cordova, Calif. “We try to proactively let them know when they’re nearing that limit, but that’s a nonbreakable rule. If we’re not getting paid, we’re not paying our suppliers and we’re not getting our product.”

Remember, nothing is black or white. Minimum orders, delivery times and guidelines for returns exist to make companies operate efficiently. But they are often bent to keep customers with extenuating circumstances happy.

“Rather than enforce a rule about a receipt, we would take the extra steps to look up the purchase for the customer. [You need to] put in that extra effort to make that customer happy,” Schilling says.

2. Know the reason behind the rules.

Employees need to understand where the rules came from and why they exist, especially the red ones. One step that can help is educating executives, managers and customers about the history of the company’s operational rules.

Thomas says this helps when you need to say “no” to a customer. In those instances, explain why you’re not able to fulfill their request. “It helps when you can say, ‘No, as much as you’d like me to sell you 25 barrels of this chemical, federal law prohibits us from doing so,’” she says.

Ann Spires agrees. “Understanding why a rule exists allows an employee to better explain it to the customer and stand behind it,” says the president of Cumming, Ga.-based Essentials Spa Supplies. “An example would be freight policies. When an employee understands the cost to the company and at what point it doesn’t pencil out, the issue becomes about what makes sense.”

Still, some rules should allow for a little flexibility. “When you’re talking about interacting with customers, it changes every day,” says Chris Wilson, group vice president of Covington, La.-based SCP. “Guidelines give us the framework to work within.”

3. Consider who’s on the other line.

Many distributors say that the key factor when deciding if it’s OK to bend a rule is the customer. “If someone asks for an exception to the rule, think about who that person is, what kind of customer they are, and how much business they do with you,” Thomas says.

She suggests categorizing “rule bending” into three types: the little and big favor, and the exception. “A little favor doesn’t put you out. It’s a onetime occurrence. Even if it’s a onetime customer, you should do the little favor if it means they might come back,” Thomas says. “If it’s some long-term customer who has been with you a long time, do the big favors. They can be your biggest advertising.

“Then there is the exception. These are usually with corporate customers. If you don’t bend over backward to help that customer, then you’re not helping yourself,” she adds.

Some experts recommend basing customer value on strategic variables, such as their lifetime value, or tactical factors, such as the worth of goods in an online shopping cart. Loomis prefers to use customer loyalty as the No. 1 factor. “For customers who have been with me a long time, it comes first,” he says.

“If I look at a customer and can say, ‘I see you’ve been with us since 1992, and it doesn’t look like you’ve had any problems before,’ then it makes a big difference,” Loomis adds.

4. Empower your employees.

Since frontline customer-service reps usually deal with upset clients, most distributors believe it’s necessary to authorize employees to make tough calls. “Make sure that employees know what their limits are in terms of accommodating a customer,” PRA’s Thomas says. “Is it a dollar amount? What is it they can use to meet or exceed the needs of their customer?”

For HornerXpress’ Schilling, it’s important that his employees believe in the limits he provides. “Having a policy is good, and it’s nice to understand the rule, but it doesn’t work if they don’t believe it. There needs to be commitment, not just compliance,” he says.

One of the most frustrating experiences for a customer is coming upon an employee who always needs to talk to his or her supervisor, Thomas says. “If I’m a knowledgeable, competent and confident employee, and I know what my limits and boundaries are, the customer interaction is so much better and positive,” she adds.

Training your employees to feel empowered requires patience. Floor managers must observe each individual’s behavior and then conduct one-on-one coaching sessions. Discuss what the customer asked for, what the employee offered, the client’s response and what other options were available to handle the situation.

“You have to train by trial and error,” Essentials’ Spires says. “You start with someone who you believe has good judgment, and you build on it through circumstances. After they solve a problem, you discuss if you would have done it differently.

“You can’t assess blame if you disagree or you will stifle that person’s judgment in the future. You just explain various alternatives and over time, you get close to being on the same page,” Spires adds.

Wilson believes SCP’s training program, which includes once-a-year Webinars, or “Poolinars,” helps develop this understanding by employees. Customer-service reps must begin with a course on “Working With Upset Customers.”

Not all distributors believe employee empowerment is wise. Loomis, for one, prefers frontline employees to convey positive emotions. “I want the customer-service people to wear a white hat. If it’s a difficult decision, then pass that person on to the manager,” he says. “At a manager’s level, you have more experience handling calls and people.”

5. Continuously re-evaluate your operations.

At the end of the day, take time to examine each exception. Determine if it’s a onetime occurrence or a regular activity. “If you’re making exceptions to a rule more frequently than not, why is it a rule?” Thomas asks. “Your customers can be right when your policy isn’t.”

Spires has changed several policies based on customer service requests, including those affecting minimum orders and drop-ship charges. Schilling, meanwhile, has made exceptions for order cutoff times to get products out for delivery.

Gelhaus found that his warehouse counter employees and call center staff weren’t able to satisfy the needs of after-hours clients. That’s why General Pool & Spa Supply developed an online shopping portal for its dealers.

SCP has a similar system. “Today, our business-to-business networking systems are on 24/7. People want the ability to place orders when they’re done putting the kids to bed at 10 p.m.,” says Wilson, who adds that the company expects usage of the B2B Web site to double in 2007.

In addition, Wilson noticed that the company’s warehouse hours weren’t long enough. Customers were arriving in the parking lot at 6:30 a.m. for the location’s 7 a.m. opening. “You’re not going to leave them out there waiting. You’re going to change your operations and open earlier,” he says.

And that’s the ultimate goal — to keep business running as smoothly as possible. “Customer service for us is about continuous improvement,” Loomis says. “Where aren’t we the best? And what can we do to make ourselves better?”