Can Customer Returns Kill Your Business or Save it?

The numbers look grim if you are an online retailer. Around 30% of the products retailers ship out will come back as returns. The downside is that 65% of those returns were the retailers’ fault resulting in money they didn’t have to spend and decreasing the bottom line. A good return policy is crucial in the ultra-competitive online world so examine yours carefully. There are other things you can be doing to prevent returns and save yourself headaches and money. Let’s look at the statistics and what they mean to you.

23% of returns are because the wrong item was shipped out. This is an amateur league mistake that even the pros seem to be making. It’s simple, have a redundant system of double check to make sure the right item is shipped every time. A few more minutes to make sure the item is the right one or hours of headaches dealing with an irate customer and refunds or more shipping charges. The choice is clear, get it right every time.

22% of returns are because the product looks different. Not 100% fixable but mostly avoidable. Make sure your product is shot in multiple angles and in different light settings. A video will also help with hands or other objects to give a sense of scale.

20% of returns are due to damage. Sure you can have insurance on the product and send the customer a new one, but is that excellent customer service? Not all damage can be avoided but taking extra precautions and making sure the product arrives intact will pay for itself in happy customers. “The box was damaged but the item was fine” = WIN!

92% of customers will buy again if the returns are easy. So you messed up and sent the wrong thing, but the right one was shipped quick and the customer is happy. You will still likely get more business from them in the future. Customers understand mix-ups, your or theirs, and will forgive retailers who make it right without a ton of hassle.

There you have it, some stats to help guide your policies and give you something to think about.

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Building a Customer Service Culture

You can have good customer service by teaching your team a few skills and a short overview on problem-solving, but then you will be giving business to your competitors. There are few competitive advantages as powerful as Customer Service and few that are harder to maintain. In the world where everyone thinks that competitive advantage means lowering your price, you can stand out by providing stellar customer service. I currently don’t know any physical location in my area that does this so I know the field is open. Here is an infographic to get you started on the path to excellent Customer Service. Let me know if you need any help getting going.

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Simple Customer Service (or How to lose a customer for $0.30)

It’s a well-known statistic that a happy customer tells 9 people on average and an unhappy customer tells 16. Unfortunately, if you provide poor customer service to a marketer they are likely to turn it into a lesson for thousands. Every company I know is constantly looking for new customers but it is always cheaper to retain the ones you have. On average it is 6-7 times more expensive to get a new customer than to keep an old one. How do you keep them? Most cases it is all about the customer experience. Today is a lesson on flexibility during the customer experience.

The short version of the story is that a popular fast food chain had an advertisement on the menu board showing the price of an Italian sub. The main menu board had a different price. The manager was already at the register due to an issue with the computer freezing while taking my groups order. The discrepancy was pointed out, he said there was no difference in the sub so a member of my group ordered the cheaper version. Of course, the more expensive version was what was in the computer. No problem, punch in the discount, change the difference, reduce the price down to the advertised price right? Wrong, apparently corporate sets the prices in the computer and the manager can’t do anything about it. Let me repeat that, the manager has no control to give customers the price they are advertising on the menu board. He absolutely refused to give the reduced price. It was a matter of $0.30. Lost a loyal customer for $0.30 due to inflexibility. Not to mention the company, famous for its social media work, has ignored the post pointing it out all day. Granted, it’s a big company, but when your business is tagged in the same post as #customerservicefail, you might want to be paying attention. Now there’s a couple tweets, a blog post, two Facebook posts and a spot in an upcoming lecture. All this fuss for $.030? Well, yes, it’s my $0.30. If I spent $0.30 more on every transaction through a year when I wasn’t supposed to I would lose a couple hundred dollars. It eventually adds up so I tend to be aware when I am not paying the advertised price. Plus I feel such tactics are underhanded and it makes me feel unappreciated when a company thinks it’s ok to overcharge their customers.

 

The lesson is about flexibility. The customer doesn’t want to hear what corporate policy is. The customer doesn’t want to hear what you can’t do. Tell them what you can do, what the solution is. In simple cases like a price screw up, get them the advertised price. If it is truly against policy and there is no way you can change something, tell them what solutions you can provide, not what you can’t. Don’t hide behind policy and procedures, it’s bad customer service.

 

Arbys fixed
Of course, as we ate the manager “fixed” the problem.

 

 

The Do’s and Don’ts of Customer Service

Customer service is the lifeblood of a business. No matter what business you are in there is some element of customer service involved. Here is an infographic giving some of the Do’s and Don’ts of customer service to use as a baseline.

Do's and Don't of Customer service

It’s All About Customer Service

If there is one thing I have learned in my 25 plus years of business it’s that customer service should be a top priority because it is part of every aspect of your business. Marketing? Begins with good customer service. Sales? It is customer service. Accounting? Ok, maybe not EVERY aspect, but accounting can be helped by good customer service. Here are some stats to keep in mind as we explore customer service this week.

Why Customer Service Matters

The Power of the Personal Touch

EnvelopesWhen was the last time you received a personal thank you from a purchase? My guess is that it has been a while. Handwritten notes are rare and a way for you to stand out from the competition. I see people saying that personal notes are “All the rage” but I still haven’t ever gotten one and neither has anyone I asked. There are companies out there that do it with great success but they are few and far between, so here is a way for a small business to really stand out without a lot of expense. Here are some tips to make your thank you note campaign stand out.

  • Really make it personal – Address it to the purchaser “Dear Steve”. and include details so the customer knows it isn’t just a form letter. “Thank you for buying the blue hat, it is my favorite color and was fun to make for you.” These little touches tell the customer you really do appreciate your business and aren’t just sending formulaic thank you cards to everyone.
  • Leave out the business card – Or at least carefully consider it. This tip goes against instinct and against my feelings that everyone should have my card.  If you include your card it diminished the note. It goes from a genuine thank you to a branding effort. Of course you make sure they can get back in touch with you, address embossed on the card or written on the back, but there is no need for branding efforts here. The thank you is the point.
  • Make it a surprise – The first purchase a customer makes should have a thank you card in it, after that, make it random. If they expect a card each time it is no longer special. This keeps the card as something they hope to get, but don’t expect. It also reduces the burden of how many cards to send. If you are set on sending a note with each purchase make sure to look at the next tip.
  • Don’t make it a chore – If you have to write too many cards, this is a good thing and a bad thing. Don’t let it burn you out of become a dread, it will be reflected in the writing. If you just have too many cards to write consider hiring someone to help with it or outsourcing the process (yup there are services for everything). Don’t let this powerful tool bog you down.

Use these tips to stand out from the crowd. Almost no one does personal notes, so it is an easy win and a powerful tool for creating customer loyalty. Feel free to send me questions or comments below.