Monday, March 13, 2006

Investment on Returns--Customer Service

So there I stood, feeling incredibly stupid. Having waited in line for a few minutes to return a paperback copy of Harry Potter, which I realized I already owned once I brought it home, I stood face-to-face with the cashier. I looked over his shoulder and read “Barnes and Nobles”, I looked down at the imprint on my plastic bag “Waldenbooks”. I paused , turned beet red and said “Oops, I am obviously in the wrong place”. I started to turn and leave when he gently stopped me with the words “If we carry that book we would be happy to refund it for you”. “Really???” I asked. “Sure no problem let me have a look”. He determined that he already had 24 copies in stock and was more than happy to take one more. He handed me a credit card looking store credit, had me sign a receipt and that was that.

But that was not the end of the story. I was so blown away and so grateful I decided to go buy a CD. Now the CD was about twice what my refund was so I handed the card and the money and I took my CD and left

But that was still not the end of the story. As soon as I got out of the store I called my brother and 5 of my friends to tell them about this amazing customer service. And now of course I am telling you, too.

So let’s look at this story and see what actually occurred. Barnes and Nobles made an “Investment on my Return”. What exactly was the “cost” of this investment? Perhaps there was a cost for training the employee that taught him to act in this kind and generous way. But other than that it cost them nothing. Okay maybe there was some cost for restocking. They will surely sell that other copy. But then we need to reverse this formula and see what the Return on Investment was.

Here is where the real power of this theory is seen. They not only were repaid their initial outlay of $7.99, they received an additional $7.99 that I most surely would not have spent otherwise. They received free word of mouth advertising (which is far more powerful and effective than traditional advertising) and they created a loyal, raving fan customer.

“Returns” are often emotionally charged events. Think about it. People return things that “don’t fit”, that they “don’t like” , that they “can’t afford” , “wasn’t what they expected”, that are of “inferior quality”, that” they don’t need” or “they don’t want”

For a lot of your customers returns are either embarrassing, filled with disappointment or frustration or at the very least a major inconvenience.

How you handle this touchy situation will impact your customers decision to continue doing business with you.

There are many stories going around about how Nordstrom would take anything in a return (including a car engine). Of course you don’t have to go to that extreme to make your return policy fair, easy and effective.

What does it take to create a return atmosphere that will keep your customers coming back?

Management needs to create a policy that is fair, easy and effective. Put yourself in your customer’s shoes and make a decision that benefits them.

Once you have your policy make sure that your employees understand what the policy is and how to implement it.

This may be the most essential element of the process. Empower your employee to “do the right thing” to “err” in favor of the customer. Then publicly stand behind that employee even if his or her decision goes beyond your policy. Take them aside privately and discuss and modify.

Your customers need to know your policy inside out. This is especially true if your business has strict regulations. If they need to have a receipt to return the product then it is best to say to the customer as they are checking our “Remember if you need to return this we require the receipt. Would you like it in the bag or would you like to have it?” Granted this will not guarantee that the customers will remember but it does help. Also have the return policy displayed at the check out line and on the receipt.

Bend within Reason
Rules are important, but customers are more important. Even with a strict return policy you need to be customer focused. Do what you can to help that customer with their need. Remember the Investment of Return.

Truly looking out for your customers best interest is actually in your best interest. Take a long hard look at your policy. Is it serving you and your customers? If not change it NOW!

Thursday, March 09, 2006

Million Dollar BAD Customer Service

I was watching the Today show this morning and heard the story of a woman who was attacked by bed bugs at a pricey Catskill resort. She was suing the resort for twenty million dollars. TWENTY MILLION DOLLARS!! Yes you read that right!

What was interesting about this suit is that some of the suit was related to the fact that she had 500 bites all over her body (yes they showed pictures), but some of the suit was based on how they treated her after she complained.

She felt that they showed a blatant lack of concern for her issue. She was offered two free nights but declined the offer.

How could this resort avoided the multi-million dollar suit? I am sure that in most cases the offer of two free nights might have been sufficient for a small problem. But this was no small problem. They should have offered her compensation that was equal to the suffering.

They should have shown empathy and concern. They should have paid all medical expenses. They should have engaged her in the solution to her problem. "What would be a fair compensation?" She may not have come up with a "fair" compensation but at least they would have the beginning of a negotiation that didn't involve high priced lawyers.

They also would have avoided probably MORE than twenty million dollars of really bad publicity.

The next time you think that the problem your customer has with your product or service is no big deal or could be handled with a band aid, remember that it could turn into a multi-million dollar problem. Fix it now, fix it fast, fix it right.