Follow up: A tale of two CompUSA’s, extended warranties and the great social media bully pulpit

Two weeks ago in my blog (article here), I totally skewered CompUSA and their warranty company (found out it’s Assurant Solutions) for not doing the right thing and honoring the extended warranty I purchased for an HDTV.

Within days of publishing that article, pushing it out to my Facebook, Plaxo, Twitter connections and posting it in the Linkedin Groups I belong to, I got a call from CompUSA.

Since I was driving in the car at the time, I never did get the person’s name, so lets call him Good Corporate Samaritan, or Sam for short.  Essentially Sam wanted me to know two things:

First that the CompUSA I purchased my TV and my extended warranty from was not in business anymore and that the NEW CompUSA had nothing to do with the old one.

Secondly, he wanted me to know that he had made arrangements with their (the old CompUSA) warranty company for me to get a replacement TV.

Sam assured me that the new CompUSA would never treat a valued customer so shabbily.  In that conversation, I told Sam that I believed heavily in the power of social media as the great equalizer that can right many wrongs that bad companies perpetrate on their clients.

I also told Sam that once I received my replacement TV, I would write a follow up and let people know that I had my CompUSA’s wrong.  So for Sam and all of the employees at CompUSA, I just wanted to let you know that I did indeed receive a replacement TV on Thursday, and that the NEW CompUSA came to the rescue.

Thanks Sam!  Much appreciated!

That said, I am a very lucky guy in that I have a bully pulpit with a decent sized following to preach to.  (and thanks to all for listening by the way!!!)

Yet I have to wonder if Joe Everyman, would be as successful at getting justice from CompUSA or for that matter any company without said bully pulpit as a platform.  I guess it depends on the company really, and how customer-centric they actually are.

Over the course of the next few weeks, I am going to further explore what it means for a company to be truly customer centric.  I have a few great case studies for you.

Before I go today let me leave you with my favorite quote and essential operating concept that drives my business practices.  The quote is from Peter Drucker and is brilliant in its elegant simplicity…

“There is only one valid definition of business purpose – to create a customer.

Companies are not in business to make things… but to make customers.”

I hope I am preaching to the choir here!  What are your thoughts?

Product Returns: A growth industry part 2

In the final part of this two-part series (read part one here) examining the value of convenient and cost-effective return policies, this week I examine how in-house quality control, product exchanges and catalog circulation can affect your company’s return practices.

Quality Control=Less Returns!

It’s vital to maintain strict quality control in your fulfillment center. If you have a high rate of people returning products because they received the wrong items, you likely have an internal quality control issue. Make sure your shipping personnel packs orders in an appealing way. Remember, you never get a second chance at a first impression. If your customer opens his or her package and the items are improperly or sloppily packed, it reflects poorly on your company and can increase return rates.

Don’t Accept Returns (When You Can Accept Exchanges)

There are many items that needlessly get returned. Having spent much time in the fashion industry, where 30-plus percent return rates are the norm, I learned firsthand that fit and color are among the top reasons for product returns. Train your customer service reps (CSRs) in the art of turning returns into exchanges. Often this can be accomplished by simply having the CSR offer an exchange. For example, the communication can be as simple as the following: “Ms. Jones, would you like us to ship you the item in a different size, color, etc.?”

Another technique is to have your CSRs use their cross-selling skills. Have them engage the customer as follows: “By the way Ms. Jones, many of the people who ordered item X also ordered item Y. Would you like us to send you that one instead?”

Some companies even pay for the inbound and outbound shipping on an exchange situation — another way of reducing the risk and “saving” the order. If you do this, however, make sure your CSRs aren’t too aggressive in offering upsell and cross-sell items on the original order. Monitor returns on both the aggregate and individual CSR level.

Circulation Planning and Returns:

Many multichannel marketers have a housefile segment of customers who’ve purchased once and returned the product. In your database, they’re “zero dollar, zero frequency” customers. I’ve mailed this segment for a number of mailers and been profitable. You may want to test this segment, as well. You’ll likely see a higher return rate from this segment as some people chronically buy and return product.

But when you test, you may find that despite the higher return rates, enough product stays in the customers’ hands to meet your profit expectation. This segment needs to be in line with your list rental goals. Keep in mind, the higher return rate is offset by the fact that there’s no list rental fee.

Do you have better ways to reduce returns in your organization? Let me know by contacting me at the e-mail address below or posting a comment on this site by clicking on the “Post a comment” icon below.

For part 1 of this series click here

 

Jim Gilbert is president of Gilbert Direct Marketing, a full-service catalog and direct marketing agency. His LinkedIn profile can be viewed at www.linkedin.com/in/jimwgilbert or you can post a comment here or e-mail him at jimdirect@aol.com.

Product returns: A growth industry (part 1)

In the first part of a two-part series (read part two here) examining the value of convenient and cost-effective return policies for multichannel merchants, this week I provide tips on how to make company guarantees more effective, as well as looking at the benefit of determining why your customers are returning products.

Most consumers perceive the returns process to be a big hassle. Everyone who’s ever bought a product via mail order has at least one horror story about trying to return an item. But, I’ve also heard the opposite. In fact, I’ve heard people brag about how easy the return process is when they’ve had an exceptional experience. Personally, I’m always pleasantly surprised when something I return goes smoothly.

You must have a clear, concise return policy with exceptional customer service when handling returns if you want to compete today. And with the emergence of multichannel marketing, that return policy needs to be seamless throughout all your channels no matter where the purchase is made.

Guaranteed Success:

Take a close look at your guarantee. Can it be stated easily? If it’s too complicated, make it simpler. Make it so easy to understand that if you read it to children, they’d instantly get it.

Also ask yourself these two questions:

1.  Do you state your guarantee and return policy clearly?

2.  Is it easy to find?

Try this test: Ask someone not in your organization (because I know you’re aware of your own policies) to find them and report back to you. You may be surprised in what you hear.

If your customers feel your guarantee is solid, they perceive less risk when ordering. By reducing the risk, you make it easier for customers to say “yes” to your offering.

You’re Returning This Because?

Most companies’ enterprise software helps track why customers return products. If you don’t know your product return reasons, learn them. By understanding the reasons why your customers return your products, you can make some powerful changes.

For example, a company I worked with analyzed its returns and discovered that the manner in which the product shots in its catalog were photographed weren’t representative of what people received in the mail. By changing how it photographed its products, the company was able to decrease its return rate. The net result: more gross profit!

Click here for the final part of this two-part series, where I delve into how in-house quality control, product exchanges and catalog circulation can impact your organization’s return practices.