Retail Customer Experience: How Should Retailers Compensate Customers For Service or Product Failures?
Through a special arrangement, presented here for discussion is an excerpt of a current article from Retail Customer Experience, a website devoted to helping retailers differentiate the shopping experience.
How should retailers compensate customers for service or product failures? This is one of the most common, popular and emotionally fraught questions I encounter. The answer is: It depends. And that variability, in fact, is what’s most important.
Customers have diverse values and preferences, so your people who placate disgruntled customers need to be given enormous discretion. Still, some principles almost always apply:
- Most customers understand that things can and will go wrong. What they don’t understand, accept or find interesting are excuses.
- Don’t panic. With most customers and in most situations, customers’ sense of trust and camaraderie increases after a problem is successfully resolved. This make sense, since you now have a shared experience.
- Avoid assuming you know what solution a customer wants or "should’ want. Ask. If a customer makes a request that sounds extreme or absurd, don’t rush to dismiss it. There may be a creative way to make the requested solution happen.
- Don’t strive for "fairness’ or "justice.’ The archetype for successful problem resolution — the doting Italian Mama — doesn’t investigate whether her bambino obeyed the sidewalk speed limit before comforting him, and a customer’s warm feelings for a company aren’t about fairness. They’re about being treated especially well.
- Learn from customer issues, but don’t use them as an opportunity to discipline or train your staff in front of your customer. While seemingly obvious, this happens quite often. Watch out for this flaw, especially when you’re under stress.
- Don’t imagine you’re doing something special for a customer by making things how they should have been in the first place. Recreating how things should have been is just a first step. You need to then give the customer something extra. If you aren’t sure which "extra’ to offer a particular customer, just make it clear you want to offer something. If the customer doesn’t like red lollipops, she’ll let you know. You can decide together on a different treat.
And always, always, keep an eye on the lifetime value of a loyal customer Studies in my experience frequently determine the lifetime value of a loyal customer to be up to $100,000 — and occasionally even more. Perhaps in your business this number is a few thousand dollars, or possibly it is half a million. It is well worth figuring out that number and keeping it in mind if you ever feel that temptation to quarrel with a customer over, say, an overnight shipping bill.
How should stores determine the “extra” incentive to make up for a service failure? What common missteps occur in such situations?