Customer Service and internet retail
One lesson that I have learned in business over the past few years is the importance of customer service. First let me start off by saying that top-level customer service is one thing that we pride ourselves on at Sewell - I credit our tech support guys and customer service reps for our above-average ratings. Putting the customer first has to be a primary goal for management also and at Sewell I believe it is.
We gauge our success with customer service through Bizrate, an independent third-party service. Our average negative feedback over the past several months is 4%. This may sound bad, but in our industry it is surprisingly good - keep in mind that the nature of our business (primarily connectivity at this point) naturally leads to a high rate of compatibility issues that neither us nor the customer can predetermine - to our employees credit they have maintained a 96% satisfaction rate while dealing with such compatibility issues and while the company is growing at a triple-digit clip - kudos to them.
Customer service seems expensive to short-sighted (and usually short-lived) companies, but poor customer service is always more expensive. Treating your customers right results in residual sales that will continue for years with no marginal marketing expense. Sometimes marketers talk about the “lifetime value” of a customer, but this is never an easy number to quantify and it is almost impossible to discount into a present value - it seems that even the most aggressive estimates of the lifetime value of a customer don’t account for other benefits such as free marketing (word of mouth). It is no secret that this was one of the primary keys to New Egg’s success in reaching $1B in sales within 3 years - a sales volume that took Wal-mart 17 years to accomplish.
I first learned the importance of customer service while working at Ukrop’s, a grocery store in Virginia, in high school. Ukrop’s was fanatical about customer service - all employees were required to go to monthly customer service training meetings and the training was meticulous. As a “courtesy clerk” (a euphemism for a bag-boy) we were never allowed to take tips - you would get fired for taking a tip. If a customer ever said “thank you” we were supposed to thank them for shopping at Ukrop’s - we were always supposed to have the last “thank you.” If a customer asked where something was we were never supposed to tell them where to go - we had to take them there. When a new family moved into the neighborhood Ukrop’s sent a greeting with some coupons and an invitation to meet a manager of the store for an introduction and brief tour to get them oriented.
My most important take away from what Ukrop’s accomplished, however, was what that extreme commitment to customer service did for the company. Ukrop’s never claimed to have the lowest prices and never had to use gimmicky promotions to get shoppers in the store - everybody in the community knew that they would pay a little more to go to Ukrop’s yet they had a virtual monopoly in our community.
The same is true with internet retail - providing premium customer service protects you from having to compete solely on price, exposing you to the risk of a cheaper competitor with lower costs putting you out of business. It promotes viral advertising as satisfied customers talk about your products and service. It also helps keep your employees happy as I’ve noticed that there is a strong correlation between the way a company treats its customers and its employees.
If you are considering building a business that will stand the test of time I strongly suggest that you invest in quality employees that will treat your customers well - you cannot afford not to.
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As an employee, a company with good customer service will keep me working there. First off, the more we can do to help customers, the happier (or at least less mad) they are and the better we feel. If we deal with irate customers all day, it wears on you, eventually you take it out on co-workers and other customers who get more upset and it all compounds. Soon, everyone hates their job. If our customers are happy and feel helped, they compliment and sincerely thank us, and we feel like we have done some good. We enjoy our jobs and will be much more tolerant of each other, and the occasional customer who is impossible to please.
On the other side I need a clear concience. If I ever felt like our company ‘policy’ was to milk customer’s wallets, I couldn’t do it. I like being able to offer a customer a less expensive solution if it will work just as well. And be able to take just as much time supporting a $5 sale as a $5,000 sale. And I have no qualms when the customer calls for a $15 part and I explain why it won’t work, and sell them a $100 dollar part–the amazing thing is they are usually happy. People can tell the difference between genuinely trying to help them get the right solution, and trying to get an upsale. If I’m thinking about the customer’s best interest they recognize, and respond to that.
Comment by mark — March 29, 2006 @ 12:24 am
Good point, Mark - I forgot to mention the benefits of providing good customer service to the employees themselves.
Comment by admin — March 29, 2006 @ 7:34 am