A Brief Guide to Effective Customer Service

Customer service is more than just answering questions about products and accepting returns. Where large businesses often struggle is with their customer service. In the 1990s and up until recently, many US companies outsourced their customer service in an attempt to save money, but the result is that millions of customers have lost faith because service provided by non-native English speakers just isn’t there. Non-native English speakers lack understanding of cultural norms, and because they don’t understand the product or service and follow a script, they often sound robotic or awkward.

Where your business can capture market share is through providing fantastic customer service. Providing an excellent customer experience before, during, and after the purchase will go a long way in increasing customer loyalty and perception. Just as having excellent customer service can create lifelong customer loyalty, an equally lousy experience can lose customers. We’ll discuss some of the positive and negative consequences of having positive customer service in this article.

Let’s start with some of the consequences of having terrible customer service. Bad customer service can harm your business.

Having an unclear or poor return policy

Customers who shop online want to be confident about their purchases. They want to know that if they’re unhappy with their purchase, you’ll accept returns without hassles. Some companies you may recognize with fantastic return policies are Costco and REI–in fact, REI’s return policy was so generous that people have been able to return items over a decade old until REI changed its system due to abuse.

Here is REI’s return policy. Notice how it’s simple and instills confidence. Customers believe that the generous return policy implies the products are high quality.

A 2016 University of Texas at Dallas study revealed that more lenient return policies led to increased purchases. Also, extended return deadlines led to fewer returns. If customers have to go through fewer hoops to return their items, then they’re more likely to purchase from you again. More extended return deadlines, like REI’s one-year policy, may seem to encourage returns, but results from the same UT Dallas study showed otherwise. People were less likely to return an item when they knew they had a year. Make your return policy and process as simple as possible. You’ll earn a good reputation and customers can shop with confidence.

Additionally, customer return policies that are time consuming or tedious, like requiring pictures or calling for an RMA during business hours, will deter customers from purchasing from you in the future. Fortunately, all Amazon sellers have to abide by Amazon’s customer service expectations, and your policies can’t be worse than what Amazon has. That means you can’t say that you no returns allowed. Nor can you say that you offer only a 14-day return policy instead of Amazon’s 30-day policy. Doing so will not only drive customers away, but customers will ignore those rules since they know Amazon will accept returns within 30 days. You should be proactive about reducing your return rate.

A negative experience can mean bad publicity

Almost everyone today has some social media presence. Even without an active social media presence, everyone can create an account and leave a negative review. The ease with which a customer can air his complaints means that he has any number of platforms to drive business away from you. Websites like Yelp, Google Reviews, and Amazon seller and product ratings all factor in a customer’s decision to frequent a store or purchase a product. So you want to mitigate the potential for terrible reviews. A negative review, if appropriately shared, may even go viral, generating a lot of bad press for your business. For example, legal fees and social media pressure forced an Oregon bakery to close in 2013 after it declined to bake a cake for a same-sex couple.

That’s why you should always remain objective even when you suspect they are scamming you. Read here for some advice about how you should deal with difficult customers.

Word of mouth

A lot of businesses in the past gained customers through word of mouth. Small family restaurants, niche businesses, and professional services all benefit from word of mouth advertising. It’s no surprise that a negative customer experience will lead to the customer telling his friends and family about the experience. Small businesses, especially ones that provide services like mechanics, can suffer tremendously from this kind of advertising. When we look for professional services, we tend to ask people we trust–who is your mechanic? Who is your doctor or dentist? Word of mouth advertising is especially useful because it comes from people we trust instead of strangers on the internet.

Poorly trained customer service staff

When customers return an item, they’re hoping the process is as painless as possible. If you have unclear policies and vague training or communication policies, then you may end up with a scenario where your customer service members may misinterpret the policies. Poorly trained staff can lead to arguments and angry customers. Customers will then want to escalate their cases with supervisors, requiring more resources from your business.

In addition to clear policies and proper training, you’ll want happy workers. A worker who is happy will convey that emotion, giving customers a positive image of your business. Clear policies, a rigorous training program, and pleasant customer service representatives will all contribute to a positive business image and repeat customers.

Some customer service representatives may believe that they are doing your business a favor by discouraging returns or finding reasons to deny returns. Such reasoning hurts your reputation and will cost you a customer. Not only that, customers are always able to request credit card chargebacks, and a high chargeback ratio will lead to increased fees.

Now that we’ve discussed some of the negative aspects of bad customer service, let’s move onto the positives.

Have clear policies regarding service

We’ve seen what kinds of issue arise with unclear customer service policies. Depending on your business, you’ll want to develop clear systems, making it as concrete as possible. For instance, when customers contact you, you want to specify when they can expect to receive a response. Small businesses often ignore this aspect, getting around to answering emails whenever they can. Unclear response times might mean a customer will have to wait a few days before receiving a response–by then, he would have found a different solution.

Here are some areas where you can be clear about your policies:

  • How long customers will have to wait before receiving a response (24 hours? 48 hours?)
  • A detailed return policy that includes the process (RMA, shipping, packaging, partial refunds, or defects)
  • What you do with their personal information (do you sell to third parties? will you email them for any reason?)
  • Clear and easily accessible contact information: email, phone, or fax

Interact with customers on social media

Feeling welcome at a business is an essential step in gaining customer loyalty. When baristas greet us at our favorite coffee shop, we feel welcomed. When we go to our favorite restaurant and the staff knows what we’re going to order, we feel as though we’re part of a family. Some stores with a physical presence attempt to accomplish this with greeters and floor assistants.

Your business should strive to generate this feeling of welcome and familiarity through social media–interact and engage with customers when they tweet or mention your business. Or actively use social media to participate larger social groups. So long as the interaction is positive and relevant, your company will benefit from the goodwill that interaction generates. Be careful not to go overboard, or people will see you as spamming your business.

Be proactive and work to fix mistakes

Everyone makes mistakes. When you make a mistake, be proactive about it and make it right before the customer notices the error. If you’ve shipped out the wrong color of an item, be sure to let the customer know what to do with the incorrect order. You can offer discounts, free products, or even credits for your errors. If you own up to the mistake and work to fix it, customers will appreciate the effort you’ve displayed, and they’ll be willing to purchase from you in the future because they’ll know you’re looking out for them.

Providing excellent customer service is no easy task. There are so many factors that can go wrong that one mistake somewhere can lead to customers looking elsewhere. Having clear policies and a great staff can help your business in ways that can’t be measured. Even something simple like asking for a survey at the end of a phone call can be unpleasant for some customers.

Make your return process as simple as possible

Because shoppers can’t interact with an item online like they could at a retail store, online purchases have a much higher return rate.  A 2013 article in the Wall Street Journal claims upwards 1/3 of online purchases are returned. Your return policy should be simplified–do they have 15 days? 30 days? Who pays for shipping when the customer changes his mind? What about defective items? How long will the return process take? Be transparent about your returns policy so customers won’t have any doubts when they buy from your business.

There will always be a handful of people who are out to “game” the system, but these few “bad” customers are a part of doing business. Essentially, your excellent customer service will earn you more than it will cost you. Don’t neglect the power of good customer service. It’s far cheaper to retain a customer than it is to find a new one.

Dealing with Difficult Customers

Difficult customers are a nightmare for employees and guests alike. Maybe you’ve witnessed these customers during the heyday of physical retail stores. You’re waiting in line thinking that there was some better way to shop. Then you hear the rising voice of some customer accusing the worker of keeping the customer in poverty. All you can think about is the wasted minutes while the employee tries to get the system to take fifty cents off from an expired coupon.

If you’ve sold items on Amazon long enough, you’ll eventually run into difficult customers. Many new sellers fear for their product or seller ratings, and they cave into the demands of these customers by issuing an instant refund and telling customers to keep the items.

One of the first things you’ll have to understand as a seller is that the customer is king on Amazon. That means that Amazon will often side with the buyer, usually at your loss. In instances where enough evidence has accumulated, Amazon may ban the buyer. But that doesn’t mean Amazon will refund you for all the damages caused by a known manipulative account. There are other ways customers can cheat you.

Here are some common scenarios that sellers may face:

Customer places an order for an item and then threatens the seller with negative feedback if the seller doesn’t accommodate him in some way. Usually, the customer is fishing for discounts or free items. When this happens, new sellers will often just give a partial or full refund to avoid negative feedback since low ratings for new sellers can impact sales.

Canceling the order in a case like this may affect the seller’s metrics, so new sellers will often avoid taking this action. Amazon has two policies that can help sellers. First, it’s against Amazon’s rules for customers to threaten sellers with negative feedback. Secondly, if a customer leaves comments regarding price, then Amazon can remove it. In both cases, sellers can open a case through feedback manager to request removal. Whether or not Amazon will remove that negative feedback is now a bit uncertain.

Customer orders an item and then immediately asks to ship to a different address. While the reasons for shipping to another address can sometimes be legitimate, many customers use this excuse to scam sellers out of items. The best option here is to have the customer cancel the order, fix the address, and then repurchase the item. In this way, the seller won’t become a victim of a scam, and the buyer gets his item without additional hassle.

If you decide to ship to a different address, then you’re opening yourself up to an Item Not Received complaint. Even if you show Amazon messages or emails stating that the customer requested a different address, you’re still going to lose the claim. You’ll lose out on the item, the money, and risk an account suspension if your metrics already have other hits.

Customer returns a different item. Returning another product is one of the more common scams, and it happens more often than marketplaces would have you believe. Customers will return different items, damaged items, or even junk to game Amazon’s customer-oriented system. Some people abuse Amazon’s generous return policy to get the latest electronics (by purchasing a new iPhone and return an older one, for example), or they use Amazon sellers for rentals.

Depending on the condition of the item, sellers can charge restocking fees to cover some losses. Restocking fees may discourage some customers with buyer’s remorse, but these costs should be upfront, and they need to follow Amazon’s standards regarding how much can be charged and in what instances.

The best way to protect yourself from return fraud is to report the buyer to Amazon with evidence. In this way, Amazon can place notes or flags in the customer’s account and will ban the customer once he reaches a certain threshold. If you don’t report the customer, then he can continue this scam across multiple sellers.

To appeal this fraudulent return, you should have pictures of the item that was returned, along with photos of the ASIN. Having other evidence will also help your case. For example, if you shipped three pounds to the buyer and the return label shows one pound, then something is wrong. Present your evidence to seller support in a clear and concise manner. Don’t be angry or write a novel about the scam.

It’s not good practice to assume that customers who returned the wrong item are scammers. Sometimes, it’s an honest mistake, and sellers should give all buyers the ability to fix their errors. For instance, scammers have mixed their fake items in commingled inventory, and customers end up with counterfeit products even though they purchased from you.

For cases where there is a blatant attempt at fraud, then some sellers have had success notifying customers about committing mail fraud. But be very careful about the wording here. While the scam may be apparent to you, there’s also no evidence for your fraud claim.

For all return requests initiated outside of the 30-day window, sellers are not obligated to refund the item.  Unless the seller has a more generous policy, just notify the customer that the return window has lapsed. Some sellers have reported that they received return or refund requests for items purchased more than a year ago. Customers have nothing to lose in requesting refunds for old purchases. Enough of them have had their requests accepted for the attempt to be worthwhile.

Customer emails for a refund or initiates an A-to-Z claim on Amazon within 30 days. Many savvy buyers will return the item with the dreaded “Item not as described” or “Item defective” reason. This excuse means that sellers are out shipping both ways. When sellers receive the returned item, they may be able to charge a restocking fee.

If the customer is within the 30-day return window, then sellers have no option other than to refund. In this case, customer returns are just a part of doing business. When customers select return within policy, you should provide a return label. Failure to do so may result in an A-to-Z claim. If representatives see that you didn’t send a return label, you may lose the item, money, and you’ll take a hit on your metrics.

There are numerous ways to reduce the incidence of returns, and we’ll cover them in another post.

The best practice amongst sellers is to report all fraudulent claims.  Case history allows Amazon to hold difficult and scam customers accountable. If all sellers report fraud, then everyone will benefit since these scammers will be banned. However, many small sellers just give in to the demands of the buyers out of fear of retribution. The only person who wins is the scammer. Or he may continually target you for free items. Remember that if you give into the unreasonable demands of difficult customers, then you’re encouraging behavior that is bad for everyone else. Honest buyers will end up paying for these bad customers through higher prices. So when possible, require a return before issuing a refund.