taking the L to drive loyalty

in things that are not news: customer service is the heart of commerce. all businesses strive to treat their customers well, sometimes in the face of unreasonable and irate behavior.  customers today expect even more from your brand, whether you’re a brick-and-mortar mom & pop in a small town or an online startup, and balancing the costs of goods and services against driving customer satisfaction is a balancing act businesses walk daily.

most companies solve for customer service needs by having policies.  return policies, customer service policies–you name it, there’s a policy for it. from the simple “the customer is always right” to legal agreements that require fifteen signatures before you’ll let your customers purchase. and policies are great.  they set guidelines, and help explain the playing field to both your customers and your employees.

however, every customer service interaction is unique – even the most mundane have nuances that your employees should be empowered to handle.  but one policy that seems to be missing on a macro level that can drive loyalty and retention for any business is this: take a short term loss to drive long term loyalty.  a Harvard Business Review study found that “customers who had the best past experiences spend 140% more compared to those who had the poorest past experience.”  every time a customer returns goods, or complains, is an opportunity for your business to win a customer for life.

a real world anecdote: i’ve been using StitchFix for several months and have really enjoyed the service – i find i get a great mix of clothes that work with my existing wardrobe, refreshing it every month(ish) at a solid price point. however, my december box was totally off base, both seasonally and stylistically.  i’m based in NYC, and despite warmer-than-usual temperatures yesterday (51F!) and today, lightweight tops and scarves and an unlined raincoat are not helpful in december.  i usually find one or two things to keep out of each box, but this time it was a total no-go, which meant i would lose my $20 styling fee, so i reached out to customer service.  this is where the magic happened.  the customer service rep was amazing, extremely responsive, and immediately placed a credit on my account to cover the styling fee (exactly what i had asked for). she also asked me for detailed information about what i liked / didn’t like, and passed it on to the stylist. finally, she rushed out a box that should be arriving by the end of the week to make up for this one.

wow.

i was already a fan of the brand, but the feel-good factor i got from being heard in a prompt way and an enthusiastic desire to make it right, even though it was a loss to the company, made me a superfan. i tweeted about it, have told everyone i’ve seen today about it, and will absolutely recommend StitchFix to anyone who is on the fence about it. they turned me from a fan into an advocate. and that kind of return on investment can’t be minimized.

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