Monday, October 29, 2012

Big Retailer has Big Problem

A friend of mine recently emailed a complaint to a large online retailer. He received a reply, obviously generated by a computer, that was designed to placate and dismiss. While my friend was aggravated by the lack of personalization, he will continue to do business with the company but will no longer buy the specific product that caused the complaint.

According to marketing guru Seth Godin, if a customer service protocol (your call center/complaints department/returns policy) is built around stall, deny, begrudge and finally, to the few who persist, acquiesce, then it might save money, but it is a total failure.

This particular retailer recently reported a quarterly loss.  While I suspect that part of that loss is that people have less disposable income, could some of it be the result of lousy customer service? This company operates on such thin profit margins that it has no financial reserves for providing good customer service. In addition, its formula for low prices and lousy service is spreading as it acquires other online retailers that are successful.  For example, my favorite shoe outlet is now part of this behemoth.  An employee there told me that the minute the reins passed from the original owners, his benefits were cut.

The only way any retailer can continually undercut the market is to shave costs in benefits, salary, quality, and service. You cannot do it any other way.  If we want to pay ridiculously low prices for everything, we must be willing to give up good service and good quality. 

I do not fault the retailer. It has made its position clear. I know exactly what this company stands for - low prices. It has been most successful in communicating this to its customers. It is up to us to decide whether or not we find this business model acceptable and are willing to support that corporate behavior by continuing to do business with the company.

Businesses communicate with customers through advertising and through service. We express our pleasure or displeasure with any company by where we spend our money.  Perhaps this retailer needs to listen to what we are trying to tell it.

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