University - Customer Experience

Customer Service

It is a given that without customer service, a retail organization, including an online retailer, cannot maximize its potential.

Why Customer Service Matters

Excellent Customer Service engenders customer loyalty to a vendor’s product like nothing else does. Returning customers are an indication of a successful business; they are putting their money where their satisfaction is, and would surely seek other vendors in the event of dissatisfaction.

In fact, the need for excellent Customer Service may be most obvious in the common, unfortunate experience of miserable Customer Service. Whether one is put on hold for an interminable amount of time, passed from one representative to the next, or simply told, “We can’t do anything about that,” the frustration that customers feel when dealing with non-responsive retailers often leads them to seek alternative providers, to the extent possible.

Customer Service Defined

Customer Service is the way the customer is treated by the retailer for the entirety of the customer’s shopping experience. From browsing to selection to purchase to departure, and even with regard to returns, the customer forms an impression of the vendor, which means that vendor has a good number of consecutive opportunities to make sure that the customers are favorably impressed.

Customer Services Challenges and Benefits

Jeff Bezos, the CEO of Amazon, explains how the need for excellent Customer Service and the need to prevent poor Customer Service are magnified online: “If you make customers unhappy in the physical world, they might each tell six friends. If you make customers unhappy on the Internet, they can each tell 6,000.” When a customer airs a grievance in the comments section of a retailer’s website, or reviews the retail experience along with the product in the review section, the customer’s words reach untold numbers of people immediately – and often for years to follow.

By the same token, positive feedback posted in online comments, reviews, on Twitter, Facebook, and the like, has the possibility of influencing staggering numbers of potential customers to follow suit.

Online Customer Service

Jeff Bezos therefore made excellent Customer Service a calling card of Amazon. Online shopping is designed to be quick, easy, painless, and smooth. The environment is fairly sterile – in the setting of their choosing, customers view images of merchandise, and, with no waiting, purchase their items with the click of a mouse. This means that Customer Service becomes even more important than it is in a brick-and-mortar store. For online shoppers, excellent Customer Service means prompt delivery of items purchased; quick and courteous responses to any and every customer query and complaint (usually by email or phone); and a smooth and efficient return process.

Selling on Amazon and Customer Service

Amazon has essentially rigged its system of enhancements for sellers to promote excellent Customer Service. For example, sellers win the Amazon Buy Box that highlights a Seller’s merchandise to the Buyer when they demonstrate competitive pricing and a high Seller Rating. Those vendors with a high Seller Rating have a far better chance of winning the Buy Box than those who are not rated, or who are rated poorly. Moreover, the nature of online Search, which returns products according to how well they meet the criteria of the Search and not according to manufacturer, for example, means that branding has less impact on the customer’s discovery of a given product than it once did.

The Buyer is unlikely to retain the seller’s name, except under notable circumstances. Instead of marketing the company name, therefore, the seller should make sure to provide stellar Customer Service and win the Buy Box, thereby boosting visibility and increasing sales. The payoff from enhanced and excellent Customer Service is exactly where the seller wants it – in sales.

Rating the Sellers

Amazon uses a performance metric – the Order Defect Rate (ODR) – to establish each seller’s standard of customer service. The ODR is determined by how many negative metrics are incurred by the seller in a given time divided by the number of orders in total for that same time. Negative metrics are based on the following:

  • Negative feedback left by Buyers.
  • An A-to-Z Guarantee Claim registered by the Buyer.
  • Chargebacks – credit card charges that are disputed by the buyer.

Amazon also considers a specific rubric of Seller Performance Measurements, in conjunction with the ODR. These metrics are positive, and may be considered goals for the Seller to meet consistently:

  • Low Order Defect Rate (less than 1%)
  • Low Pre-fulfillment Cancel Rate (less than 2.5%)
  • Low Late Shipment Rate (less than 4%)
  • Insignificant Refund Rate

The ODR and other Seller Performance Measurements establish the seller’s standards of performance, quality, and overall approach to Customer Service.

Tracking Performance

Sellers may monitor their own performance on Amazon, as measured by these metrics, by checking the Customer Metrics tool. In any case, Amazon notifies sellers if their performance drops below a satisfactory level. After a probationary period, if the seller’s performance does not improve, Amazon may revoke selling privileges.

Note: In the event of a listing becoming Inactive, the seller must maintain good Customer Service standards during the Inactive time. Any potential Buyer who contacts a seller with an inactive list should expect expeditious and courteous treatment.

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