Do You Trust Your Customers?
One important facet of efficiency and positive CX is making it easy for Customers to deal with you and navigate your processes. The reason this is important is because corporations are necessarily defensive entities: we create processes to protect our organizations from risk and loss. That protection can come in the form of cash-on-hand, liquidity, T&Cs, and sometimes flexibility (for us) in how we deal with our Customers.
What drives a lot of organizations in this direction is fear and avoidance of that risk. If you’ve actually taken the time to read through the miles-long terms and conditions when dealing with just about any service provider, your eyes would likely glaze over. These rules are put in place for no other reason than for the company to be able to avoid litigation, and in some instances even having to deal with a Customer who feels a company has done him or her wrong in the first place. I’ve had several interactions with companies whose agents’ response when I tell them I don’t think I’m being treated fairly is basically that, Well look, sir…it was all lined out in the agreement you accepted when you engaged us in the first place. This likely will avoid litigation (who’s going to sue over our usual disappointments anyway, right?), and for the most part, Customers will swallow that and move on from a negative experience like that. And for that matter I think some of us write it off as a cost of doing business generally and after all, a company does have to protect itself, we may tell ourselves.
But if we dig a little further into what’s driving that, and think of it from the CX perspective, it helps to highlight what’s really going on here: These companies do not trust their Customers. Some companies (like L.L. Bean and Land’s End to name just two) are famous for their no-questions-asked return policy. I once read an anecdote about L.L. Bean where the author returned an item ten or twenty years or something outlandish like that after purchasing it in part just to see if they were serious about the policy. He was floored when it was replaced along with reimbursement for his postage for the return of the old item. Did he take advantage of a forgiving and generous policy? The item in question legitimately was old and tattered, of course, but who’d think to do that? Surely the company lost money on this exchange, and if everybody did such a thing, it’d be ruinous. That’s the point, though: Most of us wouldn’t and don’t. (And I don’t think the author — writing a book about CX — did it in order to take advantage of the business.)
L.L. Bean, Land’s End, Trader Joe’s, Kohls’, and tons more companies with generous return policies don’t just survive, but thrive, in part because of the mutual respect, trust, and loyalty that policies like these engender. They trust their Customers and their Customers trust them back and show it with higher loyalty and greater share of wallet. But it’s got to start somewhere.
Companies that take the first step toward trusting their Customers are the ones that win, but they’ve got to be willing to take the risk. It’s not easy, but it surely can be done. What these companies do is to estimate the costs of such a policy and then integrate those estimates into their business models in the first place. They know that a few folks will take advantage of them, but that’s baked into the decisions they make. What’s a nice surprise (but not to these brands that have figured it out) is that this approach usually saves them money in the long run. That’s because the good will and loyalty they foster with their Customers lead to return visits and more spend. Plus, they’re much more likely to recommend these companies to their friends and colleagues.
Another, perhaps hidden, benefit of this approach is that it actually costs less from a processing perspective to simply say, “okay, we’ll refund you,” than it costs to have multiple layers of escalation and all the people and processes involved in that. If the policy is no-questions-asked, then anybody on the front line can simply process a return or refund. The company ends up saving a lot of overhead by simply cutting checks without a bunch of extra steps.
Recognize, too, that in these circumstances, exceptions go the opposite direction of normal: It’s an exception not to refund, and you’d really only have to go down that road if you find a Customer habitually abuses the system. That list of folks is probably easier to manage than the labyrinth of checklists and processes needed to handle your typical return policy (where the exception is needed to offer an exchange or refund). Your Customers will appreciate the lack of hassle in that case as well.
What this sort of arrangement needs above all else is trust. You have to trust your Customers that they’ll not take advantage of you (knowing full well that in rare situations, some in fact will), and you also have to have tremendous faith in your employees to allow them the authority to enact this policy. In the end, though, it’ll return dividends for you, but you need to be prepared to take the first step.
(Originally Published 20200803)
- LtCol Nicholas Zeisler, CCXP, LSSBB, CSM
- Principal, Zeisler Consulting