When it comes to customer service, nothing beats Nordstrom’s famous “tire story”. The legend goes that a man rolled a pair of tires into the upscale fashion retailer store in Fairbanks, Alaska. The salesperson behind the counter, albeit confused, handed him a refund right then and there. No questions asked.
Sounds far-fetched? According to co-presidents for the Nordstrom retail stores, Erik and Blake Nordstrom, it’s true as the sky is blue. This example of excellent customer service happened around the mid-1970’s.
Now, whether or not Nordstrom still accepts tires is debatable. However, if there’s one thing that separates good businesses from great ones, it’s in how they treat their customers. That’s why over the years, more and more companies are updating their policies to efficiently accommodate customer complaints and/or requests.
Gone are the days when you need to return items within a week of purchase. Now, as long as you have a receipt (sometimes, none at all for select stores), you can get a quick refund – no questions asked.
But what if a customer seems to return every item he bought? What about that “loyal” shopper who demands a free exchange every year?
Let’s face it: every business will get its fair share of unreasonable customer complaints.
But where do you draw the line?
And how will this affect your bottom line?
How Big Businesses Manage
The upscale fashion retailer is not alone in offering exceptional customer service. Brands like L.L. Bean, Zappos, Apple, and Burberry are only a few of the businesses that made customers happy in their respective industries, based on a 2015 survey by StellaService.
One might argue that they can achieve this because they have the budget to invest in talented customer care representatives. Although that is one of the factors, another aspect to look into is the policies itself.
For instance: Nordstrom has a very simple rule when it comes to returns. On their website, they state:
“We will do our best to take care of customers and deal with them fairly; we ask that our customers treat us fairly as well. From time to time we may not accept a return. There are no time limits for returns or exchanges.”
L.L. Bean also shares the same concept for returns and exchanges, which can be a sore issue for many businesses. When asked about a customer who was consistently returning items due to several years’ of wear and tear, chief marketing Officer Steve Fuller, simply answered:
“If she believes her zippers should last a longer time, we’ll respect that and we’ll refund her money or give her a new product until she’s happy”
This is a breath of fresh air, especially for customers who want to assess if they’re really satisfied with an item. But on the other hand, companies – particularly small ones – will hesitate in implementing something similar. For one, it opens the doors for unreasonable, and usually abusive, customers.
This is what prompted outdoor gear and goods company, REI, to revamp their return policy in 2013. Although the no-questions-asked policy was in place since the store was founded in 1938, corporate has to make some tough decisions due to the rising abuse the stores were receiving.
After a number of customers were seen “bragging” online about how they were even able to get cash back from their returns, the new policy now states that returns must be made within the year of purchase.
As a small business owner, I understand how exceptional customer service is the secret to repeat customers. That’s why brands like Nordstrom and L.L. Bean have such liberal return policies. On the other hand, though, businesses need to make a profit to keep going.
So what’s the win-win solution?
Difficult Customers: Risks vs. Rewards
As Nordstrom so eloquently put it: “we will do our best to take care of customers and deal with them fairly; we ask that our customers treat us fairly as well”. Simply letting a difficult or unreasonable customer go might seem like the best approach – but failing to deal with them may come back to haunt you tenfold.
Accept the fact that there will bad customers along the way. But HOW you deal with the situation is what matters.
When I opened my online store, I knew I was in for a rough ride. The limitations of online shopping became apparent when several people would complain on our social media accounts about products they never purchased from us. These individuals probably became frustrated when they didn’t receive good customer service after repeated requests. Thus, they came to us. In such situations, my team and I try our best to answer their concerns, while emphasizing that we are an independent store that has no affiliations with the sellers from whom those items were bought.
It’s easy to drive away irrational or angry customers. After all, they’re being unreasonable. But did you know that 70 percent of the buying experience, in fact, comes from how the customer feels he or she was treated?
Having a good product is awesome, but never forget that people are at the heart of every business. Should you be successful in turning that angry customer into a loyal follower, you can expect as much as 10x the value of their first purchase.
It’s not easy attracting new customers as well these days. While there’s only a 5 to 20 percent chance that a new prospect will buy, that likelihood increases to up to 70 percent for a loyal customer. Suddenly, a liberal returns policy doesn’t sound so bad now, does it?
However, do keep in mind that a few customers are not really worth all that hassle. As in the case of REI, the number of abusive clients has gone so bad that an overhaul was needed.
I encountered something similar when some prospects refused to pay for additional shipping fees. Even if proof of transactions such as receipts and tracking numbers are provided, some individuals are just too skeptical. In which case, we typically recommend other similar stores that will have the mode of payment that they prefer. They might not end up making the purchase from us – but they’re glad to have clarified matters with our friendly customer representative.
We can certainly look forward to having them in the future.
Bottom Line: Be Consistent
Did you know that it takes 12 positive experiences to turn ONE negative experience around?
It doesn’t matter what sort of policy you decide to implement – as long as you’re consistent. Don’t employ a no-questions-asked return rule and then badger the customer when she wants to return a worn-out sweater.
If you want to be extra grateful to repeat customers BUT you don’t want to treat them any differently, sign them up to a loyalty program for exclusive benefits. Hate to lose that one client who refuses to pay the shipping charge for a return parcel? Waive it as a one-time courtesy and be firm about it.
Will these little misgivings lose you money? Sometimes, they might. Going the extra mile for customers usually has that effect. The upside? Free advertising and marketing.
It’s YOUR prerogative whether or not to deal with that difficult client. But just remember this: Nordstrom’s tire story has been circulating since the 1970’s. At the end of the day, THAT’s the true value of excellent customer service.
Read more: Don’t Ignore Red Flags