Hundreds of Wrong Orders & Service Recovery Paradox

We had a rather wild situation with one of our e-commerce stores in 2017. We had 10s of thousands of orders. We dealt with that kind of volume for the first time and it was increasingly difficult for us to fulfil those many orders even with the help of many many vendors.

We exported the order data as CSV for one of our vendors and sent him the list of thousands of orders that he had to fulfil. But there was one small problem during the export which became a very large problem for us.

For all post codes starting with 0 such as 01234, during the exports, change of formats, somewhere along the way, the post codes became 1234. Our vendor sent out 100s of orders with the wrong post code, all of which were only going to be returned after a huge delay and after making a round trip to US from China. In addition, we were going to lose all the money spent on shipping.

This landed us into awkward situation and we hired Zeeshan for service recovery operations. Zeeshan explained me about the phenomenon called service recovery paradox. What that means is often after you solve a customer’s problem by providing him extra ordinary service; you can leave the customer happier than he originally would have been without any problem.

Zeeshan started by producing a personalized video message which we emailed to all customers whose orders were misplaced. The video was well-scripted, 50 seconds long, stating exactly what happened. In situations like these the best practice is to be straightforward. In the video we highlighted how a small computer error resulted in wrong shipping and cost our e-commerce store hundreds of dollars in shipping. Our rep simply apologized in the video, explaining the entire situation and presented two options for the customer to choose from.

The goal was to make them feel valued by offering them control over the situation. They were offered A) if they could wait 8-10 more days so we can reship them their order, plus as an appreciation for their patience, refund of their shipping fee and free shipping for the next order. B) Giving them a chance for a full refund if they would like to refuse the order.

The video worked like a magic! A customer always feels appreciated when you go to a personal level to engage with them. In this world of corporations and computer bots, people genuinely feel touched when they can see a person right on their screens. Only 4% of the customers opted for a refund. The remaining received their orders in the promised time.

The product we were selling was a kitchen accessory primarily ordered by women. We asked our vendor to add 2 more things with the orders. A) An inexpensive plush teddy bear toy with a heart on its chest with text saying “I’m Sorry”. B) An additional 20% discount coupon that they could share with their friends or redeem themselves. Remember, we had already promised them free shipping on their next order.

In the coming weeks, we saw a large percentage of repeat customers, much higher than the usual for that store, that happened due to this activity. The best part is that there was no marketing cost involved, other than the cost for reshipping and teddy toy.

The customers felt emotionally elevated and did more shopping on our store. The strategy helped our customers to get a feeling that their prepositions were being valued. Remember, our goal was to convert an unhappy customer to a happy customer. Not only did we put a smile to our unhappy customers’ faces, but we also made some extra dollars. In hindsight Zeeshan says we sold freezers in Antarctica. We took control of the bad situation and turned it around. We call it smart selling.

We also had a record low chargeback rate of 0.1%.

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