E-Service Recovery

Service recovery is the Achilles' heel of many e-tailers.  When dealing with complaints there are frequently substantial vulnerable spots and these can lead to disappointment and the damaging flight of customers.  What is needed is a thorough review of the recovery process from start to finish.

A lot of e-businesses' stock market valuations are based on the expectations of repeat customer business.  Yet if an on-line transaction is handled badly, according to a report by The Henley Centre, 78 per cent of consumers will go to another company.

When customers use the Web and other e-tools for purchases, their interactivity and immediacy sets different expectations in terms of speed of response and reliability.  Jungle.com was one of a number of e-tailers about whom consumers complained in the run-up to Christmas last year as it could not keep its fulfilment promises.  According to one report it was estimated that 25% of all on-line purchases over the 1999 Christmas season went wrong at some stage.

Evidence of Failed Expectations

The On-line Shopping Report monitors e-tailers in various categories each quarter.  It purchases items to check fulfilment and sends emails to test the quality of enquiry handling.  Its results make disappointing reading as customers are frequently being let down.

Management consultants Shelley Taylor & Associates who in April 2000  produced a similar report entitled : Return to Sender; A Study of order Fulfilment of Online Stores conclude that : 'Until customers receive what they want, when they want it, and can return it if they don't want it - the experience of on-line shopping will remain unfulfilling to consumers  and profits will remain elusive to on-line vendors. It found for example that postage and package costs often remain hidden to consumers.  One information technology e-tailer, Elonex charged £15 to post a blank recordable CD that cost just £1.50. 

Well-known retailers' on-line services feature in the report for failure to fulfil customer orders and delivering items without receipts or return instructions.

A survey by Cranfield School of Management tersely concluded : 'Home shopping and delivery should pay particular attention to the level of service offered versus expectations,' noting that there is a major gap between the two.

Service Recovery in the E-World

Research of traditional retailing channels demonstrates that dissatisfied customers who can be turned round become advocates of a company.  The same applies on the net.  Customers who complain are giving the organisation a chance to put things right.  They do not deserve to be ignored or treated with lack of respect.  They, unlike other customers, have taken the time to come back to your site, rather than clicking elsewhere. 

Based on our experience of dealing with a range of service deliverers and their customers here are some key suggestions for ensuring excellent service recovery:

• Be accessible and deal promptly with the complaint: respond as soon as possible and at the latest within 24 hours.  The longer the complaint takes to be acknowledged, the more the customer fumes.  Internet Service Provider, Screaming.net had such an unexpectedly large subscriber response that for months customers' e-mails and phone calls were ignored and dissatisfaction became very public, generating bad publicity in the media.

• Do your homework.  Use your Customer Relationship Management systems to find out about the customer so you can personalise your reply to them.  For example, find out if the customer has experienced similar problems before.  If so, you may wish to acknowledge this in your reply.

• Put yourself in the customer's shoes and consider how best to contact them.  Your CRM system may well provide this information.  Will the customer be happy with an emailed reply or do they require a more personal phone call?.  Responding by email has the advantage of speed but it does not allow further questions to be asked.  Also, research shows that customers sometimes express more negative viewpoints in writing than they would if the issue is discussed one-to-one.

• Most importantly, empathise with the customer - strong emotions are often involved.  Phrases, such as 'I am sorry to learn that you are disappointed', 'I appreciate how annoying it must be', 'I understand that it is frustrating', show the customer that you are on their side and help deflate the negative feelings that complaints produce.

• If you are in the wrong, apologise and give a brief explanation of why the problem has occurred.  Do not over-justify or deflect blame. 

• 'Own' the problem rather than passing the customer from pillar to post. This will only aggravate the customer.  Offer to help and ensure the customer knows who you for future reference.

• Tell the customer what you are going to do to put the situation right.  Preferably, offer the customer a choice e.g. 'I can send you a replacement today or I can offer you your money back, which would you prefer?'

• Check that customer is happy with the suggestion.  Having sent back an order placed with a clothes e-tailer, one of the authors automatically had his bank account credited because the line was out of stock.  However what he wanted was an alternative replacement item.  Train staff to offer sound alternatives.  For example, on-line supermarkets sometimes send substitutes which knowledgeable staff would have rejected.

• Follow up the action.  Keep your promises and email or call the customer a few days later to check that they are happy.

Preventing Complaints

For every complaint, it costs ten times the original cost to put it right, so preventing complaints in the first place makes good sense.

• Set up systems which aim for 100% customer satisfaction and rigorously target to achieve this.  At Shoplink, a motorcycle dispatch to send an immediate replacement only had to be used 22 times last year out of the thousands of items delivered.

• Ensure your web-site is easy to navigate.  Include 'phone me' buttons on your site to connect customers with a call centre to answer queries.

• Let customers know as soon as they place an order whether the item is in or out of stock and when it is likely to be delivered.

• If a date and time is specified, as in on-line grocery ordering, stick to it unfailingly.  In the worst case, contact the customer to gain agreement to an alternative date or time.

• Make it clear how much postage and packaging the customer will have to pay.

• Look at your front to back service delivery system and eliminate weak spots.  For example, one of the authors applied for an on-line mortgage.  Paperwork came back with a mistake and took six weeks and three attempts to sort out.  For the supply of goods, invest in an automated integrated back-end system that links sites to warehouses and suppliers so that goods can be despatched immediately.  John Icke, CEO of shoplink.com, a US home grocery delivery group, believes his organisation?s quality service comes from paying particular management attention to mid and back-end systems, not only the front-end which is where investment and focus has commonly been.

• Find a reliable logistics and delivery partner; be it Royal Mail or any of the other courier services, who will deliver to the customer's convenience - and this may well be outside the normal office hours catered for by many business to business courier companies.  Toyzone.co.uk for example has recently launched a same day delivery service.  Make sure your delivery partner projects the image you wish to portray to your customers.

A well-known company chose a low-cost provider to deliver its loyalty points gifts to customers.  What it got was part-time, badly dressed couriers who turned up in battered cars and sometimes left the goods in exposed places or in a damaged condition.  Quality-home shopping provider 24-7 recognises that its drivers are key ambassadors ; CEO Dominic Flanagan takes great care to recruit : 'much more than just drivers'.  It has installed satellite navigators to ensure speedy and accurate delivery.

• Send an e-mail confirming when the item has been sent and the delivery address.  Amazon.com lead the way in offering this service.

• Offer an order-tracking facility on-line so that the customer knows what is happening to their delivery. On-line book retailer, BOL recognises that consumers want increasing access to information about their order and now offer a tracking facility.  Companies such as DHL offer their consumers an on-line delivery monitoring process enabling them to tack their delivery at every stage.

• Make your returns policy clear and easy, both on your web-site and if customers want to return goods once they have been delivered.  CD e-tailer Cosmo in US has partnered with Starbucks to allow returns via their coffee shops.

• Integrate telephone support into the web-site so that a customer service representative can call to talk to the customer if they need help and click the 'call me' button.  Financial service e-tailer, Egg successfully offers this facility, though it can charge its cardholders for use of the net, which may deter legitimate complaints.

• Answer customer e-mails promptly: Datamonitor notes that, of all the new channels, email will see a significant increase in the next three years and account for 20 per cent of all customer contacts by 2003.

• Actively seek and encourage feedback from customers.  Offer on-line feedback facilities so that customers can communicate their issues and concerns using the net.  Sites such as lastminute.com and holidayautos.co.uk include pages for customer feedback.  Acknowledge and act on suggestions.

• Produce on-line surveys with a one-click facility, which allows the customer to email their completed questionnaire.  In return, email them the updated results of the survey and thank them for their input.  Organisations such as Cisco systems successfully use on-line surveys to monitor their customer satisfaction.

• Ensure your on-line complaint management system is fully integrated with other non-web based complaint systems.  Camera company Nikon, for example, has invested in an automated e-mail recognition system that recognises key words.  This facility allows complaints and queries to be automatically forward to the person in the company most able to respond.  Other organisations use process mapping to plot out the route a complaint takes through the organisation and to find ways of simplifying the process.

• Train your staff in how to handle complaints.  People dealing repetitively with complaints can often become jaundiced and blasé after the fiftieth email or call on the same topic.  When one of the authors went to pay for some tyres, he found his charge card had expired and a replacement had not been sent.  Telephone contact with the company led to no acknowledgement of the embarrassment caused.  Many organisations now rotate people in service providers' role so that they do not become stale.  One organisation seconds people from the sales force on a regular basis to work in complaint management.

• Empower your staff to make decisions on how best to handle a complaint.  Make sure that they have a voice e.g. by making them responsible for reporting back to other parts of the organisation on complaints and making recommendations for company-wide improvements.

Service Recovery Process Checklist

Conclusion

Mark Powell, Distribution Director at Tescos comments that : 'e-tailing offers a whole new customer service and relationship challenge'.  There is a need to take across-functional look at the value stream.  Process discipline and customer focus are required.

Currently customer expectations are often exceeding service delivery in e-commerce.  E-tailers need to pay much more attention to service recovery.  It is important to start with the customer needs and then in the light of these, audit the whole of the service recovery process: it requires a comprehensive review of systems and skills and then a determined action plan to rectify deficiencies.

Sarah Cook and Steve Macaulay.  Sarah is Managing Director of customer care consultants, The Stairway Consultancy. Steve is a at Cranfield School of Management.  They can be contacted on Tel: 01628 526535. 

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