eBay: biassed, incompetent, indifferent or all three?

Fairness and a transparent, responsive, timely process for getting justice matter to us

There are a number of situations, events, processes that are guaranteed to generate contempt, anger, rage.  One such situation is when we perceive that we have been punished when we should not have been.  Yet, this anger arising out of our strong sense of justice, is likely to melt away if there is access to an easy to use, impartial, transparent process for dealing with complaints.  Yesterday, the UK consumer affairs tv program singled out the DVLA and  Microsoft (Xbox 360) for their tyrant like behaviour towards their customers.  Fo example Microsoft disconnected customers in mid August. Why?  Microsoft asserted that the customers had violated the terms of usage. When customers complained (including mums and their young children) what did Microsoft Customer Service say?  Something like “We are right, you are wrong. And we never make mistakes.  If you want to carry on playing XBox 360 you have to get a new console!” Does this remind you of the behaviour that Dave Carroll was subjected to by United? Then when Watchdog got involved Microsoft recanted: we made a mistake due to a software fault!  Today, I want to look at eBay and share a more personal story withyou.

eBay: biassed, incompetent, indifferent? – I’d say all three!

Imagine that you trade on eBay, it is the early part of September and you list an item (headphones) for sale.  You describe the details of the item and you set out the price.  Because you do not want to create any problems for anyone including youself  you go further on your listing: you clearly state in a large font size that the headphones will be shipped out by 24th September 2011.  Before you know it people start buying these headphones.  You are on holiday and when you can access the internet you (the seller) remind the buyers that the headphones will not be shipped out until 24th September as you are on holiday. As it happens you get back a little earlier and start posting out the headphones on the 21st September and complete the task by 23rd September – you have to pack and post some 50 packages.  And you have a proof of postage from the local post office to show exactly when and to whom you have posted the headphones.  At this point you might be feel happy as you are shipping the goods out to your customers earlier than you had promised.

Well the story did not have that happy ending because the seller did not take into account the whims of some his customers and the bias of eBay towards buyers.  Around the 21st September some of the buyers started filing complaints against the seller stating that they had not received the headphones.  You, the seller, get on the email and remind the buyers that the listing clearly stated that the headphones would not be shipped out until 24th September.  And that you have now posted the headphones – they are on the way to the buyer.  At this point you might think that everything will work out fine – you are wrong.

Whislt some of your buyers get that that you have kept your word, other buyers are not happy.  And you find yoursef unable to resolve the issue with these buyers.  How can you?  You have shipped out the headphones and you have proof of postage.  The case escalates to eBay and eBay sends you an email to let you know that they have judged in favour of the buyer.  So you appeal.  You ask eBay to look at the listing (and they will see that it clearly states the goods will not be shipped until the 24th Sept) and you spell out that you sent the goods before the 24th.  And you offer to send a copy of the proof of postage.  You might think that eBay would ask for the proof of postage, look at the eBay listing and then rule in your favour.  You would be wrong, instead you get this:

If you take a look at this notice you will find that no rationale is give for why eBay has ruled in favour of the buyer.  There is absolutely no response to your assertion that the listing clearly stated that the headphones would be shipped by the 24th Sept, the buyer bought knowing that, you shipped as promised on the listing and you are happy to send the proof of postage to eBay.  And there is no contact number – there is nobody that you can speak to.

I’d love to share the listing with you so that you can see it for yourself.  Unfortunately, eBay has suspended the sellers account and so no-one can see the listing:

One final piece of the story: you the eBay seller have contacted both eBay and PayPal to understand what is going on, to put your case forward, to provide the documentation.  What is your experience?  The eBay folks tell you that you have to contact PayPal and get this sorted out.  The PayPal folks tell you that you have to contact eBay folks and get this sorted out!  No-one at eBay or PayPal wants to stand up and work with you to sort this out.  And they cannot or will not tell you what rules you have broken!  Just that you must have broken some rules.  Does this remind you of Microsoft’s treatment of its XBox360 customers?

What can we learn?

You cannot count on your customers to read what you have written even if ask them to read it and/or display in large size fonts right there on the screen.  This is one of the issues that plagues the insurance industry, for example, people buy insurance without reading the policies to find out what is and is not covered under what circumstances.

Many customers do live up to their side of the bargain including acknowledging their mistakes (if these are pointed out gently) and apologising.

A small number of customers cannot be reasoned with as they are convinced that they are always right and if something is not working out as they’d like then it has to be your fault.

In the West we live in a world of instant gratification if you are selling online then it is best to assume that the customer is expecting delivery within the next day or so.

If you are a seller then you cannot count on eBay to treat you fairly because eBay can get away with treating you unfairly.  Buyers are more important by the simple fact that if you are not selling then someone else will happily take your place.

Power leads us to dehumanise others.  Which is why the bigger and more powerful the organisation (eBay, DVLA, Microsoft) the more likely it is to treat customers, employees, suppliers etc badly.  I wrote a post on that about a year ago.

A final word

The eBay seller is related to me which is why I know this story so intimately.

If you from eBay or PayPal: I issue you a challenge lets make the facts of the case (publish the listing, the emails, the proof of postge) clear to the world.  And let the world at large judge who is in the right and who is in the wrong.  If you are convinced of your justness then you should have no issue in taking up my challenge.

What exactly is the cost of poor customer service? TalkTalk provides an answer

What exactly is the cost of poor service?

In the main that question is difficult to answer because conducting experiments in the business world is not easy. Companies do not easily take up experiments that say “lets provide great service to this set of customers and poor services to another set and then lets study the impact over the next three years or so”.  Yet sometimes those experiments happen and we can learn from them.  So let’s take a look at the UK telecoms industry and TalkTalk in particular.

This week this piece of direct mail landed in my letterbox and took me by surprise: TalkTalk (a well known brand) is offering unlimited broadband for £3.25 a month plus line rental.  My first thought was ” So that is the cost of poor customer service!”.  Before I dive into this deeper and share with you the financial cost of poor customer service allow me to tell you a little about TalkTalk.

According to the latest UKCSI survey “Among landline providers BT is the most improved (up 2 points), while Talk Talk is the only telecoms provider to show a significant decrease in satisfaction.”

TalkTalk has been plagued by problems and customer complaints including being billed for services that customers had not asked for and/or did not receive.  And when the customers rang up and complained it looks like those complaints were not dealt with well.  So some of the unhappy customers complained to Ofcom (the regulator).  And after giving TalkTalk several warnings and time to clean up the mess Ofcom has hit TalkTalk with the largest fine ever imposed on a telecoms provider.  Whilst the fine is large (£3m) it is nowhere near the maximum (£150m – 10% of turnover).

So the first part of the financial cost of poor customer service comes to £5.5m: £2.5 m is the sum that TalkTalk has agreed to the customers affected and the remaining £3m is the Ofcom fine.  Yet there is more.

When I was teaching the value of marketing and service to a skeptical audience of engineering oriented analyticals I justified investments in these areas on the basis that it improves the customer experience and builds the brand.  And those in turn allow you to charge higher prices, spend less on getting new customers and make higher profits.  Was I justified in making that assertion?  I decided to take a look at the broadband market and the current deals that are on offer from the major players.   Here is what I found (disclosure – I have not done a detailed point by point examination of the functions, features, pricing.. yet where possible I have compared Apples with Apples):

Looking at the table it is immediately clear (at least to me) that if you deliver a poor customer experience though poor service then you pay a financial penalty in the form of a price discount – at least when it comes to the UK telecoms market.  Take a closer look and you will see the following:

  • O2 renowned for great customer service earns £100 more per customer per year – TalkTalk is charging 2/3 of the price that O2 is charging;
  • BT the biggest player in the broadband market and not particularly know for great service yet it can earn £67.50 more per customer per year whilst only allowing the customer to download 10GB of data per month.

The Bottom Line

By providing poor customer service and not dealing effectively with customer complaints TalkTalk has delivered a poor customer experience and tarnished its reputation.  The financial penalty has come in several flavours:

  • compensation to existing customers;
  • fine by Ofcom;
  • higher marketing costs to get new customers; and
  • having to substantially discount the price in order to lure new customers.

Service (how you treat the customer) in its many facets is critical to value you deliver to the customer.  I spelled this out indirectly in the following post which is worth revisiting: “Thinking strategically about customer experience: the five components of customer value”.  In a nutshell, in the informed customer’s mind there is more risk in doing business with a supplier that offers poor service and so the supplier has to offer a price discount and may be forced to do business with price sensitive customers rather than service centred customers.

Last words

Does your business focus on providing great customer service?  Do you treat customer complaints seriously?  No.  Then you may be the next TalkTalk.  Yes, then you may become the next O2.  As always the choice is yours.

Santander – the worst bank in the UK, really?

Santander has been getting a lot of flack in the press recently.  In fact the Guardian newspaper wrote the following article: “Is Santander Britain’s worst bank?” The article points out that Santander has the highest rate of complaints (per thousand customers) and that this situation has been going on since about 2007.  Yet, the same article points out that Santander has gained over 1 million customers last year and it has a number of products that are considered to be best-buy products.

At about the same time, I received the following document from Santander.

I started banking with Abbey (one of the banks purchased by Santander) over 20 years ago and on the whole things have worked out pretty well.  Yet, at best, I have had what I would describe as a distant, transactional, relationship with Abbey and then Santander.  After all, despite the advertising, one bank is simply like any other.  They are all concerned with making the most money they can from me and it is up to me to look after myself.

Then this document arrived in the post and frankly I could not believe my eyes.  Santander is being helpful.  It is telling me that I can cut down the amount of interest I pay on my mortgage if I take a number of reasonable actions.  Actions they know that I can take – clearly Santander has done its homework.

With this document I find myself facing  cognitive dissonance: trying to reconcile the view that Santander is supposedly the UK’s worst bank and at the same time it is writing to me to provide advice that will help me and ‘cost’ Santander.

Whilst I have yet to make sense of it, I do know that my attitude towards Santander has changed.  I actually feel gratitude.  Is this the start of an emotional bond?

What is the lesson?

I believe that the fundamental lesson for banks (and all other organisations) that want to create loyalty is to be helpful proactively. Use the information and expertise that you have to create value for your customers.  Most will remember and reciprocate by staying with you longer, recommending you and buying more from you in the longer term.




What the Customer Experience community can learn from Build A Bear

Most retail experiences are dull: bland, bland, bland

Do you find most retail experiences simply dull?  I do.  Most of the time that I walk into retail stores I am left totally unimpressed.  The retails stores all collapse into one heap of blandness: one mobile phone store is just like another – the only difference is the brand name; one games  retailer is like another one; one PC store is like another and so forth.  Yet in this ocean of blandness I have come across a company that stands out: Build A Bear.

Build A Bear have reimagined  and reinvented the Customer Experience

The folks at Build A Bear have reimagined the entire bear purchasing and ownership experience.  When you turn up at a Build A Bear store you are greeted by smiling sales assistants and lots of colour – the store is alive and it draws you in especially if you are a child.  Once in the store you cannot simply go to the shelves, pick up a bear, pay and leave.  That would be dull and you would just be like every other shop selling bears.

Instead you are invited into a process where you create your very own, personal, bear.  The shop assistant invites you to select the bear skin.  Then you move on and select  the audio that you want inserted into you bear. Once you have done this ( or chosen no audio) you go with assistant and sit in front of the machine that stuffs and stitches your bear right in front of you.  You decide how much stuffing goes into your bear – depending on whether you want your bear on the softer side or more on the firm side.  Whilst you are making the bear the sales assistant invites you to choose a name for your bear.  After all the bear is your very own special friend that you are going to share your life with, not just a toy!

Once you have made your bear and chosen his name, the sales assistant shows you the section where there are lots of different outfits.  And being a child you absolutely go crazy and select school outfits, party outfits, sports outfits, night clothes and so on.  This is usually where the parent steps in to ‘help’ the child to select only one or two outfits.  When you’re ready you go to the counter and pay.  Here you are met with another surprise.  The cashier hands you a birth certificate for your bear: in my daughters case Meemoo was born in the early days of January 2011.

Just when you think you have seen and experienced it all.  The cashier places your bear into a cardboard house – one that you can decorate when you get home – and tells you that once you get home you can go and log onto the Build A Bear virtual world on the website.  And when you get home that is usually what you do or ask your parents to do.  Once you are on the website you can do more fun stuff: you can make your very own bear come alive with the outfits you bought in the store.  If you want to do more on the website then you have to go and buy more outfits from the store.  And that is exactly what my daughter does.   That is how Meemoo ends up being loved when the other thirty odd bears sit on the shelves neglected.

What is the lesson for the Customer Experience community?

Customer Experience is much more than complaint management.  Customer Experience is much more than simply improving customer interactions.  Customer Experience is much more than better service.  Customer Experience is much more than a better product.  In its fullest sense, Customer Experience  is doing what Build A Bear does: taking the ordinary and making it extraordinary by engaging the customer in co-creating an immersive and enjoyable customer experience.

It is worth noting that Build A Bear has not just reinvented the customer experience,  Build A Bear has reinvented the business model as well.  The accessories prolong the relationship with the customers (the children come into the stores regularly to buy new outfits) and drive the majority of revenue, profits and customer LTV.  Put differently, you never have to sell another bear to your customer, you can just sell the accessories.

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