The other day, a friend of mine went to Trader Joe’s and accidentally broke a bottle of wine when another customer bumped into her. Sonny felt bad and wanted to do the right thing, of course. She was surprised when an employee within earshot began to shout at another Trader Joe’s employee about what a klutz he was. My friend tried to apologize and set the record straight that it was her fault, but that only set off a series of increasingly humorous exchanges between TJ’s employees – all targeting this one “klutzy” colleague. Before my friend got really upset that not only had she broken an item but she was also causing a poor innocent to get blamed, one of them let her in on the game. It turns out it’s the store’s policy to play in this way when a bottle of anything is broken — to blame an employee with all kinds of over-the-top jokes and silliness — just to make sure no customer ever feels bad about an accident. Each morning an employee is chosen to be the day’s scapegoat for any accidents caused by customers. And, believe it or not, the TJ’s staff love it when it’s their turn to be the fall guy.
The light went on for Sonny. The staff camaraderie powered by the generous goodwill behind the shenanigans allowed her to leave with a lot more than she came for: whereas she always loved the store for its high quality food items and good prices, she now had a deep admiration — she used the word “love” — for the Trader Joe’s company. Trader Joe’s properly evaluated the cost of a broken bottle vs. the cost of a customer’s anxiety. They ensured that by the time my friend left the parking lot, she knew her accident was no big deal and that she was valued more than a bottle of wine.
Sonny told the story on Facebook to her many friends, and by the number of comments and likes her story attracted, I’m sure I wasn’t the only one who was influenced in a positive way. Trader Joe’s made points with a lot of people that day, people who felt just a little bit better for having read about a company caring more about people than a few dollars and who are doing a little bit of good in the world, one broken bottle at a time. And who knows how many people her thousand friends told? That’s the power of social media. It has ripples that can build trust and brand loyalty or destroy it. This is why it’s especially important that companies respect the fact that every engagement with the customer is important.
We learned this the hard way at eBay in the early days, and it was pretty painful. Back in the early-to-mid-2000’s I worked as senior manager in charge of community communications for eBay, where I helped the company communicate to and with our buyers and sellers on changes that were impacting the marketplace. These were the “wild west days” of eCommerce, and eBay’s pioneers — the early buyers and sellers, along with its product and policy teams etc. — were innovating every day just to get the job done. Back then, there was no photo hosting, no standard for payment, no sophisticated fraud detection, etc. — it was a new frontier. As with all voyages into new frontiers, it took some courage each time someone wrote a check and popped it in the mail to a place far away to a person they’d never met. eBay was a bit of an emblem of hope in the face of conventional wisdom that said to be wary of strangers. Before sophisticated feedback systems, online credit card processing, PayPal, online dispute resolution, and the other protections we take for granted, people all over the world were sending money and shipping items — from beanie babies to cars — to people they’d never met, affirming one transaction at a time that “people are basically good.”
As if by miracle, over a very short period of time, eBay hosted millions of great finds, thrilling sales, and happy transactions even in those primitive days. It was more than a great business idea — eBay “back in the day” was a phenomenon. In those days, eBay executives and staff were completely consumed by the challenge of keeping on top of all the problems our skyrocketing success was engendering. (As our COO Maynard Webb put it once, we were working on the Porsche engine as it was speeding at 250 miles down the highway, which we were rolling out in front of our nose as we went.) When it came to transaction disputes, however, we tried to stand behind a policy of being a neutral marketplace. When we were accused of not providing enough support when something went wrong, we said, “it’s not our problem — it’s a buyer and seller problem.”
In hindsight, of course, it’s easy to see that this was a disastrous position to take. The “we’re just a marketplace” policy was based on fear of increased expense and negative PR rather than sound strategy. It didn’t take very long before the issue caught up with us. Growth was slowing at the same time eBay buyers and sellers were growing increasingly frustrated and vocal through social media and other channels. We were losing brand equity and it was negatively impacting the marketplace dynamics.
The takeaway here is not that companies should not have transaction problems — it’s that they need to own them. In a way, eBay did the opposite of what Trader Joe’s did in my original example. We passed the buck for the problem, whereas in the Trader Joe’s example, they took full responsibility. Not only that, they used the problem to their advantage, because they know their business is not to just sell quality food items at low prices. Their real business is to offer mom-and-pop, neighborhood-friendly service that builds relationships with their customers. That’s why a broken bottle isn’t handled like a loss — it’s an opportunity to build loyalty.
Another takeaway from those early eBay days is that it’s possible to turn a bad situation around if you are willing to listen, be authentic, and grow. In a way, we had tried to build a “firewall” between our members’ disputes and our own image by not acknowledging the problem, but that had backfired. By 2003 Colin Rule (Modria co-founder and COO) was hired by eBay to help the company face the problem of transaction disputes, and my team supported his efforts to build a collaborative environment that was built on open, transparent communication. After years of eBay’s inadvertent use of divisive language (“Fraud Alert”), the policy of making it hard to file a dispute, and our slow, ineffectual methods of processing huge volumes of incoming cases, we had a lot of catching up and damage control to do. We had to start with listening.
Colin, Larry Friedberg (Modria Chief Marketing Officer), and the rest of the Dispute Resolution team worked with the people closest to the problems to form the eBay Resolution Center, including buyers, sellers, as well as the unsung heroes in customer support who had been facing the problem alone for so long. The team used a lot of channels – phone calls, conferences, meetings with “Voices” (groups of members under non-disclosure with eBay), workshops, announcements, executive-led Town Hall radio programs, newsletter articles, etc – over a period of years to develop and refine the online dispute resolution system that eventually would solve millions of cases automatically each year. They had to respond to tough questions and strong opposing opinions – from within and without – with unfailing diplomacy that was backed by both warranted empathy and data. They had to do this not once, but again and again and again.
Their open communication and diligent focus on collaboration with buyers and sellers not only helped the company design and implement a solution that would eventually work to solve millions of disputes per year, you could argue that their consistent listening and responsiveness played an important part in repairing the company’s reputation with its community. People who’d expressed skepticism or who were on the verge of abandoning eBay altogether began to trust the company again. It didn’t happen overnight, but over a period of time, things improved. After the transparent dispute resolution process was launched with well-communicated policies, anxiety began to subside. In the nascent arena of social media, more members began to support the company vocally and lend their time to help other members understand the new system and policies. Over time, as Colin shared (read Lessons in Customer Support at eBay: The Birth of Automated Resolutions (Part 2)), the dispute resolution process was proving that it increased trust in the marketplace, and transaction by transaction, it began to change marketplace behaviors in a positive way.
In retrospect, were you to interview any number of eBay executives and staff connected to the Trust & Safety effort, you’d find near unanimity of opinion that we’d made an already challenging situation much harder to deal with than it needed to be. We didn’t own the problem. As Rob Chesnut, the former SVP of eBay Global Trust & Safety has said:
“Hindsight is 20:20. Had eBay launched its INR (online dispute resolution) process at inception, it would have saved millions in customer support costs, improved trust among users, and driven significant increases in buyer and seller activity.”
In defense of eBay management, back in the first few years of the 21st century, there were a lot of competing problems and opportunities for our limited resources. What we didn’t fully appreciate was that the value of each customer engagement mattered. If we had, perhaps things would have played out differently. Of course, it would also have been a lot easier to move ahead with an affordable, technology solution to the transaction problem issue had there been a Modria. But, as was so often the case then, there was no “buy” option. We had to build everything ourselves!
I think this is a relevant lesson for eCommerce companies — small or large — today. When something goes wrong — and sooner or later, it will – how will you handle it? What business are you in, and how can you use a problem to shine in the eyes of your customer?
Smart companies know they have an opportunity to build loyalty every time something goes wrong. Handle a transaction dispute fair, fast, and transparently, and you can turn a customer into your biggest evangelist. When something goes wrong, and it’s poorly handled, you’ve lost trust and your brand just took a big ding. And remember — whatever the cause of the issue was, there’s really no such thing as “it’s not my problem.” The good news is that companies today don’t have to build a resolution system from scratch – which is particularly good news because they aren’t likely to get the development resources to build non-core but essential applications. Thanks to Modria, eCommerce companies can easily deliver fast and fair resolutions to their customers.
It’s exciting for me, after all these years, to see what Colin and the Modria team are doing today. Modria is founded on a decade of experience with millions of transactions globally and countless conversations with buyers and sellers globally in every category. It increases transparency and thus reduces anxiety, because all parties know what to expect and where they are in the process. It bakes in efficiency by being powered by a company’s own policies, and it empowers its staff – the unsung heroes in every company – by freeing them to focus on the problems that really need a human touch. This builds trust from the inside out. I see Modria as a natural step in the evolution of eCommerce that every eCommerce marketplace, payment provider and online merchant needs to consider.