We live in a truly digital world and digital commerce is a central feature of that new lifestyle. However, when a transaction problem (dispute) occurs, we rapidly move from Digital Commerce to Analog Customer Support. In other words, your customer will either pick up the phone or start a chat session. Arguably, this is the most fraught and challenging part of what is now called the “post-sale journey” (aka post-sale experience). While there are other options, the fact is that these two, human-centric analog approaches are how the vast majority of disputes are initiated.
And once we go analog, the well-known problems of negligible efficiency gains, lack of scalability, and inconsistency of CSR skill all converge. The most common systems we have focus on the metrics of call length, call queues, and CSR skill/satisfaction ratings.
Yet, these metrics can miss the most important problem of “going analog” for disputes and problem transactions: the simple fact that the costs associated with the analog handling of disputes is far higher than just about any other kind of CSR action! And few organizations are gathering the detailed information that would alert them to this fact, or building systems to replace high cost analog interaction.
Basic common sense makes it clear that handling problems and disputes in this manner is going to cost much more than other phone/chat interactions. This type of contact is going to demand more time, unless the eCommerce company immediately “gives away the store”, by providing a full refund, return shipping, and/or a credit with no questions asked; while the aim of delivering customer satisfaction is appropriate, the approach is putting tremendous burdens on your company’s financial performance.
Many of the activities that drive up customer support center costs in “analog mode” are well-known. Others, however, are less visible and, regrettably, in some cases difficult to ascertain. Some of the most obvious include:
- Longer calls – Most transaction problems aren’t simple, there’s a lot of back and forth, gathering of information, checking warranty/refund policies, and listening to the customer complaint.
- “Policy Pushing” – When the customer doesn’t like the outcome, there is a natural tendency for the customer to push the CSR to go “beyond” the policies in place. Costly minutes of whining, threatening, and other chatter result. In addition, the CSR must take the time, often repeatedly to explain the policy.
- Re-contacts – A leading contributor to contact volumes because the issue was not resolved properly, the customer didn’t understand the resolution or CS didn’t anticipate the next problem that invariably arises from the first problem.
- Escalation Costs – While it’s not 100% true, about 99.99% of all escalations are due to a transaction problem. And the cost of management or better trained staff to handle escalations are much higher than the first level CSR.
- Stringent Policies on Returns – Many commerce companies have the same return policies for a $10 coffee mug as they do for a $2,500 audiophile system. Despite the fact that they are very different animals. At the ends of the price scale, calls can be longer because the “one-size-fits-all” returns policy fits poorly.
- Cost of Compensating the Customer – Finally, at the end of the transaction problem, the customer is typically compensated for their trouble and the merchant frequently takes back what are often unsalable goods. Even restocking fees (which create more friction with the customer) might not help merchants recapture the cost of reselling the item. This is just one more cost, often a large one that makes transaction problems much more expensive.
The Return on Resolution™ Imperative
Ecommerce companies must focus on the true cost of transaction problems, and how using analog approaches only adds to the cost of resolving them The typical approach of focusing on the value of customer loyalty and the amount of lost sales goes only part of the way in developing a true understanding of the issue.
It is also makes it abundantly clear that digital systems for handling transaction problems and similar issues will, to quote the head of customer care for one of our major customers, “help keep resolutions consistent and fair, keep policies up to date with legal and business changes, enable quicker resolution time to customers and provide 24/7 support to human teams.”
In our next post, we’ll be sharing data from one large eCommerce company that demonstrates the economic difference between resolving transaction problems versus other types of contacts, so stay tuned for that!