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The Million Dollar Hidden Opportunity for E-Commerce SMBs

By Kim Lorenz E-Commerce Times ECT News Network
Jan 18, 2020 4:00 AM PT
small e-commerce businesses can achieve long term gains through excellent customer service practices

Every successful, long-term business, no matter how advanced, has a common denominator in training as it relates to online sales customer contacts. Notice I said "long-term." A great product or unique marketing effort can fall short when a customer contacts an employee who is ill-equipped to respond.

Some 72 percent of online shoppers will return up to 10 percent of their purchases, according to the UPS Pulse study. In 2020 it is expected there will be approximately US$690.84 billion in online sales. That number points to nearly $49.74 billion in returns!

As a result, any online sales organization, unless it has a bulletproof and user-friendly return system, will lose repeat customers. Some percent of those returns will involve a phone call or chat with your company, and it needs to be a positive experience.

An e-commerce company's return policy can make or break the business. Responding to an eConsultancy survey, 56 percent of shoppers wanted a hassle-free return policy. Eighty-one percent of shoppers wanted simple, easy and free returns. Ninety-two percent of shoppers said they would buy something again if they were happy with the return policy, while 67 percent of shoppers said they usually checked the return page before making a purchase. Moreover, 62 percent of shoppers were more likely to make an online purchase if they could return an item.

Meeting the Returns Challenge

I would surmise that you have some interest in e-commerce success, and I would be surprised if you have not had both positive and negative experiences on returns. The big retailers have return systems down to a science, but the small businesses have a way to go to make it simple.

A company that not only focuses resources on site development to seamlessly accommodate returns, but also has trained people to handle the low percent of calls, will gain more repeat and long-term customers.

Pay attention to outsourcing returns. Recently I had an Amazon return and was not looking forward to the process, although the company's policies are good. I found I could take my return to a nearby Kohl's store. What a win-win. As I do not recall ever shopping in a Kohl's store, I was impressed by the process.

I also was impressed by the clean store -- and of course, I had to walk through the whole store to get to the Amazon desk, which was smart. Time will tell if it is a long-term win-win. My local pharmacy now has the same service with Amazon.

A company doesn't have to be a mega business to "think out of the box" about how to serve the customer best. We all have the same opportunity. Pay attention to your customer's perception of your service at every touchpoint.

The long-term value of a customer, in most businesses, can be an enormous benefit as well as significant return on the investment spent to train employees. Upon first contact, customers should feel they are speaking to, or dealing with, a representative who truly will help that customer. Even more value is realized when an employee can turn a possible troubled customer into one who makes additional purchases and becomes a customer for life!

Turnaround Opportunities

Most of us recall having wasted our time on returns, either trying to find out more information or to correct something we found to be unacceptable about a product. Our feelings about those experiences cloud our attitudes or perceptions of the companies involved as a whole, and we are more apt to tell others.

Today, this happens a lot -- more so with rapidly expanding Internet sales and ease of online purchasing. Alas, sometimes the customer, for whatever reason, has a direct contact experience or problem, and the employee needs to know all the opportunities available to turn that experience into a positive, memorable one, even the possibility of adding additional sales.

The employee needs to understand the product and how "read" a customer. Part of the training should be that the customer, while always being "right," might not be telling the employee the whole story. All of us in any organization know the customer sometimes tell us something that is not correct.

Even if it's hard to believe a customer might give false information intentionally or simply be wrong, the properly trained customer service representative will know how to arrive at a satisfactory resolution. If not, the opportunity to please a customer, receive repeat business, and get positive reviews is lost.

Seventy-two percent of buyers will act only after reading a positive review, according to Capterra research.

Ninety-two percent of people regularly or occasionally read online reviews, Zuberance found.

For small businesses, opportunity is waiting:

Only 26 percent of small businesses have tried to create their own online e-commerce store, according to Small Biz Trends.

Seventy-seven percent of U.S. small businesses use social media for key business transactions like sales, customer service and marketing, according to PR Newsletter.

Statistics also tell us conversion rates for new business are 30 percent higher in small enterprises than in big online companies. Today, more than ever -- and increasing all the time -- excellent small website developers work efficiently with a variety of small businesses to create useful websites.

It is essential that website developers understand the importance of the user experience leading up to, during and after a sale.

Lingering Dissatisfaction

This level of service applies to both B2B and B2C sites. Like many, I buy a lot of products online -- shoes, coffee, almost everything. Some smaller companies have been over-the-top excellent in returns and service.

On the other hand, one international firm required me to call, wait on hold, and wait for a return box while it shipped me a loaner coffee machine. I had to send back my machine, and then repeat the whole process when the company returned my defective machine!

One day without my coffee I considered painful, but I felt it was ridiculous to have to wait several days to rectify an issue, and the procedures were very expensive for the company, aside from my dissatisfaction!

I had to do this again with the same company a few months later. Now, when I use that machine, I have negative thoughts about that company -- every day. The next time I buy a machine, it will not be with that company.

My experience, or variations on it, is repeated thousands of times with other customers, and one must wonder if management is made aware of the poor interactions?

E-commerce is growing some 23 percent now, year after year, according to Big Commerce, yet many small businesses have not developed a Web presence.

Many small businesses cannot afford the infrastructure to make online sales, especially a service-related industry. Still, they need a site, so the increasing number of online shoppers can find them at least and call. One of the worst experiences is to call a business, receive no answer, and have it go to the proprietor's personal cell voicemail!

Lingering Satisfaction

I want to leave you with a story that made me a customer for life. My wife and I ordered new carpeting from Costco after buying a vacation home. I made a special trip to the new house to be there for the install, as the new furniture was to be delivered the next day.

I expect a lot from Costco, and if any company leads the entire world on customer service, I feel it is the one. However, after the install we noticed some defects in the carpet.

When I called Costco, I connected with a woman who was well trained. She asked me to call the carpet vendor and assured that Costco would cover the cost of replacement or issue a refund, whatever I wanted. I called the vendor and set up a date for replacing the carpet at Costco's expense.

I called Costco back to confirm the excellent service resolution, but I ended up leaving a message: "You do not have to call me back. Everything is handled just as we expected from Costco," and I hung up.

A few minutes later, the same well-trained Costco representative called me back. She said she knew I had made a special trip to oversee the install and asked if I was going to have to fly there again for the reinstall? I said, yes. She asked how much the airfare would be. I told her about $400. She then told me we would have a $400 credit on our next Costco statement!

We have spent many thousands of dollars at Costco online, buying furniture, appliances, plumbing, and much more, because we know our needs will be handled well. The whole premise for the success of Costco is to sell only high-quality items in the first place. Any Costco vendor that delivers less than high-quality items will pay dearly and most likely be discontinued as a vendor.

Nothing can protect any business completely from an economic downturn, but clear, deliberate attention to customer needs, and a focus on customer service increases sales, loyalty and long-term repeat customers, no matter the size of the business.

Do you know the value of a customer for life? Invest in training, listen to your employees, and seek to understand what makes a customer call in the first place, so you can lower the number of customer calls.

More importantly, when a call comes in, make sure the employee who takes it is trained, knowledgeable, empowered, and knows how to listen. Make the whole experience positive, and view it as a learning opportunity.


Kim Lorenz is an author, entrepreneur and visionary who founded two companies with zero backing, the first at age 26. He went on to sell both to Fortune 500 companies before he was 47. Kim cuts through the noise of becoming a tech millionaire and demonstrates the work it takes to build multimillion-dollar industrial-strength companies. His expertise can be accessed through his most recent book, Tireless: Key Principles that Drive Success Beyond Business School.


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2020 online shopping habits and retailer strategies