There is no denying that there is a relation between customer service and business profitability, it is a well-known fact. Therefore, customer retention is a crucial task for any business that affects the company’s revenue. Most businesses include continuous monitoring of customer satisfaction as a part of their marketing strategy. In fact, as we all know, a satisfied customer is more likely to purchase again.
Statistical studies only prove how customer dissatisfaction negatively affects business, namely, it leads to the loss of 10% to 30% of customers. Many companies have been monitoring customer satisfaction levels for a long time, paying attention to the survey results:
In order to make customers increasingly satisfied and loyal to the online store, the masters of marketing and sales have invented such interrelated concepts: warranty and complaint. One word follows from the other, they cannot exist separately. Warranty and complaint together create, so-called barrier, customer protection when shopping (especially online). Thus, these processes affect consumer satisfaction with items bought online.
Definition of the word warranty – a voluntary liability of the trader to the customer, consisting in ensuring the good quality of a product or service. A specific warranty period is set by the owner on his own terms in order to make the customer feel as safe as possible when shopping online, as well as when shopping in a regular stationary store. The warranty often includes the repair of goods.
There is another type of warranty – guarantee, which gives the customer 100% certainty about the possibility of returning the goods in case of defects due to the entrepreneur’s fault. The business owner, by law, must return the goods, make a discount or repair the defects due to the fact that the customer received a product that does not correspond to the description on a website.
In any case, both the warranty and guarantee provide the possibility to return the goods.
It often happens that the consumer is not satisfied with the purchased service or product. In this case, he is forced to arrange a return, in accordance with the law provisions and clauses provided in the contract, the warranty document. This process is called – complaint.
Do you think that complaints are a bad sign for business? Indeed, a complaint means that your product is not of the best quality or does not meet the expectations of new customers. As an entrepreneur, you may lose some revenue due to the high number of returns. But most often experienced business owners take into account these possible monetary losses – 33% of online stores offer free returns, but compensate for these costs through paid delivery, and 20% of e-shops increased the price of goods, to cover the costs of possible complaints.
However, complaints are not always a negative attribute. Product returns are a process that shows you, as a business, the level of quality and demand for your services or products.
Beginning entrepreneurs often think that business development is about gaining more revenue, thus it is necessary to pay attention only to sales. Unfortunately this approach to business management is short term, in fact 9 out of 10 companies go bankrupt within 1 year of their existence. Much more important is the quality of customer service and maintaining contact with buyers, as the real development of any business depends on it. It’s worth communicating with buyers even after shopping, establishing a relationship with them, increasing their loyalty to your store, and of course ultimately helping them become regular customers.
According to research by consulting company Invesp, as many as 30% of buyers complain about products from online stores. But there’s nothing wrong with that. Most often consumers return goods for the following reasons:
After analyzing the reasons for returns, you can determine what the weaknesses are in your business: inaccuracies in the warehouse, poor production quality, or maybe a delivery problem or bad packaging.
Complaining allows you to increase customer satisfaction by presenting your business in a stressful situation from a reliable, customer-loyal perspective. Invesp statistics show that as many as 92% of customers are willing to purchase again from a store that has successfully handled a complaint. Why does this happen? Accepting a complaint gives the customer confidence that they have not been cheated at that store, as well as they and their money are protected from fraudsters. Therefore, convenient complaint conditions have a positive impact on the customer experience.
In Europe, there is a term to describe a category of customers who constantly return goods – serial returners. A few years ago the British company Barclaycard in its research revealed that 30% of buyers deliberately buy more goods in online stores in order to return some of their purchases later, and 19% order different versions of the same product and decide to buy only one of them at the time of delivery.
Unfortunately, according to TrueShip, 63% of returns are the retailer’s fault. Therefore, 23% of returns are related to incorrectly shipped goods, 20% of returns occur because the product is defective, and 23% of returns are due to the fact that the product received was different from the one presented in the photo online.
This is why it is better not to remove the return option from your online store, as it can significantly reduce sales – 63% of consumers are more likely to purchase goods online if they know they can make a complaint.
Furthermore, 67% of consumers read the return policy before making a purchase. This means that more than half of consumers who visit online stores want to be protected from unsuccessful purchases, and the owner of that store must provide them with such protection, or they could lose up to 50% of potential customers.
It is important for customers that the online store owner, where they made a purchase, responds to their comments, both positive and negative. An entrepreneur, by talking to his customers, increases loyalty to his brand, as well as the number of regular customers.
Sometimes it is difficult to track each comment, because the store’s products may be displayed on different platforms simultaneously: Allegro, Ceneo, Amazon, etc. In such a situation, it is convenient to use a ready-made solution, i.e. an application for managing opinions from different platforms in one place.
One of such tools is Rating Captain. It uses machine learning to determine customer satisfaction based on published reviews. The app shows your company’s current situation, helps you effectively respond to negative and positive comments, solve customer problems, which in a few months can result in your company receiving significantly fewer complaints and even increase sales by 60%.