How chasing $1.65 of profit can alienate a customer

Sometimes, you have to make a judgement call. Investing in your reputation is rarely the wrong choice.

I have to admit that I’m frequently amazed by how different people’s approach are to customer service here in the US compared to elsewhere. In a culture where serving staff mostly make a living wage on tips, they’ll bend over backwards to deliver outstanding customer service. Perhaps that’s why it’s all the more jarring when things go horribly wrong.

Especially jarring, perhaps when Zappos is involved.

Zappos, in case you haven’t come across them, are widely know for their outstanding customer service — in fact, they are pretty much the gold standard, and Tony Hsieh, Zappo’s CEO, has written a book called Delivering Happiness — pretty much the text book on how to do awesome customer service.

We bought some shoes, decided to keep some of them, and returned the rest of the shoes to Zappos. Perfect — until we decided to actually make the return happen.

The issue

We are staying with a friend, and as such, don’t really know where everything is kept. However, we found a roll of duct tape, and figured that’d be great for taping a box shut. Only later in the day did we find packing tape, but by then we’d already taped the boxes shut. “It’s Gaffer’s tape”, we said. “If it’s good enough for taping cameras to the top of a car, it’s good enough for a box”.

Since we didn’t have access to a car, we carried the Zappos boxes down to the UPS store.

At the store, we were met with a problem: According to the gentleman at the counter, duct / gaffer’s tape is no good for boxes; he claimed the tape melts in the heat, and that it comes off the boxes. Ultimately, he refused to take them. In my experience, duct tape doesn’t tend to melt, but if that’s an UPS policy, that’s neither here nor there. The upshot was that we were instructed to remove the duct tape from the box, and replace it with ‘clear packing tape’. The fine fellow waved in the direction of a corner of the store, directing us to a rack where we could buy a roll for $5.

“But we don’t need a roll”, we said, “Is there a chance you could tape it for us?” we inquired and were informed that yes, but at $2 per box.

Now, I’m fully aware that this sounds petty — $5 isn’t a lot of money for a roll of tape, and there was an easy service solution (Pay $4 to get the boxes taped up).

“Can we leave the boxes here whilst getting a roll of tape from home” we asked, but he refused to let us do that, because he wouldn’t be able to be responsible for them. Fair enough, I suppose — but without a car, hardly a great solution.

In the end, I ended up watching the boxes whilst my wife disappeared for twenty minutes to pick up a roll of tape from home. We then re-taped the boxes, and everything was hunky-dory. Except for the fact that we had wasted 30 minutes trying to resolve what should have been a simple interaction.

A large part of the reason the interaction was unpleasant wasn’t what the customer service chap said, but how it was said — and the completely rigid attitude of “These are the rules, and I’m not budging an inch to be helpful”. Especially against the “Everything is possible, I will move heaven and earth to help you” attitude that we experienced just an hour earlier, on the phone to Zappos.

What can you learn?

In a customer-service focused business, this interaction would have gone very differently. Imagine this:

We walk in, and are told by the customer service fellow that we’ve used the wrong tape. “We get a lot of people who use duct tape, but unfortunately it means that the boxes sometimes get unstuck. Don’t worry though, here’s a roll of tape, I’ll help you get you on your way”, he says. “We usually charge for tape, but not to worry, since it’s a beautiful day out there, this one is on me”, he winks.

So, this would cost money right? Well yes — it would. But given they charge $5 for a 50-meter roll of tape, and it would have been about 1.5 meters worth of tape to re-seal the boxes, we’re talking about approximately 15 cents worth of tape in total. And, assuming he has a 30% markup on the tape, he lost out on $1.50 worth of earnings, too — so this scenario would have put him $1.65 out of pocket.

But — and here’s the clincher — I’d argue that that would have been $1.65 that would have been a fantastic investment into marketing and encouraging positive word of mouth.

Complacency & competition

The real problem is that the UPS store has a captive audience, here: Zappos has chosen UPS as their chosen vehicle of doing returns, which in turn means that you don’t really have a choice: You have to go to the UPS store if you want to drop off a box. The service at this store can be dreadful, but we suffer it because, well, we’ve got boxes to ship.

But what if that wasn’t the case? What if there was an alternative? For a company like UPS, having systemic poor service as part of their company culture could be dangerous — it means that if a disruptive, customer-focused newcomer comes along, they have a very hard job re-training all their staff — and if they have a reputation of poor service by then, it may be too late.

Perhaps more realistically than someone taking on UPS on their own game: What if Zappos decides that they’ve had enough of their shipping providers placing their excellent reputation for customer service in jeopardy, and instead switched to another provider for their shipping needs? Zappos is presumably a multi-million-dollar customer for UPS, and losing the account over lack of customer service seems like a proverbial ‘cutting off your nose to spite your face’.

The bottom line

A company lives and dies by their word of mouth marketing. “Hey, can you ship a parcel for me? The UPS store is just down the block” “Sure. Hey, do you mind if I use FedEx? It costs about the same, and at least the guys in the FedEx store are helpful”

You don’t have to hear that too often before it starts having an impact on your bottom line…

Scffld is a blog where Haje Jan Kamps covers the great, the terrible, and a sprinkling of best practices of customer service. There’s a bit more background here.

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