The Tale of Two Services: Good versus Great Customer Service

Posted on August 12, 2008. Filed under: Amazon, eBay | Tags: , , , |

Two packages were recently returned to us by the post office as undeliverable items.  Despite us doing everything correctly, the orders were not delivered to the intended recipients.  One of the returned packages belonged to an eBay customer and one of the returned packages belonged to an Amazon customer.  Before they were shipped, both packages received the same careful packaging and the same attention to detail when typing the label.  There was a slight difference in the Shipping Time: the Amazon order was shipped less than an hour after we received the order and the eBay order was shipped within 2 days of us receiving cleared payment. 

The biggest difference between two orders, one made through eBay and one made through Amazon, is what happened after the orders shipped.  The “after care” is where the real customer service is and where a good business sets themselves apart from the competition. 

So, just how much customer service should a “good” company provide?   A company with good customer service does what any reasonable customer would expect a good company to do.  A company with great customer service does more than what the customer would expect, even when the customer makes an error.  There is a financial cost to provide good customer service and an even bigger financial cost associated with providing great customer service.  

For the two packages that were recently returned to us as undeliverable, our company provided different levels of customer service to each of the customers.

Undeliverable package for eBay customer

The eBay customer purchased an item we were liquidating and the selling price was incredibly low.  We shipped the package to the address specified in the PayPal payment but the item was returned because the buyer had moved and the forwarding address had expired.  When the package came back, we emailed the buyer to let them know right away and we offered to either 1) refund the purchase price but not the original shipping cost or 2) resend if the buyer paid the actual postage amount that it would cost us to resend.  I believe a reasonable customer would expect our actions were those of a company who was providing good customer service.  We contacted the customer as soon as the package was returned and we were offering to resend for just the cost of postage.   We asked the buyer to pay for the postage since the package was returned as a result of their error.  We didn’t make the error so we should not be required to shoulder the financial responsibility to correct the buyer’s mistake and, because we have no available margin on our eBay sales to pay out of our pocket to correct buyer’s mistakes, the most we can afford is to offer the buyer our our service at only the cost we would have to pay to a third party (the U.S. Post Office). 

Of course, the eBay buyer does not want to pay the cost of postage.  He is stating that he already paid the cost of shipping.   The eBay buyer wants to purchase the item from us at an incredibly low price and still has the expectation that he should receive great customer service because that is the message eBay is putting out by their recent actions of declaring war on sellers .  However, the fact that eBay is attempting to bully sellers now into providing great customer service will not make it happen.  eBay sellers simply cannot afford to provide great customer service.  Just providing “good” customer service is more than most eBay sellers can afford to provide on such a limited margin from their eBay sales.   

Undeliverable package for Amazon customer

The Amazon customer purchased our item at the Manufacturer’s Suggested Retail Price (MSRP) and we shipped to the address specified in the order. 

[Note: Our Amazon inventory is priced from about $45 to $500 per item and almost everything we have listed on Amazon is available for the MSRP.   And because we pay Amazon only 15% and we charge the buyer full shipping and handling costs, we receive a great margin on our Amazon sales.] 

We shipped the Amazon order to the address specified but the package came back to us because the customer failed to take delivery.  Our first step was to call Amazon directly.  When we spoke with the Amazon Rep, we explained what had occurred with the order and we detailed what we planned as our course of action.  We asked if this is the course of action that Amazon would recommend.  Our plan of action was good, according to the Rep.  The Rep went one step further to tell us what a great job we were doing overall on Amazon and how we should be proud of ourselves for becoming a featured merchant so quickly.  After our conversation with the Amazon Rep, we then received a follow-up email summarizing the phone call.  Below is a portion of the message:

Greetings from Amazon.com Technical Account Management.

Per our conversation, you are handling this situation in a conscientious and professional manner. This is exactly how we’d like all of our merchants to handle issues such as this.

Of course, everyone likes to hear great things about themselves.  Amazon praises me and I want to continue receiving that praise so I am motivated to perform in a manner that will ensure Amazon will keep saying positive things about me.  When a company such as Amazon, who is the most respected online marketplace, praises my company when something has gone wrong in a transaction then I feel even more motivated to provide great customer service.  And the wonderful thing is that I can actually afford to provide outstanding customer service to the Amazon customers, who are willing to pay the higher prices, because Amazon only charges me when I actually sell an item and so my overall selling fee is significantly lower on Amazon.  Higher selling prices and lower selling fees means I have the financial ability to provide the great customer service to Amazon customers that I want to provide.  In this particular case, I ended up spending $6.55 of my own money to resend the package to the customer and I felt great doing it.  I would never have dreamed of asking the Amazon customer to pay more money to correct their mistake. 

Ours is a good company willing to provide the best customer service possible.  What is possible for us on Amazon, though, is just not possible on eBay.  It is not an emotional decision, but rather a financial decision.  When we have to incur additional out-of-pocket expenses (such as payment to the post office) to provide great customer service then we have to consider the profit margin we make on the item in order to determine whether we can afford to provide that great customer service.   We simply cannot afford to give the eBay buyer more customer service than they are paying for no matter how many times eBay punishes us, demands better from us, or penalizes us for providing good customer service rather than great customer service.  No matter what eBay would like to happen, it’s just a fact that Amazon buyers will always receive better customer service from us.

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6 Responses to “The Tale of Two Services: Good versus Great Customer Service”

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hmmm

Last week I received an email from a customer (from eBay I currently don’t sell any where else) letting me know she hadn’t received her package yet and had looked at the tracking details which said delivery had been attempted, but she noted that the zip code was wrong. I use paypal shipping and of course as with eBay their system is wrought with errors also- this zip code was not even similar to my customer’s zip code so I of course I had to clean up PayPal’s mess.

When the package was returned I went on to the usps click n ship punched in her address with the correct zip code, slapped the postage on and sent it out with my other packages that day. emailed told her it was returned and that I sent it out to the zip she provided. Well, I got great feedback from her- I have no doubt she will buy from me again- so maybe I barely made anything off that item, but I’ll likely make much more over time with this customer, because she trusts me.

Did eBay acknowledge my great customer service? PayPal? no, but I couldn’t care less- it is the opinion of my customers that matter to me not eBay’s or PayPal’s. I don’t need their praise anymore than I need their constant interference. I just want to be left alone to do what I do best- making happy return customers.

I don’t charge bargain basement for my products either- so I didn’t take a loss I just didn’t really have a gain on the sell, but I’m a long term thinker and my category is great for customer retention so I need to take full advantage of the opportunities.

Your behavior is dictated by the net margin not venue. There seems to be this mis-conception that Amazon reaps greater margins for the seller than eBay. This may be true for some categories, but that is also true on eBay. It is just a matter of time when more competition from fellow sellers or Amazon itself. Don’t think Amazon is not analyzing sales velocity then pull the rug from under you when it sees a new opportunity.

Sun, yes you are correct in that my behavior is dictated by the margin and because my margin on Amazon is signfiicantly better I can provide better customer service. I do believe there are some eBay sellers who have a good margin in their category but I do not.

I have already thought about Amazon competing directly with me and without revealing a great deal of information, I am not really worried. I have, however, noticed some new competition on Amazon (same folks I see selling on eBay). These sellers do not have good reputations on eBay so unless they drastically change how they ship and unless they drastically improve their customer service, they won’t last long on Amazon.

I also have my own direct web sales. In addition, I am constantly sourcing new product and changing my product mix on eBay and Amazon. I have no illusions about Amazon but they sure are the best game in town right now.

Mechelle,

You make some good points.

It is worth noting that many of the eBay items I am currently selling ARE being sold at bargain basement prices and I am not worried about customer retention for those particular category of items since they are items that I will not be carrying any longer. The margin for several categories is simply not there anymore on eBay and I’m moving on to where there is more of a margin now.

I think the potential for repeat customers varies by category and that will certainly drive how far someone will go to please someone who is being difficult and is known ahead of time will not likely return. It would effect the way I handle things also.

Also, if I were selling at bargain basement prices I would be less inclined to accommodate the way I do for my customers, but I don’t and I won’t. I find the higher prices promote better buyers- it has only been when someone gets something really cheap in auction that turn out to be issues. I’m not sure why, but possibly because the major bargain hunters are more likely to bid an auction than someone who is simply looking for a good price. I don’t know

For me, and the point is well taken, your vignette reveals the limitations of Ebay customer service-the punitive, buggy & whip style of handling its sellers, a philosophy that is trickling down into every aspect of cusomer/seller relationships. The personalized Amazon approach-and the leeway their fee structure provides-allow sellers far more freedom to handle their business decisions without fear of reprisal from the customer or Ebay itself.

For me, the message Ebay is sending loud and clear is, “we don’t care. we don’t care about you, the seller, and we don’t really care about your buyers either.” They have erased goodwill in the marketplace, and i think they’re going to pay for that for years to come.


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