4 Customer-Service Lessons from Amazon

kathryn by Kathryn Hawkins on October 7, 2011
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U.S. consumers will spend an average of 9 percent more with a business when they’re impressed with its service, according to a global survey conducted by Echo Research. High-quality customer service not only can convince people to buy more, but also helps companies drum up repeat business and attract new clientele.

Perhaps the best example of how powerful excellent customer service can be is Amazon, which led 142 other companies in Temkin Group’s 2011 loyalty rankings. Here are four lessons that small businesses can learn from the e-commerce giant:

  1. Provide progress updates. Information is everything. After customers place an order with Amazon, they can simply click on the “Where’s my stuff?” link in their account profile to find out whether the item has been shipped — and where it is in the transit process. Being proactive about keeping customers informed helps them feel confident in your service.
  2. Be generous with refunds. Is an item the wrong size? The wrong color? Not what the customer expected? Amazon provides a no-questions-asked returns and refunds process, even in cases where the product is sold by another merchant through Amazon. That means customers don’t ever have to suffer from buyers’ remorse, which can lead to hard feelings (and negative reviews) of your company.
  3. Monitor your partners’ behavior. When you work with other merchants, their actions affect how people perceive your operation, too. Amazon works to ensure that sellers in its Amazon Marketplace provide high-quality service by requesting customer feedback and ratings — and booting out any merchants that have problems with 1 percent or more of their orders.
  4. Take a cut in profits in exchange for improved customer satisfaction. Amazon is the master of low-margin sales, undercutting other retailers’ prices by as much as 60 to 70 percent. The company is more than willing to give stuff away, too: Amazon hosts thousands of free Kindle books and recently launched a lending program to allow Kindle users to borrow premium books from public libraries. Maintaining low (or no) prices encourages customers to rely on you for more and more purchases. This strategy may mean smaller profits at first, but will help you to gain a large, loyal customer base in the long run.
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