Exceeding Customer Expectations is the proven way to reduce returns, a program that I helped develop at Philips and that I learned years ago by engaging with the RLA. This has been proven over the past two decades by manufacturers who focused on making products simpler to use, easier to connect, packaged more efficiently, and marketed correctly without hype. Retailers learned there is a difference between giving an unlimited return policy and a convenient process for returns that would include feedback of the issues. A focus on building customer loyalty through enhanced experience was needed.

Prior to the focus on customer experience, the quality engineers worked on Six Sigma and other quality programs to make better products. The engineers argued returns were due to liberal return policies at retailers. For example, many consumer product returns are checked and tested and usually over 75% are considered “no fault found”. When sales were good, no one tried to stop the flow of returns and recognize them as reverse sales.

The costs associated with returns, such as call center support and refurbishment, are assigned to different groups in most companies, and the end-to-end total costs were hidden. Each department worked to cut costs which often resulted in poor customer experiences. An example would be when customer call centers were moved to foreign countries for lower costs and many Americans became frustrated on the calls for help.

Then came customer experience measurements based on tracking expectations, unmet or exceeded. It was no longer good enough to deliver a good product to a competitive market place. Net Promoter Score, Service 800, and other customer satisfaction measurement companies could show that companies with good scores had better financial results, lower returns, and higher customer loyalty.

The paradigm shift that was needed decades ago is complete, and those companies focused on better customer experiences are winning. Is your company focused on the best product or the best experience?

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Tony Sciarrotta
Best regards, Tony Sciarrotta tony@rla.org