How to Handle a Customer Service Crisis

NEW YORK, United States — Elyse Hamilton says she's done with Rent the Runway after the platform cancelled the delivery of a navy sequined dress she planned to wear to her sister's wedding.

The 40-year-old manager at a pharmaceutical company said it wasn't the missed order itself, one of hundreds caught up in the fashion rental platform's logistical meltdown last month. It was how the company responded following the blunder.

Hamilton said she received an email notifying her of the cancellation, but when she called the company to learn more, she was put on hold for 40 minutes. When she finally got through, she said the customer service representative was unhelpful. The refund took six days to arrive, and a $200 gift Rent the Runway promised to customers affected by its warehouse issues took eight days to appear in her Paypal account.

“If they had called me and were able to issue the refund immediately, I’d feel so much better,” Hamilton said. “I would have had my money back to go shopping and [instead I was] sitting here ... looking at my bank account to be like, when am I going to get this back?”

Rent the Runway declined to comment.

If they can turn it around, they can get a customer for life

For retailers large and small, mishaps are inevitable, whether it’s late deliveries, wrong orders, data breaches, product recalls or, in Rent the Runway’s case, a botched upgrade to a warehouse fulfilment system. How a company responds to its mistakes is crucial. If handled poorly, a customer service misstep could cost future sales as disgruntled customers turn away from a brand for good. But the right moves can build loyalty and even forge an emotional relationship with shoppers.

“A [mass issue] can be an opportunity,” said Brian Bourke, vice president of marketing at Seko, a logistics company that works with retailers worldwide. “If they can turn it around, they can get a customer for life.”

Retailers should follow one simple adage in times of distress: communication is everything. On the backend, companies must be in constant correspondence with their distributors and logistical partners to fix the underlying issue and track down misdirected orders. With consumers, radical transparency tends to generate goodwill; in other words, customers should be informed of a problem right after it’s discovered. And in the case of a full-fledged meltdown, retailers must move fast to hire extra customer service personnel and take other steps to address widespread concerns.

Reach out to customers before they complain

Lime Crime learned the value of communication the hard way. In 2014, the makeup brand was the victim of a hack that exposed customer data. The company waited too long to notify customers and offer fraud protection; some learned of the breach only after their credit cards were used to make fraudulent purchases.

“The way it was handled at the time was probably not the best experience,” said Bianca Bolouri, Lime Crime’s vice president of global marketing. “The number one thing we do today is to always get ahead of it ... the quicker you can tell your customer, the better.”

The more proactive a retailer is with any sort of trouble — whether with business partners or with shoppers — the less likely it is to lose sales. Instead of waiting for complaints to roll in, companies can email customers explaining the problem and offering compensation, such as a discount on a future purchase.

“Everybody makes mistakes and people get it,” said Nitin Mangtani, chief executive of PredictSpring, a mobile customer service platform. “When people are not happy is when there’s no communication … Reach out to them before they complain to you.”

Customer service is the first line of defence

After its breach, Lime Crime amped up its web security and gave affected customers a coupon. It also bulked up its customer service team, who now handle consumer queries on live chat, social media and email.

There's nothing better than having a consumer have an issue and you're bringing them along for the ride

Bolouri said this has helped reduce the fallout from more run-of-the-mill problems, such as late deliveries or wrong orders. Customers appreciate when brands are accessible and willing to admit fault.

“There’s nothing better than having a consumer have an issue and you’re bringing them along for the ride,” she said. “You can see an enormous reaction, even if they had a bad experience. They’ll come to us and say thank you.”

Tommy John, an underwear start-up, hires extra customer service representatives during times of high demand, when as much as 65 percent of its stock sells out, and questions from customers pour in.

“What we found is the more frequent conversation you can have with people who are anxious about the product, the more they trust the brand,” said Tom Patterson, founder of Tommy John. “Even if it was bad news, we wanted to be more transparent.”

Amify, a firm that helps companies sell on Amazon, requires its customer service team to answer emails within 24 hours, but they’re typically answered within four, thanks to the company’s many templates of responses.

Regardless of how customers try to communicate, it’s critical that they can make contact with the company quickly. A number of companies employ customer support teams overseas, for instance, so they can offer around-the-clock services.

“The customer just wants to be heard,” said Ethan McAfee, founder and CEO of Amify. “We’d rather overbuild our [customer service] team than not.”

Set up a “risk dashboard”

Retailers should also consider setting up a system of recognising risk to prevent liabilities, according to Sarah Willersdorf, managing director and head of the luxury, fashion and beauty sector for Boston Consulting Group. This so-called “risk dashboard,” she said, could entail monitoring key indicators such as unfulfilled orders so that if a number exceeds a certain threshold, the company would know that something is amiss.

If suddenly over the course of a week you're seeing double volume of people complaining stitching coming off a jacket, the company can get ahead of it and swap out things at the store

In addition, a risk dashboard could include a social listening component, in which third-party agencies can track positive and negative sentiment around brands in real time using algorithms to detect any abnormal trends. In the case of Rent the Runway’s mishap earlier this month, for instance, users took to Twitter to complain about cancelled or late deliveries.

Early indicators of trouble could also come from the customer contact centre, Willersdorf added. “Having a really clear way of capturing increased volume on certain topics is really important,” she said. “If suddenly over the course of a week you’re seeing double volume of people complaining [about] stitching coming off a jacket, the company can get ahead of it and swap out things at the store.”

Implementing thorough channels of communication with logistics partners is another way to skirt major meltdowns in the fulfilment process. For instance, if a brand fails to notify its third-party logistics partner (3PL) of an upcoming promotion, then the 3PL may not be equipped to accommodate the subsequent surge in sales.

“Let’s say demand spikes 50 percent in one week,” said Bourke. “When marketing and customer service and logistics are in sync you don’t have these problems.” He suggests that even if a company outsources its warehousing, it could keep at least one staff person based in the warehouse as a liaison so that the operator is up to date on every company development.

Humility is key

And if nothing else, a sincere apology is indispensable.

“There’s a right tone and a wrong tone,” Willersdorf said. “It needs to be genuine and it needs to take responsibility … You don’t want to say, “I’m sorry this happened, it’s the fault of XYZ.’”

A colloquial, plain English tone is better than corporate-speak, she added.

The apology itself should fit the tone of the company, according to Seko’s Bourke. Creative messaging can soften the blow, whether it’s a funny video or a sincere apology from the CEO, “whatever matches the tone of their culture and brand,” he said.

You don't want to say, "I'm sorry this happened, it's the fault of XYZ.'

Even if the mea culpa isn’t proactive and customers are already upset, it’s a chance to salvage the relationship. This means that an apology should come with some sort of giveback, whether that’s a discount or a free gift.

“It’s something to show that the consumer is valued,” said Willersdorf. “It’s quite easy for them to hear that someone is sorry but for [the company] to do something about it, that’s different.”

While she may be staying away from Rent the Runway in the near future, Hamilton points to Amazon as a master of reparation.

“They just rectify the problem, like, right on the spot,” she said. “Whether it’s refunding the money right away or if a package wasn’t delivered, they’d be like, ‘Oh my gosh, we’ll get something out overnight’ … and I feel taken care of.”

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