A ‘Real World Look’ at Customer Service Policies

Different kinds of catalogers should have different customer service policies, according to Timothy Holody, COO of Seta Corp., which markets through the Palm Beach Jewelry catalog and ships 1.5 million to 2 million units of jewelry a year to customers. “But whatever your policies are, they have to be set up in such a way that you can measure their effectiveness, and their impact on your bottom line.”

Holody’s presentation at the recent National Conference on Operations & Fulfillment in Schaumburg, Ill., was a case study, “A Real World Look at Customer Service Policies,” which focused on how Palm Beach Jewelry handles various customers service situations and, most notably, how much those policies cost. “The goal is to offer great customer service, but at a level that you can afford,” he said.

Palm Beach Jewelry uses three major reports to track reship and refund costs:

1. a reship analysis,

2. an adjustments summary and,

3. a refunds without returns report.

These all can be handled on a regular basis by any company, either daily, weekly, monthly or year-to-date as the situation warrants, Holody noted.

Another important aspect of customer service is fixing the level of authority of first-line CSRs. “They should know what they can do, and more importantly, what they CANNOT do for a customer,” he said. At Palm Beach Jewelry, for instance, first-line CSRs have the authority to issue refunds of up to $50, but not more than that. “It’s actually excellent customer service to get the customer away from the first-line rep if that rep doesn’t have the authority to handle the problem.”

Track Trends, Tweak Policies

Customer service policies are changeable, however. “Look for trends and tweak your policies as needed to satisfy the financial needs of the business as well as customer needs,” Holody said.

But companies need to be careful not to overreact to short-term trends, he added. Policies must be tracked over time. Catalogers should take into account seasonality or other trends in a business.

Sometimes catalogers need to make fundamental business shifts. Palm Beach Jewelry once was predominantly a costume jewelry marketer. But it later added gold and silver to its product lines. The shift raised its average order value and inspired a complete review of its customer service policies.

Of course, there’s a minority of consumers who take advantage of catalogers’ liberal customer service policies and seek to rip them off. For that, Holody recommended that catalogers maintain necessary controls and measurement.

For whole-order reships, “policies need to be based on the method of shipping, average order size, your financial exposure, and your philosophy of customer service,” he said, adding that partial-order reships are tougher to deal with, at least for a cataloger such as Palm Beach Jewelry, which ships relatively light items.

Catalogers who send heavier items (in excess of 1 lb, for example) can measure weight as packages ship to establish that the order probably isn’t missing anything.

So how does a company know if its customer service policies are correct? “It’s an important question that must be answered,” Holody summed up. “Ultimately, your customers and your financial reporting should tell you.”