Turning Holiday Returns Into Return Customers With Radically Personal Customer Service

Black Friday is famed as the inaugural event for the holiday shopping season with retailers already beginning to squeeze an average of 20 percent to 40 percent of sales into the last two months of the year. Even during the COVID-19 pandemic when many chose to forgo their typical holiday traditions, the retail industry still experienced some of its most significant holiday sales growth to date — 8.3 percent year-over-year increase from 2019-2020 and 14.1 percent year-over-year increase from 2020-2021.

As holiday sales have increased, so have the number of holiday returns. Retailers have seen an increased number of returns over the past eight consecutive years, with an average of 27 percent to 30 percent of adults making a return before the end of January. It’s an inevitable part of gift giving — after all, how often do grandparents, cousins and uncles actually get it right?

While returns may seem like a burdensome part of the holiday season for retailers, companies that provide a great customer service experience — especially when it comes to offering options such as free shipping and free returns — have a considerable opportunity to maintain and gain loyal customers.

Utilizing Customer Service to Drive Loyalty

Customer service is often the first and only time a customer will interact with a human during their entire shopping journey. Add onto that the fact that a percentage of holiday returns come from people who have never been a customer before, and it’s easy to see the opportunity that customer service presents in the loyalty economy.

According to Gladly’s 2022 Customer Expectations Report, businesses are losing $75 billion a year in revenue due to inadequate customer service alone. In fact, 42 percent of shoppers said they would stop buying from a brand altogether after just two bad service experiences. So what is it that customers are looking for in their customer service interactions?

Personalization

Personalization in the digital-first era of commerce is crucial to maintaining and increasing customer loyalty. Sixty-six percent of shoppers said they prefer brands that know them and can recommend things they would like — a sentiment that's increasingly popular among millennials and Gen Z, with 81 percent and 79 percent, respectively, agreeing. With the majority of holiday returns happening online, customer service is often the only time brands can personalize the experience and make recommendations for customers based on past purchases and individual interests.

Research shows that people are willing to spend more money with a brand that offers great customer service, a sentiment that's especially important for this upcoming holiday as many consumers consider the possibility of a recession and tighten their budgets.

But in order for customer service agents to personalize each customer’s experience, they must have a complete understanding of the customer journey.

Technology That Brings Great Tidings

The idea of creating a personalized, human experience for customers isn't new. In fact, a majority, if not all companies, would say they already center the customer journey with every sale. However, not all companies are utilizing the right technology to bring this sentiment to life.

In recent years, many companies have moved toward an omnichannel approach to customer service, bolting together live chat, email, phone and social media channels to try to create a cohesive customer history for the customer service agent. While it may check all the channel boxes, it still leaves the agent searching duplicate tickets and switching screens to manage multiple channels for data the customer has already shared asking them to repeat it again — reinforcing the lack of personalization. The problem with omnichannel is two-fold: the service channels are bolted together and they sit in siloes on different screens or tabs which means they don’t communicate and don’t present as a single conversation, still relying on separate ticket numbers by channel to service customers.

One of the best ways to bring human connection to the customer service experience is to stop labeling customers with a ticket number and start treating them as human individuals. Customers don’t care about channels. Just like when you coordinate with a friend for lunch — you talk to them on the phone to make a plan, you send them an email reservation confirmation, and you text to share you’re running a few minutes late to the restaurant. Nobody thinks about that experience as “I sent a call, email and text ticket to my friend.” It’s simply “I met up with my friend for lunch!” When customer service agents are able to see the entire customer journey in one screen regardless of channel, instead of just the return, they're better equipped to offer help and can make better recommendations based on the customer’s likes and dislikes. They’re able to help customers and not just service tickets.

Being channel independent is the easiest way to eliminate ticket numbers. With channel independence, it doesn’t matter how a customer contacts customer service — whether it’s via email, phone, live chat or social media. All of the information from the customer is shown to the customer service agent in a single window. This eliminates the need for customers to repeat themselves and also gives the agent an opportunity to provide better service — e.g., offering a different size, color or product based on their reason for return, purchase history or product interests. For customers whose holiday return acts as their first brand interaction, channel-independent technology can help prompt agents to ask questions that allow for better recommendations on products to use their store credit.

For brands to be able to help customers in this way, you might call it radically personal customer service. This is the key to turning holiday returns into long-running repeat customers. Not only does it grow loyalty for long-standing customers, but it also serves as a great first touchpoint for new customers returning gifts to a brand they’ve never experienced. Brands that are able to personalize this return experience and treat new customers as loyal customers from the very beginning will see repeat purchases into the new year and beyond.

By empowering agents to view customers as humans and providing the right technology to help them connect and make personalized recommendations, companies can begin to move the needle on customer loyalty.

Jason Finkelstein is chief marketing officer at Gladly, a customer service platform helping the world's most loved brands deliver loyalty through radically personal customer service.