Let me tell you a story that perhaps you can use to improve your business. My Nespresso le Cube espresso machine is still a favourite at home. I bought it back in 2005 when we had just renovated the kitchen in our apartment. These days it sits in our not-yet-but-soon-to-be-I-hope-renovated kitchen in our house. I’m not sure if it will keep its place after we have renovated this time. And it’s all due to lack of excellent customer support.
First, a bit about Nespresso
Nespresso uses a razorblade strategy by offering espresso machines at a low price, and then make profits from high-margin coffee pods. The strategy is named from Gillette founder King Gillette who practically gave away their razors, and earned money selling exchangeable razor blades (repeat business).
Through patents, design and overall great marketing Nespresso have managed to grow and sustain their customer relationships for many decades.
Nespresso also uses exclusive distribution with coffee pods only available for sale through Nespresso’s own stores (only one in Stockholm) and web site. This gives Nespresso good control of the customer experience, and control of the price of pods. No retailers offering discounts!
The last two times I have procured my precious pods through nespresso.com, since I haven’t been able to visit the store.
The first time everything went fine. My pods arrived in a neat box and like an crack addict on cold turkey I shot myself a Ristretto in no time.
My latest and perhaps last experience
The last time I ordered through nespresso.com the package was damaged upon arrival. Stuff that happens. No worries. I called Nespresso customer service to get a replacement.
Unfortunately their logistics only makes it possible to send sleeves (10 pods in a sleeve) in even 5:s. No replacement sleeve for me. Instead they offered one (1) free sleeve with my next order. Meaning I would have to pay for an additional four (4) sleeves to get full value of my initial purchase.
The customer rep had his instructions, and not even after speaking with his manager (with me on hold) he was able to offer another solution besides having his manager call me.
Next day the manager called me. The compensation offered was now two (2) sleeves. With my next order. Now, I haven’t heard of the ”Pay 3 more to get your initial value”-strategy, but maybe there is one…
We agreed that they would just refund the cost for the damaged sleeve. Fine with me. This was some three weeks ago.
Yesterday I checked my monthly credit card purchases and noticed there wasn’t any refund from Nespresso, something that normally just takes a few days. Called to ask. Now the story was that I had to return the damaged sleeve before they could refund the cost.
Today Nespresso called me again and they will send me two (2) sleeves for free. In a five sleeve box. Hopefully it shows up undamaged. The Nespresso brand has suffered a bigger damage though.
What can you learn from the above for your business? Are there any policies or routines that should be scrapped or updated in order to attract and keep your customers happy over time? Leave a comment!