Customer Service: Delivering the Royal Treatment

Tags: 3PL, Retail, Supply Chain Management, E-commerce, Customer Service

As evolving retail models push consumer expectations to the extreme, companies explore new ways to show customers they rule.

The customer has always been king. But in an era of omnichannel retailing, mobile shopping, and ever-more-flexible delivery options, pampering consumers has evolved into an art. What does it take to deliver the royal treatment?

Here are strategies three companies are using to win the hearts of increasingly demanding customers—and keep them coming back to buy more.

Saatva Mattress: The Courteous Touch

When entrepreneur Ron Rudzin started investigating the mattress market, he found a lot of ill will between retailers and their customers. "Some stores would try to get out of honoring their warranty obligations," he says. They also antagonized customers with high restocking fees for returns.

So when Rudzin and his partners launched their own business, Saatva Mattress, they made warm relationships a cornerstone of their business strategy.

Saatva sells its luxury mattresses exclusively online, and while the notion of buying a mattress you haven't tested strikes some as odd, Rudzin, the company's CEO, notes that vendors have been selling such products by phone and infomercial for decades. Saatva sweetens the deal with a 30-day home trial, accepting returns at no charge beyond the original delivery fee.

Based in Westport, Conn., with a second office in Austin, Texas, Saatva makes its products in seven factories across the United States, and holds inventory in 18 distribution hubs. The company trains everyone who works in those locations—from customer service reps to warehouse staff—to treat customers with the utmost courtesy. The training ensures that no matter which Saatva employee a customer encounters on the phone or through the online chat tool, the conversation will maintain the same cordial tone.

Although the Internet permits fully automated transactions, any customer who clicks "Add to Cart" on Saatva's site also gets to talk with a friendly employee. During the first contact—a phone call that comes within 48 hours of the sale—a customer service rep thanks the customer for the order and checks the details of the transaction, ensuring they ordered the correct size and height. The rep also explains when to expect delivery, depending on the customer's location.

In Good Hands

Saatva uses two kinds of white glove transportation firms to deliver its products. NVC Logistics Group, headquartered in Rockleigh, N.J., handles long-distance deliveries throughout the country. A variety of mid-sized and smaller companies deliver to customers within easier reach of Saatva's facilities.

One of those regional partners is Tuscany 3PL, a furniture delivery specialist based in Fort Lauderdale. It handles Saatva's distribution in Florida and Michigan, and, as of late 2013, was scheduled to add several sections of Ohio, the Pittsburgh area, and North Carolina. Most of Tuscany's facilities serve a radius of more than 200 miles.

When a customer in one of Tuscany's territories orders from Saatva, the third-party logistics (3PL) provider receives an e-mail, and an employee enters the data into the company's warehouse management system. "Then we receive the order, inspect the product, contact the customer, and schedule a convenient delivery time," says Saatva President Ron Rudzin.

Just as Rudzin and his team want to get service reps talking to customers after the sale, they also want their transportation partners to make delivery arrangements by phone, rather than by e-mail. Personal contact makes it easier for customers to offer special instructions, such as how best to negotiate a narrow road.

Those phone calls also nurture a relationship. "Simply dropping off a great product isn't enough to win customer loyalty," Rudzin says. "We want customers to get to know us, and feel the warmth and courtesy with which we operate."

That courtesy also applies during Tuscany's delivery process. Members of the company's two-person teams wear white gloves, as well as booties, to protect the product and customers' homes. Drivers treat homes with respect as they carry in beds, set them up, and remove old mattresses. "If customers have wood floors, for example, we blanket the floors throughout the house," Decubellis says.

If a customer decides to return a mattress, Saatva wants that experience to proceed happily as well. All that is required to take advantage of Saatva's guarantee is a phone call or e-mail. "We prefer a phone call, because we want to make sure the customer understands that even a return is not a bad situation," Rudzin says.

Some customers are simply impossible to please, and some will take advantage of the company's policies, he admits. But difficult customers are the exception. "Most people are reasonable and will work with us, particularly when we're being courteous and open," Rudzin says.

The Internet has given consumers tremendous power: with a single keystroke, people can broadcast a review of a company or product to everyone from the mailman to the local congressman. For Saatva, the goal is to make all customers happy.

"We'll never forget that our business is built on recommendations and word of mouth," Rudzin says.

Tech Armor: Abundant Instruction

Information is power, and some companies turn information into a powerful force for customer service. At Tech Armor, a vendor of products that protect and connect mobile devices, one key to winning acclaim is ensuring customers know exactly what they're buying, then giving them the details they need to get the most from that product.

Based in Redondo Beach, Calif., Tech Armor sells screen protectors, chargers, and cables for a variety of smartphones and tablets, plus cases for the iPhone 5 and iPad Mini. Wireless carriers sell these products in their retail stores, but Tech Armor makes the bulk of its sales online—through its own site, and through partners such as Amazon, Newegg, and Sears.com.

"The best measure of customer service is whether customers recommend a merchant to family and friends," says Joseph Jaconi, Tech Armor's general manager.

To help earn those references, Tech Armor has to ensure its products meet customer expectations. In part, that means carefully crafting the information the company presents on its own and its partners' websites. "We are careful to provide accurate images and descriptions," Jaconi says.

Tech Armor also goes out of its way to ensure customers know how to install its screen protectors. The company's website features six instructional videos on that topic. In case a customer misses those tips the first time around, Tech Armor follows up every sale by e-mailing a link to those videos, and tucks printed instructions into the package.

"It's not human nature to always read instructions first," Jaconi says. "But we hope that by prodding customers with that e-mail and with the instructions in the envelope, we'll get them to look at the video before attempting installation."

Those videos are also the first place Tech Armor sends customers who lodge complaints—for example, if the customer can't work the air bubbles out from under a screen protector. But if the customer simply can't make the product work, Tech Armor's lifetime replacement warranty provides for a new one, no questions asked.

"The product is okay 99 percent of the time," Jaconi says. "But we're willing to send a replacement, even if there's a user error, because we want the customer to buy from us again."

Packaging Progress

To streamline replacements, Tech Armor has developed special packaging for that process. Rather than use regular retail packaging—the kind meant to show off the product on a website or in a store—the company slips the screen protection kit and instructions into a rigid envelope suitable for mailing. "All we have to do is apply postage and a shipping label, then send it out," Jaconi says.

This "ship in own container" (SIOC) program reduces environmental waste and eliminates a step from the shipping process. Tech Armor maintains an inventory of replacement product already packed in those envelopes.

Tech Armor manufactures its products mainly in China and Korea, and sells them around the world. Some distribution partners pick up their orders in Hong Kong or Shenzen. Tech Armor imports the rest to a third-party distribution center in La Mirada, Calif. From there, the 3PL ships product directly to consumers, and ships in bulk to partners such as Amazon that operate their own logistics networks.

Tech Armor uses air freight to import products designed to work with brand new mobile devices. "It's very important for us to be able to get a screen protector into customers' hands as soon as they get the phone," Jaconi says. But the company rarely learns the dimensions of new phones until those products are ready to hit the market. Then it has to rush new screen protectors into the distribution pipeline. After the initial introduction, the company uses ocean freight for later shipments.

Following the success of its SIOC program for returns, Tech Armor has started another packaging initiative to improve the customer experience, working with Amazon on its Certified Frustration-Free Packaging program. Tech Armor will use the new packages, rather than standard retail packaging, to house phone cases and cables that Amazon ships to customers.

"The service is called Frustration-Free because customers don't need any tools to open the packages," Jaconi says.

Like the envelope for returns, the Frustration-Free package is made of recycled and recyclable cardboard. It serves as both the primary packaging and shipping carton, simplifying the shipping process and reducing waste. Tech Armor plans to use the new packaging with other distributors as well.

At a time when consumers expect their vendors to consider the environment when they ship, this is one more way to give customers the kind of shopping experience they want.

General Growth Properties: Same-Day Delivery From the Mall

"Today" is the next frontier in retail customer service. As e-commerce giants such as Amazon and eBay start rolling out same-day delivery, retailers from Walmart to the corner cupcake shop are also trying to combine online shopping with a premium option that delivers orders within hours.

This scramble to please customers who want what they want right now is part of an ongoing evolution in customer service, according to Michael Hart, vice president of logistics at Deliv, a transportation service provider based in Palo Alto, Calif.

"Some say that Amazon's true market dominance lies in its ability to distribute, but it doesn't," says Hart, who joined Deliv from Amazon's last-mile delivery group in 2013. "It's in continuing to improve the customer experience. And in this, most retailers have been trying to play catch-up."

During the 2013 holiday season, some merchants in four major markets got the chance to pull closer to Amazon's heels when they launched same-day delivery based on Deliv's local transportation network. Working with Chicago-based mall owner General Growth Properties (GGP), Deliv brought the service to the Stonestown Galleria in San Francisco, Eastridge in San Jose, Glendale Galleria in Los Angeles, and Oakbrook Center in Chicago.

Retailers in the four malls who joined the program were able to offer same-day delivery to local customers who shopped online—assuming the products were in stock locally—and to shoppers who visited the stores but didn't want to lug their purchases home.

GGP started working on same-day delivery in 2012, after conversations with tenants revealed a demand for such a service. "Many brick-and-mortar retailers face questions from management about how they're trying to compete with purely online retailers," says Scott Morey, senior vice president at GGP. "This service gives them a new answer."

The mall owner issued a request for proposals in spring 2013, and chose Deliv in part because it offers customer service extras, including time-definite delivery appointments. "Its platform—both the operating and technical components—provides a unique, high-touch, connected experience," Morey says.

The drivers behind this experience are independent contractors. They use their own vehicles, and employ their own smartphones to communicate with Deliv's routing and dispatching system.

Rather than recruit full-time drivers, Deliv seeks people working in other occupations who want supplemental income. It looks for contractors who conduct themselves professionally and, ideally, have customer service experience. In addition, drivers' vehicles must look good and run well.

In addition to interviewing applicants, Deliv conducts a background check that includes driving record and criminal history, and verifies the vehicle is properly registered and insured. Generally, one to two percent of applicants in a market will receive a contract, Hart says.

After Deliv hires drivers, they commit to a specific time slot, to help ensure that whenever a customer wants a delivery, a driver will be ready. When it's time to assign a delivery, Deliv's system chooses the available driver who has earned the best rating, based on past performance.

No retailers have expressed reservations about Deliv's "hybrid crowdsourcing" staffing model. "We've discussed it with senior-level executives in luxury goods, apparel, and jewelry, and they couldn't be more enthusiastic about it," Morey says.

Getting Retailers Onboard

Deliv's dynamic routing system assigns new deliveries to drivers throughout the day. Using the GPS technology in drivers' smartphones, the system tracks whether drivers arrive on time for pickup and delivery appointments, then rates them accordingly. If traffic congestion slows a driver down, it soon becomes obvious to Deliv employees, who follow delivery progress on a color-coded display.

"We see a shift from green to red, and a tone notifies the customer service team," Hart says. The team then decides whether to hold off on new assignments until the driver catches up, or to call in another contractor to help.

In addition to assisting with quality control, GPS in the phones lets customers monitor incoming deliveries if they wish. "They also get a link to Google Maps that shows the driver en route, and the display includes a photo of the driver," Hart says.

Merchants shipping with Deliv can also offer several additional services. For example, a shopper sending a gift might record a video greeting, which the recipient views on the driver's smartphone. And some merchants want to allow e-commerce shoppers to check out different versions of a product in person.

"One program we're working on with a mid- to upper-tier retailer involves bringing the product in the size the customer wants, plus one size smaller and larger, and letting the customer try them on," Hart says. "We return the ones they don't want."

Similarly, a home goods company could deliver three units of a product, in three different colors, and let customers decide on the spot which one looks best in their home.

Trying Same-Day Delivery on for Size

GGP has not yet announced which retailers will join the same-day delivery program, although Morey hints they include some well-known names. The four malls in the trial represent about 200 unique retailers, including national and regional chains, and local merchants. Some launched the service in time for the 2013 holiday shopping season, while others needed more time to implement same-day delivery—including some merchants that are building e-commerce sites for the first time.

"Any business that now offers a 'buy online, pick up in store' option is close to being able to offer same-day delivery," Morey says. Those retailers already have systems in place to tell them if an item sold online is available locally. Some merchants will offer the Deliv option only when a customer in a participating market orders a product that's in stock at the GGP mall; others will pool inventory from several stores.

Retailers will also devise different strategies for same-day delivery to customers who shop in person. Some, for example, might offer that service only for certain items. But, ultimately, shoppers who want same-day delivery will be able to get it for any items they want, including merchandise from stores that haven't joined the service. GGP plans to establish a storefront in each of the four malls, where customers can carry in their purchases and arrange delivery on their own.

Same-day delivery from the mall is convenient in all sorts of situations, Morey says. For example, the service helps in cities where many shoppers use public transit or live in walk-up apartments.

In the future, GGP might bring same-day delivery to other malls and markets. But it's important to note that there's nothing exclusive about the arrangement between his company and Deliv, Morey adds. Other real estate firms could make a similar arrangement, or retail chains could roll out the service on their own.

As commutes grow longer, urban traffic gets worse, and people find it harder to balance work and family, demand for same-day delivery—especially for online purchases—is bound to increase. "Part of the reason is the immediate gratification attitude that's ingrained in the American culture," says Hart. Interest also stems from a desire for convenience. But in addition, it comes from the sense that the time we have available outside of work is precious and scarce.

By giving customers back their valuable free time, and providing an exceptional shopping experience, retailers can ensure consumers are treated like royalty.