Are Your Policies Customer-Focused or Profit-Focused?

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Last week I tried to get a replacement part for my stationary bike. One of the end caps from the handle bars had cracked and needed to be replaced.

First, I called the local store. They didn’t have any and instructed me to call their central service department number.

The service department indicated that because the bike was not a current model, I needed to get the part from the US manufacturer – Vision Fitness. They provided the hotline number.

I called the Hotline and sat on hold for 15-20 minutes before getting a live person. They were very helpful and indicated that the replacement part would cost $0.78 USD. They proceeded to get my mailing address for shipment.

They then indicated that it would be mailed at a cost of $10.00 USD.

When I asked why a $0.78 plastic part was going to cost $10.00 to ship I was told “that’s our minimum shipment cost”. The cost didn’t reflect the weight — it was a minimum charge for them to send out any part.

I had already invested thousands of dollars to purchase their machine. I guess the figured they already had my money and what was the likelyhood of me purchasing a second stationary bike.

Well the part wasn’t that critical and I had already spent too much time on the issue, so I decided to forget about it and just live with a cracked end cap.

What initially seemed like a minor issue was no longer worth the trouble.

My Perspective: A customer-focused organization anticipates situations like this and would simply offer to put a part like this in the mail. The fact that they have a minimum charge indicates that their first concern is their own profitability — not the customer. They will only make the customer happy if it first serves their profit motive.

We should ask ourselves whether our policies are addressing our employees and customers needs — or simply acting as barrier to providing exceptional customer service.


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7 COMMENTS

  1. i hear ya on this one!. had a similar experience with a piece of yard equipment that needed a 0.15 spring. the charge for shipping and handling was 14.98. the cost to stuff a spring in a padded envelope and send it out regular mail would have been minimal, instead of fostering good rapport with the customer and keep me potentially coming back for another product of theirs, i have found a “make do” part and will never buy another product from their company. i have also relayed this experience to neighbors, friends and family, most were appalled at the experience i had and have all vowed to avoid them as well. the power of “unadvertising” is greater than any money spent to gain a customer in my estimation.

    understandably there is a cost factor involved to ship, but something that can go usps, in what we can see as a minimal cost to the company and consumer and most of all goodwill basis but gets this treatment is just gouging and corporate greed.

  2. From a wholesale perspective, I understand the cost of shipping just one piece. If they use a fulfillment warehouse, they are charged a fee for each piece of inventory they receive, then send out regardless of the cost, plus the UPS/Fedex fee (many fulfillment services don’t use the post office), packaging fee’s and even to print the packing list, as well as service fee too – which is what escalates the cost. So it’s easy to see how the shipping cost in relation to one small piece is excessive. We used a fulfillment service for a while, but found the costs prohibitive to selling small quantities of things and so brought it back in-house so that in this tight economy we could provide retail stores with the ability to place smaller orders. When you get too many tiny orders, it is like bleeding money.

    We sometimes have retailers who only want to order one small piece for a consumer customer and they then add the shipping fee into their profit margin We often advise them that the cost of shipping will be the same if they combine several pieces of inventory they may need to supplement stock. Sometimes they go for it and sometimes they stick with just the one piece.

    The bottom line is that a savvy retailer should focus on keeping their consumer customer happy, and go the extra mile for them, by placing an order for their customer with the distributor. The distributor may on occasion go the extra mile, but one has too keep in mind that too many order “accommodations” can create a big loss. It’s a tough call.

  3. Presentation is everything.
    Had the first retailer said “no problem, we’ll get the part for you, and in our experiance the part will be $15”, More often than not the part will be purchased and the customer will be happy. The price is not really the issue.

    When handled the was you were, it feels like a rip off.

    It’s called the hooker effect; things are always more valuable BEFORE you get them, or know where you can get them, than after you have them. A happy , friendly “that will be $15” is generally taken well.

  4. I am going to try to bring the retailer perspective into this. We own a small engine repair shop and deal with multiple customers that are in need of small parts that are very low cost. We – as retailers get charged shipping, just as you the consumer would. We often try to hold our orders until we have the required minimum to place. Ultimately the shipping cost has to be shared by everyone. The 75 cent part will become a $1.75 part through our shop. We have to do that in order to stay afloat. I am not even going to go in to the fact of the time spent looking up the part and sourcing the part out for the consumer(and we never charge for our time). The end result being the consumer in need of the small part – although 75 cents online will have to accept the fact that it will cost them more to have someone bring it in for them. I pride ourselves on the customer service that we give!

  5. I can see both sides of the subject as having a point, we too own a business and price and customer service go hand in hand. I was going to purchase river tubes I sell retail. My cost of the tubes was $8.15 each, the shipping per tube was $6.00. The USPS is helping with these very issues. Get the box (it’s free), put whatever you want inside and ship it for the same price, whether it is 5lbs or 35lbs. I decided to cancel the order and keep looking. If an initial purchase starts at $65.20 and ends up at $100.00, something is out of whack.

  6. I own a small business and my cost is anywhere from $5 (very rare) to $14 for a 1-lb package, the minimum weight through UPS. Most 1-lb are an average of $9-11 so $10 is more than fair. Also, USPS is not as reliable as FedEx/UPS and if you want insurance it’s another $2, UPS insurance is included in every package for up to $100.

    Also, in order to ship USPS, it takes a lot longer than slapping on a UPS label because UPS gives you software and a label maker, so the $5 USPS shipping plus $2 insurance and a $12/hour employee taking 10 minutes to put this all together ($2 for labor), you’re at $9. Then you have to either drop the package off at the post office, which takes labor and gas, or have someone schedule a post office pickup, which takes another 10 minutes ($2 more in labor). This is not counting the packing supplies.

    Bottom line… if you don’t like the prices, shop elsewhere. That’s the beauty of the free market but people would rather pay the price and complain, when their complaints are rarely valid since they don’t know the company’s costs.

  7. Some things are so cheap that the cost of shipping far outweighs the value. So should the retailer eat the cost?

    Seems to me that the situation could have been handled better, so that the customer (Bill) understood that he was just being charged the cost of shipping.

    There’s no money being made on transactions like this. The real “cost” is to the customer relations and future purchases and word of mouth.

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