Will Sharing The Customers’ Risk Become The New Customer Experience Best Practice?


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Marketer’s and CRM consultants have been referring to the “customer experience” for several years now. It’s one of those terms that can mean different things to different people. For some it’s associated with customer interactions that occur through customer service channels. In that venue the customer experience can often be influenced by factors like how fast your service reps respond to customer communications and how successfully they address complaints. Another associated venue is in the area of product returns and exchanges. In recent times the phrase “all sales are final” was thrown out of the conversations spoken at many check-out lanes and replaced with statements like:

“If you’re not delighted with our product bring it back in XX days and we’ll give you your money back.”

Guaranteed satisfaction is a bold way to project faith in the quality of your product, confidence in its ability to delight, and show off your customer service model. It appears the current economic climate has now inspired (or forced?!) some organizations to raise the bar by not just guaranteeing satisfaction – but actually sharing in the customers’ risk. In my post “Is Hyundai the Only Car Company Currently Listening to the Consumer?” I mentioned Hyundai’s new Assurance program. In short, Hyundai Assurance is a vehicle-return program that allows a car buyer to return their purchase if the buyer becomes unemployed. In addition, a recent WSJ article (“Small Firms Resort to Freebies and Special Deals”) pointed out that many small businesses are also resorting to strategies designed to attack consumer’s employment fears head on. One example mentioned was Ficion Audio, a high-end audio store:

“Owner Peter Jiang says he heard consumers mention their fears about the area job market. So in early January, he started a promotion where customers can return their speakers for 90% of the sales price if they lose their jobs within one year. If the job loss is between the one-year and two-year mark, he’ll refund 75% of the price.”

These examples highlight consumer companies both large and small who have taken the time to listen to potential buyers’ most pressing fear and designed programs that specifically address that issue. In the coming months many b-to-b organizations are likely to have the ole “partner” phrase pushed back in their face. It will sound something like this:

“If you really want to keep my business, or to be my partner – and not just a vendor – then you need to share my risk.”

Are you currently prepared to deal with that statement? If so, how thoroughly have you examined your risk as it relates to sharing the risk? Risk is a difficult subject area to examine at best, and will probably make metrics like Customer Satisfaction and the Net Promoter Score look easy. So, if you are currently leading your marketing organization and haven’t developed a close working relationship with your CFO it’s time to start building a bridge.

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Alan See
Alan See is Principal and Chief Marketing Officer of CMO Temps, LLC. He is the American Marketing Association Marketer of the Year for Content Marketing and recognized as one of the "Top 50 Most Influential CMO's on Social Media" by Forbes. Alan is an active blogger and frequent presenter on topics that help organizations develop marketing strategies and sales initiatives to power profitable growth. Alan holds BBA and MBA degrees from Abilene Christian University.


  1. Alan

    What a great idea. Whilst service guarantees have a number of well documented problems, the general idea of sharing customer risk is a great one. The quid pro quo for the company would obviously entail some sort of reward.

    What other ways do you see companies sharing customer risks and being rewarded for doing so in the process?

    How do you see this developing as the recession bites harder?

    Graham Hill
    Customer-driven Innovator
    Follow me on Twitter

  2. Alan: you’ve cited some great examples. I’ve focused on risk and sales for many years, and I like the idea of looking at the risk equation from the customer’s point of view: that is, learning what risks buyers perceive, and addressing those risks head-on. When salespeople are struggling, not understanding purchasing risks usually lies near the top of the confusion heap.

    Companies that listen and are nimble can “product-ize” that buyer-centric understanding by promoting lower purchasing risk through a generous return offer. As you point out, input from the CFO will be required as some customers will certainly take up the offer. There will be a financial cost, and careful analysis must be conducted. Under what terms will returns be accepted? What is the probability of a return? What market value, if any, will the returned merchandise have? Through word of mouth, how many people will hear of the liberal terms of the return transaction and be moved to make a purchase themselves?

    While a return offer might seem generous to a prospective customer, it doesn’t need to be. One company I worked with over twenty years ago had a strong “satisfaction guaranteed or your money back” policy. Customers found the offer appealing, but in fact, it was a very easy guarantee to make. In eight years of doing business, no customer ever asked to return any product. An exceedingly low risk bet created trust and goodwill.

    Andy Rudin

  3. Greetings:

    Another example quoted in the article was from Vaillant Solar Systems Inc., a San Diego-based provider of solar hot-water heating systems for residences. Rather than discount their prices the company launched a program where it installs the system, which can cost as much as $7K, for no upfront cost. Customers pay for part of the installation through tax credits – which Vaillant collects at tax time or they can wrap the install cost into the monthly payments. The remaining balance is paid back from the savings customers realize on their energy bills. The amount of the payments varies depending on the customer’s energy usage and the company expects most repayments to take about seven year. In short, it’s like a car loan with 0% interest.

    This example as well as the two I offered in my original post are traditional b-to-c type situations. The base risk for all involved is cash flow. If the customer becomes unemployed his paycheck stops and so does his cash flow. If monthly payments stop the merchants cash flow not only decreases, but they may end up with a large inventory of used merchandise, and a questionable aftermarket.

    As it relates to small business owners and the current economy I suspect that the age-old practice of bartering (with the help of the internet) will surface to a level not seen in the past. Barter and trade exchanges provide the means to get business done while conserving cash. During the difficult recession of the 1970’s the merchants and tradesmen doing business in the small Iowa town where I grew up set up such an exchange. Of course this was long before the internet making the process back then clumsy at best. But my father owned a small appliance repair business at the time and even though I was just a teenager I can recall several transactions that helped pull the family business through during that critical time. My father still talks about those days, so I guess transactions made under those conditions lead to a memorable customer experience.

    Alan See
    Follow me on twitter: http://twitter.com/AlanSee

  4. I agree with your thoughts here, Alan. Adapting to meet the needs of customers is crucial — now more than ever. This dimension of risk is an important one to account for in making any promotional decision, though. There’s a fine balance that companies need to make between promotional offers they make and the potential risk of exposure to the company. Companies can minimize that exposure by making analytically driven decisions (e.g., determining likelihood of return on proposed product categories.) Companies need to use ‘both sides of the brain’ in these difficult times to not only address customer needs, but also to not lose their own shirt in doing so.

    Michele Eggers


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