Tiering Your Customer Service - A Samsung FAIL Case Study

I recently had a horrific experience with customer service at Samsung, which prompted me to post some learnings for other brands.

It highlighted something that few, if any, companies have thought to implement. A tiered customer service.

The traditional approach is to have a standardised set of policies and interaction protocols for all customer complaints, returns or product faults. Unfortunately what this means is that customers facing recurring issues continue to get treated the same as first timers, even though their stress level, frustration and anger is much higher. The outcome is an explosive failure in communications and lasting brand damage.

With the web giving consumers a voice amongst both a large number of trusted connections and an even larger number of random viewers, any given individual has the power to inflict financial brand damage well in excess of the value of the product in question. Not only will they personally never buy another product from that brand, they are able to influence others to look elsewhere too. Both result in a direct loss of revenue, even beyond the public perception of brand. Pushing people to their tolerance limit is enough to help them overcome the inertia and effort required to put their negative experience up on the web for all to see. This, being a point in case.

How it should work is that the customer assistant in the service or complaints centre should recognise a returning customer and turn up the sensitivity. All customer service systems keep a record of previous issues for any given customer, so it should be technically easy to throw up a different coloured flag depending on how many times the customer is returning with an issue.

Returning issues should be given priority, with increasing levels of amelioration, depending on the number of visits. It is the only way to ensure that if you fail a customer more than once, you do not lose them and parts of their network for life.

Here's a Case Study involving SAMSUNG. Customer Ref: 8710779400

I recently bought a Samsung Galaxy 7.7 Tablet. The high end version. I chose it over an iPad because I was both an Android and a Samsung fan. I already own four other Samsung devices, from laptops to phones.

FAIL #1

Two days after buying the product from a proper Samsung shop in a big mall, it died completely without warning when the battery power got low. I couldn't get it going again even after plugging it in. I called up about a replacement. Any sensible company would've replaced it right away. Faulty from box should have no other procedure. However they insisted it had to be taken to the service centre. The shop I bought it from was apparently just a retail outlet.

It took me an hour to get to the Service Centre, where I waited for two hours before I saw the customer service person, who insisted that they would have to repair it. That's their 'policy'. This was the first of many such examples. Apparently the customer has to follow the company's policy, regardless of it's impact.

Be aware then, that if you buy a Samsung product, you are signing up to an operating process that suits the company, not you the customer. That's the first major FAIL.

They kept the device for 5 days, agreed there was a problem and instead of giving me a new one, replaced the motherboard. I wasted another five hours collecting it. I also had to waste time changing all my passwords for security, and reload every single app after getting home.

FAIL #2

A few days later it died again. I called up the customer service number, very frustrated, requesting a replacement directly. No joy. Must return to the service centre, where the whole process repeated. When I got there they treated me the same as my first visit. I queued up like everyone else. The assistant treated me like it was my first time, with exactly the same level of disinterest. The supervisor refused to come out to see me, and no manager was available to talk to me. They told me it had to be repaired. Company policy. I lost another 5 hours in dropping it off and 5 in collecting it plus another 5 days lost in the middle. Five hours is effectively a full working day lost. So in total, that's four days of service centre time, plus ten days of being without the device, all in the first month of buying it. All my passwords had to be changed again, and the same went for reloading all the content.

To rub salt into the wound, they gifted me the cheapest little two inch, Samsung-branded pocket note pad as an apology. Since the technology doesn't work, they appear to be suggesting that I ought to just stick with pen and paper.

FAIL #3

I took it home, assured for a second time that it was now working, and a few days later it died again. Same problem. I called up a third time, sure that this time there would be no question about replacing the tablet. I was pretty angry and very frustrated. I explained that this was my third time on the phone and I wanted to speak to a manager. No manager available. Same response as before. Take it to the service centre. Drop it off. Let them have a look at it. Then go back and collect whatever they give you.

This made me really angry and for no fault of my own; the device was still pristine with not a scratch on it. Any smudging you see in the video below is just fingerprints on a protective screen. My stress levels were going through the roof, mostly because I could see pointless conflict on the horizon. Customer vs. company policy. What chance does the customer have? The eventual fall-back is that the staff member either disappears to confer with a supervisor, or just refers to some head office department that neither of us has access to. The only interface is a form they fill in.

This time I took a video of it to prove beyond any doubt that the thing didn't work. I had lost so much faith in Samsung that I was almost certain they would mess me around and I wanted proof.



I got there, waited for hours and then got my turn. This time the service person confirmed that it was dead and wouldn't charge, but then tried to blame my charger. She went and got a new one, which didn't work either. She was obviously following the instructions of some puppet master in the back as she kept holding everything up for the closed circuit camera on the ceiling. I kept insisting that I didn't care if they fixed it. It would have to be replaced. She kept disappearing to speak to the same supervisor in the back. I even showed her the video I had taken. Eventually she brought out a young technician who opened it up, fiddled with it, boosted it, and got it to work again. They tried to make light of the whole thing, like it was no big deal. Absolutely no recognition of the fact that I was coming in for the fifth time between drop off's and collections, and a third time for the same issue. No recognition that I was angry and stressed.

After an hour's conversation the girl filled the form in as 'Same Problem. Cannot Charge.' In the remarks she wrote - 'Request New Set'. That's it. No further notes on how she confirmed the problem or any other relevant details involving the technician.

They were treating me like it was my first time there. Using the same standard operating procedure they use for everybody else. I refused to accept the quick fix. Seriously, who would? Given that...

• their fixes had failed twice already so I'd have to be an idiot to believe them a third time
• another failure after getting it home would require two more repeats of the same insanity with all the lost hours and stress.

The technician then tried to bully me by telling me that if I didn't accept their fix, it might take up to a month to get a response from the Head Office. Apparently Samsung procedure is that even if the service centre agrees that an item should be replaced, someone at their Head Office has to approve it first. The official time frame is supposed to be a week, but he was trying to get me out of there by making it seem longer. At this point I lost it and blew my top. They quickly backtracked but insisted there was nothing that could be done but to follow procedure. They then agreed that the device should be replaced and took back the entire box with all the accessories and manuals, but they still had to get approval from Head Office. Someone would call back in a week and let me know if rather than when the replacement was approved. I gave up and went home as there was obviously nothing else I could do, and I was in real danger of bursting a blood vessel.

No one called back.

When I finally contacted them 8 days later, the technician insisted that when they got it back to the Head Office they could not find any problem and therefore I had to take my item back as is. No manager would speak to me.

I still don't have the device, new or otherwise. Samsung technicians are now reviewing the video I put up on YouTube. Two previous documented repairs for the same issue, my personal description, and the time wasted with their own customer service staff are clearly not good enough for them to accept that there is a problem with the device.

So the end result after three failures of the same device = no replacement and no compensation for the stress caused or time wasted.

Samsung have no complaints department, and no organisational recourse for the customer. It is a one size fits all solution. Have problem. Go to service centre. Hand in device. Pick it up a week later. Repeat as many times as necessary, regardless of inconvenience to you.

The matter has now been escalated to the Malaysian Consumer Rights Organisation Association, FOMCA and the National Consumer Complaints Centre where their lawyers will look into it. As a consumer I am aware of my rights, and refuse to waste more hours of my life chasing this down.

So as Customer Focused Brand, what should you do?

The SOLUTION

A tiered customer service process.

What should have happened is that the service policy should recognise different grades of customer and apply a tiered service procedure. If an item is identifiably faulty within two weeks of buying it, it should be automatically replaced with minimal inconvenience to the customer. If it has to be repaired more than once within a short period of time at any point within the warranty period, it should similarly be automatically replaced. If it absolutely has to be checked first, or legitimately repaired more than once, it should be delivered back to the customer instead of wasting more of their time in collecting it again. Samsung's current process treats the fault as the customer's rather than the company's, even when the device is legitimately faulty.

The whole process should also become more sensitive and resolve faster for each time a customer comes in with a repeat complaint. The tech platform in use should immediately flag the client as a repeat issue, and flag the number of returns. At each repeat, a more senior person with higher decision making power should deal with the issue. There should be no procedures that involve hiding behind faceless departments, or passing the buck around while the customer is left waiting and angry.

The outcome is not the fault of the service staff at the front desk. They have no choice but to do what the procedure tells them. The problem is the system and the attitude of the company towards its customers.

Developing this kind of customer service is not difficult. It just requires a little process re-engineering. Failure to do so results in posts like this, videos on YouTube, and legal action. In a highly competitive consumer market, every bit counts. The web collects these failures, and keeps them as a record for the world to see, long after the issue is resolved.

From this point onwards, there is virtually nothing Samsung can do to repair the damage. I still don't have a device I paid a lot of money for. What are the odds I'm going to buy another Samsung product?

The real question is, What Costs More? Offering sensible customer service, or losing customers and revenue through lasting brand damage in a hyper-connected world?

If you have any business sense, the answer is a no-brainer.

High Street 2.0

High Street 2.0 - Understanding the Next Generation Retail High Street  

Pointing Fingers Will Damage Your Credibility

I was recently involved in a customer service experience that reminded me just how badly a company can damage its brand by trying to pass the blame on to others. Here's the example...

On Monday I was offered a phone upgrade from O2 and accepted it. The operator I spoke to confirmed the contract agreement and the delivery dates and addresses. She told me exactly when and where the phone would arrive: Two days later to my home address. I consequently ensured I'd be working from home to receive the item.

By afternoon on Wednesday nothing had arrived, so I called the telecoms firm to check up on it because the tracking system on their website showed the delivery as "complete". After explaining that "complete" simply meant that the phone was now in DHL's hands - the person I was speaking to then followed it up and came back to tell me that the phone had in fact been delivered the day before to another address altogether and no one was there to collect it. The operator I spoke to had for some reason written the wrong address on the form to DHL.

Blame Shift #1 - The customerThe operator then tried to suggest that I must have given them the wrong address, and it was therefore not the fault of his delivery department that the phone hadn't turned up. No matter that the unlikelihood of a customer getting their home address wrong. After a few raises in tone of voice, we agreed that it was best to move forward and set-up the re-delivery.

Blame Shift #2 - DHL's process
Apparently once the courier found that no one was available at the address given, he returned the item to the depot for dispatch back to O2. The sensible thing would've been to call my phone number and check with me before turning back round. This is a telecoms company after all and they have my number. The return cycle meant that they would not be able to deliver the phone for at least 24hrs.

Blame Shift #3 - The Rules
Having established that I could no longer get the phone that day even though there was still most of the afternoon to go, the operator insisted that it could only be sent to the address on file i.e. my home address. This was regardless of the fact that I would not be there, as I was due to be in the office the next day. The fact that they had just sent the phone to someone else address, by definition an address that could not possibly be 'on file', didn't seem to hold merit. That was the rule, and the guy refused to budge on this point, so I had to get a manager.

Blame Shift #4 - The Operator
The manager immediately blamed the operator for being obstructive and agreed to deliver it to the office as per my request, but insisted that since they had to follow DHL's rules, there was nothing that could be done to get to me any quicker than 24hrs. This is regardless of the fact that DHL was their choice of courier. For some reason companies believe that the customer should make allowances for their own internal cost saving measures.

Anyway, the next afternoon there was still no phone so I called up again

Blame Shift #5 - The Manager
The lady I spoke to informed me that in fact the delay cycle for DHL was 2 days and not 24hrs, and the manager should never have agreed to having it delivered the next day. She then told me that since the item was with DHL I should call them myself. Note that at this point DHL is now being treated as a fully functioning third party, almost as though the customer was responsible for engaging them to make the delivery.

So I called DHL who told me they still had the wrong address on file and had received no further instructions from the O2. I duly went back to O2 and tried again.

Blame Shift #6 - The Automated System
The new person I spoke to investigated and blamed the system. It turns out that the reason the instruction never went through was that the manager who noted my new address made a mistake with the postcode and the system thus didn't recognise it. This failure did not of course trigger any workflow to phone me and correct the problem. Again, remember this is a telecoms company who should really be using the medium they're selling. They waited for me to figure out that there was another issue, and call them back. After fixing this particular error she regretted to inform me that the earliest I could now get my phone was midway through next week.

Blame Shift #7 - Easter
My phone couldn't be delivered because it was now the Easter weekend, so DHL wouldn't get the updated instructions until after the Easter holiday and then wouldn't be able to deliver til at least the following Tuesday. This means that a next day delivery agreement would not be fulfilled for at least a week. There is no good reason for this. Considering that we live a 24/7 life, and couriers work 7 days a week, the obvious logic is penny pinching on O2's part.

The cheek of the whole thing is that O2 started charging me for the new contract the day I agreed the upgrade (Monday). A full week before I was actually likely to get the phone. By this point I was so frustrated with the quality of service that I seriously considered cancelling the entire contract and switching companies, which meant that the customer service person had to bribe me by giving me the next month free just to keep my business. The worst bit though is that I had to ask for it. You would think an appeasement would be the first thing offered to an irate customer.

The upshot of all this is that O2 have had to pay additional delivery costs to DHL, have lost revenue from me, and now have a reputation drop through my sharing of this story.

The added delivery costs, the financial loss, and the brand damage could all have been averted with a simple phone call to me when the delivery guy turned up to the wrong address. As it turns out the error put him just 20 doors down and he could've walked up the street to deliver it to me. Even if the processes and mistakes were inevitable, the brand damage to O2 could easily have been avoided by taking responsibility for the trouble, and recognising that as a customer I have an agreement with O2 alone, and not the rest of their supply chain.

For any business there is absolutely no justification for messing customers about, or expecting them to pay for poor process and management. If you mess up, don't point fingers. Suck it up and focus on rebuilding your customer's trust. You'll save money, keep your sale, and maybe your customer will even put in a good word for your brand.

Industry, Online, Consumer and Mobile Trends in Retail 2009

With the standard flurry of predictions at the start of every year, it's always hard to pick out the value from the vast swathes of text that fill up the multitude of published articles. To make it easier I've distilled out some pointers towards what I believe are the key trends you should be keeping an eye on for 2009.

General Retail Industry Trends

1. The credit crunch will continue to get worse
2. The e-channel is still growing fast
3. Experience is everything – Compelling cross-channel experiences are driving product sales and loyalty
4. Outsourcing is maturing
5. Customer-centricity is driving business transformation
6. Business innovation is being driven by creativity and design
7. Disruptive innovations are lowering barriers to entry
8. Buyer niches are changing (gender, age, generations 'Y' and ‘Z’)
9. Trial before purchase is becoming expected"
10. Social credentials are defining brands (eco, green, CSR & PSR)

Online and Ecommerce Trends

1. User participation e.g. reviews and ratings is taken for granted
2. RSS syndication and sharing capabilities have become the norm
3. Price comparison is a de-facto expectation
4. Businesses are increasing their spend on digital advertising
5. Businesses are leveraging social media and networking for strategic marketing
6. Revenue sharing advertising and affiliation models are becoming the norm
7. Virtual payments are taking off e.g. Paypal Secure Card, Google Checkout
8. Branded prepaid payment cards are becoming more common e.g. Payoneer
9. Local and Hyper-local social networks are gaining traction e.g. Ning
10. Virtual worlds are expanding
11. Internet TV and Video streaming are becoming mainstream
12. Make it yourself media has exploded – collaboration, pictures, blogs, music, video, games

Consumer Trends

1. Customers are becoming more demanding as web2.0 is giving them a voice
2. Customers are expecting convenience and collaboration
3. Group buying is taking off - Crowdstorm, Yub.com
4. Social Shopping is becoming popular - Kaboodle, Wists, ThisNext
5. Crowd-sourcing is becoming normal in both decision making and purchasing behaviour (starting with reviews)
6. Social Media online is exploding
7. Premium products and services still sell well
8. Green is becoming iconic and a brand differentiator
9. Personal Social Responsibility is beginning to supplement Corporate Social Responsibility
10. Peer to peer selling of second hand items is increasing

Mobile Trends

1. Mobile notifications are becoming standard
2. Mobile payments are becoming viable
3. Mobile marketing is still under-utilised
4. Mobile games are gaining popularity
5. Location and Bluetooth based mobile social networks are increasing
6. Downloadable and Developer applications are becoming popular
7. Open source platforms are being released

[Trends originally posted by me on my work blog]

Could The Retail Industry Save Itself Using Game Theory?

In my previous post on whether the Christmas Sales have destroyed hopes of a retail recovery, I discussed how retailers have exhibited classic non-cooperative behaviour. By focusing only on individual interest and survival, their collective actions have likely damaged their entire industry's market size. By encouraging people to spend their liquidity faster through low prices in over-competitive price wars, people now facing redundancies will run out of spending ability much quicker, and retailers give themselves no time to be able to adapt to reducing market sizes and changing consumer need.

Retailer actions thus suggest a basic lack of understanding of collective strategic options. Even just a basic group recognition of Game Theory might have helped. Game theory attempts to model behavior in strategic situations, where players interact and make decisions to maximise their returns based on each others choices - arguably leading to optimal behaviour for all. The classic example is the 'Prisoner's Dilemma' which involves two participants who can either benefit together or suffer together. However this is a zero sum game and rational behaviour in this model is self-interest, so consequently the optimal solution is never chosen.

In a normal situation the retail space would probably be modelled as a non-zero sum game. One firm's success does not necessarily mean losses for everyone else, because that success may increase the general size of the market to mean success for all players. However in the current economic climate, it looks more like there is a finite and decreasing amount of money that people have to spend, and therefore a limited resource available to all players, bringing the situation closer to a zero sum game.

For retailers, what Game Theory therefore suggests is that the players can either try and maximise their own gain, in which case some will come out well while others do badly, involving high risk for everyone; or they can all cooperate strategically to all do a little less well but significantly minimise each player's risk of severe failure.

What retailers should have done, is considered working together to keep prices sensible, and thus manage both the market and their ability to stay alive long enough to change with the environment. On balance, all companies who aren't over-leveraged, would benefit and be better off as a group.

Trying to gain maximum benefit for themselves however, probably means that many will end up with little or no benefit at all as their behaviour helps ensure the market collapses. Unfortunately we must accept that historical competitive and non-collaborative behaviour means that there's very little realistic chance of retailers co-operating like this even now, so we should probably start preparing for further insolvencies and more job losses.

Have the Christmas Sales Destroyed Hopes of a Retail Recovery?

It is finally January and the industry is slowly recovering from the Christmas frenzy. The smoke is clearing to leave retailers facing the start realities of 2009, and the January slowdown is giving businesses time to reflect on the follies of collective price-slashing hysteria.

Personally, I have a feeling that the unprecedented reductions in the 2008 Christmas sales are going to accelerate the bankruptcy of most retailers, rather than saving them. I believe this for two reasons.

1. Slashing prices might mean that stock continued to be shifted even under the heavy shadow of the credit crunch, but there were no margins to be made, and consequently most retailers suffered heavy losses. When the next quarterly rent comes round, many of these retailers are now going to have even fewer funds to cover their payments. With the banks still not lending, we should expect an explosion in businesses going into administration.


2. The crazy prices encouraged people to throw their money at all sorts of products they didn't need, and will thus have significantly reduced consumer liquidity. In early December, the credit crunch was only just beginning to effect people outside the financial industry. After a few years of boom time, with life carrying as usual for most people, the buying figures show a distinct lack of prudence on consumer behalf. As the above businesses go under, many more 'common' people are going to lose their jobs. When they do, any spending buffers they might have had will have disappeared with their Christmas extravaganzas. For the retailers that survive the next quarterly rents, this means that their sales are going to drop even worse than they could normally have expected. This in turn could see many of the early survivors go down too.

Long and short of it is that by indulging in short termist price wars, retailers have simply dug their own graves.

Is The Future Of Business Going To Be Telepathic Technology?

Let's kick off 2009 with a bit of exciting futurism! Here's an interesting talk on advances in cyborg technology and what it might mean for business.

Is the future of business going to be telepathic technology? Will people be able to pay for stuff simply by connecting electrodes? Are we going to need computer screens or will we shift to 3D or sensory electronic shopping? What will it mean for web or ecommerce design? Will it mean the end of the mobile phone if we can simply receive signals internally? Have a listen and see what Kevin Warwick thinks...