In Episode 8 of the ''Der Conversion-Hacker Podcast'', Germany's top conversion hacker Jörg Dennis Krüger uses the example of e-commerce giant Amazon to explain how you can optimize your customer service to make your customers happy in the long term.
TRANSCRIPTION OF THIS EPISODE OF THE PODCAST
Welcome to the Conversion Hacking Podcast! My name is Jörg Dennis Krüger and as my personal trainer just said correctly: Yes, I am the conversion hacker! My topic today is the arch enemy of all online stores.
The Antichrist of e-commerce, the big American department store: Amazon. For many online retailers, this is both the savior and the final death blow. You can quickly get reach and sell products on Amazon, but Amazon always grabs a bigger market share and squeezes out the smaller retailers.
At least that's what you might think. But Amazon is doing that, yes well a bit out of the strategy that Amazon invests in new technologies and that Amazon now first wanted to make no real profits for a long time. And now you can still say, yes Amazon exploits employees and does not pay enough and so on. Even though I'm perhaps a bit skeptical about whether the normal warehouse worker at a smaller, medium-sized online store gets more or less than at Amazon. It probably depends a lot on the company and so on. But, Amazon is definitely a huge competitor. But how did Amazon get there?
If we ask ourselves the question and answer it, then we will know how to make our online store more successful and how to stand up to Amazon. Because from my point of view, it's not that difficult to compete with Amazon. After all, why do I also like to order from Amazon from time to time?
Well, I really, really like to order from smaller online shops where I know they have a nicer selection, I might know the people there and where I can find the products and the price doesn't really play that big a role. Price doesn't really matter that much to me on Amazon. At Amazon, I'm one of those, just like many, many, many others who only look at one thing: They look at: "Is there a small Prime symbol on it?". And many products - via Prime - are more expensive than if I didn't buy them via Prime. Prime, especially for slightly cheaper products, usually means a surcharge. And what does prime mean? Prime means the product is delivered quickly, often the very next day.
Amazon pretty much tells me when it will be delivered. But Prime also means: The product is sold by Amazon in most cases and I can make use of Amazon's customer service. And there we have the two, exciting things that ultimately make Amazon so popular. Fast delivery and excellent customer service. Cheap, Amazon is not necessarily cheap at all. Maybe so, they want to be, of course, but I know many, many, many counterexamples where the actual stores are cheaper.
And Amazon is also not particularly great to use. Yes, it has a bit of a department store advantage in that I can somehow get everything there, but in the end I also get 25 packages from 23 warehouses and so on, which is no longer this great advantage that I say okey, I'll now order everything from one provider, then the parcel carrier only comes once and that's it. No, no, it's actually these two things: delivery time and customer service.
If I have problems with Amazon shipments, then I actually have no problem. Recently Amazon delivery didn't arrive here. I have no idea on the note from DHL, or what Amazon Logistics I have no idea what was written on it: “Given to the neighbor even with the name of the neighbor.” Went there fine, neighbor says: "No one was with me." Well, I called Amazon: "Friends, what's up?"
They said: "Yes, no problem at all! I still have to wait two or three days to see whether the product will still be delivered and if it doesn't then I'll credit you!" And then he called after two days, "And did you get it?" Saying "No, unfortunately not “ – “Okay, I’ll give you credit!” bang, bang, bang. Theoretically, he would have even sent it to me again and not only wrote it well, but unfortunately the product was no longer there at the moment, you couldn't send it again, I have to order it again - well, that's how it is. And otherwise, something is defective, even within the two-year warranty:
Amazon helps! Amazon doesn't say, "Oh, I'm sorry, but it's been six months now, we'll have to see." Amazon says, "No you, no problem. Do you want a new device or should we just take it back – no thing.” Amazon is incredibly accommodating. But if you look at the statistics that Amazon publishes, Amazon has relatively low return rates overall, maybe also because a slightly different target group is addressed, maybe because they don't necessarily offer fashion, but this open strategy of providing such good service and also accepting returns, even if you say, oh God, that's not necessarily a real return, someone actually broke it, or whatever, but it's a service that keeps customers with Amazon. And if I order something that I'm not sure whether A will last long enough, or B whether I really want to keep it, then I prefer to order from Amazon.
Why did I argue with a large online shop for vacuum robots, as my vacuum robot was defective, relatively quickly. And then he just said: "Yes wait a minute, no problem at all, then send me the vacuum robot back, we'll check it and if it's really a defect and everything is ready, then we'll send you a new one, right repair it, send you the money.” Then you just have to look at the law, which says: “No, no, wait a minute, the warranty works differently. Warranty means first delivering a replacement and then requesting the defective product back.”
Because otherwise, as a customer, I'm left with nothing, I've paid, I don't have a device anymore, so everything's gone and I have to hope that the retailer will react. The legislature wants to protect me from that. But many retailers don't care. First of all, they want to distrust the customer enormously. "Well, he just wants anyway..." and no idea. And the customer notices this distrust and of course I ordered the next robot vacuum somewhere else and not from this big robot vacuum shop. What's that about?
Example from real life: I bought parasols, really first in the store and was very excited that I - Bauhaus, I'll advertise it - that I could also return the parasol to Bauhaus. Two months later, as he was defective, too, without a receipt. I couldn't find the receipt, I didn't pick it up, back again. Sure, the lady at the information desk was like: "But you have to bring the receipt with you!", but the actual complaints processor took a look at it, saw it, yes, one of our products is okay, it's defective, well, no problem, here get your money back.
That is, I'm super happy to buy again at Bauhaus, because I just know that they have a great service and even if something is defective. That was the umbrella from the Bauhaus own brand and I bought two pieces, both broke relatively quickly - of course crap - but I buy there again, because the service was good, is super.
No damage and in the end it's all good, the products aren't that good, well, well, the individual employees aren't involved either, maybe they didn't know, maybe I'm here with my umbrella on the third floor on the balcony , that's too much of a strain on the screen - I don't know. But in any case: That's customer service that keeps the user. And that's why people keep coming back to Amazon. And then of course I have a self-fulfilling story, if people keep coming back, then I can offer more products, then people buy more and I grow and grow and grow, then a few more innovations like wait, I don't know what, like an Alexa or here the buttons that you just introduced or maybe something like Prime, because then it's worth it, because I order there more often.
And then I can really grow into what I am and this statement - so with the growth of what Amazon has become, like that. But this statement from Jeff Bezos, this "We want to be the most customer-friendly company in the world."
That's actually what ultimately made Amazon great. And successful online stores, from my point of view, do exactly that. And anyone who argues with a customer or then immediately wants to get some kind of compensation from the customer or something like that sends the customer away in the long run and thus limits their growth.
I'm so in some Facebook merchant groups member and there I read more often these questions: "So, here the customer has sent me a product back, but he has now tried more than once. I can't just resell that like that, how I then of the value replacement, I would prefer to just send the product back and keep everything."
Of course I see the problem, of course I see that you have to earn money and that you can't give money away lightly and so on and immediately that the margins are generally not that big. But well, this one customer, if I treat him nicely and he tells his friends and so on, then ultimately I also have the chance to grow quite differently and of course I always have a small proportion of problem orders, but I almost don't think of problem customers, I think there are very, very few customers who are actually so fraudulent in intent. So when I click invoice payment than when I get now just always or something.
So, there I do not think that people want to cheat but simply have a problem and that can be so many things that you really then here mattress manufacturers really let themselves be sued up to the highest level, whether a mattress can be returned or something. Well God, is of course idiotic, if such companies like Ikea or all other furniture stores say: Hey, sleep 100 days sample and send it back.
And then I tell my customer, "Nah, you've already slept on it now, I'm not taking the mattress back, sue me." Then I get sued and I even lose and so on, goes through the press. Holy cow. Instead of just making the customer happy, cleaning the mattress properly and then maybe making another customer happy by just, like Amazon does with product deals, then just checking the products a bit, reselling them a bit cheaper.
And thus bind the customers even closer with me, because they see; man, I also get good deals again and so on and so forth. So I don't beat Amazon with a good conversion rate, I don't beat Amazon with a low price, I don't beat Amazon with, I don't know what, the perfect store and all that. I beat Amazon by delivering great customer service. And that starts with fast delivery, really saying when I can deliver and then really delivering and that continues with the service after the order. Not actively asking for help and stuff like that, but when there's a problem, really helping the customer, quickly refunding if necessary, quickly sending replacement goods, that's how I keep customers happy and that's how I keep customers away from Amazon.
And there are some products where I wouldn't even think of shopping at Amazon, because I know the retailers I order from are so reliable and so fast and so great, I don't even have to go to Amazon. I have no added value with Amazon. So I always order from them, even if I usually start my research, where I buy something always in smaller online stores and only maybe at the end go to Amazon and then buy there, because I have not found elsewhere somehow.
For many things, Amazon simply has a very, very large assortment, because many Marketplace dealers are on it and so on. There are then no small online stores where you can shop - also a pity. There you can also win a little bit of people maybe at the assortment, but with that I can really draw the people there. And when I see, for example, online stores that deliver with DPD. Yes good.
I don't order from there. I always run after my DPD packages. But Magic: Amazon Prime at Sela, which is also delivered by DPD, that works then all of a sudden, because Amazon has obviously thought about it and said: ok, DPD is cheap, but it must also work and I'm here two DPD packages, just recently, eternally run after, but the third thing you ordered from Amazon - new office PC - that came virtually as if in a dream.
He found the house, he rang the bell, he didn't carry it upstairs, it was a heavy thing Ten kilos, waited for me to come down, but anyway it worked. Nevertheless, I prefer the deliveries by Amazon Logistics or especially by DHL. But there you see: Customer focus is the absolute secret to defeat Amazon and there you can now just say: Yes let's go! Think customer-focused and always think, what can be the goodies, with which I get customers to buy, because Amazon does many things wrong.
Hey, I bought a toilet seat from Amazon. But it's neither a fetish nor do I have 100 toilets! I don't need more toilet seats, one is enough for me, you don't have to keep emailing me saying, "Hey, I want to buy another toilet seat?!" Amazon gets a lot of things wrong too. And there are still huge opportunities to overtake Amazon, to leave Amazon far behind in its niche. But you have to be brave for that. You might even have to be a hacker to develop the creativity to do something like this properly and defeat Amazon. So, let's go! Now, conversion hacking, hacking amazon over, more sales!