Five Tips to Lower Holiday Returns and Improve the Customer Experience

’Tis the Season to be Grumpy; Holiday Returns are the Grinch that Stole Profits

San Diego – Now that the holiday season is nearing its end, retailers and consumer product manufacturers hoping for a green Christmas can instead expect to find a chunk of the $150-to-$200 billion in annual returns under their trees after Christmas.

Excitement quickly turns into frustration when consumers can’t easily configure products or items don’t meet their expectations, and before the Grinch can say, ‘humbug,’ the holiday season becomes the holiday-return season. The worst offenders are product categories that require significant set up and assembly, including consumer electronics and appliances.

Returned merchandise not only costs retailers money on the lost sale, but affects future sales to these customers by as much as 10 percent, according to industry sources. Research also shows the largest majority of these returns are preventable. Conversely, improving customer retention rates by only 5 percent can increase profits from 25 to 100 percent, according to the Harvard Business Review [1">.

ShowUhow (http://www.showuhowinc.com), a leading provider of web-based video sales and customer support services with retailers such as Costco and BestBuy, has identified five easy steps to reduce holiday returns and to improve the customer experience.

Five Ways to Reduce Consumer Returns

1. Set Customer Expectations: Setting realistic and appropriate expectations diminishes the frustration factor. Companies can do this by providing effective pre-sales support so that shoppers fully understand what is required to get their products up and running. Customer reviews are also helpful to indicate the level of satisfaction experienced. To show you are transparent and honest, information should be posted at the point of purchase.

2. Provide Unparalleled Support: One reason consumers return products is because they do not understand how to set them up. Providing 24/7 support is essential, especially since the majority of “do it yourself” projects are tackled during the evenings and on weekends. Having round the clock support is a proven strategy to cut confusion once consumers get their purchases home. Costco’s Concierge program is an excellent example of this at work.

3. Call the Customer: Another effective strategy is to contact the customer the day after a purchase. This shows that your company wasn’t interested in a quick sale, but wants a long-term relationship. Such a tactic also enhances consumer satisfaction and builds brand loyalty.

4. Detailed pieces and parts: One of the most common calls to customer support is to confirm that all of the pieces required to set up a product are actually in the box. Clearly outlining what is needed to get started and how all the parts fit together is a “must have” to lower consumers’ post purchase anxiety and prevent their trips to the return line.

5. Educate shoppers about the product, its set-up, and use: Educated consumers are more likely to be satisfied ones: they do not return what they buy and are more likely to remain brand loyal. Using multimedia tools, especially video, helps improve consumers’ out-of-box experience by showing them how to quickly and easily set-up, install, and use products.

A four-month study by ShowUhow found that online video instruction guides (VIGs) reduced returns by as much as 30 percent, increased sales by as much as 20 percent, and reduced customer support calls by as much as 50 percent. Feedback from consumers who used the VIGs indicated that:

• 84% of consumers preferred video instruction guides to 1-800 numbers

• 95% indicated a preference for VIGs over printed user guides

• 72% said they would rather use a VIG than request help from a customer service representative

“Video Instruction Guides demonstrate the unique value and benefits of our products to our customers, which is helping to increase sales and reduce support requests by end consumers,” Jordan Schwartz, CFO Lorex Technology, CES 2010 Innovation Award Honoree.

“The manufacturers and retailers we work with are truly innovative – they care about customer satisfaction and embrace it as a source of competitive differentiation. Their business results validate that ShowUhow is delivering on an important promise: to keep their customers happy," said Kim Folsom, founder and CEO of ShowUhow.

To learn more tips for reducing returns for the holidays and year round, visit http://www.ShowUhowinc.com/resources.php. Interested individuals also can request a trial and learn more at Consumer Electronics Show from January 7-10, 2010 by visiting ShowUhow in the Swann booth (Central Hall, Booth 12544.) Appointments are available upon request.

ABOUT SHOWUHOW
ShowUhow, Inc. provides a web-based video sales and customer support platform for products that require assembly, configuration, set up or instructions for proper use. Leading consumer product manufacturers and retailers who want to increase sales, reduce returns and lower support costs use ShowUhow to improve their customer experience. ShowUhow is a privately held company located in San Diego, CA. For more information, call 877-992-1222 or visit http://www.ShowUhowinc.com.

RESOURCES

o [1"> Excerpted from Chapter 1, Loyalty Rules! by Frederick F. Reichheld, Harvard Business School Press, 2001. http://www.loyaltyrules.com/loyaltyrules/chapter_one.pdf

o Whitepaper - Winning at Retail: Competing on Customer Experience – by Second to None
http://www.ShowUhowinc.com/_downloads/Competing_on_Customer_Experience.pdf

o Case Study – Odyssey Technologies – http://www.ShowUhowinc.com/_downloads/OdysseyCaseStudy.pdf

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