E-Commerce Report: Revamping The Model: At Your Service: How
Amazon Tries To Keep Its Customers Satisfied
By George Anders
SEATTLE -- Every day, Amazon.com Inc. hears from more than 20,000 customers
with a problem. Books that were ordered online haven't shown up yet. A cute
new toy didn't turn out to be so cute after all. Meanwhile, some first-time
visitors to Amazon's Web site can't figure out how to place an order.
On the fourth floor of the Decatur Building downtown, more than 200
customer-service representatives try to put things right. They deal with a
nonstop stream of e-mails, calls and letters, tracking down warehouse
glitches and coaching new users on the basics of online shopping.
The trusty phrases "Thank you" and "We apologize" are invoked again and
again. When things get ugly, Amazon's customer-service reps are authorized
to waive shipping charges and placate shoppers with gift certificates of $10
or more.
Even in traditional industries, getting customer service right is a tricky
task. That's doubly true in the world of electronic commerce, where
merchants and customers never see each other and end up doing business
linked only by a computer connection. That increases the odds of
communications mix-ups and angry outbursts. What's more, many e-commerce
companies are growing so fast that customer traffic far outstrips their
ability to handle shipping, payment and related issues reliably every time.
Yet Amazon founder Jeff Bezos gambled several years ago that if his company
could deliver standout customer service, it could become the leading
Internet merchant without offering the lowest prices. As a result, Amazon
has rapidly expanded its customer-service department, hiring even in January
when other parts of the company endured layoffs for the first time in
Amazon's five-year history.
So far, that bet has paid off. Amazon has more than 17 million customers,
the most of any consumer-oriented Internet merchant. Amazon's prices for
books are only the sixth-lowest among 14 major online merchants, according
to Gomez Advisors Inc., Lincoln, Mass., which publishes Internet shopping
guides. But Gomez rates Amazon as the best overall online bookstore, mostly
because of its strong showing in service-oriented categories such as
customer confidence and ease of use.
In a company as automated as Amazon, the customer-service department is a
curious mix of modern technology, traditional factory methods and
old-fashioned hand-holding. Bill Price, Amazon's head of customer service,
is a former Navy officer who talks a lot about "metrics" and "rigorous
evaluation criteria." Yet as much as he tries to turn customer service into
a series of simple routines, he acknowledges that the most important parts
of the job can't be mechanized at all.
"To do this job right, you need a real passion for the consumer," Mr. Price
says. "At a company like this, we're the only heartbeat that customers ever
hear." Some of his most successful hires, he says, are former teachers and
social workers, who empathize well with frustrated consumers. That helps
head off what otherwise could be nasty disputes.
Inside the Decatur building, Amazon runs the New Economy's equivalent of an
auto-plant production line. Long rows of gray cubicles stretch across a vast
open floor. Inside the cubicles, service representatives perch before
computer terminals, writing one e-mail after another. (While some customers
do contact Amazon by phone, the vast majority of complaints come in
electronically.) New recruits in Seattle earn about $10.50 an hour.
Experienced representatives who take on low-level management tasks may make
as much as $16 an hour.
As customers' complaints come up on representatives' screens, routine
responses are rapidly assembled from a library of 1,400 pre-scripted
remarks, or "blurbs." These are customized with the customer's name and a
few other details, and then sent out electronically so that the next problem
can be dealt with. There are blurbs to address almost every conceivable
issue, from the most common complaint of "Where's my stuff?" to such unusual
gripes as: "There's a hostile [or obscene] book review posted on the Amazon
Web site and I want it purged."
In fact, says Amazon representative Marisa Cameja, there are two pre-set
responses for the obscene-review complaint. One form thanks the customer for
writing and promises to expunge the offensive review in a hurry. The other
thanks the customer for writing and explains that Amazon is committed to
letting users post a wide range of reviews, even ones that other customers
might not agree with. Service representatives are supposed to use their own
good judgment in deciding how offensive the review really is -- and then
pick the appropriate form.
Two seats down from Ms. Cameja, service rep Ben Morgan deals with a slightly
offbeat version of the classic: "Where's my stuff?" complaint. An English
customer ordered "The Texas Chainsaw Massacre" a month ago and is indignant
because she still hasn't received the cult video. Such delays are unusually
long, Mr. Morgan tells a visitor. But he isn't quite ready to decide that
the order has been lost.
He sends the customer a form note saying that waits of up to 21 days are
customary (and thanking her for writing). Later he says that if she still
doesn't have her video in a week, Amazon will probably send her a
replacement, free of charge.
Many of the e-mails reaching Mr. Morgan's screen are packed full of testy or
even abusive comments. But Mr. Morgan says he has learned not to take such
vitriol personally. "If people want to vent, so be it," he says. "It's not
my place to argue about how people feel about something. It's my job to
educate them so they won't feel that way next time."
Besides, Mr. Morgan says, even the bad days at Amazon are an improvement
from his previous job as a grocery-store stock clerk lugging heavy loads and
opening boxes with a razor. "This is more fun, and it pays better," he says.
"Plus, it's less dangerous."
Amazon says many of its customer-service workers are promoted to other jobs
at the company, but it says the department's overall turnover rate is well
below the 50% to 120% a year that's typical for telemarketing and comparable
customer-service jobs in traditional industries.
The current turnover level, Mr. Price says, is about what he wants. "You can
have too low an attrition rate," he explains, "where you don't change the
work force and reps become complacent." At other companies, some of the
customer-service units with the lowest turnover have become strong union
shops. Amazon's customer-service department, like all the rest of the
company, is nonunionized.
When service representatives solve especially messy problems, they get a
"CPR" certificate from the quality-assurance department, acknowledging a
"customer permanently retained."
In a similar form of recognition last year, Amazon management handed out
hundreds of tiny green ceramic turtles to top service representatives.
Unhappy customers are like upside-down turtles, explains Susan Robinson, an
Amazon service manager: "They want to get back on their feet, but they don't
know how to do it. That's where we come in."
Recently, for example, service representative Ursula Schweiger got an e-mail
complaining that shopping at Amazon wasn't fun anymore. "When you were
young, fresh and only into books, deliveries were rapid," the customer
wrote. "Now I'm selling my stock, because I can see your new future: slow,
cumbersome and less agile because of size."
Ms. Schweiger wrote back, apologizing for a shipping delay and offering a
refund of $5.85 in shipping charges. For once, there wasn't an in-house
blurb to address the customer's indignation. Improvising her own response,
Ms. Schweiger wrote, "Yes, we are getting bigger, but the commitment of this
company to customer service is the best I've ever seen. Your feedback is
extremely important to us." The customer wrote back to say thanks -- and Ms.
Schweiger got a CPR certificate.
Not all problems can be fixed. "We have a lot of stuff at our disposal,"
says Andrew Cavanaugh, an Amazon service manager, "but time is the one thing
we don't have. If something happened so that a present didn't arrive for
Christmas, there's very little we can do to fix that."
And in some cases, customer-service goals succumb to other Amazon
priorities. Last year, service representatives noticed they were getting
complaints from people who had used the company's "one-click" ordering
option -- and inadvertently bought items they didn't want.
Service agents helped arrange free returns of those items, but they wondered
whether the one-click service could be reworked to avoid those problems. The
answer was: No. Senior Amazon officials believed that the extra revenue and
convenience of one-click were too valuable to be undermined.
But in other cases, a simple apology or a rebate gets things back on track.
Mr. Morgan, the customer-service representative, smiles as he opens an
e-mail from a New York City woman who had been indignant a few weeks earlier
when her order for a $5.99 paperback was saddled with $3.99 in shipping
charges. Another Amazon representative had waived the shipping charges --
and the woman wrote a follow-up note saying that she now liked Amazon and
had placed three more orders.
"Look at that," Mr. Morgan tells a visitor. "Waiving a $3.99 charge is
nothing to us. But to a customer, it makes things right again. She comes
away happy. And she may even allow us another mistake in the future."
---
Mr. Anders, a former reporter in The Wall Street Journal's San Francisco
bureau, is now a senior editor at Fast Company magazine.
(END) DOW JONES NEWS 04-17-00
12:26 AM
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