HOMEOUR STORYEVENTSCONTACT USVITAL RETENTION FACTSFREE WEBINAR TRAINING
What's New

  • Vital Retention Facts
  • What is Attrition Costing You?
  • Article Archives!
  • R-tactics Tips FREE!
  • Client Case Studies
  • HOT Conferences
  • Site Map

    Starting a new company? Learn more about LaunchSmart™.


    Bi-weekly tips to boost service and retention levels!


    		•

    MLM Customer Service: The Three R's of Customer Service

    By Terrel Transtrum
    Copyright © 2006

    Customer service functions for MLM (multilevel marketing and network marketing) and Party Plan companies revolve around The Three R's: reading, researching, and responding. Each of these elements is interdependent upon the other, and each must be performed with precision and in accordance with established routines and internal systems. If this can be accomplished, the following results will likely be achieved:
    • Fast turnaround on customer inquiries
    • Courteous and friendly service
    • Meaningful and accurate responses
    • Low operating costs
    Here, we first discuss ways to reduce the number of contacts. Then, we present techniques for staffing, organizing, operating and controlling the MLM customer service and party plan consultant support functions. Keep foremost in mind what a customer fundamentally wants in terms of customer service. There are four basic elements, which are as follows: A customer wants . . .
    • to be believed
    • a quick response
    • a meaningful answer
    • a fair adjustment.
    How to Minimize Customer Contacts and Returns
    Whether or not your customer service mail, telephone calls, and returns seem excessive, the following methods will help you to gauge your effectiveness. Additionally, we offer five steps for reducing your intake.

    It almost goes without saying that the more efficiently you operate your business, the fewer inquiries, returns and requests for adjustment you will receive. Notwithstanding, in the world of MLM and Party Plan customer service, you will receive more queries and returns than other distribution methods where there is direct contact between buyer and seller and where the merchandise can be examined by the purchaser prior to purchase.
    Even the most efficient companies receive four to six subsequent contacts, exclusive of returns, for each 100 orders they take in. Additionally, depending upon the products offered, returns can range as high as 30 percent.

    In an effort to minimize returns, some companies perform ongoing computer analyses to isolate customers who return too much merchandise. The same analyses can be applied to MLM commission check problems and adjustments as well as Party Plan commissions and hostess rewards systems. Sometimes these customers are contacted by telephone to determine the reasons for the returns. In other cases, their accounts are flagged for special future handling, usually in a proactive, preventative step to save the customer but to curtail abuse.

    Remember that a customer who knows where the lines are drawn will likely adjust their habits to work within the newly discovered parameters. At ServiceQuest, we argue that it is worth the effort to win at the game of retention, and a key area for scoring big points is in this area. Don't be too hasty to cut off an account where there may be other avenues to which you can escalate for special handling. In the long run, it is more likely to be worth the effort, and you lose very little, knowing that you can always resort to the final, crowning victory of suspending the account and initiating compliance proceedings under your agreements.

    One company reports that during a year one customer returned $7,960 worth of products of the $8,000 he purchased-most slightly used. Another company's research showed that returns from 200 chronic returners amounted to seven percent of the total annual dollar value of the company's returns.

    An interesting situation on returns exists in West Germany. There, the customer may return a package to a direct sales company via the postal service at no charge. The law requires the company to pay the return postage cost! As a result, many customers order more than one size and/or color of a product and return the unwanted items. It also creates the unusual potential for customers to place high-volume orders for commission qualification, and then return much or all of the merchandise at the company's expense.

    This creates a higher return ratio than experienced in the U.S. The number of customer contacts received is heavily influenced by merchandise presentation, ordering information and forms, published policies, and corporate administration of those policies-the company's reputation. These subjects are discussed in detail in the article on Ordering Information and Forms.

    Other factors affecting contacts and returns in MLM and Party Plan companies can be divided into three groupings: (a) fulfillment execution; (b) merchandise; and (c) customer service performance. Here is a list of 17 suggestions to reduce customer inquiries, complaints and returns under these three groupings.


      Fulfillment Execution
    1. Ship quickly, so that the order will be received in less than a week from when the customer ordered.
    2. Warehouse sufficient inventory so that backorders are minimized.
    3. Check accuracy of each order before packing. Include the initials or employee of picking and QC personnel and develop a system of feedback which is initiated when a customer service call or return shipment are received.
    4. Enclose a packing slip in each shipment that shows disposition of all items ordered and provides return instructions.
    5. Indicate on the packing slip when any backordered items will be shipped.
    6. Pack neatly so merchandise is well protected.
    7. Arrange that no bill will arrive before the merchandise charged for in the document.
    8. Maintain internal quality assurance practices in each key operating function.
    9. Adhere to the FTC's 30-day regulation. By sending the required 30-day postpaid backorder notification, which gives the customer the option to cancel, it is more likely the goods will be accepted when they are finally received. This is the result of good communications which build good will.

      Merchandise
    10. Undertake a thorough product quality examination upon receipt from manufacturers.
    11. Be sure understandable and complete product installation and operation manuals are included, where appropriate. (Before printing manuals and materials, test draft versions on a few subjects not familiar with your products.)
    12. Avoid indiscriminate substitutions. The best guideline is the golden rule.
    13. Cancel backorders after a reasonable time.

      Customer Service Performance
    14. Respond to inquiries and adjustments quickly and stay current with processing of returns and refunds.
    15. Acknowledge returns upon receipt; a postcard or email is sufficient. The ServiceQuest® recommendation is to employ a dedicated continuous-feed post-card printer that dispatches daily postcards from the returns dock the same day a return is received and logged into the computer.
    16. Use plain talk in writing to customers; call customer if inquiry or problem is complex.
    17. Summarize customer service problems and returns monthly, review and then take corrective action to reduce them. The following is a suggested listing of reasons for returns that should be included in the return instructions on the reverse of the packing slip.
      • Changed Mind
      • Wrong Item Received
      • Item Defective/Damaged
      • Unsatisfactory Substitute
      • Unsatisfactory Color (fragrance, etc.)
      • Not Pleased With Product
      • Duplicate Shipment
      • Did Not Fit
      • Not As Expected
      • Received Too Late


      Returns Acknowledgement Postcard or Email Script
      The order you returned to us has just arrived. We have begun processing your request and will complete it as quickly as possible.

      If your order was paid by credit card, your account has been credited for the full amount of your return, in accordance with our guarantees that are intended to assure your satisfaction. It will be re-charged for any exchange items requested when they are shipped.

      If you paid by check, your refund and / exchange will follow shortly [or, the credit has been posted to your account and will be available to you next time you order].

      Thanks for your patience during this short delay.

      YOUR COMPANY, Box 1234 Big Rock, USA
      RETURN REF NO. 23-7890
      Computer generated postcard informing customer that returned merchandise has been received and that processing has commenced.


    Back to top



    Copyright © 2006 ServiceQuest®. All Rights Reserved.