Real challenges of e-commerce – Part 1: Good Customers and Bad Customers

So you have been told that “the customer is always right”. Uh-huh…And maybe someone told you that “the customer is always good”…😂 (<— this is cool HTML emoji). Ok, let us take a step back a little and cool down here. We don’t want to brag about customers but the reality is that your business will be much better off without some of them. Does it mean that these customers are bad? No, they just don’t fit your business and there is no reason to pretend that just “something went wrong this time”. No, it didn’t. These clients will be much happier by not buying your products and going somewhere else. Will take make someone else happy? Most likely not…

Common types of e-commerce customers

Let’s talk about a different type of clients that you will encounter, we will not be talking about your website visitors here or people who engage with your social media profiles for 2 reasons:

1. These are not customers yet and if they become customers they will most likely fall in one of the categories described below
2. These people are generally not causing problems, they just come, take a look, ask a question and go. It is unlikely that you will face problems because of visitors so this article is not about them.

As the article is about challenges we will also not dedicate too much space to loyal customers who actually deserve separate articles which will be written at a later stage. The future article will be titled “Part X: How to look after loyal customers” (or something like that).

So let us start with the most common customer who exists in every habitat where “cash on delivery” is still a popular form of payment.

Phantom Customers

The first group of customers that you will encounter is what we call phantom customers. Why is that? They are literally like ghosts, they come to the website, place an order and then disappear leaving is with feeling that it was just a ghost and the order didn’t happen. How to recognize them? Usually, they leave an incorrect delivery address, emails or phone numbers and no matter how hard you try to contact them, they don’t exist. This type of customer can be very easy to spot if they decide to leave an obvious trace like clearly incorrect phone number, an address that you know that doesn’t exist or email like [email protected]. Unfortunately, many of them are more sophisticated and in order to determine whether a customer is real, you have to take some action to verify him.

Solution for phantom customers

Some companies decide to be very strict upon their customers and they ask them to upload proof of identity or proof of address, also they impose a time limit for the customer to call them and confirm the order. The strategy, of course, is successful as it helps to filter out phantom customers in nearly 100% of the cases, but it is very damaging for your real customers who should be able to place an order on your website and get their goods delivered with no unnecessary steps. In our Advanced Order Management System, we decided to make things simple.

1. Up to 1 minute after placing an order a customer receives a good old fashioned SMS with a link that they need to click and confirm their order. Simple and effective because if the customer managed to click on the link delivered by SMS, we know that the phone number provided was correct and we can proceed with verification of the address.
2. If a client missed or didn’t receive SMS, then automatically after 4 hours he will also receive WhatsApp message with the same information.
3. if an order is still not confirmed, our system sends an email to the registered email address, but we don’t include verification link there, just information that we tried to reach them on the registered phone number and an option to provide us with the new number or just cancel the order.
4. Still not confirmed – order will get highlighted for us to attempt the call and if it is unsuccessful then we will simply cancel it.

Sounds like a lot? Steps 1,2 and 3 are fully automated which means we don’t have to touch anything until those are finished. We only try to call customers who failed to verify the order in the previous 3 steps.

Is this strategy effective? Well, for us there is no more calling as a first instance. We only call customers once if everything else failed and if we still cannot reach them, then we happily put them in the “phantom customers box” and forget about this experience.

Troublemakers

This is a very interesting group of customers, they usually talk a lot and seem to be reasonable clients. But when it comes to collecting the package and paying for it…here is where the problem starts. Someone could probably write an entire book about people who invest so much time in placing an order and then suddenly join the group of phantom customers once the order was shipped. Let me tell you here what we discovered so far about those reasons:

1. The customer changed his/her mind. This could not be any easier than that right? You see something on the ad, you immediately want it, but a few days later you realize that maybe you can live without it.
2. The customer simply doesn’t have enough money to collect the package – the easiest way out here is just disappear, never answer the call, WhatsApp and pretend that he doesn’t exist.
3. The courier and the customer cannot agree on a suitable time. Yes, it happens, some people work long hours and it is important to ask about it before you give the package for the courier company as most of them have a cut off time for delivery which may not be in line with the customer.
4. Shopaholics, these clients will literally visit 3-4 different online shops and order the same thing, this wouldn’t be necessarily bad if they wanted to collect them all but in reality, they will only collect the first item received and the rest…well let the slower shops cover the cost of returns.

How to deal with troublemakers

We have been thinking a lot about solving that problem and since none of us has magical powers to predict the future we decided to learn from the past. In our Advanced Order Management System we have implemented a customer analysis tool that will check customer phone number, email address and delivery address against all historical orders. Why is that useful? In our system, if we have an order from a customer who ordered from us before we can quickly check the history of the past order. We can see if it was delivered and paid or maybe delivery was unsuccessful and if that is the case – it raises the red flag. We were really surprised to see how many customers are coming back to us (Yay!) but also we were a little bit terrified to see how many of them ordered before and suddenly disappeared leaving us with the cost of the returned parcel.

Dealbreakers

We are slowly moving to a segment of good customers now. The third type of customer is not harmful to your business but handling them requires some skill 🙂  This type of client will quite often get back to you with a counteroffer, request for a discount or request for some free stuff if he buys from you. This is actually a very good sign. It demonstrates a customer’s will to engage with your business, what they need is just a little bit of pampering from your side.

Bet solution for dealbreakers

Surprisingly our Advanced Order Management System doesn’t have any functionality to satisfy those customers, you have to be prepared and always keep something nice that you can put in a package to make the customer feel loved 💛

Good Customers

Like in every good relationship, the best you can do to sustain it is to care about the other party. We thought about that too this is why in our Advanced Order Management System we are notifying customer service if the customer had purchased from us before. This helps us to ensure that these clients always take advantage of the latest discounts, offers, and promotions. Orders are confirmed by the system instantly so there is no delay in shipping and from this place, we would like to wish you many good customers in your life 🙂

That pretty much covers the topic of the types of customers that you will encounter on your e-commerce journey, now you are fully equipped with knowledge and tools to recognize and deal with each one of them so let us now get your package out there for a trip…

Real challenges of e-commerce – Introduction

Part 1: Good Customers, Bad Customers

Part 2: Your package is ready to go

Part 3: Billing statements

Part 4: Marketing (coming soon)