You’re never past the point of no return.
Returning a purchase can be incredibly frustrating. Whether it’s printing off a return slip or driving back to the store—it’s just annoying. But in a remote locale like Fairbanks, Alaska, returns are even more of a pain. So, in 1975, when the not-so-local Nordstrom was faced with a bizarre return, they had to decide what to do: refuse the absurd request, or go above and beyond for the customer?
Today we’re learning about what makes a great return policy, and the impact it has on CX. We’ll hear from Nathan Hecht, Founder and CEO of Rodo, who shares his philosophy on refunds and why your return policy can make or break the sale.
--------
"The vocal customers are the customers that you're going to learn the most from. Whether they're telling you good or bad news—listen to them." - Nathan Hecht
--------
Time Stamps
* (0:00) Nordstrom: the ultimate Arctic Circle fashion retailer
* (4:55) The Rodo experience
* (14:32) Creating stress-free CX
* (16:45) The value of a robust return policy
--------
Sponsor
This podcast is presented by Oracle CX.
Hear more executive perspectives on CX transformation at Oracle.com/cx/perspectives
--------
Links
Connect with Nathan on LinkedIn
Narrator: Fairbanks, Alaska, 1975. A frontiersman by the name of Old Man Snyder - let’s call him Old Man Snyder - drives his truck along Cushman Street in the early morning light. He’s headed for the Nordstrom store downtown - one of only two in the state and the closest for seven-hundred miles. In Alaska, being isolated is a fact of life. It’s also a way of life. A mindset.
When he arrives at the store, he walks past the racks of brown suede jackets and hip-hugger jeans, finds the nearest customer service desk, and plops down a pair of...used snow tires. He wants a return.
One little problem: Nordstrom doesn’t sell snow tires. Or at least, this particular location hadn’t for a year. Back then it was a Northern Commercial Company. Nordstrom acquired the Alaskan department store in 1974, at the height of the pipeline boom. Northern Commercial operated department stores, auto dealerships, and yes, a tire center. So when Old Man Snyder bought his pair of snow tires there, he was told that if they didn’t work out, he was welcome to return them to the store and get his money back. And he was holding the store to their word.
Now Old Man Snyder might not have spent a ton of time in the men’s department. But he definitely would have known how to shop for a snow tire. Winters in Fairbanks are no joke. Located just one-hundred ninety-six miles south of the Arctic Circle, the city receives over sixty inches of snow each year. Temperatures can dip to thirty or forty below, and average daylight rarely exceeds four hours. To survive here, one must be equipped for the elements, and that means doing your research.
When Old Man Snyder walked into the Northern Commercial Co. tire center, there would be no browsing, no long discussion with a salesman. He would have already known what he wanted. Price point, traction control, tread depth–he’d done his due diligence. He’d probably solicited recommendations from friends and family. And he knew the return policy.
So back to Old man Snyder dropping the tire on the desk of the return department. You can imagine how bizarre the situation must have been - especially for the employee, a 16 year-old sales associate we are going to call Craig.
So what does our buddy Craig do? What would you do? Accept the return? Or point out the obvious: sir, this is a Nordstroms.
Well forget your receipts and don’t look for tags, because today we’re reminding you that it’s all about keeping the customer satisfied. And sometimes, that starts with a refund.
Intro: Welcome to Often Imitated, a podcast about remarkable experiences from the past, and how they inspire people to create great customer experiences today.
This episode is all about how great return policies can improve your CX. Most customers have made up their mind by the time they enter the store. So when transactions go awry, it’s on us as CX leaders to respond. In this episode, we’ll hear from Nathan Hecht, Founder & CEO of Rodo, about how understanding the truth about the customer journey is helping him transform the way we buy cars. But first, a word from our sponsors.
Often Imitated is brought to you by the generous support of our friends at Oracle. Make every interaction matter with Oracle Advertising and CX. Connect all your data and empower your entire business to deliver exceptional customer experiences from acquisition…to retention…and everything in between. Hear more executive perspectives on CX transformation at oracle.com/cx.
Narrator: In the end, Nordstrom refunded the man $145 for his snow tires and gained a legendary reputation for customer service in the process. The incident set the tone for what would become a famously liberal return policy at the company. One that continues to this day. And it’s become a core part of the trust and loyalty that Nordstrom has built with its customers.
When it comes to CX, sometimes it’s okay to lose a battle in pursuit of winning the war. In fact, 72% of the buyer journey is done before they ever enter the store. Which means a great return policy can be the difference between losing the deal and creating a customer for life.
But instead of just the tires, today we’re interested in talking about the whole car. To help us better understand how a great return policy sets the foundation for an exceptional customer experience, we spoke to Rodo Founder & CEO, Nathan Hecht....
Nathan: Rodo is an online platform where consumers can buy or lease a new car without going into a car dealership. Um, it's essentially a marketplace. So we have, uh, dealerships across the country that, uh, list their vehicles on our. And consumers can lease or buy them and they get home delivery with everything being done at their convenience.
The two big differences between us And other online platforms is number one. When you come to Rodo, you are looking at a transactional. So there's no negotiating, there's no subject to conditions, et cetera. Like you see on some of the legacy, uh, automotive platforms. And the second most important is you can actually transact.
If you're looking to research cars, there's plenty of places online. You're looking for. Look, you know, to look at images of cars or post videos of, of, uh, formula one on your social. Plenty of places to do that.
You're coming to Rodo to transact.
Narrator: Remember, 72% of the buyer’s journey is complete before they ever step foot in the store. Which means Nathan doesn’t worry about the first 72%. Whether you’re buying or selling, Rodo makes the process a breeze.
Nathan: Let's start with sell my car. I got a car in my driveway, whether it's a lease that's about to expire and I've been reading about, Hey, maybe your car has equity. Don't rush to return it.
You know, new cars are hard to get right now. I want to see what my car is worth. I want to sell it, or maybe I have a used car. Um, you know, I bought it five years ago. I want to sell it and I want to get into something different. So you go to rodo.com or you download the rodo app from any of the app stores, Android or iOS, front and center right in front of you.
No need to register, no need to give us any information about you whatsoever. Just click on the button that says, sell my car or sell my lease.
We'll ask you a few basic questions about the car and the reason we need that information is because a lot of consumers don't know this car's common, like a lot of different trends.
And those things make a difference on how much your car is worth. So we ask you a few of those. You clicked submit within literally a couple of minutes, you'll get an email and a text message from Rodo from one of our representatives that says, Hey, this is what we can buy your car for. Um, you know, all we'll need is like some images of the vehicle just to make sure, you know, you didn't just wreck it yesterday and today you're trying to sell it.
Um, and as soon as you give us that information, you know, some pictures would give you some instructions to upload some pictures. We confirm. And then, uh, everything done through the app. We'll set up your, uh, your pickup and so on and so forth. Now, one thing to highlight when you're selling your car, sometimes you have a loan on your car, or sometimes if it's a lease, there is a payoff amount.
Roto handles all of that. We take care of paying the lender. We have all that information in the background. Sometimes we need you to give it to us, but generally we get. From the data sources that we have, and we'll tell you, okay, Ian, your car is worth 40,000. You have a loan with bank of America. That's 30,000.
As soon as we agree, we digitally send you a form. You agree to the amount we'll send the 30,000, the bank of America, and we'll send you a wire transfer, a check on delivery for the amount that's due to you. If you have no loan, obviously the money goes directly to you and you can do that on both a used car or Elise.
And I want to touch on one of the thing in which is you can do this completely digitally, or if you feel more comfortable and you want somebody on the phone or you want to do it back and forth by email and you have a ton of questions or not, we offer both both experiences.
Narrator: So that’s the process for selling your car. But what about if you want to buy one?
Nathan: This experience is slightly different. When you come to our app or website, we actually prompt you to register and register means you're going to give us some, some personal information, uh, no social security number or anything like that. It's name, address, and date of birth in the background. We're going to do a soft credit check with expenses.
With your consent. It does not affect your credit.Don't not register because you think, Hey, I don't qualify for a new car loan or at least wrong. You do register. Come through our experience. We'll show you stuff that are relevant to you.
So once that registration is done, you will then see cars from dealerships that are around you. You can go through a ton of different search experiences if you know the exact mechanism. You can search by make and model. If you're looking for just sort of lifestyle, you know, maybe you're into camping, we'll show you Subaru's, um, you know, et cetera, browse through vehicles.
And again, the primary difference between Rodo and some of the other stuff you'll see is you're seeing actual monthly lease payment. So the price you see is the price you pay. You can play around, obviously with terms and mileage.
As I mentioned earlier, all in really quick, easy down menus, or you can do nothing, just place an order. And once you've placed the order, we will prompt you to upload your driver's license and answer some basic credit questions. Again, everything's through the app or the website. And again, we give you the opportunity to do it manually.
If you want to speak to someone, we call that our concierge experience, or you can do it all digitally. If you're comfortable at that point, your transaction goes to the dealership that that vehicle is coming from. They complete the transaction and the vehicle gets delivered to you the same or the next day.
Narrator: Three easy steps: register, search, and browse. And the process can be as fast or as slow as you want it to be. For those who want a car tomorrow, Nathan maintains there is nowhere in America you’re going to get one as quickly as Rodo. He should know. In some ways, he was their first customer.
Nathan: It's actually an interesting story. Um, I was in the market for a car. I live in New York and I, for the first time in my life, walked into a new car dealership, a local one in my neighborhood and experienced what most Americans experience. When you go into a car dealership, I had seen an ad with a price and I said, Okay, you go in there and you say, I'll have this in black, and this is what the ad says.
And I'd like to pay and sign. And take the car home. I quickly found out that the new car experience in America is not exactly cut and dry.
I would just say it was less than pleasant. Being in that dealership for pretty much the entire day. And in the end, I actually didn't even leave with the car. Most of the time that I was sitting there, I was online as a tech entrepreneur, my entire adult life, um, browsing, you know, Lisa car in New York, buy a car online.
And I quickly learned that there was no way. To do what I was doing at the dealership online and Rhoda was born from that.
So I think the offline experience of buying a new car, um, Is a long drawn out process that is lacking in transparency. Uh, and is it really intensely time consuming? So you start with sort of, well, what type of car do I do? Uh, minivan an SUV, a full-sized car with then it's what can I afford? And then it's to, I specifically want to buy an American car or what I mind the foreign import and so on and so forth.
And then you start to go through the experience. You can do some research online, but ultimately you end up in a car dealership or really you end up in multiple car dealerships. Um, and that experience, as I mentioned is arduous. Long drawn out, um, and lacking in the conveniences that we are used to, uh, pretty much in everything else that we do today, which the internet offers.
Um, so the, the problem we're solving is the lack of transparency, the, the consumption of time, um, and everything else that sort of goes along with that. So we're taking. Offline experience and we're really slimming it down to something so elegant And so easy online.
Narrator: Now that Nathan is in the driver seat, it isn’t just his past experiences that are informing Rodo’s features. Customers do things that surprise him all the time.
Nathan: I'm shocked by some consumers, how quickly they download the app, where they go to the website, they register, they choose a car. If they place an order, they upload their driver's license and insurance and the car is delivered the same day. I'm like, dude, what just happened here?
Like red flags. Like literally the customer will do this in 20 minutes and they'll do it in the morning. And the car will be delivered at 4:00 PM the same day. And it literally, by the way, like raises flags sometimes at roto, like it has to pass a fraud check. We're like, Hmm. So quick Honda accord LX knew exactly what she wanted and just knocked it out so fast.
So that surprises me. Um, and in the early days, especially, and, but at the same time, that sort of gives you the confidence that like when you do this right, You know, there's a customer there that wants it. So I think that's one of the things that comes to mind, um, on an extreme scenario of how quick a customer will do it.
Narrator: 20 minutes to buy a car? It may sound hard to believe. But Nathan says it happens all the time. And intuitively, we all know why. Google. These days, three quarters of buyers have done the research online. Just like our buddy Old Man Snyder, we have very informed buyers. Whether it is a Snow tire, sweater, or Civic, they don’t want to haggle with a salesperson, because they’ve already made up their mind. Which means Nathan’s job is to make it as easy as possible for people to spend their money.
Nathan: one of the things that we learned very early on is, um, is, is following through the order experience to make sure. To guarantee that the customer is having an amazing experience. And I'll explain in a marketplace, you are dependent on a third party for whatever it is, product or service that you're selling. In our case, we are dependent on a franchise new car dealer.
When a customer comes in and sees a vehicle, that vehicle is coming from the local Honda dealer. And that local Honda dealer is not used to doing this. Online in the way that we want them to now transact through our experience. So from the moment you place an order with Rodo to not only through delivery, but beyond rotos fulfillment and operations team is watching that, or like literally watching it in real time from an admin perspective.
And we are making sure that the dealers. Is has the information that they need. We're making sure the customer has provided the information that we need to make sure that the numbers are accurate, that the vehicle is there and that it is moving at the pace that the customer is expecting. And we're literally moving the order along.
So I would say that that is the, um, the biggest differentiator and the most important. I guarantee if you will, for the consumer that they get, that they ultimately get what they want and it's not perfect, obviously. Um, it's certainly a work in progress as we expand as we, you know, as we improve. But, um, the goal is to, to manage that experience.
So you can even quality manage the marketplace for those that, you know, know What that means to make sure that, um, that it ends up where we want it to be.
Narrator: Buying a car is the first major purchase most of us ever make. And the second-largest purchase of our lives. So it makes sense that Nathan works his hardest to ensure the entire customer experience is just right. Sometimes though, even the best customer experiences go awry. That’s when it's important to remember Craig and the snow tires.
Nathan: the much more important things, an amazing return policy is a good customer experience
Um, really. Making the customer happy. I can't remember where I read this, but one of the first rules around like customer support and customer experience is problems will always happen, especially in a consumer transaction.
The question is how you respond to those problems, you know, are you responsive to the consumer? Are you making good on no matter on it, no matter what. Where, what is your policy around? If there is a message. Uh, or something goes wrong. How are you handling that? And I think, um, that has a big impact.
And that's probably the, the number one thing how you respond to issues when they arise is the difference between a good customer experience and they may be not so good. One.
Narrator: A return policy is more than just standard practice. It's a contract with your future customer. One that builds trust with them before they’ve ever bought your product. Just ask Old Man Snyder. Apocryphal as it may be, there is a reason the Nordstrom tire story has endured. The lesson of customer service remains unchanged. Be responsive to the consumer, and give up the battle if it means winning the war. Rodo engages with every customer from this mindset.
Nathan: with a car. That battle can be two or three years. Consumer leases, a car 24 months, 36 months, or what have you. And we have a return policy where if the consumer, we bring the car to. Test drive it, you know, read the sale agreement or the lease agreement, get the kids in, make sure the stroller fits in the trunk.
Make sure the car seat is, you know, is good and most important. Bring the wife out, bring the girlfriend out. Is this the white that they really like? And if they don't, we'll bring it back and we'll bring you a different one. So. You know, you, you are just thrilled with it. And yes, it happens where consumers are like, whoa, wait a second.
On the app. It looked great. Now that it's in my driveway, it's black and I, I just, don't like a black car, take it back. And we deal with that on the used car side, you know, you have warranty. Issues you no longer return policies of seven days and stuff like that because you know, you're buying a used car.
Someone else has already driven it. And so on with us on a new car, you know, you have the manufacturer's warranty. Um, and you know, there are no issues in a new car, so it's really just do. I like it when I see it. And once I test drive it on delivery, if I don't, I want to be able to say, I don't want this car T.
Narrator: If your customer isn’t satisfied, you need to know why. Don’t fear the feedback. You might not learn much from the happy customers. But the unhappy ones can teach you a ton.
Nathan: Listen to your customers. That means like exactly what I said. Sometimes it's hard to be. And it's hard to be told. Um, in, in harsh words, sometimes from customers, this was crap. It's bad. I want my money back. This was a bad experience. And the reasons why, especially when you're passionate about what you're doing and your team is passionate about what you're doing, and you'd rather ignore it or bury it, push it to the side and say, ah, you know, it's only one customer.
The vocal customers are the customers that you're going to learn the most from whether they're telling you good news or bad news. And therefore, my advice is listen to customers. And as a CEO, when I say, listen, I mean, literally call your. Ask them how the experience was walk into customer success or customer experience or customer service, whatever you call it at your company, read through the logs, read the chats, talk to your customer, experience.
people and ask them, what are you hearing?
What can we be doing better and so on? Or you can have a process for that many companies do, or even if you're doing an ad hoc randomly, regardless of how you're gathering the. Talk to your customers and listen to your customers. If you do that, it's it. It's just, it's the number one ingredient for success.
Narrator: Problems will happen along the buyer journey. As CX leaders, how we respond to those problems is what’s important. Whether it’s an unhappy car buyer or a pair of snow tires that found their way into an upscale department store.
So do yourself a favor: next time a customer comes walking into your store - or dealership - and demands a refund, give it to them. You’ll have made them happy, and the return on that is priceless.
This podcast is brought to you by the generous support of our friends at Oracle. Make every interaction matter with Oracle Advertising and CX. Connect all your data and empower your entire business to deliver exceptional customer experiences from acquisition…to retention…and everything in between. Hear more executive perspectives on CX transformation at oracle.com/cx.
This is your host, Ian Faison, CEO of Caspian Studios. Thank you for listening to another episode of Often Imitated. If you like what you’re hearing, tell one friend. This podcast was narrated by me, Ian Faison, written by Ben Oddo, and produced and edited by Mackey Wilson, Ezra Bakker Trupiano, and Jon Libbey. You can learn more about our team at CaspianStudios.com.