Putting Customer Care Above All Else Leads to Success for Overstock.com

Earlier this month, overstock.com was awarded the inaugural “Gartner & 1to1 Customer Awards’ Users Choice Award.” The award is given to companies who show exemplary Customer relationship strategy and excellence in providing customer experience. “Overstock.com’s attention to the customer experience as a leading way to significantly grow their business” was stated as a deciding factor in his decision said, Adam Sarner, principal research analyst at Gartner. 

In an interview conducted by Martha Rogers, Ph.D, Overstock.com’s CEO Patrick Byrne credits their customer care initiative for getting them out of an economic ditch. After six years of growth they hit a wall. They had all the technical things right but they were missing something…they did not have a cohesive customer strategy.

Overstock.com sells more than 800,000 products online and services an estimated 25 million customers. Of these, 55 to 60 percent are repeat customers. Byrne estimates that 10 percent of the customers provided 160 percent of the profit while 90 percent provide negative 60 percent of the profit. Customer value is measured by looking at gross profit less marketing costs. They also examined the costs associated with customer incidents or support. This helped them realize that even though a client may generate high sales, added time spent servicing that customer diminished overall profitability. Based on the results of their analysis, Overstock.com has established service levels based on customer value and has created a white-glove service team for their high value customers.

Instead of taking a reactive posture with their customers, they have brought their customer care department in-house and given them more front line responsibility. Customer care team members are strategically placed in various areas throughout the organization as an overseer or advocate for the customer to insure the customers interests are always first. This allows them to gather VOC first hand and see to it that the right information is shared and appropriate actions are taken to maintain a positive customer experience.  Byrne likens it to a Grecian temple, where the roof is the customer care department. They are the boss and when they speak, the appropriate action is taken.

As companies struggle to compete in today’s competitive marketplace, more and more companies will need to follow the lead of Overstock.com and focus first and foremost on their customers. We all realize that its our customers who keep the lights on, but many companies still find it difficult to allow their customers to steer the ship; choosing instead to continue along the the same path of customer dissatisfaction and churn while hoping for a different result.