Thursday, April 23, 2009

The hidden costs of customer returns


We know money is tight, so why should you invest in professional product assembly and operating instructions? Because you could significantly bolster your bottom line.

Consider this, Accenture’s High Performance Business research revealed that in 2007, consumer electronics manufacturers, communication carriers and electronics retailers spent an estimated $13.8 billion in the U.S. assessing, repairing, reboxing, restocking and, reselling, returned merchandise. Of this returned merchandise more than two thirds (68%) could be characterized as “No Trouble Found” (NTF). In other words, the device met the manufacturer’s specifications, but somehow failed to meet the end user’s (customer) expectations.

Considering the scale of these costs, we believe companies make a mistake by not putting more emphasis on their product instructions.

Returns prevention—especially when it is related to completely functional, non-defective products—is often not given enough focus as a problem aspect although it has the highest potential to impact results. By taking active steps to prevent customer returns upfront, companies can competitively differentiate themselves, deliver impressive gains to the bottom line and achieve high performance.

How? Accenture’s research indicated that weaknesses in the design, packaging and documentation could have a major impact on NTF returns. Infographics specializes in producing visual instructions that simply describe actions and clearly communicate complex information. Our illustrations serve as a universal language in product communications and bridge educational barriers. Our visual instructions simply describe actions and clearly communicate complex information.

As a result, our clients have experienced fewer product returns, improved customer service, reduced product liability claims, lower translation costs, improved brand perception, increased repeat business, and better ownership experiences.

Find out more at http://www.info-graphics.com.

1 comment:

Unknown said...

Excellent research which supports our experience of helping brand owners and retailers to reduce returns by improving the standard of their product instructions and user guides.

We have achieved impressive reductions over recent years and on average the drop is about 20% in consumer markets. We've also developed a Return On Investment (ROI) model which predicts the savings in after sales costs that we can achieve based on the number of units sold, selling price, gross profit and number of calls or returns as a percentage of units sold. The general rule is that the more complicated the product and the poorer the original instructions the greater the reduction will be.

We have saved a polytunnel manufacturer $50,000 (£35,000) this year by reducing the time spent answering calls by 50%. Payback from their investment was 35 weeks.

Within the next six weeks we should learn what impact our video clips are having on the length of time that technical support staff for a bathroom accessories manufacturer spend on the phone.

With more companies sourcing products directly from manufacturers in the Far East and importing into the USA and UK the issue of poor instructions is getting worse not better. There is a very good International Standard for instructions which everyone should be aware of.

Craig Thatcher - Director
www.userview.co.uk