The Cost of Doing Business (KS Lesson #269)

29 July 2019 | 27 Comments

What would you do if you received the following email?

“Hey, I recently ordered a game from your website, and it shipped a few days ago. Unfortunately, I entered the wrong address, and it will either be delivered to a place I can’t get it or returned to you. What should I do?”

This is truly a hypothetical example, not an exact copy of an email. I’ve received a number of similar messages, though, each with a slight tweak on the situation, culpability, and tone. A number of them also involve situations where a package is marked as delivered to the correct address, but the customer didn’t receive it.

Keep in mind that we only accept orders when a product is in stock (or days away from arriving at our fulfillment centers). If you’re a Kickstarter creator, this issue of incorrect addresses can be much more extreme, as there’s often a big gap in time between the pledge manager and delivery.

I’ve replied to emails like this in different ways over the years. Early on, my philosophy for fixing errors was focused on respectful fairness. If I messed up, I fix it on my dime. If you messed up, I’ll fix it on your dime. That kind of thing.

My philosophy has slowly shifted to the cost of doing business. Specifically, for every 100 orders, I need to be okay with the cost of those orders amounting to that of 101 orders. There’s a built-in buffer, both logistical and psychological.

Adopting this philosophy has, in my opinion, improved the customer service experience. Here’s roughly what my response might look like now.

“Thanks for your note, and I’m sorry your order was delivered to the wrong address. Can you confirm the correct address, and we’ll send you another copy of the game? If you’d like to pay for shipping, you can PayPal $10 to”

In cases where the game was marked as delivered to the correct address (but the customer didn’t receive it), I’ll recommend that they first check with their neighbors, as in most cases the game was misdelivered nearby. If they can’t find it, I’ll ask for a different mailing address and proceed with the shipment.

There are also cases where the game box arrives damaged, which isn’t the customer’s fault. In those cases, I offer a choice of a partial refund or for us to give the customer a mailing label to send the game to a reviewer, and we’ll send the customer a replacement game.

So in the end, it’s actually kind of a mix between respectful fairness and the cost of doing business. But I think the latter is particularly important, as the built-in psychological buffer has freed me to default to an immediately helpful response instead of some sort of negotiation. It also helps me, because I stress less about the little things.

What’s your perspective on the cost of doing business?

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27 Comments on “The Cost of Doing Business (KS Lesson #269)

  1. As a tiny company I’ve averaged about one problem/replacement every 200 games so far. In each case I’ve asked the customer to have a look around, ask at the post office if there was a delivery issue (which has actually fixed about as many as I’ve had to replace) and then replaced on my dime and I’ve not regretted it at all. I was wondering if that ratio increases significantly when a company gets to the size of Stonemaier?

      1. I understand that’s a way more significant number, but I think its a nice thing that your prominence and the significant re-sale value of Stonemaier games products hasn’t made you any sort of greater target. I’d say it strongly implies that even at your level the claims are still genuine.

    1. Shipping insurance? For individual order fulfillment? Have you ever tried to get a courier to pay for an individual order they claimed to have delivered? It’s simply not worth the time or effort. I left it out because it’s not worth mentioning.

  2. My business is primarily B2B, so I end up working with the same folks again and again. Typically, when there is an issue with something I have sold, even if I’m sure that I was not at fault, I just replace it. Like you, I have built this into my cost of doing business. And I find, it is not just good for PR, it’s just plain less hassle.

    However, I also weight the response of my client, and use it to inform my future dealings with them. With one client, I was fairly sure they were at fault (they damaged the product after it arrived), yet they claimed it was my fault. Fine, I apologized, paid for the replacement, but then made a note to watch out for them in the future.

    Relationship is everything!

  3. Ever ask for a refund from a yearly automatic subscription that you forgot about and be denied the refund? It hurts. So I can’t help but believe in good customer relations. It’s got to be more worth it to send another copy than keeping a dollar in exchange for bad publicity. But Even just for the sake of doing the right thing and relieving stress. But I like how you say to even it out over 100 games, and just call it the price of doing business. Very good points! (I love your games btw)

  4. To me, this comes down to one thing . . . customer service.

    Doing all you can to honor the people who gave you the honor of their business is the first rule of STAYING in business. We all know there are people who will try to gain the system, but they’re few and far between. I believe most people are genuine.

    And I LOVE that you put that blurb in your email about asking the customer if they would like to pay for shipping themselves. I think that allows the customer to show their gratitude for when they’ve made a mistake, but you still want to get the product in their hands. There have been a couple instances when I’ve purchased a game with defective components (a known issue with a particular game) and when I reached out to the publisher about replacement dice, they simply asked to see a picture of the bad items. Once I did, they sent out new components right away, and I replied with a thank you and offered to pay for the new components. They refused payment, said to enjoy the better dice, and left it at that. So now, as a customer, I have a very high opinion of that company, because I feel like I had been taken care of.

    I learned this when I used to work in fast food, many moons ago — just take care of people. Give them what they need, and if it’s a negligible expense, be prepared to eat it. As entrepreneurs, we set our own rules.

  5. This is how I tend to look at doing business. My Kickstarter was really small, but I made sure to factor in about %5 defective parts or other issues with orders. I feel like as a small publisher just getting off the ground, this would build the best relationship with my customers right off the bat.

  6. I absolutely love your idea of sending a damaged copy to a reviewer, that make so much sense!

    This does seem like a subculture where most people are upstanding, as another commenter noted, I wonder how much this could translate. Also I think w Stonemaier, a lot of us are emotionally invested in the company, and would never consider ripping you off because you feel like a friend. If that connection is not there, I think it is easier for people to be shady.

    But for yourself, psychologically, it is good to build it in. I am also guessing you do not have much of a shrink problem like w shoplifting/internal theft, which other businesses also need to add to overhead.

    The one issue as a community we do face is entitlement. I see this when people complain about the smallest of things and have a high level of expectation. To me, this would be a bit harder to deal with, even if you are writing off the product, it does encourage this bad behavior. This is a small percentage of gamers, but it is frustrating to see, esp with such a company that does its best to be transparent, thoughtful and I dare say generous.

    1. Candy: I’ve been surprised by both sides of it. On one side (the majority) are people who make mistakes or recognize that we make mistakes, and they’re patient, understanding, and not demanding. I’m surprised by that simply because I know it’s frustrating when you spend money and a company doesn’t deliver–even by accident–so it’s nice to know that so many people are so cool about it.

      I’m also surprised by the minority that you describe in your last paragraph. I think the thing that surprises me the most is that some people think that the most effective way to get what they want is to demand it and sometimes even threaten to get it. There are so many better, easier, and nicer ways to solve problems, and companies are run by human beings, so we’re a lot more likely to solve the problem if people are kind.

      1. Exactly. I think gamers are really thoughtful and generous as a whole.

        And yes, how you present a problem, you can be assertive and advocate for yourself as a consumer without being demanding. I know that sounds tricky, but I think the key is seeing yourself as being on the same team to solve the problem. Miscommunication can happen, especially when people are emotional.

        I can also see a double edge sword with you being close to your fans. Mostly great, we love you and support you!!! But if you disappoint for some reason, it is easier for people to take it personally and bad blood to happen. It will happen, just cause we are humans. I still think your model is cutting edge though, and very effective. You extend trust to your consumers, and most often, that is what you will get back.

  7. You can standardize these process by sending customers a form and letting them fill out what happened. It might not be really customer friendly but at the end you can analyzed these forms and find out where you have to optimize. Sometimes problems get solved by just asking questions instead sending a new copy. I understand that very often we want to get rid of such problems immediatly and we want to show how customer friendly we are but even if it is not the customer fault, you can asked at least about some details what happened, so you can optimize such cases in the future and probably reduce the cost of doing business.

    1. Definitely! I always try to get the information I need to understand the problem so it’s not repeated (in general or with that specific customer). But sometimes it really is as simple as, “I entered the wrong address.”

  8. The thing I struggle with more than the cost of doing customer support is the time requirement, which just get more severe the more successful one is. I wonder how you keep it from taking an overlarge fraction of your time.

  9. I agree that this “cost of doing business” is a good stance – and if it becomes a problem you just adjust again.

    As an online consumer of many things, not just games, I personally would not expect you to offer “optional” shipping reimbursement for someone that put the wrong address in at the time of ordering. Maybe I’m just distrustful, but not once in my life have I done this… and with autofill in my browsers it seems even less likely. The fact that you’re already willing to replace the game for free is a win in my book and I’d gladly cover the shipping cost in such a transaction.

    If a package was marked as delivered by the shipping company and they never got it, that’s what shipping insurance is for, right? Unless you don’t offer / use that, I’d expect to take it up with the delivery folks first, then only come to the seller if that didn’t pan out. Your handling of this is why you’re one of the good guys :)

  10. I can see how getting emails like this – probably more frequently than many could imagine – would grate on you. It’s probably very easy to be skeptical and let’s be fair, certainly SOME of these have absolutely been scams. However, for the ones that weren’t you having a level head and just accepting it as ‘the cost of doing business’ probably made a huge difference in that customer’s perception of you, your company and that product.

  11. You should check out Zingerman’s deli, etc. I work in customer service/retail and our policy is “make it right and delight,” because even if it is the customer’s fault or whatever, if they have a bad experience, it is still your problem for the future.

  12. This is a rather relatable topic as I am the customer service rep for a small antenna business. We get emails about broken/lost parts, incorrect shipments, and replacements all the time. Every week at least. 99 percent of the time we simply ship out the parts they have requested at our cost. We don’t mind absorbing a little bit to offer good customer service, but there have been a few times where people seem to take advantage of this. We see repeat emails and requests for whole antennas (sometimes international) and sometimes if we see this we have to make a judgement call and say no.

  13. 100% agree with this philosophy. If your running your business so tightly strapped that you cant absorb costs like that, then you are going to stress yourself out of the business in the first place.

    I had an experience with you like this unfortunately for for the Euphoria expansion. It happened to be just when we were moving and I thought that you would be shipping after we moved so I sent it to the new address, but then you shipped it like 2 weeks ahead of when I expected (typically great). So I called our new office and they said they would hold the package for me, but for some reason did not.

    You re sent it without so much as questioning anything or expecting me to be trying to rip you off. It was a very pleasant experience, I dont think you even asked for additional shipping even though it was really my fault.

    Appreciate how you run your business.

  14. Wow that is amazing.

    Probably in other industries it would be more open to scammers. The cost of business could be 100 to 1000 instead of 101 with that policy.

    The board game industry, from a personal point of view, seems to have the highest amount of decent trustworthy people.

    When I buy a used board game I don’t even open the box to see if there is anything in there, and neither does people that buy a game from me.

    If I sell anything else to non-board gamers for a similar dollar amount, or less, they check everything.

  15. Too often businesses assume that the customer is trying to rip them off, when it’s almost never the case. Depending on the situation I might ask them for some small action (check with the neighbors, etc) but usually I’ll immeditely drop a new copy in the mail with a handwritten note. Not possible for every business, but I love it when people in business act like humans and treat me like a human, so I try to do the same.

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