This is a true story, going on right now in the Furr household…
We bought our dresser in our master bedroom when we moved into our house in 2011, 5 years ago.
We got it from Slumberland, a regional furniture chain.
The day it was delivered, we weren’t happy.
It’d come wrapped to protect it during shipping and delivery.
The delivery people were long-gone by the time we had it unwrapped — only to discover there was a big gash in the front of it. Either it got knocked over in shipping, or something got knocked onto it.
Either way, we weren’t satisfied.
We called Slumberland. If I remember right, they wanted us to email pictures of the gash. We did.
They did the right thing.
They took responsibility. They delivered a new dresser soon after. They helped us unwrap it to make sure it was in good condition, and took the old one away.
Everything was good. It was actually a great customer experience. And even though there was a problem, they fixed it, and instilled trust in us that they would take care of us in the future.
Fast-forward to last week, and the bottom drawer in that dresser suddenly stopped working…
We checked the usual culprits. Clothes stuck behind the drawer? Nope. The drawer off its glides? Nope.
Then I saw something odd. A strip of plastic with embedded ball bearings had fallen out of one of the glides. In fact, I looked closely and there was a second similar strip falling out.
The glides that made the drawer work were failing.
This isn’t something that happens from the kids climbing onto the drawer (they don’t). This isn’t something that happens from abuse of the furniture.
This was a clear hardware failure.
So I call Slumberland. I explain the situation to their service department. They look up my order.
“Sorry, Mr. Furr. You only had a 1-year manufacturer’s warranty. I can try to find out if the manufacturer provides a replacement part, and how much it costs.”
Honestly, the service department is very friendly. Not complaining about that.
But eventually we find out it’s going to cost about $50, all-in, to get me the replacement part (which I’ll have to install myself — a 15-minute task).
I’m probably going to bite the bullet on this one. The drawer really doesn’t work well anymore. But $50 seems a bit steep when this is clearly a manufacturing or design problem with the hardware.
And what about the other 13 glides in the dresser? How long before one of them has a similar failure?
How many of those will I have to replace before I give up in frustration?
All of that thinking is going on in my head as I consider the $50 replacement expense. I don’t mind spending money. I just don’t like spending it frivolously. And paying for someone else’s poor design seems a tad frivolous. (Especially when I’m buying the same part that just failed!)
This isn’t going well…
And let me address the other side of this, because I certainly understand it.
One year is a long time for manufacturing defects to show up. It’s certainly standard within the industry. And who knows — even though it may not look like a failure due to misuse, maybe it only happened because of the cumulative stress of small misuses.
And what impact will it have on the company if they accept every $50 repair expense? And what about $100? $200?
The dresser itself sells for $944 today. We got it for somewhere in the $650 range. Can’t tell if that’s an increased retail price, or if we got a great sale (it’s not on the old email receipt).
But here’s the thing.
If Slumberland is average, their gross margin on a piece of furniture is about 40%. That means that out of our $650 purchase, their margin after cost of goods sold is about $260. By the time you factor in advertising expenses, warehouse and showroom space, delivery and staff compensation, they’re probably only making about 10-15% — or $65-$100 on that $650 purchase.
And frankly, because of the delivery problems the first time around, they were probably already financial upside-down in doing business with us (not that we should be blamed for the furniture that was damaged before it showed up at our house).
That’s transactional thinking — not relationship thinking…
There are huge implications that come from their decision not to cover this cost of repair…
We’re fairly picky on our furniture. But Slumberland has been on our short list of stores to go to when we’re looking for new furniture.
Maybe they have something we want. Maybe they don’t. But every time we walk in that store, there’s a possibility we’re going to buy something. Maybe, some things.
The first time around, when they fixed a problem with a piece of furniture, it engendered trust and liking.
We had a good impression of the company, and were more likely to go back as a result.
This $50 expense today makes us seriously question whether we’ll go back again…
Maybe we’re being fickle. But customer impression is everything. Leave your customer with a bad impression, and you could lose their business for good.
And Slumberland isn’t providing much in terms of a Unique Selling Proposition. Maybe they have unique designs. But mostly, they’re there.
Worse for them, they’re in a commoditized industry — and smack dab in the middle of it.
They’re not high-end. They’re not cheap. They just provide furniture.
In that situation, you have to do something more to get and keep customers. And you better hold onto the ones you have.
It’s become trite but it’s still true — it costs 6-10X as much to get a new customer as to bring back an old one.
If we go elsewhere, how much are they going to spend to bring a new customer back in through the door to replace us?
What is our lifetime value as customers? If we come back for one more similar piece of furniture, that’s another $65 or more in net profit — probably a lot more because the advertising expense is minimal.
We have kids, too. They’re growing. As they grow, they will want new furniture. In the next 20 years or so, we may have multiple bedroom revamps, as well as helping to furnish dorms, apartments, or houses as our kids move out.
Plus we’ll have our own home redecorating needs to think about along the way.
$65 profit could quickly turn into $650 or a whole lot more, over the next few years.
But only if they maintain our trust as customers.
Consider the alternative…
Let’s imagine for a minute that Slumberland didn’t lean on the manufacturer’s warranty to tell us no.
Let’s imagine that instead they had a culture of selling great products and creating great customer experiences.
Let’s imagine that instead of telling me I’d have to spend $50 to replace the glide, that the interaction went something like this…
“I’m sorry Mr. Furr, that must be frustrating. It sounds like the drawer just kind of failed on you — like there was some kind of problem with the hardware. Let me see if this is covered by the manufacturer’s warranty…
“Okay, the warranty was only for a year, so this isn’t something the manufacturer will cover. But at Slumberland, we really care for you as a customer and, as our website says, ‘we hope your Slumberland purchases will remain in your family for years.’” [It really does.]
“Not only that, we hold your trust and satisfaction in the highest regard, because we know you have a lot of choices in furniture, and we want you to keep coming back to choose us whenever you shop for furniture.”
“It’s our policy that we can spend up to 10% of your purchase price to right any wrongs with your furniture, for as long as you own it. If it’s more, management will decide how much of the cost we can cover to keep you satisfied as a Slumberland customer. Let me check with the manufacturer to see what we can get that replacement part to you for.”
“… Okay, it says it’s about $50, so I have some really good news. We’re going to get that part shipped to you as soon as possible, and it’s not going to cost you anything. All that we ask is that you remember this conversation the next time you’re going to go furniture shopping — and consider stopping by your local Slumberland store.”
“Now, let me confirm where we ship this part to…”
There are policy and culture decisions that go into this. And yes, they would be exceptional in the industry.
But just imagine if I were writing to you about that conversation ACTUALLY happening, rather than the alternative.
Not only would I be more likely to go back to Slumberland over and over again, rather than feeling like I’ll be choosing someone else next time…
You would be getting an ecstatic customer review rather than a #BusinessFail story.
Slumberland would be getting positive word of mouth, rather than negative.
It’s about engendering trust and liking for the long haul. It’s about recognizing that your customers are more than transactions — that customer value is measured in relationship, and not in the profit or loss of an individual purchase.
Short term, milking every penny of profit out of every transaction can make you look really good. But in the long run, the trust-based, relationship-driven company will win every time.
Yours for bigger breakthroughs,