Customer’s Rock Blog: Costco’s Response to a Customer Need
Customers Rock is a new WordPress blog which is getting quite a boost due to being referenced on a number of popular marketing blogs. The latest post on Customers Rock is about Costco and their new free technical support.
Costco has been listening to the frustrations of their members and has entered the realm of providing technical support to help ease their pain. According to a store supervisor that I spoke with, Costco will provide free technical support for televisions, cameras and camcorders, as well as desktop and notebook computers. The service has been available for about one week now in the Southern California area. It is part of their existing Concierge Services, which Costco started testing for high-tech TV installs this past summer.
The real reason that Costco is doing this is that the returns are killing them. Costco has an amazingly liberal return policy. They have expanded their Home Entertainment offering and a pretty good computer business, and all that new technology is difficult for customers to manage. As a result, they have seen returns skyrocket and profits erode.
Offering free support is a brilliant strategy, assuming that they can deliver a great experience. They are well on the way to that by assuring members that when they call tech support, they will speak with someone in the US. There is nothing more frustrating to me that to hear a thick accented CSR introduce themselves to me as “Bob” or “Mary” and then not be able to communicate with me.
In addition, Costco is offering the free tech support for the life of the product. Now that’s an added value that’s easy to understand.
Costco intends to take on Circuit City and Best Buy for the Home Entertainment and Computer customers and they are coming out swinging by turning what was a problem for them into differentiated offering for their members.