Why Customers Feel Buyer’s Remorse After Purchases and How Some Companies Are Causing It
What is Buyer’s Remorse?
Buyer’s remorse is that feeling you get just after purchasing something in which you think:
“Man… Why did I buy this? Do I really need it? Should I have spent the money? Was the other version better than this? Does another store have it for a better price?”
It’s a feeling that almost everyone encounters after one purchase or another, and it’s a major problem for marketers and CFO’s alike.
In today’s age of commerce, almost everyone has some form of a risk-free return policy. Nordstrom will let you return a coat you bought a year ago if it didn’t hold up well enough to meet your standards.
You can return almost any product you buy at Best Buy up to 3o days after your purchase, as long as you have your receipt. I’ve even seen a shopper at Safeway return a gallon of milk because they said it tasted too milky.
But with these almost required no-risk return policies becoming ever the norm, businesses are struggling to keep up with the added burden of returns and the loss of revenue because of them.
Why is Buyer’s Remorse Such a Problem for Companies?
Department stores now have entire departments and counters devoted to returns and exchanges. Their employees seemingly have mini law degrees in Return Policy Law and Precedent.
In the old days, if you bought a sweater and decided you didn’t like it two weeks later: Tough luck, hopefully you have a cousin with less discerning taste and style. If not you would be in for a real treat arguing with the store manager about why you need to return it.
Nowadays it’s almost as if stores want you to return items. They spend more time focusing on how to make it easier to process returns, rather than investing time and energy into convincing you to keep what you bought. This is especially true of big-ticket items.
I know the comparing business and customer relationships to dating and marriages analogy is well past overplayed, but please forgive me for this one as I find it to be most fitting:
When you go out on a first date with someone, it’s common place to make contact with them soon after the date is over. There have been many a movies with clever dialogues debating the proper timeframe for this follow-up contact to achieve optimum suaveness, but everyone agrees that contact should be made.
“Department store employees seemingly have mini law degrees in Return Policy Law and Precedent.”
This follow-up contact is crucial as it reinforces the good feelings your date had during your time together.
“Hey, I had a really great time tonight. I’m glad you liked your sushi, can’t wait to do it again soon.”
In this text sent the night after the first date, you are reminding your date of the pleasant time you shared and how great their sushi was. Now the good feelings hopefully continue and momentum potentially builds into a second date.
Obviously, the desired outcome is a happy long-lasting relationship, which is exactly what we businesses are trying to build with our clients and customers.
Many businesses and marketers have become very skilled at flirting with other people, asking for their number, and then often times even a great first date. However, the follow up after that point for the majority of companies is dismal.
Enter widespread buyer’s remorse throughout business including Fortune 100 companies and Mom & Pops alike.
Many customers feel like they are being scammed by slimy, smooth-talking sleaze balls into going on a date, and then never hearing from them again. It’s basically as if customers feel like businesses are Charlie Harper from Two and a Half Men, and customers are every woman he has ever slept with.
Attractive people in nice clothes with huge smiles are selling products over counters all across America and Europe, and increasingly more customers are returning them every year, creating an unimaginable amount of lost dollars and euros.
So how are we supposed to combat the problem of buyer’s remorse? Are we supposed to stop offering such liberal return policies? Some stores could probably use a slight tightening of their return allowances, but most businesses need to invest in customer and product activation.
One of my favorite purchases of all time was my Citizen Echo-Drive watch that I bought when I was 21 years old. As a huge sports fan, naturally I just as millions of other sports fans have seen countless commercials featuring famous athletes such as Eli Manning, Paula Creamer and many other sports celebrities, wearing incredibly stylish Citizen-Echo Drive watches. The commercials always did a great job driving the message of “practical, stylish elegance for the active person.”
“Customers feel like businesses are Charlie Harper from Two and a Half Men, and customers are every woman he has ever slept with.”
I was hooked. I didn’t have much money at the time, so spending $500 on a watch was truly an incredibly unwise move. I went to the local mall and into the jewelry store with an impressive assortment of Citizen watches. Immediately I saw the one I wanted. It was silver with fine detail around the edge of the face, and a stylish diamond-like gleam. The jeweler let gave it to me to try on and that was all she wrote. I paid for it and left with it on my wrist.
The amount of excitement and joy I felt about buying the watch seemed almost double in the opposite direction as soon as I left the mall. On the car ride home my head was filled with thoughts resembling:
“Why in the world did I just do that? Am I the stupidest person alive? What would my parents say if they knew how much money I just spent on a watch? Should I just take it back now? How foolish would I look?”
I had major, major buyer’s remorse.
When I got home I got out the box and started guiltily to explore what was inside. It was a very elegant box, burgundy in color and a very high-quality cardboard. The name “Citizen” was printed on the outside in gold, and the extra band links were in a shiny (but not obnoxiously so) bag that was as soft as silk.
Under the bag with the links was a small CD-Rom disc. I put it into my laptop and launched it. A very stylish and pleasant looking interactive interface popped up, offering to walk me through my watch. It had a training on how to set the time, how to change the date, alarms, timers, etc.
But the kicker that really wowed me was a video that was about 3 minutes long, introducing me to the watch and all of its many advanced features. It showed me how you could dive with it in the ocean, and the technology inside that allowed it to be charged by sunlight instead of using a traditional battery. It also reinforced all of those messages of class and elegance for the active person that their commercials displayed.
After watching that video and realizing what a beautiful timepiece it was, I was too sold on the idea of having it to ever consider returning it.
When I look back on my purchase of that watch, I still say that it was a mistake. There’s no way a 21-year-old should buy a watch for himself that costs over $500. However, that watch is still one of my favorite possessions. I wear it everywhere, with everything that’s appropriate, and I’ve probably gotten close to a hundred compliments on how nice it looks. I hope to one day pass it down to one of my children, and I’ll never have to get a new battery in between then and now. 😉
The CD-Rom that Citizen included in the box with their watch showed that they really care about the relationship between them and their customers. They want their customers to understand how their watches work so that they can become brand ambassadors for them. Not only did the CD combat my buyer’s remorse, it activated me as a loyal Citizen customer.
“When you engage in a relationship with your customers post-purchase, you are creating more value.”
If the Citizen Echo-Drive TV commercials during sporting events was them flirting with me before asking me out, the post-purchase activation and customer appreciation was them sending me a goodnight text, flowers, and possibly some chocolates. Citizen will also clean your watch of scratches for free for one year, and provide you with basic maintenance of your watch to keep it operational after that. That’s a long-term relationship worth having.
The underlying problem when it comes to customers experiencing buyer’s remorse is them not feeling like the product or service they purchased was worth the money the spent on it. If they feel like the money they could get back is worth forfeiting the new product and the time they would have to spend to return it, they will. It’s about the perceived value.
Combatting Buyer’s Remorse
Nordstrom may be one of the most liberal of all companies with their return policy, but their policy provides more value to their customers, which in turn builds stronger long-term relationships. By making customers feel free and relaxed when they make their purchases, it leads to less anxiety on the back end of a customer’s purchase because they automatically feel better about their purchase.
When you engage in a relationship with your customers post-purchase, you are creating more value. No longer did the customer only pay for your product, they also paid for a connection with your brand. A brand that possibly stands for what they stand for.
Who would buy a Harley Davidson motorcycle and then demand a refund just after taking a road trip with a group fellow Harley motorists while decked out in Harley gear?
No one! Not once you’ve experienced being a part of the Harley club. That makes your perceived value of the motorcycle more than just the motorcycle itself.
The most disappointing part of the failing of businesses to effectively activate new customers is how little effort or money they may actually need to invest.
One email from a company thanking you for your purchase could do the difference in a purchase being returned. Best Buy could email you and tell you how many other people have bought the same exact product you just purchased. Then you wouldn’t feel so alone in your guilt.
Read my full post on fighting buyer’s remorse post-sale here.
Car companies and home buyers often feel some of the worst buyer’s remorse. Most car dealerships will hound you to death until you purchase a new care from them, but how about a follow-up phone call a few days after the purchase thanking customers for their business.
When I was considering returning my watch, it was just me alone telling myself how stupid I was. However, if I had seen a hundred other people across the country who had bought that very same watch that week, I would have felt like I had peers who made the same decision I did, making me feel better about making it.
When you experience buyer’s remorse, you often experience it by yourself. Companies use Social Proof all the time to convince you to buy a product, but when was the last time they used it to convince you to keep it?
Computer stores could tell you how many other people have bought the same TV or laptop you just bought, making you feel like it must be a good purchase and there’s no reason to return it.
Of course, the social proof method could backfire if the product is something that is supposed to be trendy or one-of-a-kind. If a woman buys a new purse because she thinks no one else will have it, and then is later informed by email that 347 other people have bought that same purse today alone, she may be enticed to return it.
If the store she bought it from sends her an email reminding her of its uniqueness and her savvy fashion sense, however, then they might be barking up the right tree.
“One email from a company thanking you for your purchase could do the difference in a purchase being returned.”
The key to battling against buyer’s remorse is making people feel just as comfortable about a purchase once they get home with it as they did when they made the decision to buy it in the first place.
You can’t match the endorphins that were present when they bought their new purchase, but you can make them feel like it was a sound purchase and that they made the right decision in buying it. If you combine this with a way to add value to their purchase that can lead to a long-term bond with your brand, you are on your way to a completely different way of managing returns within your company.
Buyer’s remorse stands no chance against true brand loyalty.