Chewy and the customer service multiplier
September 2011, Ryan Cohen and Michael Day dropped out of college to pursue their online pet food startup, Chewy.
They tried to raise money, but investors weren't interested. Apparently Amazon was already established in the market.
Five years later, Chewy overtook Amazon as the biggest online pet food retailer in America.
Chewy wasn't cheaper. They didn't sell special pet food. There was no Prime delivery. The difference was customer service. Where Amazon was faceless, Chewy treated customers like family.
Every customer is welcomed with a handwritten card reminding them to call anytime:
They employ 100 artists whose sole job is to paint customers' pets. The portraits are then mailed to unsuspecting customers:
If they hear about a pet passing away, they'll send a bouquet of flowers and a condolence note:
And if you buy the wrong dog food, customer service will tell you:
Don’t worry about returning it, we’ll refund you, just donate the item to a pet shelter
The customer service multiplier
Delighting customers is expensive. Not every company should be hiring artists and sending flowers. Why does it work for Chewy?
Firstly, pet food is a recurring purchase. One customer might spend $70,000 on dog food over a lifetime. It pays to delight customers when their lifetime value is high.
Secondly, people love to share pet-related content. Each day social media is littered with Chewy’s portraits. It pays to delight customers when they're likely to broadcast their delight.
Finally, in certain sensitive markets (e.g., education, healthcare, pets), people make buying decisions based on who cares most. And Chewy's customer service shows they care.
It's this combination of high lifetime value, high sharing coefficient and customers who care which make Chewy's customer service efforts so effective.
The multiplier effect of delighting your customers is contextual on the marketplace.
You can’t set up an online kitchenware store and outcompete Amazon with better customer service. The customer service multiplier just isn't big enough.
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I don't know how to segway into this...
But, if you’d like a break from COVID-19 here’s a story about the pet brand Chewy:
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