In a recent study by Northwestern University and MIT researchers (reported by Neuromarketing Blog), a quantifiable value was placed on retail return policies. While it may seem like the real value of return policies comes from the positive brand perceptions they create, there are now hard metrics that prove return policies are important and should be well promoted
In the study, researchers determined the specific value that customers put on having the option to return items they purchase online. As you might expect, the value was closely tied to the perceived risk of a purchase. However, the study also reveals some specifics about how much more customers are willing to pay for a great return policy.
The study determined that the value of a return policy on men’s shirts equates to $3.19. For women’s shirts, the value is $5.00. However, the value of a return policy on women’s shoes is $15.81. These valuations make sense when you consider the fact that purchasing a man’s shirt is less risky than purchasing shoes for a woman. Without actually trying the shoes on, it can be difficult for women to find the right fit. Men’s shirts are more likely to fit without trying them on than women’s shoes are. It’s a riskier online purchase making the value of a good return policy five times higher for women’s shoes than men’s shirts.
Of course, a good return policy can mean different things to different people, but offering comparisons between your return policy and competitors’ return policies can demonstrate to consumers that yours is more valuable (assuming it’s better than your competitors’ return policies). If your return policy is great, make sure your customers know it, too. They need to understand its value in order to see it as an important benefit to them and differentiator of your brand from others.
You can follow the link to read the complete Northwestern University and MIT study findings. It’s filled with statistical analysis and information you can take to your leadership team to help you sell the need for your brand to have a great return policy.
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Susan Gunelius is the author of 10 marketing, social media, branding, copywriting, and technology books, and she is President & CEO of KeySplash Creative, Inc., a marketing communications company. She also owns Women on Business, an award-wining blog for business women. She is a featured columnist for Entrepreneur.com and Forbes.com, and her marketing-related articles have appeared on websites such as MSNBC.com, BusinessWeek.com, TodayShow.com, and more.
She has over 20 years of experience in the marketing field having spent the first decade of her career directing marketing programs for some of the largest companies in the world, including divisions of AT&T and HSBC. Today, her clients include large and small companies around the world and household brands like Citigroup, Cox Communications, Intuit, and more. Susan is frequently interviewed about marketing and branding by television, radio, print, and online media organizations, and she speaks about these topics at events around the world. You can connect with her on Twitter, Facebook, LinkedIn, or Google+.
