BASIC MARKETING 18th Edition by Jerome McCarthy William Perreault, Joseph Cannon

Exercise 1

DrGlen.com-Elite Vitamins and Supplements
letter from a customer. When he received the letter, he passed it along to John Soderberg, the firm's customer service manager, to get his recommendation. Now Motyka has a reply from Soderberg, and he must decide how to respond to the customer and determine if changes are needed in his company's customer service operations.
Dr. Motyka has a reputation as a health and nutrition guru. His fame grew after he published two books-both of which were very popular and received a lot of attention in the press. Five years ago, Internet entrepreneur Dinah Spano approached him with the idea of creating a Web site to sell custom vitamins under Dr. Glen's name.
Motyka and Spano became partners, and the business enjoyed success in its first four years of operation. Spano handles the Web site technology, inventory, production, and shipping. Dr. Motyka is the health expert, creates content provided on the Web site, and is in charge of marketing and customer service.
The complaint letter and reply from Soderberg follow:
Dear Dr. Motyka,
I am a longtime fan of your books and like to visit your Web site for health tips. As a new grandmother, my health is even more important to me. I want to see my grandchildren graduate from high school, go to college, and have kids of their own.
You have made me a bit of a guru as well. I work out every day. People always ask me how I stay so fit and healthy.
Having read both your books, I tell them they should exercise regularly and take vitamins and supplements for long-term health. I always recommend your DrGlen.com Web site and especially the section on your custom vitamins. That is my favorite part of your Web site. I really like that you take information about me and my medical history-and then recommend custom vitamins and supplements. I also like how you send me packages that each contains a daily dose.
But after my recent experiences, my loyalty to you and your company is now in jeopardy. Here is my story.
Six months ago, I went to the Web site to reorder my vitamins and supplements. The home page announced a new and improved health survey and custom health program. So I went through the survey and filled out all the details-it would have been nice if you had saved some of them from my previous survey. At the end of the survey the Web site offered me a 90-day supply of a custom set of vitamins and supplements selected for my specific needs. The $212 price was about $50 more than my previous 90-day supply, but I trusted your advice so I placed the order.
About two-and-a-half months later, I phoned your 800 number for DrGlen.com to place a refill order. The person on the phone was very nice and asked if I wanted to set up automatic refills. I said no because I hate those automatic programs. They remind me of those book clubs that automatically send you books you don't want if you do not reply fast enough. About a week later my order arrived-then two days later another identical order arrived. I did not understand this, but I figured I would eventually use them up and I kept everything (and I was billed for both orders-$424 on my credit card). I should mention there was no e-mail explaining this mystery delivery. I was a little annoyed and sent an e-mail to customer service seeking an explanation. I received an automated response, "Thank you for your inquiry; someone will get back to you within 24 hours." No one ever replied, but I forgot about it.
Then two weeks ago I received an e-mail from DrGlen.com telling me my refill order had been shipped and would arrive in a few days. But I did not place a refill order! I did not even need more vitamins because I was still working off the two 90-day supplies that I received three months ago. So I replied by e-mail that I did not want the order and to cancel it. A reply e-mail (from Sally) told me that I had signed up for automatic refill six months ago. I replied that I certainly had not and that I would not pay for the order that was being sent.
A few days later I received a call from John Soderberg, your director of customer service. He told me that I had originally signed up for automatic refill and that was why I received vitamins. I told him that was impossible, and he told me that unless I checked some box on my original order that this was done automatically, "for my convenience." He said there were also several warnings and that I must have missed those. Basically, I think he told me this was my fault. I did not like that one bit!!! Mr. Soderberg told me the vitamins were on their way, but I could refuse delivery of them. He offered to let me have them for 20 percent off if I simply kept them. Unfortunately, the vitamins were on my doorstep when I arrived home that day. I had to take the vitamins to UPS to get them shipped back to you.
You guys are no longer very good at your business. You might have a great product, but I am now seeing other vitamin companies offering the same products. I have no doubt these other companies offer better customer service. If you want me back as a customer, I would expect a formal apology from Mr. Soderberg and a free 90-day supply. Otherwise, I figure my business will be welcomed at one of your competitors. I will be sure all my friends know about my experience at DrGlen.com, and I intend to post a bad review at resellerratings.com, too.
Sincerely,
Julia Rezvani
Next is the reply that John Soderberg sent to Dr. Motyka concerning Julia Rezvani's letter.
Dear Glen,
As per your request, I reviewed Mrs. Rezvani's order history. Yes, she is a very good customer who spent almost $800 with us last year. And she is a member of our referral program-and we can count at least seven new customers she has directed to us in the last 18 months.
But I want to clarify some of this particular situation.
• You might recall that our automatic refill program has been a big success. Since we instituted the program a year ago, our customer retention rate has jumped by 10 percent. There are occasional complaints, but given the large number of customers we serve, the complaints are really just a "drop in the bucket."
• When Mrs. Rezvani placed her order six months ago, there were at least two different warnings about the automatic refill program-customers have to check a box at the bottom of the screen to "opt out" of the program. We all agreed that it was better to make them part of the program automatically, but to give them two chances to remove themselves from automatic delivery.
• I do not know if we replied to her e-mail asking for customer service help.
• I did not tell Mrs. Rezvani that this was her fault, but I did tell her that when she signed up there were two chances for her to choose to not be part of the automatic refill program.
• Mrs. Rezvani did not get an e-mail notifying her of the first refill order because that system was not yet in place. But this has now been fixed, and the e-mail notifying her when we ship shows that this works.
• I offered her 20 percent off, as is our standard policy when we make a mistake. Considering this was her mistake, I thought this was generous.
• If Mrs. Rezvani had called and asked, I could have had UPS come out and pick up the package for return to us.
I do not recommend giving her a free 90-day supply. This may simply encourage her to complain again in the future. Besides, this was not our mistake. We may be better off without certain customers-and I think Mrs. Rezvani falls into this category.
Feel free to call me if you have any more questions.
John
Assess the customer service operations at DrGlen.com. What should Motyka do about Mrs. Rezvani? What changes, if any, should Motyka make to customer service and ordering operations?