In the fourth episode of our ‘Customers at Heart’ series, we dive into how LG US has boosted customer satisfaction by revamping its refund system through the Online Brand Shop (OBS).

Imagine purchasing a brand-new washing machine or refrigerator, only to have it malfunction unexpectedly with no feasible repair options. Even with a full refund, such an experience can leave a sour taste. To rectify this, LG US initiated a collaborative project aimed at overhauling the refund process to enhance the customer experience. Six teams – the North America Strategy Team, DXP OX Team, DXP TDI Team, Service Corporation Call Center Team, Service Corporation Planning Team and the North American Accounting Team – voluntarily joined forces to develop a more efficient and customer-centric refund system.

The initiative targeted customers whose products had malfunctioned under the warranty period but were unable to receive a repaire due to discontinued parts or other impracticalities. To provide alternatives to a one-time cash payout, the company sought ways to retain customers and encourage future purchases by introducing rewards through the OBS of LG US, the official website where customers in the US can directly purchase products online.

Analyzing core customer grievances, the company endeavored to reform the existing cash refund policy for an easy and more pleasant process. To foster a positive customer experience, LG US developed MyLG Rewards, an OBS rewards program that offers a 110 percent points refund and encourages customers to actively use the points through a convenient and user-friendly system.

The company took proactive action to identify potential issues of the new OBS refund policy, monitoring real cases to finalize the best possible IT asset monetization process. LG US also implemented specialized training for call center staff and expanded operations to improve the overall customer experience and get ahead of any issues that could arise from the new system.

After the introduction of MyLG Rewards, the company conducted regular surveys targeting customers who received refunds. These surveys aimed to gauge customer satisfaction, track the likelihood of repurchasing LG products and monitor the frequency and duration of OBS visits. In addition to analyzing the percentage of refund customers who became new OBS members, the company also examined when customers used OBS points as well as any additional purchases made through the system.

As of October 2023, the survey results indicated high customer satisfaction, with those who utilized MyLG Rewards rating the process an average of 4.7 out of 5, compared to a 3.3 rating from refund customers in general. Customers who used MyLG Rewards also expressed a higher propensity to repurchase from the brand, with 71 percent stating they would buy LG products again, compared to 50 percent by refund customers in general.

Overall, approximately 40 percent of refund customers shared that they have regained trust in the LG brand after the introduction of the OBS point system. Those who used OBS for the first time reportedly visited the shop more frequently and for longer periods of time, and 64 percent of customers made additional payments through OBS even after using up their points.

The success of the LG US initiative has prompted expansion plans to LG Canada within the year and the launch of an OBS membership program that will offer differentiated benefits based on OBS points and membership tiers. The company has also rolled out the LG Referral Program, which enables customers to earn rewards by referring friends and family.

Through these initiatives, LG US has revolutionized the customer experience for those seeking refunds, ensuring that these customers continue their ownership experience (OX) journey with the OBS rewards system.

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