When Children Are Your Customers: How Webkinz Builds Trust, Then Betrays It

A child is automatically a vulnerable customer. Unlike adults, children place naive and total trust in vendors. As parents, we expect those vendors to honor that trust and behave accordingly. When a vendor betrays that trust, our reaction as parents is to get exceptionally angry. Such has been my experience with Ganz, a toy company, and their online subsidiary, Webkinz.

Founded by Holocaust survivors Samuel Ganz and his sons Sam and Jack in 1950, Ganz Toys started out as a toy and amusement park supply company. In 2005, the company created Webkinz, a product line that combines adorable stuffed animals with an accompanying online virtual world. The company is family-owned and privately held so financials aren’t public, but Wired magazine estimated that in 2006 alone, Webkinz had more than a million user accounts and brought in more than $100 million.

Trust the stuffed animals

Children are automatically drawn to and trust Webkinz. After all, who wouldn’t trust an adorable stuffed puppy, unicorn, or even okapi? The image they project is almost Disney-esque, but the customer experience behind the facade is anything but.

The Webkinz site is riddled with technical glitches, creating enormous disappointment for their child customers. Their technical staff seems to be barely hanging on, keeping a minimally viable website up so that the subscriptions keep rolling in. Worse yet, the Webkinz approach to customer support is to fall back on an extensive pile of legalese that boils down to “too bad.” Signed up for a premium subscription with the promise of virtual prizes, only to have them disappear? Too bad. Bought a Webkinz stuffed animal but misplaced the unique code that ties it to its virtual self? Too bad. Our bug ate your virtual property? That’s just too damn bad.

Earlier this year my daughter saved up her allowance for weeks because she had her heart set on getting all kinds of new things for her stuffed animals’ virtual avatars. Once she had saved enough, she paid for a particular subscription that promised additional virtual items via the Webkinz mobile app, but the items never appeared. After multiple phone calls and over a dozen emails trying to resolve this issue, I finally received this lovely response:

Thank you for your question.

 

You had an issue with receiving a prize from Webkinz World.  If you did not receive your prize please make sure to check your dock for the item.  Please try to log out of your account and then back into your account. Missing items have been noted in accounts that may have items stored improperly (items blocking doorways, overloading rooms excessively with items). For more information on how to store items and decorate rooms correctly please refer to the Webkinz Guide, which can be found in the ‘Things to Do’ menu once you log-in.

 

Please be advised that, as stated in our User Agreement, the website and all materials contained on it are provided on an ‘as is’ and ‘as available’ basis, without warranties of any kind, either expressed or implied. Any lost or missing items resulting from a minor anomaly on the website will NOT be awarded. [emphasis mine] For more information please refer to the User Agreement located on the main Webkinz homepage.

 

We are aware that sometimes technical problems do arise while using the website and we continue to address these issues. Our technical team works very hard to not only fix problems as they arise but also to make sure that once an issue is identified and fixed, it does not reoccur.

 

We apologize for any inconvenience this issue may have caused

 

Thank you,

Webkinz Consumer Support

So let me make sure I understand this correctly:

  • Webkinz mobile app has a bug which does not deliver the promised behavior.
  • My nine-year-old daughter, who has spent literally every spare dollar she has earned on dozens of Webkinz, was disappointed but trusted that I would be able to speak to Webkinz and get things put right.
  • After giving me a run around with a series of canned messages, they fall back on the excuse of the user being too dumb to understand how the system works, so it must be the user’s fault.
  • Just in case I still think they may have actually taken our money and delivered less than promised, they wave the legal terms of the agreement in my face, rather than actually attempting to deliver reasonable customer service.
  • Hey, we’re working hard over here.  What do you expect?
  • And here’s a form apology from a faceless, anonymous team that is both insincere and meaningless. “We apologize for any inconvenience this issue may have caused.” What, you mean the crying, sobbing, devastated little girl in the next room?  Sure, that’s an inconvenience.

The power to ignore the vulnerable

Webkinz has a relative monopoly in this space, so they can act with near impunity. In addition, their customer base ages out rapidly, so their model assumes a significant amount of attrition every year. We lost another user?  So what?  We’ll replace him with the next five-year-old who loves stuffed animals.

Here’s the really bizarre thing: the nominal cost of virtual property is practically zero.  It would be extremely easy for Webkinz to address customer complaints with a sincere apology and some free virtual goodies like Kinzcash, the in-game currency. They control the entire in-game economy and the virtual property can’t be exchanged for anything with real-world value, so what’s to lose? In the end, it would probably take less time and energy than the current runaround-based model, while simultaneously boosting customer loyalty and spending.

The world is full of crappy companies with poor technology and awful customer support—but what makes this situation so egregious is that their customers are vulnerable. In a previous post I talked about how vulnerable customers present an opportunity; unfortunately, Webkinz seems to view that opportunity as “let’s see how much we can abuse our customers while still maximizing revenue.”

I find it hard to believe that the original founding family is aware of and condones this behavior. Part of me desperately wants to believe that this is just poor decision-making far down the organizational tree, the unfortunate consequence of rapid growth and technical naivete in a company that spent fifty-plus years manufacturing objects rather than experiences. Howard Ganz, where are you? How could you let this happen in the company that your family built?

Webkinz continues to sit on a fantastic opportunity, and it would only take a few small changes to their approach and behavior to exploit that opportunity in the best possible way for Webkinz, their customers, and their customers’ parents.

Based on their current behavior, I’m not optimistic.

 



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