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How Consistency In Service Can Affect Customer Retention

Anand Srinivasan | Sep 11, 2017 92 views No Comments

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A 2014 McKinsey report outlines the 3Cs that are absolutely essential to customer happiness – consistency in customer journey, consistency in customer emotions and finally consistency in communication. Their study found that creating a consistent experience can increase customer satisfaction by 20 percent, lift revenues by 15 percent and also lower the cost of servicing by 20 percent. In short, consistency in business transactions can make or break your business.

But how exactly does consistency affect customer retention? A research study commissioned by the Peppers & Rogers Group has two interesting insights about customer retention. Their study found that 80% of defecting customers described themselves as ‘satisfied’ or ‘very satisfied’ before they left the business while 70% of them quit because of poor service, often attributed to a salesperson. In other words, regardless of how happy your customers are, one experience that is inconsistent to previous instances can be enough to drive customers away.

Why does this happen?

Contrary to popular perception, customers do not always end their relationship with a business because they are angry with a singular instance of poor service. To a lot of customers, transacting with a business is a habit. Take Amazon for example. Millions of people buy products from the world’s largest online retailer each month. Not all of these purchases are because Amazon has the cheapest or the best products. Instead, a lot of these transactions are out of habit.

The same is true for coffee shops that customers keep going back to. It is not always because the particular shop offers the best coffee (although that may be the reason why people visit it the second or third time). Instead, it is out of habit. So what happens when this shop shuts down briefly for a week or a month? Customers who routinely visit the cafe might find other coffee shops close by to have their daily shot of caffeine. A break in consistent delivery might impact loyalty that may not always come back when this coffee shop reopens.



This is also true for capital intensive business transactions. A recent report from Australia found that adoption of solar batteries ‘exploded’ with demand set to triple in 2017 following a spate of power blackouts in South Australia. In this case, a failure to offer a consistent supply of electricity could be bringing about a dramatic shift in the way people source electricity.

How to ensure consistency

While focusing on customer satisfaction is not entirely wrong, it may be a mistake to equate satisfaction with loyalty. As we have already established in the earlier paragraphs, loyalty does not always come from satisfaction. To ensure consistency, businesses must begin with identifying this as a key performance indicator (KPI) for your marketing campaigns. It is important to track consistency in service at every step of the customer’s journey right from acquisition to onboarding, service execution, billing and post-sales support.

In addition to this, marketers must also evaluate the sync, or the lack of it, that exists between a customers’ perception of your offering and what you actually deliver. A coffee shop marketing themselves as the cheapest cafe in town may create an inconsistent experience by stocking premium brands of coffee. Similarly, if your business takes pride in a 30 minute delivery, it is vital that you make sure you live up to the promise. Failure to do this creates an experience that is inconsistent to the customer’s expectation and this could cause issues with retention.

Marketers are well aware of the fact that it is cheaper to retain a customer than it is to acquire a new one. By ensuring a consistent experience, you could make sure that customers are not caught unawares while transacting with you and are thus bound to come back for future purchases.

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