Businesses compete fiercely on products, price and branding to acquire new customers. However, customers will only return if the organisation creates a shared sense of trust, value and belonging. Great service stands out as the way to allow for this to happen. Great services create equity – Service Equity.
Great service breeds customer loyalty
Organisations strive to hear customers say; ‘They treat me so well, there’s no need to look for alternatives’. Done properly, services offered when people need help are the dominant force in the customer experience – not features or cost. Great marketing makes customers curious, great service keeps them coming back.
Value the customers you have
It is a paradox that many businesses invest massively in acquiring new customers, but forget to treat them well once they have bought in. Offering the right product at the right price will drive customer acquisition. But once customers have made their choice, features and price become an assumption.
Customers turn their expectations to being served well and supported when they need it. The truth is – customers are cheap to keep but expensive to re-gain or acquire.
Service equity is to be gained by meeting basic expectations first and then going beyond with relevant services.
Services can drive loyalty up. Or down.
People will come because they like your product, but leave because they detest your service. Although service is often not seen as the core operation of an organisation, the service experience has a disproportionally large impact on the customer experience.
Invest in making life easier for existing customers with well-designed services. It will make them spend more and stay longer.
Upgrade customers to partners
Great brands manage to create a sense of shared purpose, value and trust with their customers. This can only be done when customers are valued beyond the purchase and when feel they are appreciated.
For example, a business can demonstrate that it cares about customers by making a simple on-line transaction even simpler or offering highly competent staff. Both simple and complex service transactions offer ways to build a sense of partnership, because they engage customers in dialogue.
The fact that the customer is actively doing something together with the organisation builds potential for a sense of shared purpose. Show that the organisation cares, and customers will return the effort with trust.
Listen to your customers and act accordingly
When customers complain about a problem, their greatest dissatisfaction is rarely that the problem occurred – they expect problems to happen. The fear that the problem will not be fixed is what grows anger and erodes confidence. Customers worry that they will encounter the problem again, and that other customers will share the same experience.
To build confidence and loyalty, businesses need to take customer input seriously, invest in responding to their needs, and report back that the feedback is appreciated and action will be taken. Done consistently, this will turn customers from having a negative experience to experiencing a positive surprise – it will build equity.
68% of customers leave because they were upset with the treatment they received whilst speaking to customer services.
How to increase customer loyalty
It may seem unfair, but if an organisation has not built equity with a customer, one irritating experience with an on-line procedure or a call centre is enough to scare off an otherwise satisfied customer.
On the other hand, businesses that demonstrate that they care and treat customers as partners, can receive forgiveness for even the worst blunders. Even better, customers that trust and believe in an organisation will happily take its advice, and disregard the competition.
Beyond satisfaction scores
The value of consistently providing great service goes beyond customer satisfaction scores. Building service equity with customers results in customers that return, pay a premium – and even forgive mistakes. The investment made in great customer service finds its way back to the organisation in the shape of retention, loyalty and advocacy.
