How Much Is Excellent Customer Service Worth?


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Have you ever wondered exactly how much bad customer service is costing your business? Here’s why you should pursue excellence – for financial and PR reasons.

According to the White House Office of Consumer Affairs, a loyal customer is worth 10 times as much as their first purchase. Therefore it makes financial sense, as well as good PR for your company, if you provide excellent customer service.

It can be difficult balancing ‘customer experience’ with the all-important goal of making profits. Obviously businesses exist to make money, but without customers you have no business.

Here’s why your customers might be heading for the door and how you can improve customer service and as a result, your profits.

Why Customers May Never Buy From You Again

There is a Chinese proverb which says ‘a man without a smiling face must not open a shop’ and this is certainly still true today. However with e-commerce and multi-channel retailing, things have got a little more complicated than simply a bricks and mortar shop.

In 21st century retail, other essential criteria could be added such as specialist knowledge, efficiency and being able to help customers the moment they get in touch. Here are two of the biggest customer turn-offs and how they could be affecting your business:

1. Inconvenience
If you are asking a customer to jump through too many hoops, they may just give up. Buying a product or service shouldn’t be a test of a customer’s resilience or patience! Inconvenience is one of the biggest reasons customers abandon ship and if they have to contact your business several times before a problem is resolved, then you have a problem.

Seeing as they are paying you for a service, customers should have to put little or no effort into the sale, as you should be providing them with a service. Most customers feel the same and that is why 67% of people have hung up on a call centre: because they can’t get through to a real person. Why spend ages trying to get through to one business, if another will be with you in a matter of minutes?

2. Lack Of Knowledge
A customer service agent needs to have detailed knowledge of your products/services – make sure you spend as much time training staff as possible to avoid the all-too-common “umm… I don’t know” moments.
Your customer service team is the face and voice of the company and so if they don’t know what they are talking about, the whole business looks bad.

How Your Call Centres Can Create Loyal Customers
Contemporary technology is developing to help retailers tackle common customer service problems such as call centre queues. Innovative a new cloud call centres can help businesses manage waiting times and empower customers.

With cloud contact centres you can utilise home agents for busy periods, have overflow contact centres where calls are immediately transferred to if there is a queue – and this is all possible because everything shares the same network in the ‘cloud’.

As well as this, cloud technology gives customers more choice and allows them to take control of the call more easily, with features like ‘request call back’ and estimated waiting times, if you do happen to be in a queue. A real bonus against most traditional call centres, and likely to make the customer journey that much better.

What Customers Really Want

Quite simply, customers want their questions or problems solved in one quick, easy phone call – no transfers, no queues and no ringing five times a day just to get through.

The most requested improvement in customer service is a ‘better human service’. As much as consumers have embraced multiple channels, the human voice is still very important and any company that tries to cut back on call centres to save money is more likely to lose it in the long run.

You should aim for the buying experience to be positive. Even a complaint should be turned into a positive experience, where the customer is compensated for the problem and left feeling happy and appreciated.

Happy customers are much more likely to buy again, or even to buy more. Think about it; are angry or disappointed people likely to go on a spur of the moment shopping spree?

So, How Much is it actually Worth?

As I mentioned at the beginning, the startling fact of the matter is that a loyal customer is worth around 10 times as much as their first purchase. And if this is not enough to convince you of the financial value of excellent customer service, then there’s more.

Studies have shown that you are much more likely to make a sale with an existing customer than with a new prospect. Winning a customer is about much more than their initial purchase; it’s about optimising each interaction to build trust and customer engagement – so that they come back again… and again!

The financial value of existing customers means that you should always spend more time keeping your current customers happy rather than chasing new ones.

The typical business hears from 4% of its dissatisfied customers – all the others just slip through the net. You may not hear from them but chances are they will not buy from you again.

While they may not get in touch with you to complain, bad news spreads more quickly than a story of perfect customer service and your brand’s lone voice can’t compete with thousands of angry voices tweeting and messaging.

But on the flip side, this allows you to see your weaknesses in a much more realistic way than any kind of survey – this is called ‘social listening’.

In many ways customer service is the new marketing – in today’s age of social media, excellent customer service is free advertising, so why not invest in your customers today?

What do you think are the main benefits of excellent customer service? Share your thoughts below.

James Duval
James Duval is a marketing expert who has been cited by Mainstreet, ProBloggingSuccess and MarketingProfs. He works for Comm100, thinking about new tricks and techniques in the email and marketing industries.


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