How Customer Service Differentiators Can Impact Your Business
Imagine that you walk into an electronic store to purchase new ear phones and they are behind a glass panel with a lock. You wait for a minute and no one comes by to help you, so you take it upon yourself and look for someone. After a few minutes you find someone, but they can’t help and call someone on the speaker to assist. A few more minutes pass and you’re still waiting, and so you find someone else who also can’t help who re-announces it over the speaker. After 5 more minutes waiting, you get frustrated, leave and purchase the ear phones a block away where you were helped right away (this actually happened to me recently).
We all know that customer service can affect your business. Providing outstanding customer service is key to both driving new business and retaining your existing customers. Customer service differentiators could arguably be the #1 selling point between competitor products and services.
– 66% of consumers who switched brands did so because of poor service
– It is 6-7X more expensive for companies to attract new customers than to keep existing customers.
– 13% tell 15 or more people if they’re unhappy. Conversely, 72% of consumers will share a positive experience with 6 or more people.
– Only 1 out of 26 unhappy customers complain. The rest churn. (Source)
Here are 5 ways customer service can affect your business both negatively and positively…
1) Increases Loyalty and Prevents Churn
It should be every business’s goal to ensure that a customer who buys from you should continue to do so over and over again because it is far easier to sell to a loyal repeat customer than to find a new one. Great customer service is the key to this loyalty. After you receive a customer’s initial business, it’s vitally important to keep in touch with them and respond immediately to their inquiries and issues so that they always have a positive impression and continue to come back to you. Each time you resolve a customer question or complaint, you build confidence in your business. And, if you’re able to resolve an issue in a customer’s favor they will to continue do business with you 70% of the time (Lee Recources).
It is these consistent positive experiences with you that turns this individual into a loyal and repeat customer. Since you are 60% more likely to sell to a repeat customer and only 5% likely of getting a new one, it is integrally important to focus on making all your customers loyal to you. Providing a great customer experience is the single best way to prevent churn and keep customers loyal to your brand.
2) It Builds Trust and Helps You Sell
In today’s marketplace, people love to share. We have built an entirely new economy out of the concept of sharing (the share economy) and customers will do the same with your business. Customers will share good and bad experiences with the world. Shared bad experiences can severely impact your business by deterring new consumers from even trying your product or service. In fact, it takes 12 positive experiences to make up for one unresolved negative experience (“Understanding Customers” by Ruby Newell-Legner) and 48% of them will tell 10+ people about it.
On the other hand, if a customer has an amazing experience with you, 87% of them will share it with others. This has an amazing impact for your business since 88% of consumers are influenced by online customer service reviews when making buying decisions. It is really difficult to put a dollar value on word of mouth sharing.
When people are so excited by your product or service that they’re willing to spontaneously refer their friends and family to you, this is invaluable to your business. Simply by giving them impeccable customer service, you’re able to build brand awareness and recognition. Afterall, people frequently trust their friends and family’s advice over an online ad and more often than not, they won’t even shop around, they’ll just go to the service or product that their loved ones recommended for them.
This is the beautiful domino effect that is achieved by having outstanding customer service in your organisation.
3) It’s a Differentiator
Every company is looking for an edge up from the competition and more and more, businesses are turning to customer service as a differentiator. Focusing on customer service allows you to personalize a customer’s experiences ensuring you know what they need and how to resolve issues when they come up. And if you can do this effectively, consumers will choose you over the competition time and time again. In fact, for most people, customer service matters far more than price.
In 2011, 7 in 10 Americans said they were willing to spend more with companies they believe provide excellent customer service. (American Express Survey, 2011)
Differentiate through customer service and personalize their experience.
4) Save Money
We’ve talked about how much you have to gain with great customer service, but you have so much to lose with poor service. Spending a little bit of time more regularly will save you hours of time of attempting to remedy a huge problem, appease an unhappy customer and even run the risk of losing a customer.
We know that finding a new customer is 5 times more expensive than keeping a current customer happy. There’s no point in risking losing that customer. And we also know these current customers are more likely to buy from you again when they need more of the same. When you’re in touch with your customers and allowing them to reach out to you in a timely and efficient manner, you’re able to attend to their needs and concerns immediately, long before they become unsatisfied customers.
5) Reduce Employee Turnover
It may surprise you that creating a culture of providing outstanding customer service can actually lessen the impact of employee turnover. When a company consistently treats their clients well, employees know that and are in turn filled with a sense of pride regarding their position and in that organisation. It encourages them to stay in a company longer and also encourages others to want to work there as well. And an employee who has a positive impression of his/her workplace performs better and encourages a happy work environment.
Where to Go Next
We have learnt that customer service is critical in todays marketplace, it builds loyalty, prevents churn, builds trust, brings you new business, and your customers are willing to pay more for those benefits. Where to go next depends on the type of products or services you are offering. I’m a true believer in focusing and making businesses decisions based around customer service and a customer’s experience.
Tools such as Supportbench can be a huge help to focus on tracking and resolving customer questions and issues and helps you measure those. If you do not yet have a tool to help you in your customer service and experience, we documented some warning signs that let you know if you are ready to make the leap into a customer service and support system.
The bottom line: Focusing on delivering exceptional customer service and differentiating that experience from your competition gives you an edge.