Businesses are evolving and becoming more challenging every day, but so is their competition. Customer support is one of the key factors determining a company’s success. So, providing your customers with valuable information that is responsive and relevant is more than ever.
Customer support has always been an important notion that dictated how companies operate, but it was always deemed an additional expense.
However, it has now become a key factor that differentiates companies. Increased customer support also encourages retention and increases sales among your existing customers.
In this blog post, we’ll discuss how recurring revenue has changed the narrative for customer support, how customer service is now seen as an investment and the benefits of investing in good customer service.
What Is a Recurring Revenue Business Model?
In simple terms, recurring revenue is a section of the company’s total revenue that will continue in the future. Unlike other sales parameters, recurring revenue can be foreseen and is stable. It has a relatively high degree of certainty.
So, the recurring revenue business model is now the choice for many industries in contrast to the one-time sales model. This model allows businesses to generate consistent profit by giving constant access to their services or products in exchange for regularly scheduled payments.
Moreover, business workflows for this framework are no longer limited to movies, magazines, or music subscriptions. It now spreads across different automobiles, groceries, furniture, and clothing.
Since customers regularly make monthly purchases, the incoming cash flow ensures a sustainable profit margin for the company. As a result, the recurring revenue model encourages a deeper relationship with customers, leading to higher customer retention.
How Can Businesses Use Retention Revenue to Improve Customer Service?
Introducing ticketing and aligning with product/service management departments can help you focus on persistent problems and streamline your goals and agendas for a more mutual workflow understanding.
Plus, knowing where your product/service management is lacking can introduce you to issues you never knew existed — which you can now solve — and working on the same page with all the departments is easier.
Benefits of Investing in Customer Service
The days of providing good customer support at the purchase and forgetting about the customer are long gone. So, here are some benefits businesses can get by investing in a recurring revenue model:
Customer loyalty is a huge virtue. In fact, 91% of customers agree that a positive customer service experience influences their future purchase choices.
However, investing in new customers is more complex and expensive. It’s actually 5x more expensive to get customers than it is to retain them. And even a 5% increase in customer retention can increase profit by 25 to 95%.
So, creating loyal customers through effective customer service — usually through a helpdesk — ensures lucrative long-term relationships that lead to stable revenue.
Long-term relationships derived from customer service help businesses drive more profit, and loyal customers are 5x more likely to repurchase, 4x as likely to refer, and 7x more likely to try new products or services, increasing return on investment (ROI) or overall revenue.
So, companies can grow their revenue based on the support they offer to customers. Thus, building a better customer support system than your competitors allows you to stand out and generate more sales.
Maintaining your existing customers through customer support allows them to recommend your business to others. This is a handy tool as most customers are influenced by others when a product.
So, create loyal and long-term relationships with your customers by listening to them and catering to their needs. You’ll get back referrals for your effort, which can be worth more than your entire marketing and sales budget.
Increase Public Standing
Public perception of the brand depends greatly on the customer support you provide. According to statistics, 78% percent of customers are likely to forgive a brand after receiving excellent customer service. So, giving a positive experience to your customers is crucial in gaining their trust.
How Do Personalized Relationships Help in Customer Retention?
Customer retention is an often-used metric that shows customer loyalty and the ability of a business to retain its customers over time, but it’s affected to a great extent by personalized relationships.
Personalized relationships help predict customer satisfaction, purchase trends, purchase behavior, emotional ties with the business, and customer engagement. They help improve the customers’ experience, transitioning them into repetitive customers, which leads to the greatest profits, as we’ve seen above.
Data gathered through campaigns, and different platforms can help organizations in deriving customer preferences to give more personalized service. Social media is another excellent tool that helps establish lucrative customer relationships by reaching out and providing instant responses to customer support queries.
Become a Partner, Not a Vendor
We live in a world of ever-growing competition in the marketplace, which is one of the reasons why customers expect so highly of businesses. They want quality service and products at an affordable price and delivered with exceptional customer service.
A long-term strategy will help you, but you can only implement that by becoming a partner for your customer instead of trying to sell your service or product like a vendor. This strategy helps to build strong relationships with your existing customers.
So, how can you become a partner?
· Offer Value-Added Products – These encourage your existing customers to return to your products and tell their friends and family about your services. In a nutshell, your customers become some of your best (and free) salespeople.
· Communication with Customers – Communication is vital in any domain. For establishing strong relationships with your customers, it is imperative to have frequent interactions to build trust and keep your customers satisfied.
· Provide Positive Interaction – The last thing you want is to provide bad customer service. Speaking to customers without showing genuine concern for their problems will likely throw them off. So, aim to be genuinely interested in customer issues and invest in automation to assist them with whatever they’re struggling with.
The Bottom Line
Good customer service opens up pathways for new revenue streams to upsell to. It increases profits, decreases customer churn, and leads to long-term relationships that ensure recurring revenue.
So, educating your existing customers on your products/services is vital, as there is no one better positioned to teach about your products to potential customers.