According to the Rocket Marketing Group, “Customer loyalty increases profits, improves sales success and allows for sustainable growth.”
According to Beehive Research, “Compared to new customers, repeat customers tend to spend more and are more likely to try your new products. Businesses should therefore work towards building a customer base with trust and loyalty towards their brand, to see their profits increase over time.”
Why have we mentioned the importance of customer loyalty and repeat customers? Because these are two factors that good customer service can have a huge influence over. Good customer service may have the obvious goal of making/keeping customers happy; it is the ‘ripple effect’, the non-immediate consequences, that result from good customer service that can make a huge difference to the profitability or overall success of a business.
Today’s world is governed by reviews for virtually everything we do or buy. Good reviews are the lifeblood of commercial organisations as without them, their businesses would swiftly fold. However, the situation is not helped by the willingness of many people to leave a bad review for a product or service if they feel they have been let down or disappointed.
This is when good customer service becomes critical, and especially if that service is a proactive as opposed to reactive one.
It is remarkable just how many bad reviews for products sold on Amazon Marketplace have been left primarily because of extremely poor or non-existent vendor customer service. However, if you read product reviews on Amazon Marketplace carefully, you might be surprised to see how many five-star reviews also involve the initial receipt of a faulty product. However, an exceptional customer service that resolved the problem enabled the purchaser to rate not just the product, but also the vendor. Readers of that review will find this additional information doubly reassuring and therefore they are more likely to make a similar purchase.
Without being able to analyse facts and figures, many businesses would fail. Consequently, those facts and figures surrounding customer service are of tremendous importance. For example:
The above may have come as a surprise to you, but in today’s hyper-competitive business environment, cost savings that can be made anywhere can have a considerable impact on the survival and profitability of that business, and customer service is one of the areas frequently missed.
For many of us, job satisfaction is a vital aspect of the work we do and is often the reason why we choose to do a particular job. For many in the ‘service industry’, customer satisfaction is imperative as ‘feedback’ is almost instantaneous and often delivered personally as well as within the relative safety of an online review platform. However, if the business you work for understands the importance of good customer service, chances are they will have invested in the appropriate training and facilities to enable you to do your job to the best of your ability. It is indisputable that when customers are happy, staff morale gets a boost, and with boosted morale comes the motivation to become even more productive.
In an excellent Forbes magazine article on word of mouth (WOM) marketing, it states that according to data from Nielsen Global Solutions, “92% of consumers believe recommendations from friends and family over all forms of advertising.” Now that’s an impressive figure. If you stop to think more carefully about it, how often do you recommend products or services to your friends? More to the point, have you ever had a bad experience with a company, but felt comfortable still recommending their services or products because they successfully and efficiently dealt with any problems? In fact, do we not actually feel more confident telling our friends about a product or service if we have had an additional (and successful) interaction with that business? In other words, you feel confident recommending that business because you have seen how it deals with problems.
In a day and age where social media is at the forefront of many people’s lives, there is almost a thirst for consumer interaction with a business as it gives the consumer something to post on social media other than the usual what they had for breakfast! It is remarkable how good customer service can affect not just the original consumer, but those who also know them, even if only in the ‘ethereal world’.
Of course, while WOM recommendations can be a great way to drive sales, you also have to remember one of the other reasons why faultless customer service is so important, and that is because of the damage negative reviews and bad word-of-mouth warnings can do. According to an article in Square Media, the Review Control Center has reported that one bad one-star review can cost a business up to 10% of potential new customers. Of course, that figure can be greatly diluted if that one-star review is set within a sea of five-star reviews. However, any poor review is never going to be good for business.
The difference between proactive and reactive customer service is that a proactive customer service gets to unhappy customers before they have a chance to complain about a product or service. A reactive customer service tends to concentrate on ‘firefighting’, putting out small fires every time a customer has a problem or a complaint. Problem is, too many small fires can have a hugely damaging overall effect, unless your reactive solutions are guaranteed to keep a customer happy, and that can be costly.
As an example, have you ever bought a product through the Amazon website? Now this is an ideal place to experience both forms of customer service. Where Amazon itself is concerned, they have a no-quibble, free product returns policy. In addition, if you ring one of their customer service operators, they work hard to provide a totally satisfactory outcome, which can include partial or total refunds for a product. Such actions all work well in creating customer loyalty, but ‘customer service’ extends well beyond problem-solving and troubleshooting.
One of Amazon’s key customer services is providing a next-day ‘Prime Delivery’ service. Now that may surprise you, not the service, the fact we have included it as a ‘customer service’. It is important that any business does not fall into the trap of thinking that ‘customer service’ simply involves dealing with (potential) problems. In truth, good customer service is just that, a service that is good for the customer. With Amazon, that service continues with emails advising you of an item’s despatch and due delivery, and then a confirmation email on the day of delivery.
Consequently for, say, an online business, customer service begins with the ease of use of the website, how easy it is to find products, read about them, and purchase them; how easy it is to actually pay, followed by the after-sales process. The easier and more efficient the system, the more likely the business is to create loyalty.
Then there is the proactive customer service. On the Amazon website, there is Amazon Marketplace where other, independent retailers can sell goods. Many of these will contact you as soon as they have dispatched your goods and then, once you have received them, they will email you to check that you are happy with your purchase and ask you if you would be happy to leave feedback and a review for the product. In the event you are unhappy with your purchase, such an email can intervene in the process of receiving a poor product and leaving a bad review, resulting in averting a negative review and instead achieving a positive outcome for both parties as the problem has been swiftly and amicably resolved.
As you will now realise, providing good customer service extends well beyond the desk in a retail outlet which has a sign above it saying: “Customer Service” or a “Customer Support” number provided on an ecommerce website. In fact, it can also be seen that effective customer support can be more proactive than reactive and that getting to unhappy customers before they can get to you can be hugely beneficial.
What is clear is that in many cases, businesses let themselves down because they either lack an understanding of the importance of good customer service, or the staff have not been sufficiently trained and educated in the correct ways to deal with customers. That is why, here at Commodious, we specialise in providing training courses for businesses, including one on Customer Service. To find out more about this course or if you have any other questions about our own services here at Commodious, just give us a call and you will soon discover we really do practice what we also preach when it comes to customer service!