Want To Save Your Company? Give Great Service

It should come as no surprise that consumers value their customer service experiences. In fact, last year, the U.S. State of Multichannel Customer Service Report confirmed that 98 percent of American consumers believe customer service is important. What might surprise you is just how highly they value it. According to a survey from American Express, 78 percent of consumers have bailed on a transaction or not made an intended purchase strictly because the service they received failed to meet their expectations. In a study by The Harvard Business Review, 84 percent of customers said their expectations were not exceeded in their most recent customer service interactions.

Add those three reports up and it equals disaster for companies that don't provide good customer service. Think about it: imagine potentially losing three out of four of your customers simply because your company failed to offer quality service. Could your company absorb those losses?

If you are still not convinced of the importance of customer service, then consider more statistics, this time on how quickly word of a bad experience can spread and its impact on other potential customers.

According to a Zendesk survey of more than 1,000 consumers, those who had bad customer service experiences are 34 percent more likely to share those experiences on online review sites like Yelp! than those who had good service experiences. Perhaps even more alarming is that 88 percent of those respondents said that negative online reviews affected their purchasing decisions.

For some, truly focusing on providing the best possible customer service will require a paradigm shift in their approaches. Here are four reasons such a move is justified:

  1. It helps your bottom line: Studies revealed that U.S. companies lose $41 billion due to poor customer service and that 44 percent of customers switch to competitors following poor customer service experiences. These statistics paint a pretty clear picture: It doesn't matter how low your prices are, or how conveniently you're located, or what your online reviews say; if you are losing almost half of your customers because of bad customer service, then rectifying that is clearly essential to your bottom line.
  2. It helps you keep your current customers: Each company has its own cost to acquire new customers. While those costs vary across industries, there is one constant: No matter how much it costs to bring in new customers, it is still more cost-effective to keep existing customers happy, satisfied, and coming back. In fact, it is six to seven times more expensive to acquire a new customer than it is to keep a current one. Additionally, once customers have become loyal, they are easier to upsell or re-sell. 
  3. Customers trust word-of-mouth recommendations: As a rule, American customers aren't easily taken in by advertising, no matter how flashy or poignant. In fact, only 4 percent of us trust advertising as a reliable source for product and service information. However, 83 percent of us trust independent sources with whom we have built personal relationships. A strong customer service team is able to build lasting connections with customers, and they, in turn, are more likely to share their experiences with friends, family, and colleagues, and even on social media.
  4. Providing good service means keeping your employees: There is a direct correlation between job satisfaction and job performance. If an employee is fairly compensated and able to go the extra mile to really satisfy customers, she is more likely to stay put. That impacts the bottom line not only because good service usually equates to higher transaction totals, but also because reducing employee turnover helps the bottom line.

Whether your business is retail, direct-to-consumer, or business-to-business, it's pretty clear that giving your customers the service they expect, or even exceeding those expectations, is the best way to keep your company's profits headed in the right direction.

While CEOs and business owners understand the value that excellent customer service adds on some level, many are simply unwilling to pay for it, viewing it as an almost optional expense rather than what it truly is, an absolutely necessary investment.

Gabriel Bristol is president and CEO of Intelicare Direct, a customer service solutions company.

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More than 80 percent of consumers say businesses are either meeting or exceeding their customer service expectations, according to the 2017 Customer Service Barometer study conducted by American Express, up from 67 percent back in 2014.

Posted December 16, 2017