How many times have you come off a phone call, left a shop, or finished reading an email, and thought ‘Wow! What great customer service!’?
Not many, I’d guess.
Real noteworthy service has unfortunately become the exception rather than the norm. That’s why it can make all the difference in highly competitive markets. In fact, the U.S Chamber of Commerce estimates that 68% of customers who leave a company do so because they feel undervalued.
Clearly, the way you treat your customers has a huge bearing on the loyalty they show to your business in the long term.
Sadly, many companies forget this, especially during difficult economic times. When faced with a recession, businesses tend to prioritise sales over customer service, regarding their sales department as the arm of the business that brings in revenue, while customer service is seen as non-profit making, and therefore expendable.
The problem with this approach is that it ignores the vital role that customer service plays in generating continued consumer loyalty, and, as a result, revenue.
Concentrating on sales may bring in more revenue in the short term, but if you lack the resources to service these new customers correctly, they probably won’t stay with you for very long. Furthermore, existing customers may feel undervalued and subsequently move to your competitors, forcing you to put even more costs and resources into customer acquisition to replace them.
Business research company Gartner estimates that it’s around five times as expensive to acquire a new customer than it is to retain an existing one, so it makes clear financial sense to concentrate your efforts on keeping the customers you already have. Happy customers also provide an invaluable asset in promoting your business through word of mouth, helping you increase revenue without increasing your acquisition costs.
Retaining customers does not have to be an expensive process, and there are several simple methods you can employ to keep customers happy and generate long-term loyalty.
Firstly, don’t make claims about your product that you can’t back up. You will only serve to heighten expectations to a level that you cannot service, resulting in your customers feeling frustrated and disillusioned. Investing in the resources to ensure complaints or questions are quickly resolved is also hugely important. The longer it takes you to answer a customer’s query, the longer you give them to find an alternate company to do business with.
Simple acts like sending your existing customers rewards or incentives to shop with you again is a great way of generating sales and increasing loyalty. This can be done through regular email communication, creating another touch-point with your customers. Asking for feedback is also a great way to show your customers that their opinions matter to your business, and that you’re listening to their concerns. It also allows you to see your business through their eyes, so you can examine where your company is meeting expectations, and where it has potential to grow in the future.
First published in The Argus, 09/10/10