If you have your own business, are currently working in the customer service industry, or if you’re actually the customer on the receiving end of the service given by a company, you know how important customer service is.
Customer service can make or break a sale. In this day and age where most consumers can have anything delivered to their door with just one click, how can companies keep up with this demanding customer persona new technology has created?
According to a study by Walker, the customers of 2020 will be more informed and more in charge of the type of service and experience they will receive. Companies are expected to know a customer’s individual needs and preferences. Anticipating and proactively addressing a customer’s immediate and future needs should be the staple for any company, and providing personalized experience will be the trend.
Let’s start at the beginning – why does service matter so much?
Why Is Customer Service Important?
Crucial Customer Touchpoint
Customer service, as the name connotes, is defined by Kotler and Keller as a “person’s feeling of pleasure or disappointment which resulted from comparing a product’s perceived performance or outcome against his/her expectations.”
Any customer who goes through the purchase cycle has a perceived notion and a standard level of service they expect to be met to be satisfied. Some clients will initially inquire about a product or service, then go through a decision process before they ultimately purchase.
As they go through that decision-making process, a company’s end goal is to actually convert it to sales. That is a crucial touch point. If the customer is satisfied with how their inquiry is handled, there will be a high chance of buying. But if the initial touch point turns out to be a disappointment, they will never buy. Perhaps more importantly, they will tell their friends about their experience.
Promotes Repeat Purchase
Good customer service is also the backbone of developing repeat customers. If the customer service agents have established a good rapport and helped them with their initial purchase, chances are they will buy again.
Keep in mind; it is easier (and cheaper) to keep good customers than it is to find new ones.
A study by White House Office of Consumer Affairs says that on average, loyal customers are worth up to 10 times as much as their first purchase. This means that the initial customer service experience is a crucial deciding factor on whether or not you will gain a repeat purchase. The first sale is always the most important. You would never want to have the first-and-last purchase from your customer.
If a customer purchases from you again, it means that they have been satisfied by your product or service. According to a study, after a positive customer experience, 69% of Americans would recommend that company to others, while 58% of Americans following a negative customer experience would never use that company again. Statistics show that 78% of consumers have bailed on a transaction or not made an intended purchase because of a poor service experience.
Helps Avoid Problems
Good customer service is proactive rather than reactive. If a client is satisfied with how their inquiry is handled from the start, you can avoid problems such as irate customers waiting on hold, or product-related problems such as defects, which ultimately resulting to refund or product replacement.
As mentioned earlier, the customers of 2020 expect more from brands, so we should take the cue, and learn how to anticipate needs and proactively respond to. In cases where issues can’t be avoided, a good customer service personnel should know how to empathize and handle the issue head-on, with the customer’s best interest in mind.
How to Provide Good Customer Service
Zappos, the online shoe store, is a leader in providing excellent customer service. Its CEO, Tony Hseih, has an unconventional approach towards handling customer service. He believes that cultivating a fun and happy company culture has an indirect impact on the level of service that the agents will provide to customers.
He has emphasized this to Zappos employees so well that the company actually pays unhappy trained agents to leave. They have an impressive track record of 75% repeat business, and have been known to provide fast and free shipping, with no minimum purchase required. They are also famous for their free 365-day return policy, which is very uncommon.
While Zappos’ customer service policies may seem over the top, and not all companies can afford to provide service at such level, how can regular, normal brands provide good customer service? There are a few ways.
Know Your Product
Make sure your sales people know your product in and out. How can you sell something you do not know, right? They should know the answers to these questions:
- What need does your product answer?
- What is your product truth?
- What is your competitive advantage?
- What is your USP?
Know Your Customers
Once you have a steady grasp of what your product is, the next step is to truely understand the profile of your target customer. Answer the following questions:
- Who are you selling it to?
- Where are they in terms of geographic, demographic, and psychographic aspects?
- What is their language?
- What problem do they need solved?
- What is their main pain point when it comes to finding a solution to that problem?
Engage With Your Customers
Seek their opinions through social media, focus group discussions, or through any other channel. The important thing is that you listen to what they have to say about your brand and your products. Ask them what they like and dislike about your product. Consumer insights are a goldmine that will enable your brand to continuously improve.
According to a study conducted by Twitter, brands that were responsive to tweets from customers are more likely to receive higher revenue potential, higher customer satisfaction, positive word of mouth, and more customer recommendations. This shows that responding and engaging with customers has big benefits beyond customer loyalty.
Apologize When at Fault
If a customer complains about your product, make sure that you validate their claim. If proven at fault, apologize and rectify the situation right away. This is particularly important on social media – even if you can’t make them happy, other people are watching to see how you respond.
Respect begets respect, which means treat your customers the way you would want to be treated. Great customer service means not just meeting, but exceeding expectations. Great customer service is about more than just doing the right thing – it is about building a brand that customers know and trust.
Subscribe to SEJ
Get our weekly newsletter from SEJ's Founder Loren Baker about the latest news in the industry!