Customer service supports customer retention, retention equates to loyalty, loyalty means repeat business, and repeat business means you’ll hit those revenue goals. Your customer support team is the frontline of offense and defense, as well as the first and sometimes only person who will interact with a customer. That first or only impression will make or break your relationship with that customer. If your company’s brand, reputation, and profitability are important, then an exemplary customer support operation must be a priority. This week is Customer Service Week, so this is a great time to think about your company’s customer service.
Warren Buffett once said: “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
The direct link between customer service and revenue is proven, but appreciating the depth of its importance to your business and how to integrate customer support into your operations remains a challenge for many companies.
The Importance of Customer Service
A simple Google query of “the importance of customer service” yields 1.35 million results. Good customer service correlates with positive revenue growth. A great primer on the topic is Forrester Research Analyst Kate Leggett’s article, “Customer Service: Why It Matters — And How To Do It Right”. Leggett’s argument is spot on: Good customer service is good for business and bad customer service is bad for business. Some numbers that illustrate those points:
- Forrester calculates that a 10% improvement in a company’s customer experience score can translate into more than $1 billion in increased revenue and other benefits.
- The cost of failing to meet customer expectations is high: 75% of consumers move to another channel when online service fails, which can cost millions of dollars. Even worse is when poor customer service experiences results in customers leaving your brand.
Retention Should be an Internal and External Goal
Retention when referencing customer service is often accompanied by high turnover. If a company wants to acquire and retain customers, it needs to do the same with its employees. Employee retention goes hand in hand with customer retention and satisfaction.
The International Customer Management Institute (ICMI) reports on the positive benefits of tackling employee retention: by decreasing employee turnover by 25%, a health services provider was able to save $836,000 in the first year alone. By investing in the front line, companies can save the bottom line.
We manage an array of health care and employee-benefit related contracts, and the programs are constantly in flux between corporate changes and government regulations. They are some of the most complex contracts to manage, so we must consistently update our team training and share best practices. The longer our agents stay with us, the deeper their knowledge base, which translates to a better customer experience.
Christine James highlights the importance of service in customer retention in a story for Business.com.
When people switch companies, they don’t do it for fun. They do because they are not satisfied with their previous experience. A drop in return customers is a major sign that your customer service is failing.
Customer retention was the driver for Calyx Flowers choosing us to manage its customer service.
Mark Ranalletti and Kap Wallingford faced a nearly 20% year-over-year sales decline when they purchased the company. They sought to pivot the online flower seller from a customer acquisition-focused brand to a customer retention-focused brand, which meant replacing a former system that Ranalletti described as “robotic”.
“We’re not interested in a one-and-done customer,” said Ranalletti, CEO of Calyx Flowers in an article about their work with us in Retail TouchPoints (“Calyx Flowers Replaces ‘Robotic’ Service Reps With Retention-Focused Call Center”). “We’d rather have customer retention because we’d rather keep a customer than always trying to replace them with new customers. For us, the overall objective was making the customer-facing front-end shopping experience easier with fewer steps to check out on our web site.”
The Contact Center is a Team Sport
Leggett recently revisited the topic of customer engagement, driving home the importance of customer service being a team sport. Why? Simply stated, customers expect businesses to deliver outcomes and success.
The most successful companies are those that consider customer service as a cross-functional team that supports the entire company. It’s that belief that is embodied in our company’s first guiding principle: “Every single interaction is important and meaningful.”
Why invest in customer service? It’s the one place that a company has an opportunity to positively interact with its customer. And it’s the best way to avoid a topic for another day; it’s more expensive to acquire customers than retain them. Contact us if we can help you. (link to email@example.com)