Is delivering good customer service worth the effort and expense? Consider these stats from the 2021 Achieving Customer Amazement Study:
- 73% will go out of their way to do business with a company that provides better customer service.
- 52% will pay more if they know they will receive better customer service. That number is even higher if the experience is easy and convenient.
- 70% are likely to tell their friends and family after a good customer experience. Remember, word-of-mouth can be your best marketing.
And then there is the ugly side of not meeting customer service expectations:
- 83% said they would switch brands or companies because of a bad customer service experience.
- 79% said they would switch if they knew of another company that would deliver a better customer experience.
- 67% said they would share bad customer service experiences with friends, family or on social
Many companies and brands recognize the power of a good customer service experience and are making important investments in new processes and technologies that will fuel a powerful digital experience. Our research shows that 41% of customers who have a problem or question are choosing digital self-service options, such as a Frequently Asked Questions page on a website, video tutorials, chatbots, etc. That number will continue to grow in the future.
But even with an investment in technology, you can’t disregard the human-to-human interaction needed when a customer reaches out directly to the company. If 41% of customers would choose a digital option first, that leaves 59% who prefer to call and talk to a live customer service agent.
With the right investment, the live interactions can give you some of your best ROI. From the beginning of my career back in the 1980s, I’ve preached that customer service is not a department but a philosophy to be embraced by everyone in an organization. I believe that what is typically called the Customer Service Department should be changed to something more appropriate, such as the customer support department, the customer retention department, the revenue generation department or even the customer love department.
When you manage customers’ questions, problems and complaints well, they reciprocate by coming back, spending more and even becoming loyal to the company or brand.
Speaking of loyalty, it doesn’t happen without trust, which is another benefit of delivering good customer service. Seventy-nine percent of the customers we surveyed trust a brand more if it delivers excellent customer service. You can’t have loyalty without trust. Trust creates confidence. It comes from a predictable and consistent experience that customers know they will have every time they do business with the company or brand. While trust sometimes comes from a quality product, it’s also how the customer is treated throughout the buying process as well as after the sale, from follow-up and support that gets the customer to want to come back again and again. Any kind of repeat business, and especially business that comes from loyalty, is less expensive to generate than new business.
Now for the ROI. If the stats at the beginning of this article aren’t enough, let’s track some numbers. All you have to do is study the stock market and how the top-rated companies in customer service compare to companies that are not known for service. Watermark Consulting tracked the 13-year performance of customer experience leaders versus laggards between 2007 and 2019. Note that this does not include the past two years, when the market had huge gains. The point is that these numbers are realistic and even incorporate the downturn in the market in 2008.
- The S&P Index had a 199.6% return.
- Customer experience laggards had a 90% return, less than half of the S&P.
- Customer experience leaders returned 307%, a 50% increase over the S&P.
The facts cannot be disputed. There is a definitive financial return on delivering a high level of customer service. That doesn’t happen by accident. Customer service is more than a strategy. It must be baked into the culture. Look at the companies that have done well and are recognized as leaders. Study Glassdoor.com, which rates how good a company is to work for, and it’s no mistake that there is enormous crossover between companies that are great to work for and companies that are great to do business with.
Customer service is in the culture. Everyone must be trained, and that is where many organizations go wrong. They don’t train everyone. Just the front line. While the front line may deal directly with customers, and as a result should be trained in techniques that others in the company may not need, the key to building a culture focused on customer service is to train everyone. While the people in non-customer-facing jobs may not need the same training as those on the front line, they still need to understand their role.
I hope I’ve helped you understand the need for an investment in customer service training. The outcome is building the customer’s confidence and trust in the company to keep coming back, spending more and telling friends, family and colleagues about their positive experiences with you. All of that enhances revenue, which is the ROI you are looking for with the investment in customer service. Look at it this way. Customer service doesn’t cost. It pays.