You can't afford not to invest in customer service

July 6, 2020
By Kate S

 

I can’t count the amount of times I have said to myself ‘I’m never using that company again, their service is just awful’.

When you don’t have much choice where you go to buy something, the fact that the service you get isn’t very good is just something you have to live with - what else can you do.

But it’s not like that anymore.

Now, if anything, there’s too much choice where you can go to buy something. Whether it’s a consumer item you’re buying or a major business purchase, there’s a seemingly endless choice of companies out there.

And this has completely changed how customer service works.

Nowadays, the service is just as much a part of the purchase as the thing you’re actually buying.

Don’t like the service? Just go somewhere else. Businesses can’t afford to offer bad service anymore. Here’s why.

 

New customers are more expensive than current ones

Businesses are run by the money people right? So if you want to get their attention on customer service, let’s start with this.

According to results of a study published on Harvard Business Review, getting new customers is between five and 25 times more expensive than keeping the customers you’ve already got.

Also, according to the creator of the Net Promoter Score, Frederick Reichheld of Bain & Company, increasing your customer retention rate by 5% can increase profits by between 25% and 95%.

So your current customers are worth more to you than you probably think.

So you definitely need to take the time to treat them with the same level of attention and care than you did during the sales process.

Here's a bit more detail on why customer service needs to be a big part of your growth strategy.

 

Happy customers will recommend you to their network

All you have to do to prove this one is spend 10 minutes scrolling through LinkedIn.

I’ll bet at least one in every 10 posts is someone asking for recommendations for a service for their business.

Then there’s all the conversations that go on in conversations in individual networks.

If one of your customers has someone in their network looking for a service that you offer, and that customer knows that you provide a good product and a good service, then they’re likely to recommend you.

And that brings in a new customer for you, and you’ve not had to spend any money on marketing or sales to get them.

You obviously can’t just rely on referrals for new customers but they can be really useful.

 

But, unhappy customers also tell their network

On the flip side of this, unhappy customers are not going to actively recommend you to other people in their network.

Worse than that, if someone in their network mentions that they’re considering using you, that unhappy customer will probably go out of their way to recommend their network doesn’t use you.

This is a very dangerous position to get into because if you develop a reputation for poor customer service it can incredibly difficult to change that perception.

In this blog we talk a bit more about how you can better manage the customer experience.

 

Customer churn is bad for morale

So this last one doesn’t have an impact on the bottom line, but you can’t underestimate the negative impact customer churn has on a team.

Yes, some customers just churn naturally.

Either they’ve been with you for a long time and feel like they need a change, a new team comes in and wants to go in a different direction and things just don’t work out.

But when a customer leaves you because they’re happy with the service they got, that has a big impact on your company’s morale.

If it happens time and time again, you risk your business getting trapped in a circle of negativity and a team that is constantly demoralised.

Especially if they know they could provide a better service, but aren’t being given the tools to do so.

 

It’s time to invest in your customer service

So now you understand why it’s no longer viable to not invest in customer service in your business.

One thing you can do straight away to gauge how your business performs with customer service is to survey your current customers to find out what they think of the service you give.

You might be a bit shocked if it comes back lower than you thought, but better to figure out that now than trying to ask them once they’ve already left.

Don't forget, the customer experience starts from the first time they get in touch with you. So it's important you have customer experience built firmly into your sales process.

Try our free sales assessment tool to see how your current sales strategy stacks up against industry best practice.

 

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