A breakup always begs the question: Could I have prevented this separation?
When it comes to businesses and losing valuable customers, the answer is almost always yes.
US companies lose an estimated $84 billion every year due to poor customer service.
Despite the numbers, there are very few business owners or customer support managers who would openly admit their customer service just plain sucks.
There are a couple reasons for this:
In the words of Kate Zabriske, “the customer’s perception is your reality”.
And in this case, there is a clear disconnect - 80% of companies believe they deliver superior customer service, yet only 8% of customer actually agree.
This huge gap begs the question:
How can you objectively gauge whether your customer service is on point, or just plain sucks?
To help answer this question, we’ve outlined a series of questions and data points below that will help you pull your head out of the sand and determine whether you are truly delivering kickass support for your customers.
Data: A 5% increase in customer retention will typically boost profits between 25-95%.
(Source: (Bain & Company)
Customer support is the most underappreciated marketing channel, yet it yields massive ROI.
Delighting consumers in their time of need is guaranteed to produce results.
For example, Zappos’ outstanding customer support acts as a word of mouth advertising machine. The online retailer is renowned for offering free exchanges and empowering reps to award freebies to customers.
By eliminating the friction around purchasing, Zappos attracts and retains loyal customers. A 75% customer return rate is proof that exemplary customer service pays.
Like any other marketing channel, customer support is an opportunity to differentiate your brand. To fall short on customer service is to fall short of the competition.
Ask yourself: How does our support stack up against the competition?
If it doesn’t, you’re losing a lot of customers and money, even if you have a superior product.
Data: For every dissatisfied customer that complains, there are 26 who don’t.
Don’t let the silence fool you. Few complaints does not necessarily equate to a happy customer base.
Customer complaints are just the tip of the iceberg. The majority of your unhappy customers will leave without saying a word. In fact, you will hear from only 4% of dissatisfied customers.
Since feedback is the only way to know how to improve, be brave in soliciting feedback and criticism. Instead of dreading customer complaints, think of them as valuable insights. And, make it easy for customers to give feedback.
But, don’t just send out a boring survey no one wants to fill out. Consider incentivizing feedback. Keep the questions open-ended so customers can truly give you a piece of their mind :)
Listen closely and personally acknowledge all feedback. You customers love to feel like their voice is heard, and the best way to show this is to act on their input.
Data: 80% of your company’s future revenue will arrive via just 20% of your existing customers.
(Source: Gartner Group)
Customer acquisition is essential, but to overlook customer service is to neglect your largest profit center — loyal customers.
The math is simple: Happy customers = loyal customers.
On average, loyal customers are worth 10x as much as their first purchase, and will tell nine other people about a positive experience. Therefore, it’s easy to understand why its 6-7x more expensive to acquire a new customer than to keep a current one.
Despite the numbers, only 16% of companies put their primary focus on customer retention.
If you are a startup, then naturally your initial business objective should be acquiring new customers, but as your customer base grows, start shifting your focus to loyalty and retention.
Since 86% of consumers will immediately quit doing business with you following one bad customer experience, your business cannot afford to leak loyalty, no matter how good you are at acquiring new customers.
Data: By 2020, customer experience will be the key brand differentiator—surpassing product and price.
(Source: White House Office of Consumer Affairs)
Modern consumers control the buying process, meaning their experience is paramount.
Bain & Company found that customers are 4x more likely to purchase from a competitor if the problem is related to service, instead of price.
I.e. More customers are shopping for the experience, not the price.
Sophisticated consumers are shopping for comprehensive solutions. If customer service is a hassle, net value is diminished.
In the early 2000s, Applecare revolutionized tech support around historically frustrating computer products. Unlike their indifferent competitors, Apple computers came with a warm blanket—amazing 24/7 customer service. Immaculate support was fundamental to growing the tech giant into what it is today.
Even if your product is disruptive, subpar support puts you at a competitive disadvantage.
Data: The probability of selling to a new prospect is 5-20%. The probability of selling to an existing customer is 60-70%.
(Source: Marketing Metrics)
Leading brands know happy customers are their best source for growth. While new customers are definitely important, the continuity of repeat revenue is what grows the bottom line, and gives a business the predictability it needs to scale.
Research by Rosetta Consulting found engaged customers are 5x more likely to buy from the same brand in the future. Sustaining a dialogue improves loyalty, whether you’re following up after the sale, assisting with onboarding, offering surveys or inviting customers into loyalty programs.
Neglecting your current customers is one of the biggest customer support mistakes you can make.
Data: 78% of consumers cite poor customer service as a reason for bailing on a transaction or not making an intended purchase.
(Source: American Express Survey)
By nature, customers are neither forgiving or particularly loyal. Research by Harvard Business School found that a company’s highest-spending customers are also the most likely to consider other brands.
Top spenders are the quickest to jump ship when they feel their contribution isn’t valued.
If you’ve made a mistake, apologize. It’s the most effective way to protect the customer relationship. According to the Carey School of Business, 37% of customers are satisfied by a service recovery that contains a monetary value. If a business adds an “I’m sorry” to the compensation, customer satisfaction doubles to 74%.
Swallow the ego, and acknowledge your mistakes.
Data: 83% of consumers will require customer support during an online purchase.
During the pre-purchase consideration phase, consumers want to find quick answers and interact with empathetic brands.
Empower customers to answer their own questions with a self-service knowledge base or portal. Provide immediate access to live support agents. And, use a helpdesk solution that automatically assigns emails as support tickets.
86% of customers are willing to pay more for a better customer experience, reports American Empress. By delivering on the desire for attentive care, you open yourself up to increased sales and order value.
Data: 50% of consumers prefer to find their own answers, but 70% of customers expect a company’s website to offer a full-service feature.
(Source:Steven Van Belleghem)
Choosing a form of communication can be a powerful moment for a customer. There is no one channel that is preferred by everyone, so forcing customers to only contact you via phone, email, or chat is going to alienate some of them.
Maybe the room is too loud to chat over the phone..
Maybe the information is too sensitive to send over email or live chat..
Forcing customers to interact over your preferred channels is the easiest way to get the experience kicked off on the wrong foot.
Make sure your company provides a centralized “customer support hub” or portal that accommodates all customer interactions - phone, email, live chat, self-service.
While traditional channels like phone and email are still popular, more consumers now prefer to answer their questions on their own time. In fact, 91% would like a company to provide a knowledge base option.
Data: In a study that asked customers what annoys them the most, 37% of participants mentioned they don’t like being “passed around.”
In a traditional service model, companies would start all support tickets at the lowest “tier” and advance them up the hierarchy until a customer’s problem was solved, or it reached the top “tier” of service.
The logic: save money and time by having more experienced reps handle the most complex support issues.
While this hierarchical approach may have worked in the past, it fails to align with modern customer expectations. Not only does it create a poor customer experience by delaying ticket resolution, it also prevents new agents from learning from their peers.
Instead of structuring tiers, companies need to implement collaborative support software where agents can work together to solve issues. If an issue is too complex for a new agent to solve on their own, they can easily tag in a more experienced agent to help.
Think of it as a live chat thread on every ticket - customers can chat with staff, submit questions, screenshots and other information to help resolve the problem.
Likewise, you could set up an automated tagging system to ensure all support requests are routed to the right team member. For example, technical issues should not be sent to the billing department :)
Data: 80% of companies believed they delivered excellent customer service. But, only 8% of customers agreed.
A lot of support teams have an unrealistic view of their performance. Some brands look at the wrong KPIs or metrics to gauge how they’re doing, while others fail to collect and analyze the data at all.
Companies view silence as a soft metric for customer satisfaction. As we saw above, this is a costly mistake.
How to fix it: Establish a clearly defined set of KPIs to measure support performance at each level of the organization - agent and organization.
Resolution time can highlight efficiency. Monitoring ticket types can identify product weaknesses or support bottlenecks. Agent-level metrics can help identify friction points within the team.
There are a ton of metrics you can be monitoring within your organization. You can see what other support professionals are using to gauge performance here.
Finally, ensure you are using a ticketing system that can accurately track your most important KPIs across each level of the support team - organization and agent.
Take a close look at every facet of your support structure, from top (organizational) to bottom (agent-level). Be brutally honest with yourself.
Where are your weaknesses? What are you going to do to turn those weaknesses into strengths?
Leave a comment below and let us know.
Check out 11 Ways Bad Customer Service Is Burning Your Bottom Line