In the current digital age, customer service is still a vital element of business operations that may impact your bottom line. It can also affect how the public, your clients and potential clients view your business and dictate how much business they are willing to do with your business.
In recent times, many companies and businesses have found themselves in the spotlight for all the wrong reasons as a result of poor customer service policies.
Customers are increasingly taking the initiative to record and document poor customer services, and in the current digital world, such recordings spread like wildfire and the impact on businesses offering poor customer services is enormous.
What is customer service?
Customer services are collective policies that govern every facet of the businesses and companies’ interactions with their customers.
Therefore, customer service is a broad term encompassing every action taken by a company or a business from the moment a customer walks or drives into a business premise to the moment they are fully satisfied with the service. It encompasses everything from the parking space available for your clients, reception of the clients, how you handle clients’ complaints, and after-sale services offered once a customer purchases a product or services from a business.
Cost of good customer service
Businesses invest a considerable amount of money in bringing customers to their establishment through advertisements and marketing. The reality is, it costs businesses a fortune to attract new customers than it does, taking care of the ones they already have.
Research shows that happy customers are 77 percent likely to share a positive brand experience with others, resulting in loyalty for your brand.
Bad press due to poor customer service is also not good for business and can result in considerable losses, further reinforcing the importance of having good customer service.
Customer service critical to business success
We have already looked at customer service and what it does to a business, but why would a business invest a considerable amount of money to improve its customer services? Here are some of the reasons why customer service is critical to business success:
Improving brand reputation
Business reputation dictates how the public perceives an establishment. A positive reputation leads to higher growth, attracts investors, partnerships and employees are happier working in a company with a positive brand.
Customers are also more likely to recommend businesses with a positive reputation. This may further increase the sales of your products, leading to growth.
Increase in revenue
The true measure of a business is its profitability. Good customer service results in loyal customers who are willing to spend more money on your business. This creates a demand for your product and service, leading to an increase in revenue.
Research also shows that 67 percent of customers are also willing to spend more on businesses that offer quality customer services. Such statistics cannot be ignored, and focusing on customer service can play a significant part in the success of a business.
Businesses become competitive
Your customers may not tell you about poor customer services your business is offering, but your competitors will through attracting your clients away from your business to theirs. It is very simple happy customers return to do more business with you; unhappy customers run away from your business.
As a business, the best indicator that you might be doing something wrong is through losing business with your long-term client. However, if that happens, it is not the time to press the panic buttons and give up on your mission. You should evaluate your customer service policy and invest in providing quality customer services to become competitive again.
Businesses with good customer services have a better reputation which leads to better customer relations.
Customers are willing to pay more for a good experience
Research by Oracle shows that 86 percent of customers are willing to pay extra money for a better customer experience. The research showed that customers are more than happy to part with their cash if they believed it would incentivize a business to provide them with a better customer experience.
The research is not surprising because every business knows that being good is just not enough for customers; they need the best customer experience they can get and are willing to even pay for the experience.
- Growth of customer lifetime value
Customer lifetime value (CLV) is an estimate of what a business expects from a single customer over an extended period of time. To have a higher CLV, businesses need to ensure that they are retaining customers at a higher rate.
Customer retention can only be achieved through quality customer services. Therefore, businesses looking for long-term engagement with clients are expected to be at their best when providing customer services.