|Rich Best has spent 28 years in the financial services industry, as an advisor, a managing partner, directors of training and marketing, and now as a consultant to the industry. Rich has written extensively on a broad range of personal finance topics and is published on several top financial sites. Recent books include The American Family Survival Bible and Annuity Facts Revealed: What You MUST Know Before You Invest.|
Why Businesses Must Make Customer Service Their Top Priority
Before the COVID pandemic, businesses were finding it increasingly difficult to differentiate themselves. In this digitally wired world, consumers have much more sway in determining the winners and losers. For all businesses, 2023 will prove to be a critical inflection point ushering in a dramatic change in the way consumers choose which businesses to support. According to a Forbes survey, 59% of consumers will care even more about the customer experience in a post-COVID world, valuing it even more than lower prices.
Not too long ago, small businesses generally viewed providing customer service as a necessary cost of business. Today, focusing on delivering a superior customer experience is an essential investment that drives competitive advantages and business growth, which is why it should be the top priority for all businesses in 2023.
Neglecting Customer Service Hurts the Bottom Line
According to the American Express Customer Service Barometer, more than half of U.S. consumers have scrapped a planned purchase due to bad customer service.
The same study found that one-third of consumers would change their patronage because of lousy customer service.
But it gets worse. On average, consumers tell 15 people about a poor service experience while they tell 11 people about a pleasant experience.
The critical takeaway here is that lax customer service can actually cost businesses money.
Here are the positive reasons why customer service should be your top priority in 2023.
Superior Customer Service Increases Revenue
You’ve probably heard the adage that customers remember the service a lot longer than they remember the price. According to the American Express study, 70 percent of consumers say they’ve spent more money with a business that provides excellent service. The same study found that 86 percent of consumers would be willing to pay higher prices for better customer service and that, on average, consumers are willing to spend 17 percent more with a business that delivers exceptional service.
And Grows Profits
It shouldn’t surprise anyone that superior customer service increases customer loyalty and lowers the churn rate (the rate at which customers move on). That’s according to a study by Harvard Business Review, which also found that the cost of acquiring new customers is five to 25 times higher than the cost of retaining a customer. If a business can increase customer retention by just five percent, it can increase its profits between 25 and 95 percent.
Customer Service is the New Marketing
Word of mouth is still the best way to market your business, and digital channels such as social media can amplify its effect exponentially. According to a Temkin Group study, more than three-quarters of consumers would recommend a business after having a positive experience with a business. By creating superior customer service as a key marketing initiative, businesses can leverage their marketing and advertising dollars.
Customer Service Delivers Exceptional ROI
Small businesses that treat customer service as a cost center are missing out on the tremendous ROI it can deliver. In fact, according to Bloomberg, providing a great customer experience is now a top strategic initiative for 75 percent of larger companies because of the ROI it delivers. Now, an increasing number of small businesses recognize that providing excellent customer service is not just for larger companies and that it can have a direct impact on their bottom line.
How to Create a Superior Customer Service Initiative
Develop a clear customer experience vision. With input from up and down the organization, develop a clear customer-focused vision to communicate with all employees. The vision can be in the form of a mission statement and core values that will be embedded in all training and development to drive the behavior of your organization.
Hire and train the right people. In addition to a well-trained customer service team, each member of the organization should have or acquire a skill set that enables them to communicate effectively with customers.
Build the right culture. Providing superior customer service needs to be a top-down, bottom-up initiative with an all-consuming focus on creating happy customers.
Know your customers. All employees need to understand your customers-their demographics, preferences, needs, and what they value most in a relationship with your business.
Buy the right technology. The right technology can improve efficiency and lower the cost of providing excellent customer service. Investing in an email marketing program with personalized content while increasing your social media presence can build your brand, increase customer loyalty, expand word-of-mouth, and increase cross-sell opportunities.
Capture customer feedback.You need to ask your customers how you’re doing in serving their needs. Send follow up emails to every customer using post-interaction surveys. Make outbound calls to customers asking for feedback. Encourage Yelp reviews. Then review the information with members of your organization who interact with customers.
Measure ROI.Nothing reinforces an initiative like solid business results. Collecting data, such as the average sales and average sales revenue per customer, can provide immediate ROI feedback.
The Bottom Line
For many businesses, providing superior customer service may be the difference between surviving and thriving. For those that can’t or won’t compete on price, it may be the competitive advantage you need.
The challenge for businesses is customer expectations are rising faster than the pace of improving customer experience. Customers expect every touchpoint in their interactions with your business-from their first impression, throughout the buying process, and with all communications-to be the best they’ve ever encountered. The sooner your business makes customer service its top priority, the sooner you’ll see improvements to your bottom line.