The Value Of Quality Customer Service
Prepared by Kate St. Clair
Professional surveys reveal that 100% of business owners and corporate executives rate Customer Service as “Important” or “Very Important” to the success of their business. When asked which is MORE important, the quality of customer service or the quality of their product, the answer is split 40% customer service, 60% product quality. When a third criterion is added, price, the answer is even more split: 50% price, 20% customer service, 30% product quality.
How do you think the customer would answer the same questions? Here the answers vary by industry. In heavy service industries, i.e. restaurants, the ratio between the importance of customer service and product quality is 60:40 percent; in product-focused industries the ratio is 25:75 percent. Price comes in a distant third in both scenarios – surprised? Customers say that an attractive price will lure them in for a first visit, but poor quality customer service will prevent them from coming back – no matter the price! 75% of customers leave, not because of product dissatisfaction, but because of poor customer service.
Customers will remember poor customer service long after they have forgotten the lower price.
How good is your customer service, and how do you know? Are you guessing based on how you ‘think’ you are doing? When was the last time you asked your customers to rate your customer service quality? How well do you know what your customers want?
Why should you care? Your bottom line depends on it because your customers care! Let’s look at the quantifiable costs of poor customer service:
- Loss of all future revenues from that customer and every referral they do not send to you
- Redundant cost of replacing a lost customer rather than adding a new one (advertising, promotions, sales and marketing expense)
- Collection efforts for dissatisfied slow-pay or bad debt customers
- Loss of employee morale from dealing with grumbling customers
- Further decline in customer service from unhappy employees
Now, let’s calculate the benefits:
- Increased revenues
- Increased referrals
- Improved reputation
- Lower sales & marketing and operating expense
- Increased time to focus on new products and services
- Increased Bottom Line
- Sustainability of your business
Satisfied Customers is one of the key factors for building a successful business. What creates a “Satisfied Customer”? – Exceed their expectations – even by just a little bit. You don’t need to create a BIG WOW every time, but you do need to consistently create a wow factor! Every time you exceed their expectations you just raised the bar on what they expect – be prepared to raise the bar and get a wow – every time.
Customers have choices. How does your customer service stack up against that of your competitors? Do you know what exceptional customer service looks like? Are you able to deliver it?