Every single year US companies lose roughly $41 billion dollars in business. They aren’t losing them because of faulty technology, bad PR (sort of), or because their competition is better than them.
They aren’t losing their business to companies because their competitors have better marketing campaigns, are more tech savvy, or have viral videos.
They are losing $41 Billion dollars a year because their customer service sucks.
On the other hand…
Companies that understand that their customer service teams are the backbone of their organization. Companies that have identified that their company facing departments are the lifeblood of their company, have the opposite effect.
73% of customers say friendly customer service reps can make them fall in love with a brand
86% of customers are willing to pay up to 25% more for a better customer experience (Reminds me of how Apple takes care of their customers and have built brand loyalty)
Acquiring customers is going to be one of the largest expenses your company has. It actually costs roughly 4 to 10 times more money to acquire a new customer, than it costs to keep one. So it makes sense that smart companies are investing more and more into their service talent, and the technology they use (like multichannel call center software – we have a platform that does this by the way).
The Good, the bad, and the ugly
What’s your churn rate? What is your cost per acquisition? How much money does your company lose per year because your service department couldn’t handle a situation, or resolve a customer’s problem on the first call?
44% of US customers switch to a competitor following a poor customer service experience
A few years ago my father-in law turned me on to Amazon Prime. I never thought of paying for a membership for anything before, especially since I never heard of Prime. He told me a story about how he ordered some shoes and got them in two days. The shoes he got were too small, and they made it really easy for him to return them. He was left happy and impressed. He has been an amazon prime member for 4 years now, and my wife has now been one for 3.
The polar opposite happened to me a few months ago on eBay. I was happy to pay for a new VR headset that came out only to find out later that the guy had “listed it at the wrong price”. I contacted eBay and they said there was nothing I could do; I would have to wait for 10 days while they returned my money. I went from feeling like an 8-year-old on Christmas to feeling like a 4-year-old when it’s bed time. Did they offer to talk to my bank? Did they do anything to make me a loyal customer? Nope. To them I was probably just a metric but that also means that I am now one of the 82% of customers that have stopped doing business with a company because of bad customer service. I don’t mind being a statistic in this case.
Ok fine, amazon is a huge company, they have spent a lot of time perfecting their customer experience in a way that make other companies envious. But so is ebay, why the polar opposite?
I’m a small company, I can’t compete
Yes, you can. It’s the little things that you do that turn your customers into fanatics. And you really need to invest in the little things, because;
48% of people who had a negative experience told 10+ people about it
Can you afford that?
87% of customers share good experiences with others
Think about it. What does your company spend to acquire new customers? And what are you losing by hiring Mister Frowny Face rather than Capitan Sunshine and Smiles.
Here are some typical industry standard costs of acquisition:
- Travel: Priceline.com: $7
- Telecom: Sprint PCS: $315
- Retail: Barnesandnoble.com: $10
- Financial: TD Waterhouse: $175
Sometimes service departments can lose sight of all the work that happens before them. It takes a massive machine to generate interest, drive in prospects, sell someone on an idea enough to get them to pay you. From there the product or service has to be delivered and the customer has to know how to use it well enough for it to help him accomplish his goals.
By providing excellent support and service you are in fact enabling your company to lower the total cost of acquisition and retention, therefore enabling the company to survive and keep paying your paycheck.
When your customer service department builds advocates people come to your company because of those stories.
Some of the biggest brands in the US are built on their customer relationships.
When a customer feels valued they feel special, when something magical happens to them they share it with others. When something bad happens they want others to sympathize or acknowledge the wrongness of it, so they will proceed to tell anyone that will listen to them. You’ve made an enemy for life. If the chance arises this disgruntled person will make sure that their friends know that your brand is heartless.
So the question is…What sort of brand do you want to build? And can you afford to build the wrong one?