In the competition for customer dollars and loyalty, delivering a winning customer service experience is a top business strategy.
Customer service isn’t just about answering questions and addressing complaints and issues with a smile. Customer service is a critical part of doing business that can impact your bottom line and brand reputation.
The importance of delivering excellent customer service can be found in the numbers:
Delivering poor customer service costs more than you think. Not just in dollars but also in terms of time, reputation, and future business. Studies show that $62 billion in the U.S. is lost each year due to poor customer service, and 91% of unhappy customers will leave without complaining and quietly take their business straight to the competition.
For businesses that put customer service at the forefront:
Strengthens Customer Loyalty and Attracts New Customers. When a business delivers a positive experience, customers are far more likely to stick around. An unhappy customer is four times more likely to buy from a competitor if the issue with the business is related to service rather than price or product related.
Loyal customers are profitable. Returning customers are five times more likely to purchase again and four times more likely to refer a friend to your business.
Businesses that invest in initiatives to improve their customer experience see employee engagement increase by 20% on average. And employers with engaged employees outperform the competition by 147%.
Impacts Your Brand Reputation. Word-of-mouth is powerful. 73% of consumers say a good customer service experience ranks at the top when it comes to influencing brand loyalty.
The impact of word of mouth also has a long rippling effect. Study after study shows that during the buying process, customers will trust personal recommendations over all other sources of information. Customers will share a positive experience with an average of 9 people, but they will tell 16 people about a negative experience. And it will take 12 positive customer experiences to make up for just one negative experience.
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For the customer that walks away? The stakes are high. An American Express survey found that 78% of consumers backed out on an intended purchase due to a negative experience. In the same study, 91% of unhappy customers won’t do business with the company again.
And the costs? Expect to pay up. New customers are not so easy to replace. On average, it costs approximately five times more to attract a new customer than it costs to keep the customer you already have.
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With all of the compelling reasons to make customer service a top priority, why risk losing even one customer? One of the few ways small businesses can outshine the competition is by delivering excellent customer service. While larger companies may have more resources and greater reach, customer service is a space where small businesses can excel and compete.
Do you have a customer service experience that stands out? The good news is that delivering a four-star customer service experience doesn’t have to blow your budget. Do it right, and your efforts will be rewarded with more business, an enhanced reputation, customer loyalty, and word-of-mouth referrals which will result in long-term success.