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Retailers are having to relearn that the customer is always right. Over the past several years, the estimated cost of bad customer service has risen from $62 billion per year in 2016 to over $75 billion in 2018, according to NewVoiceMedia. Industries across the board are so fiercely competitive that customers can (and will) switch brands over any grievance, real or perceived.
A Northridge Group found that a majority of survey respondents (54 percent) would try a new brand in search of better service and support. More than a quarter of consumers would even abandon a brand entirely because of bad service.
It’s no surprise that bad service leads to disgruntled customers. What is less clear is how you define good versus bad service and how you deliver a stellar experience to every customer every time. That requires a top-down focus and leadership that comes directly from the C-suite. More specifically, it requires a focus on three critical elements: culture, data/tools and care.
What unreal service looks like in the real world
Salesforce is a great example of a company that is crushing customer service on all fronts. I am a customer myself (not just a booster), so I know how Salesforce repeatedly rises to the occasion. No company is perfect, but this one comes pretty close, and it really embodies my three principles of service.
When you reach out to Salesforce, you can feel the empathy the reps have for your problem. They care about the issues you face and are invested in the solution. You get the sense that those reps are looking for a true resolution, not just a way to wrap up the interaction.
Finding that solution is usually seamless because Salesforce empowers its reps with data and tools. They have the means to actually fix things, not just offer apologies or stock solutions. The company gives reps the resources they need to truly support and serve customers — something that may sound obvious but is often rare.
Salesforce has built a culture of customer service, not just a department. Service is considered instrumental to what the company does and how it succeeds. Considering that the company’s stock hit an all-time high in May, it’s obviously doing something right. Everyone else, inside and outside tech, might be wise to follow its lead.
Keeping tomorrow’s customers happy today
A better approach to customer service is overdue. Otherwise, merchants may continue to hemorrhage unnecessary billions. Follow some of the lessons I’ve learned by studying companies like Salesforce and fine-tuning the service and support within my own company.
1. Give customer service its fair due.
One of the biggest pits leaders fall into (myself included) is thinking more about new customers than returning customers. We inject huge amounts of investment into sales and marketing yet treat customer service as an afterthought. Bad, underfunded service makes existing customers feel like second-class citizens, which only drives them to the competition.
Expectations around service have transformed in the age of the internet and the era of big tech companies. Brands like Apple and Disney make customers feel like individuals rather than service tickets. Living up to that expectation takes more reps, new technology and a conscientious culture change — all of which can be expensive. It’s up to leadership to set the tone for service, and that ties directly into how much investment it puts in. Companies, in other words, must be willing to open up the purse strings.
2. Put your reps in a place to succeed.
As consumers, we know what a great customer service experience feels like, and it has a lot to do with the rep. Working with someone who feels your frustration, understands your issue and is ready with a solution is what all of us want. Living up to expectations means you need exceptional reps who have the full support of the company behind them. It takes a culture of service that extends enterprisewide.
Once again, leadership has an important role to play, but culture is also built from the bottom up. There is no way to plan or prepare for every possible service scenario. But when you recruit the right people and train them carefully, you instill the culture of superior service and make every experience more consistent.
Nordstrom does this with a massive training manual filled with seemingly mundane requirements: walking guests to an item instead of pointing at it, for example. Taken collectively, these instructions help to teach Nordstrom’s customer-first approach. The reps are great representatives for the brand because the company has facilitated it, not just requested it.
3. Add tech to the mix.
Great customer service has human and technical elements. Reps have a much better chance of being helpful when they have customer data to reference and service tools to utilize. Technology also helps companies track service performance and make necessary improvements as quickly as possible. It’s easy to assume that service is stellar. Measuring it empirically reveals where things are actually going right or wrong.
Customer-facing technology is also important. Many customers want to handle service without speaking to a rep over the phone. The Amazon Mayday button provided a simple solution by making chat help available at any point in the shopping experience (although it was summarily discontinued in June). The human element of customer service can’t be underestimated, but neither can the technical element.
To give you a sense of how important great service is, take a quick look at your metrics. Determine your average customer’s lifetime value; that’s how much you lose when an existing customer leaves. Now, figure out your average customer acquisition cost; that’s how much it costs to replace the lost customer. That’s a lot to lose over bad service.
Fixing bad customer service might not be easy, but the companies that make the investment and commitment never regret it. Their long-time customers don’t, either.
December 3, 2018 at 01:32PM