How Effective Customer Service Can Boost Customer Loyalty - Guest Post

The following is a guest post from Garret Norris. Garret is the founder and CEO of Healthy Business Builder and through his company, remains dedicated as ever to use his training and real-life business experience to meet his passion for seeing business succeed through disciplined management, creative marketing and committed client service.

Building a strong customer relationship and satisfaction that leads up to customer loyalty is possible through improved quality of customer service.

Having excellent customer service can lead to an increase in customer retention.  When you tend to your customer’s needs, over time, you’ll be able to build a relationship with them which results in repeat sales.

On the other hand, once you missed their expectations, they are more likely to switch to another competitor who can provide a better experience while dragging down your reputation along with them.

A single bad encounter with a customer service representative could cause a ripple effect on your business. While there are 72% of customers who would share good experiences with others, 62% would likely share the bad as well.

If your business provides a less than satisfying experience, chances are your reputation would take a hit from the bad reviews and complaints you’ll get. New customers rely less on advertisements and sales reps than recommendations from people they know such as family and friends.

Excellent Customer Service Means Making Returns Policy Easier

Before making a purchasing decision, some customers look at a company’s return policy for basis. Offering hassle-free returns is essential to your overall approach to customer service as it is not only great for persuading new customers but also boosts existing customers’ loyalty.

While a lenient policy resulted in more returns, it also led in an increase in purchases.

A study showed that free returns could boost spending by up to 457% of pre-return spending.

Items that are easy to return gives customers enough confidence to make and repeat purchase.

Compared to an organization with a generous return policy, firms with a stricter policy decreases consumers’ willingness to buy a product. Creating rules that discourage customers from returning products, such as fees, reduces spending and a business decreases to 75%- 100% by the end of two years.

Another factor that lessens a customer’s motivation to make a purchase is a deadline. A short time frame also creates pressure around the decision to return an item. Meanwhile, a longer return period would take away that urgency. The product would eventually grow on the consumer.

Researchers at the University of Texas-Dallas find it may be a result of the endowment effect. It means that the longer the customers hold on to a product, the more reluctant they’ll be to part with it.

Of course, returns come with a cost that your company has to cover but making a returns policy easier can increase customer satisfaction.

Excellent Customer Service Fosters Efficient Delivery

One of the root causes of customer service issues revolves around delivery. Poor delivery services discourage customers from doing business with your company again. 

A study shows that late deliveries makes 17% of consumers abandon business with a company after one delivery and 55% of customers left after two to three times.

Delivery can be a real challenge, especially for smaller business. Not only do you need to provide high quality and reliability for customers, but you also need to keep costs down which means relying on couriers. While you can control the quality of your product and customer service, you have to trust your courier not to undo your hard work.

You might not be able to control when deliveries arrived, but you can set customer expectations around the delivery. Your customers would be kept happy by under promising and over-delivering.

If you promise delivery within a few days, then ship everything overnight or priority, customers would be left with a significantly more favorable impression on your company. On the other hand, if you promise overnight delivery, and then there are delays, your customers may think negatively.

Excellent Customer Service Means Giving a Quick Response

One of the essential factors with effective customer service is speed. Responding quickly to your customers with their inquiries or complaints keeps them from moving their business to the competition since they expect and demand fast services.

A fast response is especially necessary for a customer sharing their bad experience. This would leave them with a good feeling and memory that overtakes any unpleasant incident. It would make them feel important.

The longer your representatives take to respond, the greater the chance you’ll lose your customer, but there will be times when a slow response couldn’t be helped. Sometimes, slow response is due to not having anything to tell, the lack of updates or changes to communicate.

Immediate request is not the only way to keep your customers happy but giving a timely response. Customers understand that orders could take time and some things cause delay. Sometimes a response to their inquiry is enough.

Top 5 Customer Service Mistakes to Avoid

I’ve said it before and I’ll say it again, customer service is very important for successful marketing. The companies that do customer service right are the ones that correctly identify it as a point of differentiation and spend time optimizing it.

Sadly, those companies are still in the minority. Most of us still do a terrible job at customer service.

Here are 5 of the most common customer service mistakes we’re still making:

  1. Complexity – we make it too hard for customers to get the answers to their questions, forcing them to jump through hoops or search far and wide for an email or phone number. The last thing you want when you have a customer who needs help is to frustrate them even more by making it hard to get in touch.
  2. Ignorance – we assume that our products and services are so good that customer service is not a priority. These companies simply have not acknowledged the basic fact that without strong customer service, you can’t succeed in a competitive marketplace.
  3. Complacency – we know we need customer service but we don’t want to invest the money to make it better, so we don’t monitor, analyze, report, and coach. We just let it flounder, knowing it’s not good enough but not caring enough to make it better.
  4. Disempowerment – we don’t give our customer service representatives the tools they need to make customers happy. Instead, their main job is simply to be the sounding board for angry customers, trying to save as many relationships as they can simply by talking people down.
  5. Disassociation – we silo our customer service department instead of fully integrating into other key areas of the organization. Sales and marketing, product managers and engineers, and top executives can all learn a lot by working directly with customer service – who are on the front lines and the only ones who can give real, honest feedback about how customers view the company.