“Every day we’re saying, ‘How can we keep this customer happy?’ …because if we don’t, somebody else will.” – Bill Gates
Customer service can make or break a business. Companies that focus on delighting customers gain loyalty, increase revenue, and build a strong brand reputation. Just think of the times you’ve received exceptional customer service – the kind that made you want to tell everyone you know. Perhaps it was a seamless return process, or an unexpected gesture of goodwill. Those experiences stick with you. They create advocates for your brand. Just 4% of customers don’t see customer service as being important in their choice of a brand.
Consider the inverse: poor service can drive customers straight into the arms of your competitors. In fact, globally, 61% of customers have stopped doing business with a brand because of poor customer service according to this report, and with the power of social media, bad news spreads faster than ever. The stakes are high, but the rewards of getting it right are enormous.
Customer service isn’t just a department – it’s an ethos that runs through every interaction a business has with its clients. According to Bain & Company, improving customer retention by as little as 5% can boost profits by 25% to 95%. And customers who feel valued and well-treated spend significantly more: 140% more, according to the Harvard Business Review. This shows that providing great customer service is not just about keeping customers happy; it’s a core strategy for profitability.
This article kicks off our theme for the month, “A Passion for Your Customers,” by exploring the transformative power of exceptional customer service, why it’s critical for the sustained growth of your business, and giving practical tips for integrating it into your company’s culture. Bill Gates’ quote serves as a reminder: if we don’t keep our customers happy, someone else certainly will. So, let’s explore how to delight them, every time.
How Great Customer Service Benefits a Business
Customer Loyalty & Lifetime Value:
Loyal customers are the foundation of long-term business success. As mentioned earlier, customers who have the best past experiences spend as much as 140% more, and loyal customers are also more forgiving of occasional missteps.
When you provide exceptional service, you encourage repeat business, which in turn enhances customer loyalty. Coupled with Bain & Company’s findings on the impact of customer retention, it’s evident that great service directly contributes to increased profitability.
Take Amazon, for example. Their commitment to customer service is so strong that customers remain loyal despite price competition. Their easy return policies, fast shipping, and focus on convenience keep customers coming back. No wonder it’s one of the world’s most valuable companies, at #5 globally.
Increased Referrals & Reduced Marketing Costs:
According to Nielsen, 92% of consumers trust recommendations from friends and family more than any form of advertising. Word of mouth is one of the most powerful (and cost-effective) forms of marketing. Exceptional service leads to positive referrals, meaning you spend less on customer acquisition. The better the service, the more you can rely on free, organic promotion from your customers.
Look at Zappos: the online shoe retailer built its reputation on outstanding customer service. Its willingness to go above and beyond for its customers resulted in a large portion of its sales coming through word-of-mouth referrals. The savings on marketing have contributed to their profitability, even in a competitive market.
Employee Motivation and Morale:
Happy customers mean happier employees and, in turn, as Vaugh Aust says, “Happy employees lead to happy customers, which leads to more profits.” There’s a direct link between customer satisfaction and employee morale – no one enjoys dealing with unhappy customers. When customers are delighted, it makes the team’s job less stressful, more rewarding, and fulfilling. Engaged employees are more productive, leading to reduced turnover and a better overall working environment.
Brand Reputation:
Your service levels are a critical part of your brand’s reputation. Poor customer service can quickly lead to negative reviews on social media and other platforms, which can spread rapidly. Conversely, businesses known for excellent service, such as Apple or John Lewis, enhance their brand’s prestige, further attracting loyal customers.
Competitive Differentiation:
Deloitte reports that 62% of customers believe service is a key differentiator when choosing a brand. In today’s competitive landscape, products and services can be replicated, but customer service experiences can be your unique selling point. Customers will pay more for convenience, personalisation, and seamless experiences.
Boosting Revenue & Profitability:
And, of course, all this means that excellent customer service boosts your bottom line. It costs far more to attract new customers than to keep existing ones, so focusing on retention and repeat business is crucial for profitability. In addition, retained customers are more likely to try new offerings, further increasing sales without significant additional marketing spend.
Creating a Culture of Great Customer Service
Inculcating Service into Company Culture:
Customer service cannot be an afterthought. It must be embedded in the culture from top to bottom. As Tony Hsieh, said when leading Zappos, “Customer service shouldn’t just be a department; it should be the entire company,” – so it’s essential that service becomes a core value. Every department, from sales to finance, must understand their role in delivering a great customer experience.
Leadership’s Role:
Great customer service starts at the top. Leaders need to champion customer service by walking the talk, showing empathy, and making sure customer-centricity is an organisational priority. Richard Branson of Virgin Group famously said, “Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.”
Customer Empathy:
At the heart of excellent service is empathy. Employees must be trained to understand the customer’s viewpoint so they can respond in ways that address their emotional, as well as their practical, needs. Empathy allows businesses to connect deeply with their customers, turning interactions into long-term relationships.
Customer Feedback Loops:
Continuous improvement requires feedback. Implement systems that allow for regular customer feedback, and act on that feedback quickly. Companies like Tesla excel by constantly iterating on customer insights, keeping their products and services ahead of the curve.
Training & Empowerment:
Service excellence requires continuous training. Equip your team with the skills they need to handle customer issues – active listening, empathy, conflict resolution – and empower them to make decisions that benefit the customer without needing approval from higher up. Empowered employees deliver faster, more effective service, and are more motivated, too.
Recognition and Rewards:
Celebrate and reward great customer service. Recognition can motivate employees to continue delivering high-quality service. A well-crafted employee recognition programme helps sustain the focus on customer satisfaction.
Practical Tips for Delivering Great Customer Service
Know Your Customer:
Understanding who your customers are and what they want is the foundation of exceptional service. Use customer data, surveys, and feedback to gain insights into their preferences. Personalise interactions and anticipate their needs.
Timely Responses:
In our digital world today, customers expect rapid responses. Whether through email, social media, or phone, ensure your team is equipped to provide timely solutions. According to HubSpot, 90% of customers expect an immediate response (within 10 minutes) to customer service queries.
Personalisation:
Personalised service makes customers feel valued as individuals. Simple gestures, like addressing customers by name and acknowledging their purchase history, can go a long way in fostering loyalty.
Listening to Complaints:
As I’ve highlighted in my article quoting Bill Gates, “Your Most Unhappy Customers Are Your Greatest Source of Learning,” complaints can be a goldmine for improvement. Take negative feedback seriously and show customers that you value their input by taking action. In fact, unhappy customers can become some of your strongest advocates if you are seen to take their problem seriously and resolve it quickly.
Proactive Problem Solving:
Anticipate problems before they occur and address them. If you know a product or a delivery will be delayed, inform the customer in advance and offer solutions, rather than waiting for complaints to roll in. It prevents dissatisfaction, and promotes trust.
Omnichannel Experience:
Today’s customers interact with businesses through multiple channels. Whether it’s phone, social media, or email, ensure a consistent and seamless service experience across all touchpoints. And with some 66% of customers preferring to try to solve their issue themselves, self-service options are an essential part of your omnichannel strategy.
Consistency:
Customers expect the same high standard of service every time they interact with your company, not matter how or when. Inconsistency leads to frustration, dissatisfaction and a loss of trust.
Exceed Expectations:
The ultimate goal is to exceed expectations. When customers are surprised and delighted by a company’s efforts, they are far more likely to become loyal advocates. Train your team to look for opportunities to go the extra mile.
Real-Life Examples of Great Customer Service
- Zappos: Known for its “wow” service experiences, Zappos’ dedication to customer happiness is legendary. From surprise upgrades to handwritten thank-you notes, their efforts have created a fiercely loyal customer base.
- Ritz-Carlton: The Ritz-Carlton’s motto, “We are Ladies and Gentlemen serving Ladies and Gentlemen,” highlights their commitment to unparalleled service. Their staff are empowered to spend up to $2,000 per guest, per day, to resolve issues and exceed expectations.
- Apple: With its Genius Bar, product reliability and customer support going beyond mere transactions to build long-term relationships with users, Apple’s customer service is a key reason it has one of the highest customer retention rates in the industry.
Exceptional customer service is about more than solving problems. It’s about creating experiences that customers want to repeat, share, and become loyal to the companies that provide them.
Conclusion
Exceptional customer service isn’t a luxury, but a critical component of business success. From boosting loyalty and profits to enhancing your brand’s reputation, the benefits are substantial. By ensuring a service-focused culture, empowering your employees, and delivering consistency, businesses can create memorable customer experiences that last a lifetime.
Remember, too, the vital importance of leadership in these endeavours. As Simon Sinek said, “Company culture matters. How management chooses to treat its people impacts everything for better or for worse.”
So, take the time to assess your company’s approach to customer service. Are you simply meeting expectations, or are you exceeding them?
It’s your turn now: What steps will you take today to ensure your customers are not just satisfied but delighted? Share your strategies and insights in the comments!
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This month we’re focussing on A Passion for Your Customers, with this being the first article in this series.
Stay tuned for more articles on this theme over the next few weeks – or, better still, subscribe to my blog and receive the latest articles automatically, simply by clicking here.
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Related Posts
If you’d like to learn more about customer service, sustainable business growth, leadership and the areas we’ve covered here, the following articles and posts might also be of interest:
- “Your most unhappy customers are your greatest source of learning.” – Bill Gates
- “Customer service shouldn’t just be a department; it should be the entire company.” – Tony Hsieh
- “There is only one boss. The customer. And he can fire everybody in the company from the chairman down, simply by spending his money somewhere else.” – Sam Walton
- “It’s not the employer who pays the wages. Employers only handle the money. It’s the customer who pays the wages.” – Henry Ford
- “Wonder what your customer really wants? Ask. Don’t tell.” – Lisa Stone
- Finding Your Why – “People don’t buy what you do, they buy why you do it.” – Simon Sinek
- Defining Your Ideal Customer Boosts Profits
- “Price is what you pay. Value is what you get.” – Warren Buffett
- “Excellence is Not a Skill. It is an Attitude.” – Ralph Marston
- Performing a Competitor Analysis – “Study the past if you would define the future.” – Confucius
- Fine-Tuning Your Brand Positioning: A Compass to Guide Your Business Growth
- “If you don’t have a competitive advantage, don’t compete.” – Jack Welch
- “What business strategy is all about – what distinguishes it from all other kinds of business planning – is, in a word, competitive advantage.” – Kenichi Ohmae
- Conquer New Markets: Strategies for Explosive Business Growth
- “Businesses often forget about their current customers [audience] – the people who are already listening, buying, and engaging.” – Paul Jarvis
- 4 is the New 2 – How Becoming a B4B, or B4C, Business Will Boost Your Company
- “The Lifetime Value of Customer” Concept
- Service – the Quick Way to Kill a Brand
- Who Controls Your Brand?
Backgrounders
Microsoft – State of Global Customer Service Report – 2018
Linnworks – 15 great examples of bad customer service (and what to do instead)
HBR – Understanding Customer Experience
Fast Company – Why ‘customer obsession’ is the new customer service
Entrepreneur – 4 Ways to Provide Excellent Customer Service
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