6 Key Ways Customer Service Impacts Your Profits

MontypythonMonty Python’s Dead Parrot sketch is a master class in complaining. We can all identify with customer John Cleese, as he becomes more and more frustrated with the appalling customer service being dealt out by Michael Palin. We’ve probably all been in a similar situation at some point.

It’s easy to measure the costs of manufacturing your products or delivering your services. The returns from your sales team are clearly visible. But how do you work out the value of your customer services team? At times, they seem just like a cost you’d rather not have (or even a necessary evil).

If this is the case, you may be missing a huge number of opportunities. What’s worse, if you don’t give your customer services team the attention it needs, it could sink your business. 

1. Word of mouth

Most people understand that life isn’t perfect and that, occasionally, things can go wrong. At this point, they may pick up the phone and call your customer service team. It’s well known that if they receive a successful outcome, they’ll tell one person about their experience. If it’s a poor outcome, though, they could tell 10. This would be a very easy way of alienating huge swaths of your market very quickly—or, alternatively, an easy way of gaining a new customer. 

2. Repeat business

Some companies provide such great customer service, and on a global scale, that their repeat business is phenomenal. Take Apple, for example. Their customers know they will be fully supported if things go wrong, and this means that they return again and again. Apple breeds tremendous loyalty not just because its products are excellent, but also because people are treated so well by its customer services. 

3. Extension

Similarly, if you give great service at every stage of interaction with your customers, you’ll see that they’re keen to buy more of your products and services. This extension selling is much more profitable that the first sale due to the lowered cost.

4. Identify problems

If you support your customer services with the right tools, you’ll be able to record the types of queries you are dealing with. If you review this data, and consult your team, you’ll soon be able to spot if there are any patterns or trends indicating a particular fault or frustration with your products or services. This is a useful learning opportunity. By having a chance to sort out these problems, you can improve your customer experience while reducing the need to call your customer services team. Use your dissatisfied customers to aid your improvement because, as Bill Gates said, "Your most unhappy customers are your greatest source of learning."

5. Identify new products

When you’ve discovered why people are complaining and you’ve had conversations with your customer services team, you may be able to identify new products and services, too.

To identify potential new products, who better to ask than your existing customers? These people are usually only too keen to tell you exactly what they want and how they want it to work. If you train and support your customer services team to welcome and record such insights, you’ll have a thriving new products pipeline in no time. And, since they’re based on customer recommendations, you can feel confident that these products will be well received!

6. Getting it wrong

For all of these opportunities, there are an equal number of threats caused by poor customer service. Your customers will be dis-inclined to buy from you again if they don’t feel supported when things go wrong. Poor customer service also means that you’ll never spot problems that are putting potential customers off.

Supermarket chain Stew Leonard's is known for its great customer service policy. At the entrance of each of store, a motto is etched into rock, and reads:

1. The customer is always right.

2. If the customer is ever wrong, re-read rule #1.

If you have the same attitude towards your customers, you’ll establish a customer service team that’s second to none. You’ll increase your profits and have happy customers returning for more. Creating a great customer service experience should be one of your company targets. As Walmart founder Sam Walton once said, "The goal of a company is to have a customer service that is not just the best, but legendary." And who wouldn’t want that?

 

About the Author: 

6a01a511390cc1970c01a511393b37970c-120siHeather Foley is a consultant at etsplc.com, HR technology and consultancy.

 

 

 

 

Click here to learn more about salesforce.com's customer service solutions, or download our free e-book below.

BlogButton_BL_2