Apr 30, 2020 11:07:00 AM
Customer service teams are the under-appreciated champions of many companies. Contrary to popular belief, it is the customer service teams who hold the key to customer retention—not the marketing or sales teams who offer discounts and run email campaigns.
Research shows that perceived low service quality is the number one reason why customers churn. Customers are five times more likely to stop buying from a company if they feel they are being treated with indifference, than for example if they’re not happy with the product.
In short: when customers receive service that meets their expectations and makes them feel appreciated, they are likely to stay loyal to your brand.
But in practice, there are often complications. A study by Bain & Co found that 80% of companies believe they are delivering superior customer service—but only a stunning 8% of their customers agree. Fittingly, Bain & Co dubbed this phenomenon the “delivery gap”.
Since customer service is the main channel for companies to communicate with customers one-on-one, it also has the biggest impact on the personal relationship companies have with their customers. For customers, it’s also a “moment of truth” in the relationship, as they will see how the company handles a problem. If the outcome is successful, paradoxically, the customer will be more loyal to the company compared to other customers who never had a problem in the first place. This curious phenomenon is known as the “service recovery paradox”. It’s built on the idea that “making things right” after delivering a poor experience will be rewarded with a stronger bond and better customer loyalty than if the company had delivered an excellent experience from the beginning.
Customer service teams are therefore in the best position to express a company’s appreciation, especially when customers actively request help. When they have had a bad experience, it’s the last moment in which things can still be turned around.
So, a lot of companies might be under the impression that churn rates are out of their control, even though in reality, they could potentially use those challenging customer interactions to their advantage. With a little operational help plus the right tools and processes, customer service teams have the power to turn the tide.
The biggest improvements can usually be made in relation to the overall communication between the customer and the service agent. Poor communication is often the main reason for customer dissatisfaction.
A study conducted by American Express identified the three most important traits that customer service teams need to have: efficiency, empathy and the ability to handle requests without transfers (first-contact resolution). It also found that customers are likely to spend more on companies that deliver excellent service. In this light, the aforementioned service recovery paradox actually makes sense: when a customer experiences a problem with a service provider, they will see the company’s “true colours”. Does the company really care about their customers—or is it all just empty promises? Are customers going to be treated with empathy? Will their problems be swiftly dealt with?
Delivering quick, empathetic and satisfactory service when needed will encourage customers to stick with you. In fact, customers are even happy to spend more with companies that have a reputation for delivering great service.
To that end, we now present the first three steps any service department can take to close the delivery gap and improve its service quality by showing customers the love they deserve.
Companies should embrace complaints and enquiries. When customers reach out to you to request assistance, you should view it as a valuable opportunity to “win them over”—rather than as trouble. These customers trust you to help them and this is an opportunity to build a strong relationship with them.
The first step is rather simple: reply to each and every contact you receive. Of course this is easier said than done, since most customer service teams are well occupied. But fear not! There are ways to let customers know you care, without hiring new service agents.
An easy way to get started is to put technology to work by sending automated replies that acknowledge the receipt of incoming messages. In its simplicity, it signals to the customer that they’ve been heard and that you’re there for them.
From a practical point of view, auto-replies should contain a ticket number for all future communication. For most companies, auto-replies are a low-hanging fruit as virtually all email clients and CRM systems are able to send them. They are also prime real estate for directing customers towards self-service channels. For instance, they can include a reminder about the existence of the help centre or support forum, or even send out applicable FAQ entries. Of course, for the latter, a more advanced system is required.
Since email is a relatively slow channel in any case, it might be one to skip altogether. Younger generations in particular tend to do a lot of their communication through social media. So these are channels that companies should consider (depending on their audience, of course). Live chats or chatbots <link to live chats vs chatbots blogpost> in social media might be a more efficient way to resolve your customers’ problems than an email service.
It can be hard for companies to address each and every customer request on a personal level. Most customer service teams are under a lot of pressure and receive tons of queries every day.
That being said, customers love it when the communication is personalised. Most people recognise generic macros and canned replies that don’t address their original enquiry, or give answers to completely divergent problems. Personalising each interaction could include addressing customers by their name and referring to the specific problems or products/services they mentioned. It is an easy way for companies to show that they really pay attention to their customers.
If your service team is pressed for time (which most of them are), see if there’s an opportunity to use new technologies, such as chatbots, to free up their time. There are now a variety of “out-of-the-box” chatbots on the market for different price points and use cases. Chatbots can handle repetitive requests such as questions about delivery times, tracking parcels or changing account details. When such tasks are delegated to chatbots, they won’t drain your agents’ valuable time and attention.
Many support centres transfer customers around a lot, which results in customers having to repeat their issue multiple times. That’s why it’s a good idea to give every service employee the training and tools they need to solve customer problems without passing them on to another department. This not only saves your company time, it also improves customer relationships.
Great tech solutions are the customer service team’s best friend, because often, poor customer service occurs when there is no clear record of the correspondence. If customer complaints are not centralised, categorised and given a reference number, the agents and departments will be misaligned. To avoid situations where customers get passed around, companies should use Customer Relationship Management (CRM) or help desk software to make the interactions and follow-ups smoother.
Modern CRM solutions offer a variety of benefits. They collect information about specific customers, the issues they’ve encountered and all their interactions with the company across different channels—and it’s all stored in one place. Ideally, all communication channels should be integrated in one CRM, including chatbots and communication via social media channels. By doing so, companies can ensure that there are no information gaps and agents have a clear overview when assisting customers.
With CRM, companies can empower their customer service agents by giving them easy access to all the relevant customer information.
There are many ways to close the customer service delivery gap and use the service recovery paradox to your advantage. You can integrate different technical solutions and processes into your workflows, increase your responsiveness with auto-replies, add a personal touch to each message, and centralise all your customer information with CRM software.
All in all, great customer service and retention is not sorcery. But providing high-quality service consistently and efficiently might require some changes to your service strategy, technical solutions and working methods. If increasing customer loyalty is a priority in your organisation, the aforementioned actions are only the beginning—they will lay the foundation upon which you can build a new, customer-centric approach.
A well-trained and well-equipped customer service team is the number one asset for companies that really want to look after their customers. If you show your customers some TLC, they will reward you with their loyalty and business.
Friederike is part of Solvemate’s marketing team. She enjoys being creative, but has always had a weak spot for science and nerdy stuff, too. In her free time she loves expanding her horizon through travelling and many other opportunities that come her way.