Beth Boen is on a mission at The VOICE Customer Service Training - to restore the lost art of providing exceptional customer service and turn the tide on poor customer service becoming the norm! Her blogs contain tips on how to provide exceptional customer service in everything you do!
The 5 W's & H of Exceptional Customer Service Part 5
Common questions people ask me are usually the 5 W's and H of providing exceptional customer service (who, what, where, when, why, and how). My last blog was on where should exceptional customer service be provided? My last two blogs in the series of six will cover the why and the how.
Why should exceptional customer service be provided? This is an easy question to answer. There are so many studies with evidence of why providing exceptional customer service is so important – reasons from saving money with marketing expenses to how retaining customers is less costly than acquiring new ones.
One such study indicates that a company who consistently provides exceptional customer service, can often times spend half the money in marketing than a company who does not provide consistent exceptional customer service. Imagine that! I once knew of a company that spent a couple million dollars of year in advertising/marketing. When customers would come into this company’s stores, they were not greeted, no one came up to ask if they had questions, etc. I know this, because I worked for this company in marketing. A customer called me up and complained about this very thing and promised me they would never step foot into another one of these stores again. Imagine if that customer had actually been greeted and felt welcome instead of being agitated that the staff was all hanging out around the counter talking to each other. That customer was ready to spend at least $1,000 on merchandise in this store. How much did that ad cost that drove that customer and many others into those stores? How many more customers were just as annoyed and walked out that day of the big sale kick-off? That brings me to our next statistic.
Only 4% of unhappy customers complain and as many as 26 more complaints exist for every one lodged. So, given the example above, I only heard from one unhappy customer, but what if there were 26 more at $1,000 each? Talk about lost revenue and wasted marketing dollars. When I went to the owner of the company and told him there was a customer service issue with the sales staff, he thanked me for letting him know. But, in the end, he never invested in getting the staff customer service training (at least while I was there).
Lastly, let’s consider the cost of a lost customer. Studies show that it is 6-7 times more expensive to acquire a new customer than to retain an existing customer. If you can, figure out the average lifetime value of a customer – that is, what will an average customer spend with you over the lifetime of them doing business with your company? That is how much one customer is worth. For example, I had a really bad customer service experience with a dry cleaner. The first time I had a bad experience, I did not complain. The second time I nicely said something. The third time something bad happened, the owner was there. I told her about the prior two times and she got angry with me, accusing me of not trusting her and by the way, go find another dry cleaner to take your clothes. I was in shock. I had valid and true complaints. Well, needless to say, that dry cleaner is no longer in business. But, what was my lifetime value to her. I spent about $15 a week in dry cleaning. We had been going there for 10 years and we don’t plan on moving anytime soon, so add another 10 years in revenue. At $15 a week for 52 weeks x 10 years, that equates to $7,800. She should have been happy I was complaining and allowing her a chance to fix the problems. I wasn’t even asking for money back. I was just voicing my concern so she could fix it.
Many other statistics from a variety of customer service studies exist that show why delivering exceptional customer service is so important (Google "customer service statistics"). It is unfortunate that many companies just don’t see the value in investing in providing customer service training to their staff. Many do see the value and those are the ones who call us. Many of them already deliver great customer service, but want to get better. Those are the companies who will continue to grow market share and surpass the competition. When your company is ready to invest in customer service training, contact us for a complimentary phone consultation.