At The Sunflower Group we like to think beyond the numbers and look at areas which can directly influence company profitability and are not immediately obvious. Yesterday we attended a seminar on Customer Service.
The presentation was very insightful and so we wanted to share some key points with you.
Most people know it can be a costly exercise getting customers, there are the marketing costs, the cost of the time invested by you and your team etc. So once we have our customer, do companies always maintain high level of customer service to ensure customer loyalty? Sadly not.
“80% of CEO’s think their business offers great service but only 8% of their customers do!”
Quite a misconception!
“91% of unhappy customers will never purchase from a provider again if they feel they have had poor customer service.”
We should clarify at this point that this blog is not to advise on how to improve Customer Service, it’s to highlight that poor customer service can be a significant cost.
Depending on the business it can cost between 5 and 20 times more to get a new customer than to retain one. That’s a huge impact on your profitability.
What about the customers you never get due to negative word of mouth from the unhappy customers?
“For every formal complaint made 1,560 people hear about it, that’s the power of the internet! So those 1,560 people are highly unlikely to purchase from you.”
This is the Customer Service Iceberg.
These are quite thought provoking statistics and very difficult to ignore, so what can we do to ensure our company isn’t one of the businesses who incurs these costs?
A golden piece of advice given yesterday was:
“Say “hello”; 30% to 55% are more likely to buy if they are acknowledged in our business. Make your customer feel valued.”
We are not the experts here, but we know someone who is, if you would like to review the cost of your Customer Service drop us an email firstname.lastname@example.org and we will gladly introduce you.
Here’s a positive statistic to end on:
“80% of people are willing to pay more for good customer service.”
That sounds like sensible investment advice to us!