Excellent customer service is the key to retaining customers and boosting profits—and technology can help your SMB achieve it.
By Andrea Holved
The data is in: Focusing on keeping current customers can drive profits far more than focusing on acquiring new customers.
Increasing a business’s customer-retention rate by 5% leads to an increase in profits of 25% to 95%, while a 10% retention-rate increase boosts a company’s value by 30%, according to research published by the Harvard Business Review. A separate study by Adobe found that it takes five new customers to equal the revenue of one repeat customer.
Clearly, keeping your customers is important. But how do you do it? By providing the best possible customer service. Read more about tech tools to build customer loyalty.
Eighty-two percent of consumers say they’ve stopped doing business with a company because of a negative customer-service experience, according to a survey conducted by Harris Interactive for RightNow Technologies. Perhaps an even stronger vote in favor of providing good service: The majority of Americans are willing to spend more money with companies they believe provide excellent customer service, according to an annual survey by American Express.
Current technology can help or hurt your customer-service efforts, depending on how quick you’ve been to embrace your customers’ changing expectations. For example, if you aren’t utilizing live chat services—56% of 18- to 34-year-olds prefer it—or monitoring social-media channels for customer complaints—88% of messages to brands go unanswered—you may be losing customers daily and not even realizing it.
Enabling great customer service
When a company offers a product at the forefront of technology, it needs its customer service to match it. That’s the situation for New York-based BetterCloud, which offers management and security for cloud solutions. Founder and CEO David Politis pegs the company’s two-years-running 98% customer-satisfaction rate to their investment to the following customer-service technologies:
- Live chat: “More than 70% of our tickets come through online chat,” Politis says. “Customers love interacting through live chat because it gives them instant gratification, instant interaction with someone who can help them and generally solves their problems much faster. With that being said, it is important to have enough team members fully dedicated to online chat because response times need to be sub-10 seconds to keep the customer from getting frustrated.”
- CRM software: “It’s not just a sales tool anymore,” Politis says. “It needs to be used across the board, from sales to account management to technical support, all the way to the billing department. It’s important for everyone to be on exactly the same page about the customer’s history with the company.”
- Customer-service platform: The biggest appeal of using a customer-service platform isn’t necessarily the increased speed of response or improved organization of support tickets—it’s the analytics. “We look at a number of key metrics: how many tickets have been opened in a day/week/month, how many tickets per agent, how many have been solved, first response time on web-tickets and chats, total resolution time, customer-satisfaction score, and interaction stats for our knowledge base,” Politis says. It’s these analytics that help the company reward their best employees and adapt their products and systems to better serve their customers’ needs, he says.
Check in with customers
Online reviews—positive or negative—are almost always motivated by a customer-service experience, says Curtis Boyd, who, as founder and CEO of Los Angeles-based Future Solutions, has spent the last four years managing the online reputations of hundreds of mid-sized businesses in the U.S.
“Most bad reviews online are written after two to three interactions with a business,” Boyd says. That means the company had “ample time” to identify the unhappy customer, turn his or her experience into a positive one, and prevent the long-lasting damage to the company’s online reputation, he says.
A positive review, on the other hand, most often comes from a single stand-out experience with an employee whom the customer remembers and likes—“not necessarily an amazing product or service,” Boyd says.
Utilizing customer surveys to follow-up on questions and purchases is a good way to identify both unhappy customers (before they resort to bad-mouthing your business) and top-notch employees who are leaving good impressions.
This article was underwritten by HP: Introducing HP BusinessNow, the right technology to help your business grow.