Would it surprise you even the slightest bit if I told you that customers will overwhelmingly pay more money for great customer service?
In fact, most say they will pay up to 13 percent more and when you are in an industry that often struggles to drive blended margin of even 20 percent, that 13 percent can be all the difference in the world.
The problem is, great customer service is somewhat subjective and as a whole, I don’t think most companies would have the slightest clue what makes a great experience vs. an average one. And in the commercial integration business, most integrators’ customer service management starts and ends with a blank name tag on an office that doesn’t exist.
Many business leaders in the industry may tell you things like “customer experience” is managed by everyone and that it isn’t a role, but a way of doing business. To some extent I will give leeway on the latter, as customer focused companies generally do have an organization-wide approach to delivering memorable customer service.
Having said that, an organizational approach to customer service still needs to have some accountability, and often that means having dedicated methods for measurement and personnel that are responsible for shaping customer service.
It isn’t uncommon for me to be asked about “what defines great customer service,” — I mean, after making a promise based on data that “great experience” yields higher margins, wouldn’t we want to define “great”? Of course we would, but for any company to truly have the capacity to define great, they would also need to have a baseline for what is “normal” in terms of performance and this requires measurement and management.
So what are you thinking if you haven’t invested in your customer experience team? Moreover, not dedicating resources to making sure you have happier customers who are feeling like their “partnership” with your business is more than just transactional, but truly a reciprocally beneficial relationship; one where they will want to come back, and potentially pay more?
Still not convinced?
The irony of customer experience is that it is rare that customers offer feedback unprovoked. And, research indicates, as a whole your bad customers are far more likely than your good ones to engage in word of mouth. Unfortunately for the customer who speaks up on your behalf, they will tell only about nine people, whereas, the unhappy one will share their experience with more than 22.
What is more alarming is that most businesses do very little to push their happy customers to share and engage in positive word of mouth, so they leave that on the table all while having almost no control over the negative word of mouth that may take place.
Once again, this is rooted in companies lacking a commitment to customer experience — like having no designated person to manage programs such as surveys that help better understand why customers stay, and also why they leave. If you can’t clearly articulate why customers work with you and continue to do so then it makes your sales, marketing and future customer satisfaction planning nearly impossible. And I’ll let you in on a little secret: there is a good chance you actually don’t know why they buy. (Unless you have thoroughly investigated this in the past.)
In one study it was found that 80 percent of business leaders felt their business was strategically differentiated from their competition. However, when businesses were surveyed about their “strategic” relationships, only about 8 percent felt their vendors were in fact strategically differentiated. This data point reiterates the need for constant customer engagement to better understand your customers, or you may just be guessing.
And I will give you one more stat that may surprise you. Customers rarely leave a vendor due to the product or service delivered. In the integration industry the solutions and products are more similar than we often like to admit. So when I tell you that only 15 percent of the time customers defect due to the products delivered, it shouldn’t surprise you. However, you should probably make note that roughly 70 percent of the time when they do leave, it is because they are (surprise) unhappy with the customer service.
In the end, customer experience cannot and should not be ignored. If you choose to make it less important than other functions, you may want to note it when pondering where margin is being left on the table. Sure, there are costs to managing customer experience, but in comparison to not managing it? I’ll invest every time.
If you enjoyed this article and want to receive more valuable industry content like this, click here to sign up for our digital newsletters!