5 Ways Service Can Improve Customer Retention While Reducing Costs
Customer retention is a company job. People often think that customer acquisition is a marketing function while retention belongs in the service department. Both of those functions are interchangeable because a company that does a good job retaining customers finds it easier to acquire them. Loyal customers keep coming back and bring their friends with them.
Every job description should include customer retention. How your employees conduct themselves on the job and in their private life has a direct effect on people’s perception of your brand. Creating an environment focused on keeping customers coming back improves the stability of your company and reduces cost. Providing quality service is much less expensive than the alternative.
What is quality service?
We know that poor service alienates customers, reduces lifetime value, increases acquisition costs, and escalates operational expenses. We also know that quality service contributes to customer loyalty. The problem is matching service to expectations. To a degree, expectations can be managed. But there is that gap between perception and reality that is very hard to define. Sometimes, the best a company can do is strive for continuous improvement in meeting expectations.
Overall, expectations have changed. There was a time that people expected white glove service almost everywhere. The marketplace has evolved and a new self-serve customer has emerged. Companies that create an environment where people can easily serve themselves have stronger loyalty and lower costs. It turns out that your customers don’t really want to talk to you. They want to complete their transactions and move on with their life. With this in mind, here are a few ways to keep customers happy while reducing costs:
- Provide one-stop service. Moving customers from one representative to another like a game of hot potato is the fastest way to lose them. When people have problems, they want them resolved quickly. When people have questions, they want them answered quickly. Train your people well so they can resolve problems and answer questions without transferring customers to someone else.
- Make it easy to return purchases. Before you start visualizing mountains of returns, please note this is not an untested recommendation. Making it easy for people to return purchases reduces your operating costs. It does not increase the number of returns. Having clear instructions, preprinted labels, and easy to complete forms streamlines the return process for your company. It also reduces the number of, “how do I do this?” calls and emails.
- Offer self-serve options online. People like serving themselves. They want to be in control. Providing online options for them to get their questions answered, start a return process, and troubleshoot issues improves satisfaction and reduces service costs. Make the functionality user-friendly and intuitive. The easier you make it, the happier the customers and the lower the cost.
- Keep the promises. Work with the marketing department to define promises before they are shared with customers. Once the promises have been publicized, do everything reasonably possible to keep them. If a promise has to be broken, explain to the customer why, and then tell what you’re going to do to make up for the failure. People understand that things happen. They don’t understand a failure to fix it.
- Be grateful. Your customers can choose to spend their money elsewhere. Pricing becomes less of an issue when people feel valued and appreciated. Allow your customer service representatives the time needed to show their appreciation. The effect on your operating costs will be minimal. The effect on your customers will be incredible.
Debra Ellis is a business consultant, author, and speaker. She specializes in showing companies how to improve customer acquisition and retention using integrated marketing and service strategies. Her latest marketing guide, 31 Ways to Supercharge Your Email Marketing, is a practical resource for marketers seeking better results with minimal investment. Her engineering background provides ...
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