Among the chief maxims of the business world, one has remained at the top for many years. This idea has been expressed in several ways, from “The customer is always right” to “It’s easier to keep a customer than make a new one.” Regardless of phrasing, each of these essentially expresses the same idea: Customer service is the most important part of business.
Successful companies recognize these truths. The reality of today’s business world is that competition is stronger than ever. Consumers have a louder voice than ever. And word-of-mouth, either positive or negative, travels faster and further than ever. With all these changes in consumer/business interactions, some people are questioning the legitimacy of customer satisfaction metrics, arguing instead that customer loyalty should be the main focus of customer methodology. These proponents will often use a tool called the Net Promoter Score (NPS) as a way of measuring the loyalty of a company’s customer relationships.
The NPS, some argue, replaces traditional customer satisfaction measures, making the latter largely irrelevant. While the NPS is certainly a useful method for some businesses, it can be incomplete. Despite changes in consumer demographics and expectations, customer service still matters. Here are five reasons why:
1. Without Customer Satisfaction, There is No Loyalty
Customer satisfaction and loyalty are related, but separate, entities. Whereas customer satisfaction is a form of mental cognition, loyalty is action wrought by the mental state. As persuasion theory argues, it’s relatively easy to get someone to think differently; the difficult part is getting them to act on that new way of thinking. Yet, the latter can’t happen until the former occurs. In the same way, repeat business typically happens for one of only a few reasons: A) lack of better options, B) a deal that can’t be passed up, or C) because a customer wants to return. Only option C is true loyalty, and option C is only achieved by delivering a consistently positive customer experience.
In short, loyalty is the result of good customer service experiences. Ensuring client satisfaction will lead to future loyalty.
2. You Must Keep Customers Satisfied to Maintain Their Loyalty
Most humans have an attribution bias that assumes the following: For people we like, errors are typically attributed to external factors; for people we don’t like, errors tend to be attributed to internal character flaws. Some social science fields may refer to this tendency as a result of high and low ethos.
Regardless of its academic vernacular, the application is that when your business has loyal customers, those customers are more likely to give your business the benefit of the doubt. This is a good place for a business to be, for it means greater forgiveness of business “sins” and a willingness to dismiss one-off mistreatment as a fluke. Getting to this point, however, is a long process that is only achieved though consistent positive customer service experiences. Once loyalty has been attained, it’s important not to neglect the service. In fact, these loyal customers are your most important customers. They can give you insights for improvement. They will be happy to offer feedback on what is working and what is not working without taking mistakes personally. Through their positive interactions with your business, these customers feel as though they are part of the organization and are thus inclined to work for your business’ success.
3. Customers Care More About Service than Prices
Price is certainly an important factor in consumers’ decision-making processes. But time and again, consumers have demonstrated a willingness to pay a little bit more for good service. In truth, customer decision-making processes are complex. Rarely is a decision made based on a single factor. Price is never the only thing considered when deciding what and where to buy. Subconsciously, people weigh price, ease of transaction, speed of service, return policies, and many other factors when making their purchase choices.
What stands out most, however, is just how important service is in that equation. According to a recent study by Conversion Research, 54% of millennials said they stopped doing business because of poor customer service. This is not just a generational occurrence—50% of Gen Xers and 52% of baby boomers felt the same way.
As you can see, it’s not all about the price. Consumers are willing to pay a bit more for quality service. Neglect the service, however, and better prices will not matter.
4. Good Service Keeps You Ahead of Your Competitors
Going above and beyond customer expectations can differentiate a company from its competitors. You need not think too hard before coming up with a list of companies that have built their business on maintaining customer satisfaction. Disney, Amazon, Chick-Fil-A, Apple, and Marriott have established themselves at the top of the customer service scale. These reputations become self-perpetuating, with people believing in their service simply because of the buzz.
It’s quite possible that your organization is not a multi-national industry titan. Yet, the same lessons that apply to Amazon apply to all businesses. Differentiate yourself with outstanding customer service, and success will follow.
5. Word of Mouth Matters
Customers talk. Positive comments on message boards, review websites, or to friends and neighbors can go a long way. Unfortunately, good service is not always notable because customers expect it. The same cannot be said for negative experiences, which are often shouted from the rooftops, posted on social media, and shared with friends.
Wise businesses recognize the great benefit in keeping consumers happy and the harmful effects of upsetting them. These businesses will work hard to maximize the former and minimize the latter. Developing a business mindset of maintaining high levels of customer service is perhaps the best way to increase a happy customer base.
If your organization is struggling to understand its customer needs, or wants help revitalizing your image, give 212 Media Studios a call. We’d be happy to work with you to develop a plan that will boost your customers’ satisfaction.
Sometimes, the old business adages are best. This one rings true across generations: The importance of customer service cannot be overstated.