When customers have a poor experience with your organization, the outlook is quite grim.
There’s just about a 40% chance that they’ll be your customer in a year, according to a recent Harvard Business Review study. On the flip side, there’s about a 75% chance that customers who are highly satisfied will stick with you for at least the next 12 months.
Loyalty will drop
“Most companies say that making customers happy is their top priority, and effective business leaders understand the link between customer satisfaction and success,” said Robert C. Johnson, CEO of TeamSupport. “But customer service excellence — or lack thereof — has a more direct and profound impact on the bottom line than many realize.”
It’s clear that a poor customer experience will likely lead to bad things for any organization: Customer loyalty will drop significantly, and profitability will suffer.
Good customer experiences can often be more powerful than best-in-class products or services, researchers found.
Here are four proven effects of poor customer experiences — and tips on what front-line customer service pros can do to avoid provide them:
1. Spend less
Customers who have experiences that meet or exceed their expectations will spend 140% more than those who have negative experiences, the Harvard study found. Imagine that: Good vs. poor experience can be the difference between spending more than double in the next year and not spending another penny.
Tip: Gauge satisfaction. Front-line customer service pros should ask every customer at the end of every interaction if customers are happy with the outcome. If they hear, “it’s fine,” “It’ll work” or any other neutral response, it’s almost guaranteed customers actually aren’t happy — and they need to dig deeper to find out where they’ve fallen short and how they can make up for it.
2. Waste more
While happy customers spend more, customers who are unhappy with their experiences will subtract from the bottom line, Johnson said. They contact service more to try to get their unpleasant experience resolved, return products and often demand refunds.
Tip: Not only do service pros want to gauge satisfaction when they end a contact, they should check that any problems encountered were fully resolved. Yes, it takes time, but asking customers to review with them what’s been done — and anything that needs to be done yet — can help contacts on solid, satisfied grounds.
3. Share less
Customers who’ve had consistently good experiences tell their friends, family and colleagues about it. Conversely, customers who’ve had one bad experience tell others, too — except they do it about ten times more. So you need to provide about 10 great experiences to diminish the potential consequences of one bad experience.
Tip: When customers tell you it’s been a great experience, remind them to share it with others.
4. Relate slower
Customers want relationships with people, not companies. The sooner they feel connected to the people they contact, the more likely it is they’ll have a great experience. So a system that allows front-line reps to access customer information — and not have to ask customers for anything related to their history — will improve the time it takes to handle requests and issues, said Johnson. A fast resolution from a friendly person turns into a great experience almost every time.
Tip: “To achieve true collaboration, companies need to break down silos between departments, use a single database and enable knowledge sharing across internal teams,” said Johnson.
Customer Service can lead the charge by offering their customer database to other departments and highlighting the information that is most beneficial to each group. For instance, share invoice questions regularly with Accounts Payable so they can see what part of the billing process causes the most issues for customers.
