A recent Bain Capital Customer Loyalty study found that consumers are four times more likely to do business with a company that provides good customer service versus a competitor that offers a lower price. Moreover, the 2012 Accenture Global Consumer Pulse Research Study found that 63 percent of consumers said the quality of customer service received is the most important factor when choosing a brand.
Though the “nine out of 10 startups fail” axiom is largely a fallacy, one way to guarantee your startup is included in that group is customer negligence. A great product alone is not enough to sustain and grow revenues in a global marketplace with seemingly endless options for customers to consider. Entrepreneurs willing to invest the time and effort into satisfying the most valuable component of their business are setting themselves up for long-term success.
Retention Is Key
The book “Loyalty Myths,” which was named the Best Business Book of 2006 by review firm Soundview, argues that it’s inaccurate to say it costs five time more to acquire new customers than to retain existing ones. But eConsultancy’s 2013 Cross-Channel Marketing Report found that 70 percent of business owners feel acquisitions are definitely more expensive than retention. Regardless of where you sit on this issue, it’s safe to say customer retention is important to every business.
Rewards programs are by far one of the most effective retention strategies. Amit Keinberger, CEO of Menchie’s Frozen Yogurt, told Business News Daily that the company’s mySmileage rewards program has not only increased profits, but also customer engagement. The program offers customers $5 for every $50 they spend at one of their 350-plus locations located in nine countries. Subway sandwich shops offer a similar rewards program based on a points systems that corresponds with dollars spent per purchase.
Anticipatory service is another effective retention strategy. A white paper by cloud computing firm Aspect on proactive customer care points out the importance of constant contact to make customers more “sticky.” Aspect’s Zipwire cloud-contact system is a cost-effective way for a company of any size to manage both outbound and inbound campaigns to keep customers engaged and informed. An airline sending text messages to customers about flight delays or billing departments sending reminder of upcoming invoices are two examples of anticipatory service.
Live Chat Online
The 2013 GE Capital Major Purchase Shopper Study found that 81 percent of consumers will research a product online before buying it. A great way to turn those diligent leads who happen to find your website during their research is to answer all their questions in real-time.
Live chat tools detect when someone is on your website and a pop up a window appears, which allows for a dialogue between the consumer and the company. A customer looking for a new lawnmower, for instance, may stumble across your site that sells several different brands and offers various levels of warranties. You’ll be able to answer all their questions and even direct them to a shopping cart to complete the sale.
BoldChat, Olark, and LiveZilla are just a few options to consider to bring live chat to your website.
Speed Versus Quality
Customers were nine times more likely to be fully engaged with a company that offered quality and courteous customer service versus one that focuses solely on speed, according to a 2002 Gallup study. It’s an art to find that happy medium between speed and quality, two aspects of customer service that are not mutually exclusive.
Eric Passaris, of Australian customer service advisory firm BDO, told Business Review Australia that today’s “need it now” mentality does not change the fact customers still desire top-quality service. He recommends incorporating more technology, such as social media engagement and mobile communications, to achieve this goal.
A startup that places customer service at the top of its priorities is setting itself up for sustained profitability. Customers always have and will be the most valuable asset of every successful business.
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