Why exceptional customer service is important

Keeping loyal customers is less expensive than getting new ones. Research shows that it costs about five times more to attract new customers than to retain existing business.

Satisfied customers become devoted buyers when a business is trustworthy and provides good customer service. Loyal customers provide positive endorsements and good online reviews that can help businesses strengthen their brand. A loyal customer, on average, is 10 times more valuable than their first purchase. Research shows that people often make purchasing decisions based on recommendations from family and friends vs. Here are four statistics:. One of the contributing problems is poor customer service.

Buyers become frustrated over small problems that are not addressed. A positive public persona can strengthen the way people see your company, products or services. Positive word-of-mouth referrals come directly from previous and existing customers that have had a great experience with your company.

They tell their friends, relatives, colleagues and may even post to their social network about your friendly and helpful customer service. Their contacts, in turn, feel encouraged to buy from you. Word-of-mouth advertising is often a company's best and least expensive form of advertising. Customer lifetime value CLV represents the total amount of revenue your company can expect to receive from a single customer over time. By increasing the CLV, you can significantly increase your company's revenue without having to spend more on marketing.

An increasing CLV means that your customers are spending more money each time they order or they are buying more often. Customer service is a great way to increase CLV. If customers have a positive shopping experience, they'll be more likely to buy from you again. Proactive customer service is when you reach out to customers before they know that problems exist.

By being proactive with your customer service approach, you can let customers know that you're working to improve the user experience for them. For example, if you have a group of customers who had a common problem and released a new product or feature that resolved that issue, you could use your ticketing system to identify those customers and then reach out to let them know about the new feature or service.

This approach can be effective because customers recognize you're trying to resolve problems for them. When everyone at your company shares the same end goal of customer service, you promote a more streamlined workflow.

For example, your engineers may be more willing to help the sales team, or the production team may be more willing to listen to the customer support representatives. These individuals speak directly to your customers and they have the responsibility of representing your brand when interacting with current or potential buyers.

Without your customer service team, you have no means of direct communication. Due to this, your customer service team is essential in relaying to customers what you want your brand image to be. They can help influence customers and convince them of your strengths over competitors. No employee is going to enjoy coming into work if they feel under-appreciated compared to employees on other teams.

The same goes for your customer service team. However, their reasoning behind serving customers is less about wanting to provide quality service. Instead, it's about maintaining their professionalism and integrity, not wanting to get fired before quitting, being empathetic to customers, but getting recognition from them in the end.

Therefore, if you want your customers to do their best work, they should feel respected and appreciated. Only then will they find intrinsic motivation for doing a good job and serving their customers the right way, which will lead to your customers also feeling more respected and appreciated.

And, when your customers are happier, they're more likely to spread the goodness to friends, family, and coworkers.

Think about it: if you have a stunning experience with a brand, you're probably going to rave about it to your friends over dinner later that night. It's natural; you want your close ones to commit to a brand that you trust. It's a chain reaction. If you have a happier customer service team, they'll work harder to satisfy and exceed the expectations of your customers.

Then, those customers will be extremely happy with your brand and refer others to it. Your customers can be your best — and cheapest — form of word-of-mouth advertising, as long as you give them a reason to do so. As said before, it's a lot cheaper to retain an old customer than to acquire a new one. In this sense, the higher a customer's lifetime value — the total revenue a company can expect a single customer to generate over the course of their relationship with that company — the higher the profit for your company.

Image Source. In comparison to, possibly, hundreds of competitors with similar products and services, your company has to do more than relish in the exciting features of your products. By providing stellar customer service, you can differentiate your company to your customers.

Loyalty is rooted in trust, and customers can trust real-life humans more than the ideas and values of a brand. So, by interacting with your customer service team, those customers can build, hopefully, life-long relationships with your business. Clearly, customer service matters so much to customers that they would literally pay more to interact with a brand that does it well.

These are statistics that can't be ignored. In an era where companies are learning to prioritize customer service, any company that doesn't do so will crash and burn. Customers are influenced by even a single experience; one positive experience could be the deciding factor for them to stick to a brand, whereas one negative one could send them running to a competitor. For instance, if you work for an athletic wear company, you might associate your brand with fitness, health and wellness, and people who play sports.

However, your customers may purchase from you because they associate your brand with leisure, comfort, and attractiveness. So, you should align your marketing with those values as well.

Your customer service team can answer a lot of these probing questions for you. Rather than having to spend time and money on constantly surveying customers, you can have your customer service employees simply ask these questions while interacting with customers. Their response can give you a lot of insights into improving your products, marketing, goals, and employee training. And, the more you improve the customer experience, the harder your employees will work.

If you're running a business, customer lifetime value CLV is a pretty important metric. It represents the total revenue you can expect from a single customer account. Investing in your customer service offer is an excellent way to improve customer lifetime value. If customers have a great experience with your service and support teams, they'll be more likely to shop again at your stores.

Or, at the very least, they'll share their positive experience with others, which builds rapport with your customer base. This makes new customers more trustworthy of your business and allows you to upsell and cross-sell additional products with less friction. New users will trust that your sales team is recommending products that truly fit their needs which will create a smoother buying experience for both the customer and your employees.

If you're looking for a cost-effective way to invest in your business, you should consider adopting proactive customer service. Rather than waiting for customers to report issues, this approach reaches out to them before they even know they exist. That way, customers know you're constantly working to remove roadblocks from their user experience.