June 11, 2019
Since I’ve been speaking to CEOs about “Pricing & Profits”, the true impact of customer service and retention is arising as a game changer. Can you create a situation where you make a “forever promise” to your customers? It certainly will directly impact your customers’ perceptions of your value and your bottom line!
The statistics are staggering:
- According to Bain & Company, Increasing customer retention rates by 5% increases profits by 25-95%
- According to Harvard Business Review, it is anywhere from 5 to 25 time more expensive to acquire a new customer than to keep a current one.
- According to Salesforce, 74% of people are likely to switch brands if they find the purchasing process too difficult.
- U.S. consumers are willing to spend 17% more to do business with companies that deliver excellence customer service
- According to Newvoicemedia.com, after one negative experience, 51% of customers will never do business again with that company.
Do you know how your company is doing?
What Should We Consider and/or What Impacts Could Arise?
Clearly, in reviewing the statistics, we should all be ultra vigilant about customer service and the customer experience. Where do we start? In our experience, our best clients understand their target customers and what is meaningful to them. The customer experience has to start there. It is easy to get carried away in measuring on-time delivery, customer complaints and other metrics but what does that really tell us? Do our customers simply want a reliable delivery estimate and someone to pay attention to ensure success or do they want a tailored, customized customer experience? Are we getting complaints from our unprofitable customers and silence from our best customers, and therefore focusing in on the”20″ of the 80/20 equation? It happens more frequently than you’d think!
Once you know what is meaningful to your key customers, define a way to measure your success in achieving your objective. Perhaps use the net promoter score as it is one simple question that speaks volumes: How likely is it that you would recommend [brand] to a friend or colleague? As you explore why, you’ll find ways to increase the value of your customer experience to your key customers. Certainly, customer service is a critical topic in creating a resilient supply chain. You’ll find more information on these types of topics on our resilient supply chain series.