With So Much Attention on Customer Acquisition, Why Isn’t There More Focus on Keeping and Delighting Your Current Customers with Exceptional Customer Service?
In the wake of the horrifying customer service blunder where a passenger was dragged off a United Airlines flight for refusing to give-up his seat, let’s take a closer look at this customer service thing. First, the incident, although tragic and disgusting, is not unique. It was just an incident that was captured on someone’s phone, posted on social media, and went viral. As it relates to customer service in general, other poor customer service experiences are not as severe, but we all hate sitting on hold for 20 minutes in the telephone or navigating through five initial options on an answering service, just to find that the menu is three-layers deep, and then you get put on hold after making your selections. In a recent article that I wrote for Inc. Magazine, “How to Nail the Most Important Job in Your Company”, I cover 11 key things that companies need to do to retain customers through better servicing of key customers, even in times of difficulty or adversity. However, let’s look at this urgent issues for businesses a little more deeply.
Are We Measuring All The Right Things?
Unfortunately, many businesses are overly focused on customer acquisition and a few other financial metrics and don’t pay attention to keeping and even growing with the customers that they already have. There is an ever-increasing emphasis on Customer Acquisition Cost (CAC) and the Lifetime Value of a Customer (LTV) for investment professionals. However, Customer Churn is just as important since it effectively increases CAC since you need to get new customers to replace your old ones, and it decreases LTV since the duration of a customer sticking with you, on average, is shorter.
Why is Customer Support So Bad?
Why is it then the case that customer service is so poor in so many companies? I think there are three reasons at the root of this. The first is that there is an overemphasis on cost as companies scale because they are not providing the same levels of growth. This causes the replacement of caring people with automation. Second, good customer service is really hard. It is emotionally and mentally taxing to deal with really pissed-off people. So people avoid doing it and forget what Bill Gates said, “Your most unhappy customers are your greatest source of learning.” Third, a lot of companies just don’t select the right people or train them properly to deal with customer issues. Fourth, companies don’t reward the service function the way that they reward the sales function, so compensation is not aligned with behavior, which is the basic principle in any good comp system. Fifth, the company does not put enough emphasis on the importance good customer service because it cannot be directly measured and it isn’t as sexy as sales growth. Finally, the company doesn’t treat its employees in a service-oriented way, and thus the customer is not one of servicing others. These catchy statements like “Delight Our Customers” are posted all over the place, and the employees just shake their heads about how management behavior is no even close to being in alignment with this statement.
Urgent Need to Fix Things are Die
In the era of mobile communications, social media, and heightened awareness, the importance of excellence in customer service is even more urgent. Mobile communication is becoming increasingly an important part of business, but while social media is an effective tool, many are seeing automated text messages: automated text messaging for business as a good way of showing customers that they are important to their business as well as showing adaptability. Those that adapt, listen to customers, treat crisis urgently, and understand the impact and importance of social media will thrive. Those that don’t risk being put out of business. AnswerFirst Communications is a company that does understand the importance of customer service, and can help other companies that don’t have the resources to answer calls from customers with it’s first class answering service, you’ll never need to leave your customers hanging on the phone ever again.
I’d love to hear your thoughts on this topic.
This is Patrick Henry, CEO of QuestFusion, with The Real Deal…What Matters.