The Key to More Revenue, Repeat Customers, and Effective Word-of-Mouth Advertising Companies are beginning to shift their focus toward improving the customer experience in an effort to keep current customers loyal to their brand and attract new business. On average, loyal customers are worth up to 10 times as much as their first purchase,1 and a 2% increase in customer retention has the same effect as decreasing costs by 10%.2 As for potential customers, 70% cite poor customer service as a reason for not buying from a brand.3 Customer service was once considered an expense, but in this changing economy, customer service is proving to be the best investment a company can make.
Customer Service: The Key to More Revenue, Repeat Customers, and Effective Word-of-Mouth Advertising
To Sell or Not to Sell There’s a debate among companies and consumers alike that selling during a customer service call is taboo – and it can be. The conflicting statistics available only further complicate the concept of cross-selling as part of a positive customer service transaction. For example, in one white paper 88% of customers value service reps who suggest alternative products or services that better meet their needs.4 However, in a survey by AchieveGlobal, 40% of respondents said they get annoyed when employees upsell or cross-sell them during a customer service interaction.5 Digging into case studies and additional research, it becomes apparent that the happy medium comes in the form of a well-trained customer service team that puts customer needs ahead of “getting the sale.” Fifteen percent of customers actually want to hear about upsell offers, but only – if done properly.6 This means upselling and cross-selling needs to be based on the customer’s needs and at the right time. The ROI of upselling and cross-selling as part of the customer service experience won’t be immediate, especially if a company measures success based on daily sales quotas. The financial return will happen exponentially over time in the form of repeat customers and new referrals from word-of-mouth advertising.
Zappos – A Customer Service Success Story The power of great customer service is illustrated best by the success of Zappos. They have generated sales just above the $1 billion mark in less than 10 years and have become the poster child of ecommerce success. The key to Zappos’ insane growth is no secret, and CEO Tony Hsieh has never been one to shy away from discussing how Zappos managed to vigorously increase year-over-year revenue. In his own words, “Zappos is really a customer service that just happens to sell shoes.”
Everything Zappos does, including the treatment of their employees, is done with customer service in mind – literally from the inside out. Hsieh has closed all of the entrances to the building except for one in order to increase the likelihood of chance encounters between employees. He believes that building employee camaraderie results in a willingness to help one another and ultimately customers.7 New contact center
Customer Service: The Key to More Revenue, Repeat Customers, and Effective Word-of-Mouth Advertising employees complete seven weeks of intensive training – if they make it past “The Offer.” After one week, new employees are given the opportunity to quit for the time they worked plus $2,000 in an effort to weed out those who aren’t committed to the core values of a company.8 Call center employees are not given a script, are encouraged to “have fun” on calls, and are truly empowered to do what they need to do to keep a customer satisfied – even if it means ordering a shoe from a competitor website if Zappos doesn’t have it in stock.9 The obsession with hiring the right people and then keeping them happy is creating a culture that is genuinely interested in helping others, and it’s paying off tenfold for Zappos. The correlation between happy employees creating happy customers and increased profits is mind-blowing. Zappos proj