In my role as a Value Consultant at Salesforce working with clients on large IT investments, I am starting to see an interesting expansion of the role of customer service. Though traditionally viewed as a cost to a company, improvements in customer service are now being attributed to a company’s overall profitability.
As a result, my conversations with VPs of Customer Service have expanded as well. These leaders are asking how they can create lasting customer experiences, what I call Relationship Moments. They have a chance to do right by customers AND drive revenue at the same time.
Relationship moments are how companies seize the opportunity during service interactions that leave customers excited to continue business, willing to spend more, and happy to share their experiences with others. Creating a service culture invested in Relationship Moments empowers employees to start making decisions that puts the customer first. My favorite story comes from Zappos, famous for their customer service, setting a record for a 10-hour long customer service call. The length of the call and the fact it made an eventual sale is noteworthy but what stands out to me is the fact that this behavior is considered business as usual at Zappos.
Here are three examples of how Relationship Moments can deliver big returns for companies.
Relationship moments are about really knowing the customer. Keeping these current customers happy, not only lowers customer churn but also extends the overall customer lifetime value (CLV). CLV allows companies to evaluate future revenue based on factors such as lifespan of customers, their average spend, and retention rates. This can have huge impacts to top line revenue particularly for companies with subscription based business models.
A great example of extending CLV is Rosetta Stone which helps congratulate learners and nudge customers along who are falling behind. Their new approach to service includes engaging with customers on their preferred channel whether it be phone, email, self-serve portal or chat. With the help of Salesforce.com, Rosetta Stone has now been able to “get closer to customers and keep them engaged and renewing.” In other words, Rosetta Stone was able to create relationship moments in the right channel at the right time, and help extend the customer’s loyalty to their product.
Just because a customer is calling with an issue, does not necessarily mean selling needs to happen. But when a Relationship Moment has been created this can be an opportunity to delight customers with special promotions, new packages, and warranty extensions. TCS, a roadside assistance company with over 1.6 million members in Switzerland, has been able to better understand their customers by centralizing data from billing to payment to campaigns. By having this 360 view of the customer they were able to streamline the case resolution process while also improving cross-sell opportunities from their service centers. For other companies this can be a time to send leads back to Sales and foster better communication between the two organizations.
By delivering the best customer experience possible to current clients, companies can actually see impact in their sales from acquiring new customers. Not only are they attracting customers from word of mouth but they are now lowering their cost of acquisition at the same time. Huntington Bank, both a Sales Cloud and Service Cloud customer, saw huge spikes in their lead referrals in the first 12 months of using Salesforce.com. They generated 500,000 new up-sell and cross-sell referrals and increased lead conversions by more than 40 percent. They did this by creating a custom referral object that made it easy to transfer a customer to a partner to cross-sell their services. Since these leads came from customers versus Sales or Marketing, it meant that these were much stronger leads with a higher probability of converting to real opportunities. Word of Mouth sales acts as a great double win in both driving sales and lowering customer acquisition costs.
Relationship moments move customer service centers from just case closers to also becoming key players in revenue generation within their company. These tweaks in service should not be overlooked as significant contributors to a company’s profitability. According to Reichheld’s Loyalty Effect study “a 5 percentage point shift in customer retention consistently resulted in 25-100% profit swings”. As companies are looking to differentiate themselves from their competition, developing a new vision for customer service with the right tools for relationship moments will be critical.
For an even deeper look at creating a customer service process that enhances the bottom line, be sure to download the free ebook below.