Despite popular opinion to the contrary, there are some very important people who like it when you practice bad customer service — namely, your competitors. And why wouldn’t they, considering how much potential business it could redirect away from you? Insights from a survey conducted by American Express revealed that 78% of consumers have given up on an intended transaction as a result of sub-par customer service, and another survey used in the Salesforce State of the Connected Customer study revealed that 57% of customers have stopped buying from a company because a competitor provided a better experience.

The insights these studies and surveys share demonstrate, in short, that ineffective customer service has a very real, very negative impact on not only customer satisfaction, but also an organization’s bottom line. The customer’s business doesn’t always go to the least expensive option; more often then not, the customer’s business goes to company that demonstrates real, sincere interest in the client themself. The importance of customer satisfaction cannot be overemphasized, and no amount of sales savviness can ever make sacrificing customer satisfaction or service worthwhile.
That’s because loyal customers tend to yield ten-times more than the customer value of their first purchase over the long term, according to the White House Office of Consumer Affairs. Not only that, but repeat customers tend to convert at rates between 60 and 70%, whereas conversion rates for new prospects fall somewhere between 5 and 20%. When businesses really begin to understand the vital impact of customer satisfaction, it becomes more than just another buzzword, or a necessary business expense; it becomes the foundation for present — and future — business success.

Defining customer satisfaction is important for every part of the business. So, what is the importance of customer satisfaction? Well, there's an old adage that says a customer will remember the service far longer than they’ll remember the price. And while this is probably not true of all customers (or all prices), it does demonstrate the comparative impact that superior customer service can have. In fact, according to a survey by PwC,  most customers across a variety of industries are willing to pay 16% more if it means improved customer service.

Unfortunately, too many businesses see customer satisfaction purely as the responsibility of the customer service agents. But while division of labor may make sense in other aspects of business, it is completely inappropriate when it comes to customer service — and it can be very dangerous as well. In the 21st century paradigm, e-commerce sites, social media, and online ratings services such as Yelp, Yahoo! Local, and Google My Business have made it extremely easy for customers to bring their complaints and criticisms to the public sphere, and negative public reviews can really do damage. As Pew Research tells us, 58% of Americans search online reviews for products they are thinking of buying. And there’s a definite bias toward negative reviews. Likewise, more than a million people browse tweets about customer service on a weekly basis, and 80% of those tweets are negative or critical in nature. That’s a lot of dissatisfaction for businesses to have to deal with, and a lot of negative publicity that can do more than its fair share of damage to an organization's reputation and bottom line.  

Customer service agents are still a critical piece of the customer-satisfaction puzzle, but is their job simply to clean up the messes created by abrasive sales staff, smarmy marketing practices, or clunky, thoughtless web design? No. As the famous business author, Gary Vaynerchuk explains in his book The Thank You Economy:

“You have to be no less than a customer concierge, doing everything you can to make every one of your customers feel acknowledged, appreciated, and heard. You have to make them feel special, just like when your great-grandmother walked into Butcher Bob’s shop or bought her new hat, and you need to make people who aren’t your customers wish they were.”

In essence, it’s not enough to fix problems as they arise; you need anticipate and eliminate issues long before they become a reality, and you have to provide a great overall experience as well. So, let’s talk about how to get to that level.

With so many available options for customers to choose from, businesses can’t afford to provide anything less than outstanding customer service. And as we’ve mentioned before, people tend to be more vocal about their bad experiences than their good ones. According to American Express, Americans tell an average of nine people about their good experiences, and an average of 16 people about their negative ones. But while these insights may be sobering, the nice thing about the digital age is that even though negative reviews can damage a business, those reviews are still feedback that can be used to improve the business itself, and all feedback is good feedback. Understanding the importance of customer satisfaction and loyalty means listening to those vocal critics, and then quickly addressing their problems. Believe it or not, those people are teaching you how to make your business better, and the returns from taking their lessons to heart come almost immediately. Resolving complaints in customers’ favor earns you a return customer 70% of the time.

So, why do some businesses settle for mediocre service, when it’s well known that customers will reward appreciation with their wallets? Well, some businesses prefer to hide behind self-service tools, and automated customer service phone lines. And while there is certainly nothing wrong with automating processes that might otherwise require the attention of salaried employees, organizations need to be aware of the human need for human assistance; 67% of customers have hung up on automated customer service systems out of frustration of not being able to speak with a living representative. But beyond even the issue of unwanted automation, the most surprising fact may be that most companies don’t even know when they’re providing bad customer service. Data suggests that 80% of companies think they’re providing superior service while only about a tenth of those actually do.

Thankfully, there are a few basic customer-satisfaction principles that will guide most any business toward turning all their existing customers into long-term, loyal, return customers, and all their return customers’ friends into new customers.

  1. Personalization
    People don’t like being treated like a number, a dollar amount, or a problem that needs to be resolved. As such, you should make sure to have live service agents available to take phone calls. Train sales staff and customer service agents to learn customers’ names, and then use them when appropriate. A high-quality CRM can make this aspect (and others) of customer service much simpler.

  2. Make Feedback Easy
    Whether you run an ecommerce site or a brick-and-mortar store, implement methods for customers to give feedback. Learn about the importance of customer satisfaction surveys. Gather reviews — solicited and otherwise — and take that feedback to heart. Not only does this give your customers a role to play in the solution, which they will appreciate, but it also provides you with valuable free data that you can use to improve your business. Reliable feedback is a surefire way to make providing top-tier customer service much simpler.

  3. Training
    Good customer service is not a specialty reserved only for a few. Every business that has customers is, at least to some extent, in the ‘people business.’ To this end, all employees should be trained on customer satisfaction techniques. Even more, every department should be able to identify certain markers that help gauge customer satisfaction. The importance of measuring customer satisfaction and tracking improvements or declines is a responsibility that can (and should) be shared through the entire organization.

Businesses, now more than ever, should implement methods to keep high levels of customer satisfaction due to the ease of review sharing online. The points listed above are a great starting point to build a foundation upon and to further expand.

The rewards of exceptional customer service cannot be overemphasized. Businesses that excel at customer service are the ones that understand it as a vital sales opportunity, rather than as an expense. And as for those who fail to understand this concept, they help drive business as well — directly to their competitors.

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