The Importance of Customer Service for Loyalty and Retention

David Tooman once said, “Sales without customer service is like stuffing money into a pocket full of holes” and it’s true. The importance of customer service is profound in any business. It helps build employee and customer loyalty. Just like what Valeria Maltoni once said, “The way to a customer’s heart is much more than a loyalty program. Making customer evangelists is about creating experiences worth talking about” and it starts with great service and product.

It is a proven fact that Great customer service can improve customer retention and repeat business. Customer service can also improve your acquisition of new customers through positive reviews and word-of mouth. In fact, according to Bright Local, 61% of businesses said that the majority of their revenue came from repeat business, with repeat buyers spending 67% more than new customers.

Customer service can be seen as an opportunity to leave a good impression with customers by dealing efficiently with their questions and ensuring that they end up being happy with your service. Customers who are unhappy with your service will tell people about it which in turn effects retention and marketing. In fact, a Zendesk study shows that, 42% of customers said they bought more after a good customer service experience, while 52% didn’t buy from that company again. The same study also says that nearly three out of five consumers report that good customer service is vital for them to feel loyalty toward a brand.

Now that we have established the importance of customer service for loyalty as well as retention. Let’s have a look at ways in which we can improve our customer service and increase customer loyalty and retention as well.

  1. Shipping

Inaccurate shipping can cause a lot of customer service problems and in turn effect retention as well. As a company If you can deliver goods on time as promised, customers will be confident to order again and again. In fact, a deloitte research shows that free shipping and convenience are key motivators for 70% Of Consumers. It’s important to set customer expectations around delivery and never make promises you can’t keep. In fact, Retail Touch point says that 98.1% of consumers say that shipping impacts brand loyalty.

  • Hassel free return/replace policy

A hassle-free return policy can be great for persuading first-time customers to buy, but it also works for retention. According to 80% of customers read your returns policy before placing an order and 72% of customers say a hassle-free return experience makes them more likely to shop from an ecommerce brand again. There is a cost connected to these returns but most companies don’t need to keep them under control. So, by making returns easy, you can keep customers happy.

  • Advertise your great customer service!

Did you know that according to Microsoft, 53% of shoppers believe their feedback doesn’t go to anyone who can act on it, so, if your company prides itself to be good in customer service then shout about it and attract customers to your side. If you have a reputation for good service, and positive reviews from customers, then this can be a great marketing asset. Great customer service is a plus point just like Sam Walton, founder of Walmart said, “The goal as a company is to have customer service that is not just the best but legendary.”

  • Communicate effectively and regularly

Customers are more likely to stay with your company if your product or service is delivering results and ROI for them. In fact, a Zendesk study shows that, More than 70% of consumers believe that companies should collaborate on their behalf so they don’t have to repeat information to different representatives. It’s important that you are transparent about the activities you executed last month, the results you saw, where you see opportunities for improvements, and what you will work on next month to your customers to stay loyal to you and trust you.

Customer retention is a by-product of customer service and experience. If you create a good experience, that is consistent and predictable, then you have a right shot at improving and setting good customer retention examples. Everything you do impacts your customers’ perception and their decision to return back to your business or not. So, make sure you keep your customers happy, only them you can expect great retention and your customer loyalty.