Published October 10, 2021 What is customer service’s role in customer retention?

What is customer service’s role in customer retention?

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Good customer service is more than just responding to customer complaints (though, that is critical). In a digital-first, experience-driven economy, customer service impacts the entire customer journey and is a vital and strategic component of business success.

In fact, quality customer service is the biggest driver of customer retention—even more than product or price. So, if you want to reduce customer churn, it’s time to bring service to the forefront of your brand.

What is customer retention management?

Customer retention refers to a company’s ability to keep customers over time. And if it’s not a key strategic focus of your business, it should be. Why? Because time and time again, studies show that it’s cheaper and more profitable to retain existing customers than it is to acquire new ones.

Existing customers are more likely to:

  1. Try new products or services
  2. Spend more money per purchase
  3. Refer friends to your business

Customer retention management is your company’s process for maintaining relationships with existing customers to drive satisfaction and loyalty.

And customer service plays a crucial role in that process.

How customer service impacts customer retention

Customer service includes everything from answering customer questions and handling complaints to scheduling maintenance appointments and responding to product reviews. Really, any time a customer engages directly with a team member, it can be counted as a service experience.

As much as product and service quality, it’s how you show you deliver on your brand promise.

Customers who receive great customer service are more likely to do repeat business with your brand, even when other companies have similar offerings at lower prices. But on the flip side, bad service experiences can stop the relationship in its tracks.

Boost customer retention with outstanding customer service

Since customer service can make or break the customer’s experience, companies that deliver stellar service will have longer, more valuable customer relationships. So, to boost your customer retention rate, start with your customer service experience.

Ask yourself: Is your customer service…

  • Easy to find and navigate?
    Too often, companies try to avoid flooded inboxes by burying their contact information deep within the site. Wrong move. When customers have issues, sending them on a scavenger hunt for your email address will only add to their frustration. Instead, put your Help info front and center. Whether it’s through your website’s main navigation menu or a chatbot at the bottom, make it as easy as possible for customers to reach out.
  • Customer-centric?
    It’s no longer enough to provide great service. Now, you need to provide a great service experience. And that means taking a customer-centric approach to both what you do, and how you do it. Use data-driven insights to learn who your customer is and how they like to engage. Then, deliver a service experience based on their preferences and priorities.
  • Convenient?
    If you’re a global company, do you offer 24/7 customer support? Are your service channels the ones your target market prefers? For example, older audiences may prefer using the phone, while younger generations may expect the whole interaction to happen via social media. For simple questions, users like self-service options, such as how-to videos or FAQ pages. But the more complex an issue is, the more they will want to talk to a real person.
  • Helpful?
    Of course, service is all about helping. You’re helping customers troubleshoot issues, or get greater value from your products and services. No amount of friendliness will make up for an unresolved problem. Solicit feedback from your customers to ask how the service experience could be improved, or whether they found it helpful. Send follow-up emails to customers after a service interaction to ensure their questions were answered. Use their feedback to make improvements.

Better customer service=Better customer retention=Higher ROI

Customer retention isn’t really all that complicated. To keep customers coming back, keep delivering value. Show them that you care even after they’ve made their purchase. But, while simple doesn’t mean easy, the payoff is worthwhile.

Not only are loyal customers more likely to spend more, they’re also more likely to refer their friends and peers to your brand. Nurture customer relationships with ongoing service and support.

By delivering a customer service experience that goes above and beyond to make their lives easier, you’ll build stronger, lasting customer relationships. And that will drive revenue and value for you.

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Emily Morrow

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