CUSTOMER SERVICE HITS THE BOTTOM LINE
The quality of the customer service experience is one of the biggest influencing factors on a business’ bottom line, according to new research from the Institute of Customer Service into the Retail, Banking, Insurance and Utilities sectors
- 63 per cent of people who have a good customer experience with a member of staff would purchase again from the same organisation
- 69 per cent of people who have had a good customer experience with a member of staff recommended that organisation to others
- 58 per cent of people who have a bad experience with a member of staff would never purchase again from the same organisation
- 70 per cent of people who have had a bad customer experience with a member of staff say they will warn others not to use that same organisation
Almost two thirds (58 per cent) of people would stop buying from a company as a direct result of poor customer service with a member of staff, according to the results of the latest research into the financial services, retail and utilities sectors.
“Recommend or Avoid? How Engaged Employees Influence Customer Service and Buying Behaviour”, published by the Institute of Customer Service, concluded overwhelmingly that customer experience has a real impact on purchasing decisions. The research underlines the distinct shift in power over recent years as customers become more knowledgeable, discerning and increasingly have the opportunity to go elsewhere if they do not receive the level of service they expect.
More than three quarters (77 per cent) say they would avoid using a company again where there is another option available after experiencing poor service. Conversely, 63 per cent of people who have a good customer experience would purchase again from the same organisation.
Jo Causon, CEO of the Institute of Customer Service says: “This is even more important at this time of year as businesses hire temporary staff, many without any customer service experience or training, as trade increases in the run-up to Christmas. For all companies this should be the time to focus on providing the best customer experience to galvanise relationships with existing customers and win new customers.
“Good customer service is highly prized. It is clear that most customers want a balance between customer service and price. But about a quarter (23 per cent) of purchasers said that they would pay more – on average an additional 10 per cent – in return for a better customer experience.
“Customers are using a wide variety of methods and devices to interact with organisations, whether electronically or in person,” says Causon. “The value of recommendation in this new environment is more important than ever as consumers have access to this information at their fingertips on smartphones or tablets and, in many sectors, have a wide range of choices allowing them to vote with their feet if they are not happy.”
Implications for retailers
In the run up to Christmas, the busiest time of the year, shops and restaurants are focused on maximising revenues. Yet, busier than normal and keen to secure large numbers of staff for the Christmas rush, retailers often recruit temporary workers with limited customer service experience or training, at a time when delivering a positive customer experience is especially crucial. Get it right, and organisations can benefit from high levels of recommendation and repurchase from customers. But bad customer experiences are highly likely to lead to customers avoiding an organisation and even warning others about it.
However, there is no excuse for businesses not to be prepared for Christmas. “Recommend or Avoid? How Engaged Employees Influence Customer Service and Buying Behaviour” highlights that investing time and effort into customer service training will have a tangible effect on customer perception and make a real impact on the bottom line.
Implications for banks
Though levels of customer satisfaction in the banking sector have been flat in the last year, as measured by the UK Customer Satisfaction Index (UKCSI), the good news for banks is that the sector scored higher than insurance, retail and utilities for friendly, helpful and knowledgeable staff. This suggests that as banking enters a new era of increased competition and regulation, engaged employees can be a key asset in improving customer relationships and building trust.
Jo Causon comments: “In the Christmas period and beyond, banks will receive a significant number of enquiries from customers who may be more stressed than at other times of the year. Employees therefore need to display empathy, tact and intelligence in the way they deal with customers. Those organisations that invest in customer service training to deliver consistent levels of satisfaction across all channels will be best placed to retain existing and attract new customers.”
Implications for Utilities
Utility companies, especially in the energy sector, have come under the spotlight for price increases and this scrutiny has intensified since the political party conference season. Our research found that over half of customers who remembered a memorable experience with a company (54 per cent) reported a bad customer experience – higher than any of the other sectors customers were asked about.
Jo Causon adds: “One tangible initiative that Utilities companies can focus on to build trust with customers is providing consistently high standards of service across all channels. Central to this is ensuring that all staff are equipped to deliver knowledgeable, helpful and professional service. Not only will this increase customer satisfaction, it will also encourage more customers to recommend organisations to their friends and associates.”