How customer service impacts loyalty and how to improve your strategy
Great customer service is one of the most valuable assets to a Shopify merchant's customer retention. Think back to any time you've received great or poor customer service; it impacts the impression you have of that brand, and chances are if you received unsatisfactory service you'll be a lot less likely to want to shop with them in the future.
Customer service has a big impact on loyalty, but why is this? And how can merchants improve their strategy to drive that loyalty?
Why customer loyalty is invaluable
There are a number of great reasons why you should aim to maximize every opportunity to drive customer loyalty. The first and perhaps most important, is that customer retention is cheaper than acquiring new customers. Investing in new customers can be anywhere between 5 and 25 times more expensive than retaining existing ones. Therefore if you can build an audience of loyal, repeat customers, your store will fare better in the long run.
The second reason is that loyal customers typically spend more, and purchase more frequently. This is because there’s a level of trust built between your brand and the customer that simply doesn’t exist with a new customer. They’ve used your products, they know the quality, they understand the kind of experience they can expect from your store. Therefore they’re more comfortable spending a bit more money on your store than they would have as a new customer.
And lastly, loyal customers become your most valuable brand ambassadors. 90% of US customers will recommend a business whose service they rate highly, and 81% say that they trust the recommendations of their friends and family. Therefore if someone who has never bought from you before gets that personal recommendation from a loyal customer, they’ll be more likely to consider purchasing from your brand because someone they personally know has tried and trusts your store.
How customer service impacts loyalty
Whether or not a customer remains loyal to a brand is often determined by the customer experience. Many may think that price or discounts affect loyalty, but surveys show that 86% of US consumers are willing to pay more for a better customer experience. That means you want to provide customers with the best experience possible to drive that chance of them remaining loyal to your brand. Customer service is a big part of that.
People have very high expectations when it comes to customer service; 95% say that it’s important to brand loyalty. Not meeting those expectations can have a big impact on retention, and the cost of poor customer service is huge. 56% say they’ve stopped doing business with a brand due to poor customer service. On the other side of the coin, 89% say that they’d be more likely to make another purchase after a positive customer service experience, and 78% say they’d do so even after the brand made a mistake. It makes sense - if a customer gets in touch with customer service because there’s something wrong with their order, that’s a bit disappointing. That disappointment can quickly turn into frustration and annoyance if the brand in question doesn’t deliver top class customer service and make right by the customer. The better the customer service you deliver, the more likely that customer will be to make a repeat purchase giving you even more opportunities to show them why they should remain loyal.
3 ways to improve customer service strategy
1 - Offer self-service options
It’s becoming increasingly common for customers to want self-service options to try and solve their issues without speaking to a customer care representative. For some issues, they want answers fast and self-service options give them that instant information they’re looking for. However, while 69% of consumers first try to resolve their issues on their own, over half say that the main reason they can’t do so is because there isn’t enough information online. And less than one third of companies offer robust self-service options.
It’s a huge opportunity gap for merchants looking for an easy win without impacting the time of your customer service team. Give customers what they want and expect, and not only will it increase their satisfaction but your customer service team don’t even have to do anything. You’re essentially automating a positive customer service experience. You can do this through a searchable and detailed knowledge base, intelligent AI customer service chatbots, and real-time tracking.
2 - Make it easy to reach your team
Not every issue is going to be resolved by self-service options, and when that is the case you need to make it as easy and fast as possible for customers to reach your team. 30% of customers say the most frustrating part of customer service is not being able to easily reach a real person.
An easy way to implement this is by including clear “Contact Us” information and links throughout your self-service options. For example, if the customer uses a chatbot, the bot can ask if they were able to resolve the issue and if the customer responds no this can prompt the bot to ask if they would like to speak to a customer service rep. With knowledge bases, this can be as simple as including clear messaging on each page i.e. “Not finding the answer you need? Get in touch with our team here”.
This will still have a low impact on your team, as the customers who do get in touch with them have already exhausted their self-service options meaning your team are still only dealing with issues that require additional assistance.
3 - Follow up on feedback
It isn’t enough just to give good service, but to ensure that you’re asking for feedback and doing something with it. 77% of customers have a more favourable view of brands that ask for and accept customer feedback. With every customer service interaction whether that’s through a chatbot or directly through your team, ensure that at the end of that interaction you ask for customer feedback. Was their issue resolved? How satisfied were they with their experience? If a customer provides poor feedback, be proactive and follow up with them to figure out how your team can continue to assist them. By doing this, you’re demonstrating to customers that their opinions matter and you value their experience. Make sure your follow-up is actionable and demonstrable, for example if a customer complains about an order missing from their order then instead of simply sending out the missing item, let them know that you’ve passed their feedback onto your fulfillment team so they can look into how the error occurred and how they can improve for the future.
Poor customer service sends the message that your business only cares about getting a sale, and not about the overall experience and satisfaction of your customers. According to McKinsey, 70% of the customer journey is based on how the customer feels they are being treated. You can easily drive loyalty by showing your customers that your brand values them by providing an excellent customer service experience. This can easily be achieved by implementing simple tools that maximize their experience without impacting your team.