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$1.6 Trillion Is Lost Each Year Due to Poor Customer Service – What You Can Do to Stay out of This Statistic

$1.6 Trillion Is Lost Each Year Due to Poor Customer Service - What You Can Do to Stay out of This Statistic

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Poor Customer Service. A huge $1.6 trillion is lost every year due to poor customer service! This statistic is alarming, not just because of its massive scale, but also because it’s entirely avoidable. Poor customer service has many roots, but at its most basic, it comes down to failing to understand your customers and their needs. Are there some problem customers who will always be unhappy? Sure, there certainly are. However, these people make up a tiny minority of your customers.

Most of your customers are reasonable people who just want a good experience from your company. After all, you already did the hard part – you got them through the door and to the checkout. Now you just have to keep them happy! Easy, right? Ok, we know it’s more difficult than that, but we’re going to tell you exactly how to avoid losing money to poor customer service.

Customer Service Statistics You Must Know in 2020

Before we delve into how to offer excellent customer service, here are some customer statistics you should know. The purpose of highlighting these statistics is to remind ourselves why customer service is so important. Sometimes when we’re stuck in the day to day running of the business, we can forget to look at the bigger picture and remember to stay focused on the “why”. The consequences of poor customer service can be severe.

  • 90% of Americans consider customer service when deciding whether to buy from a company.
  • Acquiring new customers is between 5 and 25 times more expensive than retaining existing customers.
  • Almost 50% of Americans switched companies last year due to poor customer service.
  • Customers will spend 17% more on a company with excellent customer service.
  • Almost 80% of customers would recommend your company to their friends after a positive customer experience.
  • It takes 12 positive reviews to make up for 1 negative review!
How to Offer Great Customer Service

How to Offer Great Customer Service

1.  Nail First Contact

First impressions are extremely powerful. Getting your first contact off to a good start can determine how the rest of the conversation goes. You need to make a good first impression to develop a good relationship with the customer. Here’s how agents can create a great first impression on the phone or messaging service.

  • Watch your tone: Without body language, you have to try harder to convey your tone. You want to appear friendly, approachable, and confident. Over the phone, be pleasant and polite, rather than excited (this may seem fake). Over a messaging service, use a smiley face emoji in your opening message.
  • Thank the customer for calling.
  • Tell the customer your name because it helps build that relationship. It also shows that you are accountable and dependable.
  • Ask how you can help.

2.  Actively Listen to Your Customers

Active listening is when you concentrate on, understand, respond, and remember what the customer is saying throughout the whole conversation. Active listening builds trust and rapport with customers. Agents will also be better equipped at solving problems if they fully understand the customer’s perspective. Here’s how you demonstrate active listening in customer service:

  • Give regular verbal feedback to the customer. If the customer is explaining their problem, show them you’re listening by saying “I see”, “go on”, “what happens next”, “That must be frustrating”.
  • Don’t interrupt. Let the customer explain their issue without interrupting them.
  • Repeat the customer’s problem back to them. This shows that you were paying attention and will also ensure that you’re both on the same page.
  • Ask relevant clarifying questions at appropriate times. Don’t try to rush the customer onto the next part where you find the answers you need to solve the problem. Ask questions when it seems natural.
  • Summarise their problem and suggest a solution.

3.  Empathize

When customers have a problem, they often feel confused, frustrated, and lost. They are looking at the customer service agents for help with their issues. Effectively showing empathy towards your customers will have a huge effect on shaping their experience. It’s simply human nature. We all want to feel validated and understood.

There are two types of empathy, affective empathy, and cognitive empathy. Affective empathy is when you sincerely “feel” for the other person, either through physical sensations or by becoming emotional. Cognitive empathy is when you understand someone else’s perspective and emotions. Affective empathy doesn’t play a significant role in customer service. After all, agents would find it difficult to do their job if they were constantly struck with negative emotions. It would be overwhelming. However, cognitive empathy plays a huge role in customer service and this is what we’re referring to when we say “empathy”. Agents must be able to put themselves in the customer’s shoes and understand what they are feeling. Here are some phrases you can say to convey empathy:

“I understand how frustrating it is”

“I’m sorry to hear that”

“I will get this sorted for you”

“Thank you for bringing this to our attention”

“I’m going to pass your suggestion onto the relevant team to see if we can avoid this in the future”

It’s also a good idea to make the customer’s problem your own. Take ownership of the problem rather than treating it like some abstract issue that you are not responsible for. You may not be personally responsible, but your company is, and you represent the company.

4.  Provide Excellent Agent Training

Customer service agents are almost always positive people with great communication and problem-solving skills. However, there’s always some room for improvement. The customer service agent must know exactly how to respond to customers in a range of different scenarios. They must be able to keep calm under pressure or when they encounter a unique problem. They must always be polite, even when the customer is being rude.  The best way to ensure your agents are always their best is to provide excellent quality training. Training should also be updated and added to over time. Your agents should never be done learning.

5.  Utilize Automation

One of the major reasons customers have a bad customer experience is because they were waiting a long time to get help. Another major reason is that the agent was not adequately knowledgeable about the product to solve the issue. Automation can help greatly here!

You can use automation and AI in the form of chatbots to take the pressure off customer service staff. Some customers have a simple problem that needs a quick and straightforward answer. Chatbots are perfect for these customers. Why make these customers wait in a queue for longer than it would take to solve their problem? This will only make them more frustrated and dissatisfied with your company.

You can also use automation and AI to route customers through to the most appropriate agent. For example, an agent might have a lot of experience in one element of your product or service. There might be an agent which excels at fixing technique issues. Or an agent who’s great at calming down distressed customers. Whatever skill they have, you can ensure that they are matched with the customers who need them most. This is good for both agents and customers. Agents get to do what they excel at and feel that they are making a positive difference. Customers get the problem solved quickly and effectively.

6.  Be Solution Oriented

When customers contact your customer service team, they are looking for solutions. They have a problem, and it’s your job to fix it. You must offer solutions as quickly as possible and check that the customer is happy with the solution. You need to get the customer on board with how you want to fix things. Sure, you might know best. You know the product better than anyone! Even so, the customer has to be engaged with your solution otherwise they won’t be happy with the end result.

What is Bad Customer Service?

What is Bad Customer Service?

So, we’ve covered how to offer great customer service, but can you also spot what bad customer service is? This part is crucial to avoiding poor customer service experiences.

When You Get Bogged Down in Company Policy

Popular publication Business Insider ran a story about a large retail company that prioritized company policy over customer service. The customer found a product they wanted, but it was priced higher in the store than on the company’s website. The customer asked the agent to match the lower price and the company refused due to policy. This story then went viral and damaged the company’s reputation.

Company policies exist for a reason, but they shouldn’t be considered law. Agents should have the flexibility and autonomy to override company policies in situations where it might win the customer over or avoid damage to the company. If your agents are bound by restrictive and rigid policies, at some point they will frustrate customers.

Ignoring Feedback

Customers leave feedback for a reason. They’re not doing it because it’s their favorite hobby. They leave feedback to inspire action and inform other buyers. You should aim to respond to all customer complaints, whether that’s via your complaint form, on social media, or via reviews.

Lack of Initiative

It’s the agent’s job to provide a solution, not the customers. If your agents always wait for the customer to explicitly say what they want, then customers will be left feeling abandoned. Some customers know exactly what they want, but it’s still for the agent to weigh in and confidently suggest the most appropriate solution and explain why that solution will meet their needs.

Taking the initiative is also important when it comes to proactively responding to customers online. If someone tweets you an angry message about the issue they’re having with your product, don’t just send them a stock response. This will only anger them further. Instead, create a unique response every time and try to get to the bottom of the problem. Taking things offline is always a safe option, but equally don’t be afraid to talk to customers publically, if they’re comfortable with it. This is your chance to show off how great you are at solving problems.

Putting Customers on Hold for Too Long

No one likes to be kept waiting! There’s no good reason to ever place your customer on hold for several minutes unless it is explicitly agreed on with the customer. If the problem is going to take a long time to fix, then organize a time the agent can call the customer back. That way the customer can get on with their day instead of waiting aimlessly.

Using Negative Language

Agents should be upbeat, friendly, confident, and polite. If agents use negative language, sound unsure, argue back with the customer, or suggest it’s the customer’s fault, then the customer will be left unhappy.

Transferring Calls Too Many Times

Customers shouldn’t be passed from agent to agent. This is especially true if you don’t have an omnichannel platform with integrated AI that will carry the customer’s ticket details through the chain of agents. If the customer has to explain their issue multiple times, they will become dejected, frustrated, and feel hopeless. Don’t let this happen!

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