Annoying issues affect customer loyalty on a daily basis. In every industry, it is inevitable for a customer to contact support to report a problem. "I am constantly being transferred from one service manager to another." "Nobody reports the status of the solution to my problem." "I bought your product, but it doesn't work as expected." "I ordered an item last week and still have not received it." "I can't access my account."
While service issues are common, exactly how and when your company addresses them has an impact on future purchases and customer lifetime value (CLV).
To successfully meet customer needs for responsive, personalized attention, companies are leveraging a variety of technologies that go beyond traditional voice and email. With the introduction of channels such as online chat, social media, mobile apps, SMS / text messaging, self-service solutions, and more, companies are ready to communicate with customers according to their preferences.
But how important is this in terms of buying behavior? How long does the effect last? What are the expectations of customers regarding the channels they use to contact support? What do they value? And does good service have the same long-term impact on customer experience as negative experience?
Numerous studies show that there is a direct relationship between customer experience and their CLV:
- 97% say that poor service can lead to rejection of the company's services;
- 89% of customers believe that a quick response to an initial request is important in deciding which company to buy from;
- 27% say that the inability to quickly contact support through their preferred channel significantly reduces their loyalty to the company;
- 28% of the audience are of the opinion that an important element of a quality service is having multiple options for contacting support, and that excellent service cannot be limited to one or two customer services.
Customer preferences include a wide range of channels of communication with the support service and their preferences change depending on how complex and important issues are being resolved:
- For simple inquiries, 60% of the audience prefer e-mail, 58% prefer telephone communication with a service manager, 48% prefer real-time chat, 24% prefer SMS / text and 18% prefer social networks;
- For complex service requests, 76% prefer phone, 43% prefer chat, 40% prefer email, 15% prefer text, and 12% prefer social media.
Such changes in customer behavior, depending on the situation, clearly confirm the need for the development and high-quality support of several communication channels in addition to traditional call centers and e-mail. For example, 36% of buzzers and 5% of boomers only use social media to communicate with service providers. But, what is very important, they have different motivations: it is more convenient for buzzers (81%) to exchange photos of a problem product with the support service, and for boomers (69%) it is important to share a problem with other buyers, thus informing others about possible difficulties with the product.
67% of the audience use chat, social media, or text messaging equally for customer service. And 98% consider it convenient to have various online resources for self-service, since it gives them the freedom to choose.
Customer perception of a good service is changing not only in terms of the choice of communication channels, but also in expectations regarding the speed of the company's response. Millennials are especially striking in their changing buying behavior, 65% of whom expect faster service than they demanded five years ago. So, for example, 51% of millennials who do not receive a response from the company within 60 minutes and 10% within five minutes will start using alternative methods of contacting the company through other channels. When customers seek help from a different channel of communication, this can create confusion for the organization of support, as requests with the same problem will go to several representatives of different service providers at once.
This trend is forcing long-term revenue-driven companies to ensure highly coordinated service channels to maintain effective communication with customers based on their changing preferences. Whatever the reasons for these service delays, clients should not repeat their requests using the second (or third) communication method. Companies must be proactively available wherever their customers need them, and must strive to offer responsive customer service across all of their channels if they want to increase their CVL.
Good customer service influences their purchasing choices. People interact with companies on a regular basis and sometimes things don't work out as expected. But what exactly counts as a negative customer experience from a human perspective? Mostly customers are annoyed by only three factors of poor service: unpleasant communication with a company representative, waiting too long for an answer to their question and a complete lack of an answer and solution. On the other hand, their positive customer experience includes the same aspects: interaction with pleasant people, fast and effective response to requests, no need to explain the situation many times and simple problem solving. These factors are more than enjoyable to have and directly influence purchasing decisions and, in turn, CLV and business performance. A quick response is important (89%) when deciding which companies to buy from.
Customer service is changing shopper behavior. There is a universal truth that good customer service will propel a company forward, while poor customer service will throw you several or even many steps away from your desired goal, be it retaining new customers or increasing the value of existing customers. Both current and new customers will remember their experiences - good or bad - when it comes time to make their next purchases.
But how does good customer engagement really change consumer behavior? Various studies show that 87% of the audience confirm that the customer service of the company they contacted influenced their buying behavior, ranging from recommending products or services of this company to other people (67%) to repeat purchases from this company (54%) ...
Most worrisome, however, is that consumer behavior changes after poor customer service interactions. Of those who faced negative customer experiences, almost all (97%) changed their future buying decisions. In particular, 58% stopped buying from the company, 52% shared their negative experience with their environment, and 48% will no longer contact this company when making future purchases.
Even more worrisome is the length of time negative emotional experiences have had on buying behavior - over 46% of the audience remembers for more than two years that the company provided them with poor service. For comparison, five years ago this figure did not exceed 21%. At the same time, if you ask to recall examples of quality service with the same time gap, then no more than 24% of the audience will be able to give any examples.
Over the past five years, there have been clear changes not only in terms of customer preferences regarding channels of communication with companies where they buy goods and services, but also in terms of their recommendation activity. So, for example, if five years ago 40% would have shared their negative experience, now it will already be 52% of the audience, which will actively spread a negative impact on the potential audience due to their negative customer experience.
However, there is a clear positive change - we are seeing a similar trend with good customer experience. Today's consumers are much more likely to share their positive experiences as well. If five years ago only 51% would recommend goods or services against the background of high-quality customer service, now this same number has increased to two-thirds (67%). And against the general background of the development of social communications, a further increase in the recommendatory activity of the audience is predicted.
So, what should a company interested in CVL growth and trend do?
First, offer more self-service options. All generations, especially millennials (48%), are increasingly trying to solve problems on their own, looking for answers in online communities, frequently asked questions and the like.
Second, look for opportunities to streamline your internal processes to make it easier for people to communicate with customers. More than half (51%) of millennials, 42% of X's and 43% of boomers expect interactions to be less complex than in the past. They do not tolerate repeating information or sending reminders.
Third, provide additional channels like chat, SMS / text, social media, and so on for consumers to get in touch with customer service. Again, this is especially important for millennials (41%) who want more opportunities to reach customer support than they did five years ago. The Xs and Boomers share this sentiment, too, with 34% and 22%, respectively, expecting more common ground. As one of the most experienced generations in digital technology, Millennials want to make it fun and easy to solve any challenge. And they don't want to wait.
Thus, clients are changing the rules of service and demand from companies a prompt, multi-channel and convenient approach to solving any issues. They do not forgive mistakes, do not remain silent and actively share their experiences with others. The future sales of your company directly depend on how quickly and conveniently you helped your today's clients with the solution of their small and big questions.
Be always in touch, friendly in communication and responsible towards everyone. And remember that for 97%, poor service can be a reason for rejecting your service.