October, 2022

Globalization and digitalization in today’s world are constantly transforming businesses around the globe. To be competitive, companies must be agile and get creative in how they present themselves to current and potential clients. To stay relevant, businesses need to offer a lot more than before – omnichannel solutions and more complex CRM tools, but the number one spot is held by the reigning champion – customer service. No matter the product or service a company provides, having and maintaining outstanding customer service is a must. Achieving that isn’t easy and is a process, but creating a customer service philosophy helps a lot. What is it and how can you create one? Let’s find out together, shall we? As always grab your coffee, tea, or whatever drink you prefer, and let’s get down to business.

Elements of Good Customer Service

Before talking about what makes customer service good, let’s first quickly define it. Customer service refers to the way a business provides help before, during, and after a person has made a purchase. Most companies have dedicated teams that take care of that part and some prefer to outsource it to other businesses. Either way, customer service should be a fundamental part of any company. If you’re not convinced, a relatively recent study, conducted by American Express, shows that seven out of ten customers are willing to spend more money if a business offers great customer service.

Most elements of good customer service are very intuitive and logical. Some key factors are:

• Empathy goes a long way – being empathetic with a customer and meeting them where they are at, can help you understand and define their goals and the potential roadblocks they might encounter when interacting with your product.
• Quality over quantity – sometimes, during higher demand e.g holiday season, the volume of cases can pile up and customer support representatives, logically, would want to prioritize speed, but a speedy solution doesn’t always lead to a happy customer. A careful balance should be maintained between efficiency and customer delight.
• Create omnichannel support options – providing the customer with plenty of options on how to interact with your business is crucial for their overall positive experience. The freedom of choosing a channel and then easily flowing through other media is a fundamental part of offering excellent customer service.
• Ask for feedback – establishing a working feedback system can be very beneficial for improving customer service. Learning from positive and negative customer experiences and making the necessary adjustments will enhance the overall experience of clients.
• Troubleshooting collaboratively – including the client in the solving process is important for two reasons. The first one – is they feel part of the process which makes the experience more personal in a way, and the second one – it teaches them how to troubleshoot properly, which can help them solve future issues by themselves and reduce the volume of cases for your team. Win-win.

What’s a customer service philosophy and how do you develop one?

A customer service philosophy is a set of guiding principles that are applied when customers interact with products. They help to better solve support issues and to build and maintain customer relationships. Simply put, customer service philosophy acts as ground rules, which direct every customer interaction.

A solid customer service philosophy is built upon your customer’s needs and your company’s values, vision, and goals clearly and simply. Generally, it is composed of two parts: customer service vision and customer service values.

The first part, a customer service vision is a simple statement, which defines the type of customer service customers are expected to receive. An example of such a statement is Atlassian’s customer vision statement: “Don’t &#!% the customer.” It’s very hard to forget and cuts to the chase. The second part of a customer service philosophy is customer service values. They provide more context and offer an explanation for why adhering to the vision is important. A prime example can be Apple’s guidance for support reps:

Approach customers with a personalized, warm welcome. 

Politely understand all the customer’s needs. 

Present a solution for the customer to take home today. 

Listen for and resolve any issues or concerns. 

End with a fond farewell and an invitation to return.

Good customer service philosophies have things in common, but they never are the same because each business is different. Therefore when creating yours you need to take into consideration your team’s specific values and goals, and long-term vision for your relationship with customers. Here are a few steps which might help you when you are creating yours.

Define your support team’s values

Organizations thrive better when everyone is aligned with the company values. Transferring this logic to teams, they tend to also thrive when they are following and working with shared values. Simply define them and use them for creating the team’s vision statement.

Define your support team’s vision

A hack to do this is to ask everyone on your team to answer one question: “What do you want our customers to think of when they think of the service we provide?”. By using the answers and by using the previously defined values, you can create your vision statement.

Stand by the philosophy

As powerful as your customer service philosophy might be, at the end of the day, it’s just a set of guidelines. It’s up to your team to uphold it daily and make sure to adjust it when it feels outdated. 

Example companies with excellent customer service philosophy

LEGO’s customer service philosophy “Only the best is good enough” is simple and concise. It matters for their products, as well as for how they provide customer service. A prime example is the LEGO ideas platform where customers can propose and vote for potential new LEGO sets. By making the best of their baseline, nothing else suffices. 

The Ritz-Carlton is famous for its high standards of care and service. The luxury hotel chain operates under its Gold Standards, which include three core steps of service: a warm greeting, using the guest’s name, and providing a fond farewell. Each Ritz-Carlton strives to meet “even the unexpressed needs” of its guests.

Disney is committed to creating “magical moments” through exceptional customer service at its theme parks, stores, and beyond. The company’s customer service philosophy revolves around seven customer standards, based on the seven dwarfs, making it easy to grasp from every employee, on every level. 

Final thoughts

At the end of the day, companies need a solution that will help them stay on top of every communication channel and will make the not-so-easy task of having excellent customer service and an approachable target. That’s where talkt comes in as an affordable, approachable, and easy-to-implement solution for your business. Customer satisfaction should be a priority for every business. It’s a fact that it’s not easy to retain customers and keep them pleased with the product or service you provide. But with a solid customer service philosophy fulfilling clients’ needs should become easier with time. There are a plethora of benefits that come with keeping clients content. At the end of the day how a business treats its customers represents the company’s values and beliefs. Happy customers are proof that a business is on the right path and a customer service philosophy helps out.

Every business out there wants to attract more customers. By having more customers, you will acquire more revenue, and by acquiring more revenue you can afford more employees to provide new and better services/products, which hopefully will attract more customers, and voila, your business grows exponentially. In other words, more customers equate to growth. But retaining customers is equally as important, if not sometimes more important than having new ones. Good customer retention is one of the fundamental factors which makes a business successful. What is it all about and how can you improve it? Well, grab your beverage of choice, and let’s find out, shall we?

The importance of customer retention and why is it so crucial for your business.

As you’ve probably heard or know by now, it’s more expensive to acquire new customers than to retain them. Acquiring a new customer can be five to 25 times more expensive than holding on to an existing customer, according to the Harvard Business Review. Charming your customers and making them come back again, and again over time is what it’s all about. A small change in customer retention leads to big results. Maintaining a healthy relationship with existing customers can benefit your business in numerous ways.

A higher customer retention rate means that your customers trust your company, therefore they are more likely to come back for another purchase. According to a study conducted by Bain & Company, the longer the customer’s relationship with the company, the more he is willing to spend. For example, in apparel, the average repeat customer spends 67% more in months 31-36, than in months 0-6.

The same Bain & Company study also found that loyal customers are more likely to try out different products from the same company. For example, almost 70% of Gap’s online customers said they would also consider buying furniture from Gap.

Word of mouth is still considered to be one of the best marketing tools. Longtime customers tend to act as your brand ambassadors, spreading the word to their social circle as well as vouching for your service/product. It wasn’t easy to explain the importance and value of cloud storage back in 2008. By adopting a referral program, Dropbox managed to increase its user base from 100,000 to four million in only 15 months.

There are plenty of studies and examples which we can pull out but we hope these did the job to highlight the importance of customer retention.

How can you increase customer retention?

Before sharing ways to improve your customer retention rate, first, we need to measure it. The first thing to do is to define the period. This number differs from a month to a whole year or a few years. Other factors to include to determine the retention rate are:

• The number of customers at the start of the period (S);
• The number of customers at the end (E);
• The number of new customers acquired over the same period (N)

Once these metrics are recorded the formula applies as follows:

E-N/S * 100 = CRR (Customer Retention Rate)

Simple, right? The higher the CRR the better. (No more math, we promise.) 

Now that we know how to measure it, let’s explore ways to improve it. Here are seven strategies that can increase your customer retention rate.

• Improve user onboarding
  It is crucial to explain how your product and its features work as easily and smoothly as possible to your new customers. Training sessions, explainer videos, and teaching best practices can do wonders for new clients. 

• Use client feedback
  Acquiring user feedback is paramount when trying to improve customer retention. Businesses should gather accurate feedback from their customers. This can be accomplished in a lot of ways – 1:1 emails, surveys, a feedback platform on the website, etc.
  
• Create user journey maps
  By using a detailed user journey map you can easily identify potential turning points or “chokeholds”, which can negatively influence the interaction of new and existing customers with your product/service. Improving the overall experience of your users will lead to an increase in customer satisfaction.
  
• Provide immaculate customer support
  Having 24/7 customer support, which offers resolutions on time is key to making customers happy, and happy customers increase your customer retention rate.
  
• Create personalized loyalty programs
  Giving back to your most loyal customers is a chance to build a personal connection. As we mentioned before, they are your brand ambassadors, so treat them like one.
  
• Encourage inactive users
  A simple automated email or a targeted campaign can prompt an inactive user and “revive” his incentive to interact with the product/service. An example is to give a promo code/discount to people who still have products in their online shopping carts but never committed to buying them.
  
• Reduce churn rate
  The churn rate is the opposite of the retention rate. It shows the number of people who stop using your product/service for one reason or another. Defining those reasons and designing solutions around them will reduce the churn rate, which will indirectly increase your retention rate.
  

How does an omnichannel solution benefit customer retention?

We already highlighted the importance of how customer support can influence the interaction with your product/service. According to Trends Report, only 50% of high-performing brands had taken advantage of omnichannel contact center solutions by 2021. By empowering your clients to use whichever channel they see fit, to interact with your business, you likely will increase the customer retention rate. This is because you’re minimizing your client’s effort to make and complete a purchase or to give feedback. We, at talkt, provide omnichannel solutions which are tailored specifically to your needs. With omnichannel, customers are more likely to have a positive interaction, which directly correlates to your customer retention rate. If interested, you can learn more about our product here.

Closing lines

Acquiring customers, building customer loyalty, and improving customer retention is a process that requires time and effort. You won’t be able to build a strong relationship with your clients overnight, but by providing great services and products, and making your customers’ lives easier, they will likely be inclined to trust your business and become an advocate for your brand. Extraordinary end-to-end customer experiences are a sure way to earn customer trust and increase customer retention. 

This article barely scratches the surface of the topic. Still, if you want to know more about customer retention, we want to leave you with an awesome video, from the powerful Brian Balfour, who goes more in-depth with beautiful examples to explain the importance of customer retention.