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Balancing service and cost is always a difficult task. Some could argue it’s the most difficult to do. Consider the following: 

You are the manager of your division. The CEO wants you to cut costs–sales are slow and the economy is puzzling physicists worldwide with its similarity to a black hole. The CEO tells you, “We need cuts and we need them yesterday! This company is bleeding money. We need to stay to increase our cash or we wont be able to stay afloat. I don’t care how, we need a 20% reduction in your division’s spending.” Fearing your own job security, you figure out the easiest way to save money is to outsource customer service to the lowest bidder in another country. You keep the same service level, save the company money, and keep your job, right?

Let’s look at some facts from the 2010 Harris Interactive Customer Experience Impact Report:

  • 82% of consumers stopped doing business with a company because of bad customer service. 4 years ago this number was only 59%. That’s an increase of 23%.
  • 85% of consumers will pay more to the company with better customer service, even in a down economy.

Pursuing a “lowest common denominator” strategy of customer satisfaction could lead to greater costs. Ironically, companies that attempt to save money by cutting their customer service costs end up losing customers and are forced to spend much more for costly new customer acquisition. The end result is angry customers badmouthing your business and skyrocketing acquisition costs obliterating the saving from your cuts.

From Satisfaction to Delight

Researchers have found that companies that exceed customer expectations create customer loyalty. Walker Information, a research and consulting firm, has found correlations between customer loyalty and profit margins, growth rates, and other market value measures. Researchers Barry Berman and Ken Blanchard have also made a similar conclusion that delighted customers are more loyal. Berman wrote in an article titled “How to Delight Your Customers” published in the Fall 2005 issue of the California Management Review:

Mercedes-Benz USA found that the likelihood that a client who is dissatisfied with the service at a retailer will buy or lease from the same retailer is only 10 percent.  Mere satisfaction produces a 29 percent likelihood of rebuy or re-lease.  However, the likelihood of a delighted client rebuying or re-leasing is 86 per­cent.

Clearly, there is a major difference in the profitability and loyalty of a delighted customer.

Defining Delight

What exactly does it mean to delight your customers? Berman gives the following example:

…a supermarket satisfies customers’ expectations if its produce and meat are of good quality; the floor and shelves are clean; and the wait for a cashier is reasonable.

By contrast, customers are delighted if the supermarket offers help in loading their groceries into their cars; free delivery for out-of-stock goods; an in-store dietitian to help shoppers plan healthy meals; and fruits and vegetables from local farms to maximize freshness

Customer service is important. Don’t just satisfy your customers, delight them. The company used in the beginning example can see the sales slump as something to fear or as a stimulus to excel, increase customer loyalty, increase sales, and outpace their competitors.

Consider new technologies such as a comprehensive hosted call center solution with workforce management, multi-channel support, and analytics to take your service beyond the next level.

Don’t make problems worse–aim higher, not lower.

 

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