Good service is good business. If you don’t know the value of great customer service, you might be holding your business back. I don’t mean only in customer satisfaction; I’m also talking about profits. Great service equals great profits. Consider the following experiment that Arthur Hughes of The Database Marketing Institute recently related in his article How Customer Service Builds Loyalty and Profits.

The Setup

  • The top 1200 customers of a building products manufacturer were divided into two equal groups, one control and one test group for the six month experiment.
  • The control group was treated the same as the rest of the company’s customers–service representatives waited for customers’ calls and gave them good service when they called
  • The test group of clients were each assigned one customer service specialist and one building products engineer for the duration of the test. Each pair called every decision maker, influencer, and user they could find in each company and used relationship building tactics:
    • Asking about customer needs
    • Following up on bids and quotes
    • Scheduling product training
    • Reminding people about pricing specials
    • Giving product comparison information
    • Giving new product information and samples


The Results

Compared to the six months before the experiment:

  • The test group made 12% more orders
  • The test group made orders that were 14% bigger
  • The control group made 18% fewer orders
  • The control group made orders that were 14% smaller

After the six months, the test group brought in $2.6 million more than the control group. The experiment’s cost was $50,000. The return on investment was $2,550,000 or 5,100%! Clearly, there is a great deal of value that can be captured through better customer service.

It Gets Better

This data isn’t just limited to the building products industry. Echo Research, in a commissioned annual report titled the 2011 Global Customer Service Barometer, found consumers were willing to pay more for better customer service.

  • 70% of consumers in the US were willing to spend more for companies providing excellent service, an increase of 13% over the previous year.
  • Globally, consumers in every market surveyed were willing to pay more excellent service.
  • Not just a recent trend, 73% of American consumers have spent more with a company because of a history of great service experiences.

Your business and your contact center can always do better. The potential benefits are huge. The researchers found that 42% of US consumers felt businesses were being helpful, but weren’t going the extra mile to keep their business. 22% felt companies take their business for granted. And the most sobering statistic?

59% of consumers would try a new brand or company in order to get better customer service. That’s more than half of your customer base willing leave if better service can be found at a competitor.

How are you going the extra mile for your customers? What’s the value of good customer service for you? Let me know in the comments below.

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