32 Customer Service Facts You Can’t Afford to Ignore
Your customer service affects everything from profits to employee retention. Here are 32 customer service facts and stats that you can’t afford to ignore.
Anyone who works in sales knows that customer service is important. But you might not realize just how crucial it truly is to the success of your business. In fact, customer experience can have a tremendous effect on everything from repeat business to revenue to employee retention.
If you operate a sales-based company, understanding the trends surrounding customer service can help you position your business for growth. That’s why we’ve compiled a list of the 32 customer service stats and facts that you can’t afford to ignore. Some you might know, but others may surprise you…
Customer Experience Will Soon Be More Important than Price
This customer service trend could surprise a lot of sales pros. According to a recent study by Walker, customer experience will soon be more important to consumers than price and products.
Walker began research into this trend back in 2013. At that point, they predicted customer experience would be the most important factor to consumers by the year 2020. Now that we’ve reached that year, Walker has updated and confirmed these findings.
The reason for the shift is due in part to the fact that communications are becoming more complex. Years ago, we didn’t have as many ways to contact and interact with each other. Now, businesses provide customers with a myriad of ways to reach out with inquiries. This results in many more touch points between buyers and sellers. However, this increase in interaction comes with more chances to get things right… and wrong.
That puts more emphasis than ever on the quality of your customer service. By providing an excellent customer experience, you improve your chances of crushing company sales and retention goals.
Customer Service Is a Deciding Factor for Most Shoppers
This fact may be a bit less of a shock to sellers. Several different studies and reports indicate that customer service is a major deciding factor for most shoppers. These studies indicate that 90% or more of consumers use customer service to determine whether to do business with companies.
That means shoppers pay close attention to how you treat your customers. By ensuring a positive experience for each buyer, you can facilitate business growth.
Customers Are Willing to Spend More for Satisfaction
Today’s consumers want to be assured of a great shopping experience. As such, they are more eager to buy from sellers that stand behind their products and customer service. According to multiple outlets, over half of America’s shoppers spend more money when there’s a satisfaction guarantee. Additionally, a study conducted by American Express concluded that consumers spend 17% more on companies that offer stellar customer service.
Knowing this information gives you a great opportunity to improve sales by utilizing pricing strategies. For instance, you could combine the Premium Pricing Strategy and the Satisfaction Guarantee from our recent pricing strategy guide.
Expectations Are Rising
As customer service becomes more important to a company’s success than ever, expectations are also rising. The Microsoft 2017 State of Global Customer Service surveyed 5,000 consumers from the U.S., U.K., Brazil, Germany and Japan. They found that 54% of respondents said their own customer service expectations had risen over the span of a year.
As expectations increase, companies must rise to the challenge in order to remain competitive and relevant.
Many Consumers Say Expectations ARE Being Met
Since we know expectations have risen, whether or not companies meet them is the next logical question.
The aforementioned American Express study offers promising information on this subject. In fact, 81% of Americans reported that current business practices either meet or exceed their customer service expectations. The 2017 study showed a rise in the stats from just 67% on the same question in 2014.
What this tells us is that companies are indeed stepping up their game. But that means it’s a very competitive market out there. As more businesses increase their focus on providing excellent customer service, you need to do even more to stay ahead.
Many Shoppers Believe Their Feedback Isn’t Addressed
Here’s an area in which consumers believe companies are dropping the ball. A study conducted by Qualtrics on consumer engagement found that 50% of shoppers feel their feedback is ignored.
More specifically, those customers believe their feedback doesn’t go to anyone within the company who can act on suggestions.
This provides businesses with an exciting opportunity to offer transparency to customers. Make sure feedback on your company site is reviewed by people in charge. Also, ensure customers are aware of it. By doing so, you can improve your brand’s image and relationship with shoppers.
Customers Switch Companies Over Bad Service
You may already realize that customers are more likely to switch companies when they receive poor customer service. But here are several eye-opening statistics on the subject.
New Voice Media offered compelling information on the consequences of bad customer service in a recent research report. For starters, 49% of American consumers reported having switched companies in the last year because of bad customer service. Additionally, the #1 reason shoppers offered for switching to new brands was feeling underappreciated.
Another study from InMoment showed 50% of customers have left a company for competitors that could better meet their needs. Finally, Bain & Company reports customers are four times more likely to switch brands over service-related issues.
It’s obvious from these findings that one of the biggest reasons for losing customers is inadequate customer service. By making sure your team is addressing all customer inquiries and needs, you can protect your company and boost retention.
Poor Customer Service Has Caused Tremendous Financial Loss
We already know customers are likely to leave a company over a negative experience. So, it stands to reason that bad customer service also contributes to financial loss for brands. Driving that fact home is a dramatic statistic from Accenture. They report that shoppers switching brands over poor customer service costs U.S. companies around $1.6 trillion annually.
This is a huge amount of money being lost by companies each year over a problem that is completely avoidable. Certain issues, such as slow shipping times may be outside your control. However, you can still ensure customers are receiving the most attentive, friendly and dedicated care when they contact you.
Obtaining New Customers Costs More than Retaining Existing Ones
Once a company loses a customer over bad customer service, it can be incredibly expensive to replace them. Studies show that obtaining new customers costs significantly more than retaining existing ones.
The Harvard Business Review reports that new customers are between 5 and 25 times more expensive than existing customers. This is mostly because of the resources required to attract and obtain new customers. Advertising, marketing, engagement, prospect attraction — all these tactics take time and money. It’s much more cost-effective to keep your existing customer base happy. Then they keep coming back to your store because they already know who you are and what you sell.
Once again, offering excellent customer service is an inexpensive way to both save and make your company more money.
Poor Customer Service Results in Abandoned Purchases
As you would expect, poor customer service also results in abandoned purchases. For instance, think of a customer who has an item in their online shopping cart. They send the seller a question about the product but never receive an answer. That shopper will likely decide not to buy.
A report by Glance indicates that 78% of customers have abandoned a purchase due to a negative customer experience. Train your staff to respond to shopper inquiries in a polite, timely and knowledgeable way. That way, you can help avoid these missed sales opportunities.
It Takes a Lot to Make up for One Negative Experience
Once a customer has had a bad experience with your company, it can take a lot more than one good interaction to make up for it.
The same guide from Glance estimates that it can take 12 positive customer experiences to make up for one instance of poor customer service. This is another reason why it is so important to get things right the first time. By starting off on the right foot with your customers, you make sure they never see your company in a negative light and there are no huge hurdles to overcome.
Better Customer Service = Higher Revenues
Several different studies and statistics show great customer service leading to higher company revenues.
The study by Bain & Company concluded that companies delivering better customer service earn revenues between 4% and 8% above their market’s average. They also found that improving customer retention by just 5% leads to a 25% to 95% profit increase.
Additionally, a release from the Temkin Group, entitled Report: The State of CX Management, 2018, showed that 73% of businesses with “above average” customer service enjoy better financial performances than their competitors.
The conclusion: better customer service invariably leads to making more money.
Customer Service Dictates the Majority of a Shopper’s Journey
We’ve already established that customer experience is quickly surpassing price and even product in terms of consumer importance. But it is crucial to note that statistics from McKinsey state customer service actually dictates a full 70% of the customer journey.
That is a huge percentage of the customer journey, and it further drives home the fact that how you treat shoppers means everything to the success of your business.
Positive Customer Experience Results in Recommendations
When customers are happy, they talk about it. The report from The Temkin Group states that as many as 77% of respondents report recommending brands to friends after just one positive customer experience.
A whopping 53% of American shoppers also report posting positive comments on social media after receiving great service (according to American Express).
All sellers know how important reviews are. Your reviews are often the first thing a new prospect looks for when deciding whether or not to buy from you. One of the easiest ways to influence what is being said about you is to ensure every single customer is treated to the best service possible.
Negative Customer Experiences Also Get People Talking
When customers are unhappy, they talk about it even more. According to the American Express study, happy American shoppers will share their good experience with approximately 11 people — while angry customers will share their bad experience with around 15 people.
Additionally, 35% of those same American shoppers report posting negative reviews and comments about companies on social media.
Finally, studies from other outlets suggest that more than 60% of shoppers say they share their bad customer experiences with other people.
While we’ve already mentioned that you can’t control everything that happens during a sale (such as slower shipping speeds), you can make sure that each and every customer receives top-notch care and attention. By responding to inquiries quickly, politely and knowledgeably, you are decreasing your chances for getting a bad review.
Shoppers Want Companies to Value Their Time
Like everyone else, customers want to feel like their time is valued. For example, research from Forrester shows that 73% of consumers report that valuing their time is the most important thing a company can do with regard to customer service.
Showing your customers that their time is valued is fairly simple. Respond to inquiries quickly and efficiently. Use language that conveys empathy for their time and gratitude for their business, such as “Thank you for taking the time to contact us, we appreciate the opportunity to assist you.”
On the subject of valuing a customer’s time, it turns out that speed matters quite a bit to consumers. The 2017 Microsoft study found that 12% of U.S. customers marked lack of speed as their top source of customer service frustration.
Also, American Express stated that 40% of consumers wish customer service representatives would address their needs more quickly. Finally, other outlets report that the vast majority of shoppers between the ages of 16 and 24 say a fast customer service response dramatically improves their experience.
You can improve your company’s speed in a variety of ways. First of all, make sure your website (both desktop and mobile) is operating smoothly and efficiently. Secondly, it’s a good idea to devise a method for ensuring inquiries are responded to within a specific time frame (minutes or hours rather than days). Also, offer solutions that address a customer’s needs expediently when you’re assisting them.
Shoppers Want Personal Customer Service
In addition to speed, customers want personal care. While some inquiries can be handled by a chatbot or automated service, others require a human touch.
The Microsoft study found that 30% of consumers find an inability to reach a real person when they need help to be the most frustrating part of a negative customer service experience. When your customers have important questions that need to be answered, it is critical that you have a team of helpful customer service agents available to assist them.
Customers Dislike Having to Hold or Speak with Multiple Agents
Two more issues that really annoy customers are having to sit on hold for too long and being shuffled around to multiple agents.
Research from HubSpot shows that 33% of customers are more frustrated by having to wait on hold than anything else. Furthermore, another 33% are most bothered by having to repeat themselves to multiple support representatives.
There are times when customers will inevitably have to hold (such as during instances of high call volumes). However, companies should do everything possible to make sure there are enough reps to handle incoming inquiries efficiently. It is also important for callers to be able to get through to the correct department the first time. Setting up the right prompts on your call system can go a long way toward streamlining service.
Problem Resolutions Encourage Return Shoppers
When it comes to problem resolution, addressing customer issues doesn’t just help you avoid negative reviews. It can also increase the likelihood that shoppers will buy from you again.
The Glance study estimates that 70% of previously unhappy customers whose problems are resolved would return to a business.
This is where your customer service team’s conflict resolution and creative problem solving skills really come into play. Use our free guide on The 29 Most Important Customer Service Skills for eCommerce Sellers. It can help you and your team master all of the traits necessary for providing excellent customer care.
Great Customer Service Will Get You Even More Repeat Business
In addition to solving customers’ problems, providing stellar customer service across the board will increase your likelihood of repeat business even more.
The HubSpot research shows that 93% of customers are likely to buy multiple times from companies that offer great customer service.
Since we’ve already established that shoppers are willing to spend more money when you offer great service or a satisfaction guarantee, the fact that they will also be more likely to return to your store later is even more reason to shore up your customer care.
Polite Reps = Customer Service Success
From the importance of customer service surpassing price and product to the effect your customer care has on reviews, revenues and repeat business, we’ve covered a host of ways your treatment of customers can impact your company.
Now, let’s look at some stats on how to actually improve your customer service, starting with the friendliness of your team. According to multiple studies and outlets, well over half of the world’s consumers (nearly 70%) say the key to great customer service is a polite support rep.
No one who calls in to a company with a question or problem wants to encounter rudeness or a dismissive demeanor. Make sure your entire customer service team approaches every customer interaction with a friendly, helpful and empathetic attitude.
Friendly Customer Service Leads to Brand Loyalty
Polite reps don’t just improve your overall customer experience, they can also help your company increase brand loyalty. A survey commissioned by RightNow concluded that 73% of customers develop affinity for a brand and remain loyal to it because of great customer service agents.
Every online selling pro knows how important brand loyalty is. When customers are fiercely committed to a brand, they shop there regularly, recommend them to others, talk about them on social media and essentially serve as free marketing for your products.
If increasing your brand awareness and loyalty is as simple as utilizing a team of personable customer service employees, there’s no reason not to take advantage of it.
Both Demeanor and Product Knowledge Matter
On the topic of customer service rep attributes, product knowledge proves equally as important as a friendly demeanor.
The research from American Express shows that 62% of respondents reported their satisfaction with a customer service agent depends largely on the rep’s product knowledge or resourcefulness.
Training your team on your company’s products and services ensures they are ready to provide excellent customer service. This leads back to the previous section regarding customers’ dislike for being shuffled to different agents. If your support reps are capable of answering questions about company products, each customer’s issue stands a better a chance of getting addressed correctly the first time they contact you.
Including Personalized Customer Experiences Can Increase Conversion Rates
As most eCommerce pros know, online shoppers love a personalized customer experience. By receiving product suggestions based on their previous purchases, customers feel like your store knows and cares about their wants and needs.
The statistics on this subject, therefore, shouldn’t surprise anyone. According to Trustpilot, online conversion rates can improve by approximately 8% when you include a personalized customer experience.
In addition to shopping recommendations, a few other ways to personalize a buyer’s experience include sending customized emails and training your customer service agents to call customers by name when assisting them. For example: “Thank you for calling [company], may I have your name, please? Thank you so much, and how may I assist you today, Julie?”
Some Customer Inquiries Go Completely Ignored
One of the worst customer service offenses a company can commit is to ignore a shopper’s inquiry altogether. However, research suggests that this happens far too often.
In fact, the Microsoft study found that up to 15% of all customer inquiries are going ignored. This problem likely boils down to the fact that customer service teams are overwhelmed by incoming questions and messages.
By making sure that your company has an organized system for centralizing, prioritizing, keeping up with and assigning emails, you can help prevent queries from falling through the cracks.
Shoppers Believe Customer Service Is Improving
These statistics contain a lot of good news for retailers. For instance, according to American Express, 40% of American respondents reported that they believe businesses have increased their attention on customer service as of late.
While companies are obviously doing something right, this is no time to let up. The better customer service shoppers receive throughout the sales industry, the more your company needs to step up in order to remain relevant and competitive.
Customers Love Knowledge Bases for Information
One interesting note regarding buyer behavior is the fact that customers overwhelmingly rely on knowledge bases as a source for information.
The Forrester report indicates that consumers prefer knowledge bases over all other self-research channels. This gives you a great opportunity to delight customers through the information available on your website.
In addition to providing education about your products and offerings, make sure to detail your company’s dedication to customer service and experience in your knowledge base. For example, if you offer any satisfaction guarantees or special perks, include a full FAQ-style description of them.
The Majority of Customers Have Facebook
Nearly every shopper or prospect you target has some form of social media, especially Facebook. In fact, according to a marketing statistics release from Lyfe Marketing, 79% of American internet users are on Facebook.
This means it is imperative for today’s sales pro to be actively engaged on social media channels. Pay special attention to your company’s direct messages, mentions and tags. Many customers will go to Facebook to ask questions or lodge complaints. By staying on top of these comments, you can address problems and needs, as well as protect and improve your brand’s public image.
Great Customer Service Also Improves Employee Engagement
Did you know that great customer service can also help you retain and engage your own employees?
The McKinsey study shows that, on average, companies that invest in their customer experience also report a 20% increase in employee engagement. It is theorized that this is due to a few reasons.
For starters, keeping customers happy will inevitably lead to a less stressful work atmosphere (because you don’t have so many angry or disgruntled shoppers contacting your company). Secondly, employees are more likely to take pride in their work when they’re employed by a company that they can be proud to represent.
Finally, the type of company runner who invests in customer service is probably an employer who also cares about employee satisfaction.
Overall, improving the customer experience also enriches a company’s work atmosphere. And happy customers + happy employees = what’s best for business.
Most Shoppers Use Email for Customer Service
Several studies show that the vast majority of shoppers use email for their customer service contact needs.
HubSpot’s research reveals that 62% of shoppers prefer communicating with companies via email for customer service, while 48% like using the phone, 42% go for live chat and 36% tend to utilize a website’s contact form.
The report from Forrester also showed that 54% of customers reported having used email for customer service in the last year.
Obviously, the ability to view and respond to customer emails quickly and astutely plays a crucial role in your company’s success. For starters, make sure your email servers or messaging platforms are working properly on all of your sales channels. Additionally, ensure that your team is receiving, reviewing and responding to inquiries in an organized and timely manner.
The Ability to Be Reached for Questions is Crucial
Finally, the ability to be reached for customer questions is absolutely crucial to your company’s success.
In today’s marketplace, an overwhelming majority of shoppers reach out online with questions or needs. For example, the Comm100 study reported that 63% of Millennials begin their customer service interactions online (via live chat, a helpdesk, a contact form or some other web-based support vertical).
The same study showed 79% of Millennials are more likely to buy from a company with mobile-responsive customer support. And approximately a third of ALL customers reported having sent text messages to companies when in need of assistance and offered that feature.
A whopping 74% of Millennials said their perception of a company improves when it’s clear that the brand replies to customer comments or needs on social media. And lastly, Millennials claim to prefer live chat over other channels for customer service.
These statistics and figures may seem overwhelming. But they all boil down to one central point: the success of your business depends on your customer service.
By providing a great customer experience, you can sell more items for more money. Your customer service also enables you to prevent customer loss, improve customer retention, boost brand loyalty and even encourage employee engagement.
The key to offering amazing service to your customers is to make sure you and your team handle incoming messages in the most efficient and effective way possible. Replyco offers you the ability to:
- Centralize messages from all selling channels into one inbox.
- Tag and prioritize messages for stellar organization.
- Allocate and assign messages to various team members.
- Make sure no messages fall through the cracks and every customer walks away delighted.