People pay more for better customer service

Kelly  | 

While many businesses see customer service as being an unavoidable cost of doing business (on a par with the fact that you will need electricity, say, or staff), the reality is that it’s part of the customer’s decision-making process when choosing to do business with you. Consumers will always seek value for money, especially in tough financial times.

However, a recent American Express survey has reconfirmed that people are willing to pay more than the lowest available price for a given product or service – as long as the customer service is good. The results of this survey place Indian and Singaporean consumers at the top of the list of those who value good service, but that’s not to say that people in other countries aren’t prepared to shell out for good care. Quite the opposite.

One poor customer service experience, and they're off

I can hear what you’re thinking: that people will say they want good service, but when it comes to the crunch, it’s the hip-pocket nerve that drives their decisions.

It’s true that survey results in general are notoriously unreliable, but consider this: customers do switch brands. That’s an established fact. And one of the main reasons they give for switching is that they are unhappy with customer service. So even if you do suck them in with low prices, you’re going to lose them again if your service isn’t up to scratch. With 89% of people saying that they’d switch to a vendor’s competitor after a poor customer service experience, you’re taking a pretty big risk if you focus simply on price. And in the original AmEx survey, 38% of consumers say that they would immediately consider switching to another company after just a single poor experience.

Show customers that you understand their needs

So how does this work? Your customers are influenced by price, but customer service is where the real influence kicks in. Unfortunately many businesses seem to be a bit confused by what good customer service actually is. There is a secret, and it’s probably not what you think it is. In fact, failure to understand this secret is behind 95% of bad customer service experiences. What you need to do, is show customers that you understand their needs.

I couldn’t count the number of times I’ve had a bad customer service experience which was founded on a lack of awareness of that simple statement. Companies love to show that they’re speedy (by giving fast reponses). They like to show off how organised they are (automated phone menus with 10 different choices at each level before you finally get put through to a human being). And oh, they love to show off what a wide range of goods and services they have to offer.

Accept, assess and fulfil

What most of them fail to demonstrate is any sort of awareness of the customer’s needs. Let alone understanding of them. Accept that your customers’ needs go further than just finding the lowest price possible. And then to assess each customer communication individually to see just what it is that they need. This part is really not that hard – customers will usually tell you. Customer complaints are invaluable market intelligence. Then once you know what their needs are – and this is the key – fulfil them.