Build loyalty through good service, says report

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By: Wise Marketer Staff |

Posted on September 22, 2004

Companies that master the service qualities most valued by their customers can earn their customers' loyalty and ultimately drive business growth, according to research from the training and consulting services firm AchieveGlobal.

Sharon Daniels, AchieveGlobal's CEO, says that customers who feel loyal to an organisation are more likely to behave in ways that help grow the business and, in markets that are characterised by fierce competition or increasing commoditisation, it may no longer be enough to simply satisfy customers. In fact, fully 80% of consumers who switch providers report making the change despite being satisfied with their existing supplier.

Cost of poor service
Multi-industry customer research conducted by AchieveGlobal has revealed a clear relationship between improved service delivery and customer loyalty, and that loyalty can be earned through experiences that employees create. On the other hand, failure to leverage good service to foster customer loyalty can be expensive, as demonstrated by the statistics produced from the research:

  • Highly effective organisations spend approximately 10% of their operating budget on resolving customer problems caused by poor service.
  • Ineffective organisations spend as much as 40% of their operating budget on the same thing.
  • On average, it costs a company five times as much to win a new customer as to keep an existing one.
  • Consumers tell twice as many people about a bad experience as they do about a good experience.

"With numbers like these as an incentive, it's hard to understand why more businesses don't work harder at building customer loyalty," said Daniels, who asserts that the real challenge lies in the ability to project attitudes and behaviours that consistently result in excellent customer service. "But to deliver this kind of service, companies must first understand what customers value," Daniels added.

Keys to good service
The company's own research indicated that, regardless of industry, geography, product, or service, consumers consistently report that they value four particular qualities in the service they receive:

  • Attentive service: The ability to provide caring and individual attention to customers, recognising both their human and business needs. This quality, considered the most important by consumers, is derived from the desire to be recognised quickly, politely, and with respect.
  • Trustworthy service: The ability to provide what was promised, dependably and accurately. Customers want to feel they are in capable hands, and that promises and commitments will be kept. They want things to be correct the first time but, if something does go wrong, they expect a quick and thorough recovery.
  • Seamless service: The ability to manage service factors that are invisible to the customer. Although customers may want the benefit of the organisation's services, they do not want to be exposed to behind-the-scenes details, and neither do they want to deal with several individuals on the same issue. They expect frontline staff to coordinate everything for them.
  • Resourceful service: The ability to provide prompt service and creative solutions. Customers like a fast and flexible approach to the customer service interaction. If needed, they expect prompt and creative problem-solving in the service recovery.

Empower the team
"Employees must have the ability to listen to and understand a customer's needs and offer a solution that will meet or exceed their expectations," explained Daniels. "That's what makes the difference between a routine encounter and a great service experience."

According to Daniels, every person throughout a company is responsible for delivering great service experiences. At each interaction the customer is shaping an opinion of employees and of the organisation. By integrating these four qualities into attitudes and behaviours company-wide, employees can provide more meaningful and memorable experiences that will help build true customer loyalty.

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