How much does your business spend annually on marketing and advertising the products/services that you offer? How much does your company spend annually on customer service? Which of the two, marketing/advertising or customer service, give you the biggest bang for your buck? The chances are that you cannot or do not calculate how much you spend annually on customer service; therefore, you cannot answer my question about which gives you the biggest bang for your buck.
There may be an argument that marketing/advertising is more important of the two since without marketing the company will potentially not have any revenue. And without revenue then the company does need customer service. In my opinion, this is a very short sided view since customer service can be and should be a big revenue producer in and of itself.
How you may ask can great customer service produce additional revenue? First, your existing customers are much more likely to buy more if they are treated well throughout their transaction with you. Secondly, if your customer service is great, then your existing customers will more likely recommend you to others. These referral sales have almost non-existent acquisition cost (think marketing/advertising). These customers also have a level of trust for their initial purchase, since they were referred, than someone who responds strictly to your marketing efforts.
I would like to share some statistics with you that I would like you to think about what they might say about you and your business:
- An estimated $41 billion is lost by U.S. companies alone each year due to poor customer service. (Source: SocialMediaToday.com)
*63% of U.S. customers say they have stopped doing business with a brand due to a poor customer service experience. (Source: Microsoft)
- 80% of Americans agree that smaller companies place a greater emphasis on customer service than large businesses. (Source: LiveHelpNow.com).
A well-prepared and executed marketing plan should bring in new customers, but is our customer service going to cause these new customers to become repeat customers? Great customer service requires commitment to 3 things: a well-thought out hiring process, a training regimen that never ends and a mechanism that constantly follows up with the customer to measure their experience with your company. All the above require an investment of time, talent and money. Now look at the statistics above and ask yourself how much money you are leaving on the table if your business does not have great customer service.
Be sure to tune in every Monday to the The Weekly Business Hour from 11:00a – 12:00pm to learn more ways to save money and build a larger, stronger business for you and your family. You can listen live at www.irlonestar.com or on Facebook Live on The Weekly Business Hour page or on City of Conroe FM 104.5 or FM 106.1.
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