How customer service affects sales

June 12, 2012 6:32 pm

customer service

Okay so it’s not exactly breaking news, however in the one of the latest consumer reports it documents the very clear relationship between customer service and the retailers bottom line. Unsurprisingly the report shows that if you have good service, then a customer is likely to spend more and there is a much higher chance of repeat business. This is especially important for businesses hoping to improve sales in their local community, and we are very keen to express the benefits of building a rapport and on going relationship with these customers.

The flip side to this of course, is that bad customer service is even more detrimental than you might think. It can evoke a strong negative emotional response, that can mean you might never see that customer again. To make matters worse the “sad but true” fact is that negativity spreads much faster than positivity. A customer that has a good experience may recommend you in the right circumstances. However a customer that has a bad experience becomes proactive in making sure that everyone knows about what happened, which can be very damaging to your reputation.

SMG, the customer insight agency, has estimated that poor customer service costs retailer approximately £45 billion per year. They also state that a 2011 survey shows that positive customer interaction would increase the average spend from £23.36 to £32.47.  Jeremy Michael Managing Director at SMG, said

“As the UK high street fights for survival amid the proliferation of e-commerce, store closures and a double–dip recession, this research provides food-for-thought for retailers to identify trends, improve customer service and, ultimately, sales.”

“Our research into a huge number of genuine UK customers has identified that the quality of customer service is a key driver to increasing sales and building loyalty.”

“With over 30 million visitors expected this year, it is vital that stores invest in staff training to appropriately engage with customers to enhance customer experiences, and therefore improve sales.”

There are a lot of marketing and retail websites offering advice about how to offer great customer service, and have articles such as “the ten commandments of great customer service” which are all useful reading. The majority of the feedback for customers seems to be that they would like the retailer to be:

  • Friendly and polite; made to feel welcome and appreciated
  • Helpful but not pushy; offering help and advice but without a hard sell
  • Attentive; someone that listens and has time for you

Some of the biggest issues appear to have been around improperly trained part-time staff and chain shops that go through the corporate motions and try and push store cards and offers at the checkout as if on auto-pilot.

From personal experience, I always try and buy from local businesses but I find it hard to go back to a retailer if the experience was bad. My pet hates are when they don’t appear to have time for me, or if I feel that they don’t value my business.  Don’t get me wrong I don’t need to feel like royalty when I walk through the door, but recently there have been 2 occassions where I almost felt like I was inconveniencing the retailer while making my purchase!

Many consumers would prefer to spend their money locally, so don’t give them reasons to go elsewhere. Money spent locally stays in the community.

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