Strategy Centre

Customer Service

 
  
14 January 2014 11:40
  

Customer Service is Key to Ecommerce Growth, Reduced Costs and Profitability

Customer Service is Key to Ecommerce Growth, Reduced Costs and Profitability

Good customer service is key to converting customers, retaining customers and reducing costs. Therefore it is fundamental to your profitability.

There is a cost involved if you provide poor customer service. The penalties can seem unfair because the balance of power often lies with the customer.

To improve your customer service you need to follow three steps:

The Cost of Poor Customer Service

There is a financial cost to pay, online or offline, if you provide a poor customer experience. You tend to lose that customer's business. They may then try to influence your other existing and potential customers to avoid doing business with you.

Offline this can have a limited demographic impact. Online however, the balance of power is with the customer. The impact can be exaggerated by negative feedback published on forums and social media.

It's important to remember that most online and offline customers are honest. You can sometimes overlook this because a small percentage of customers are dishonest.

If you deal fairly and quickly with all customers they should respond to you with positivity. At a simple level, this just means letting them be heard and dealing promptly with their issues. Treat them well.

Improving Customer Service

There are three important steps involved in improving customer service to ensure that it continually moves in the right direction.

1. Reduce the Need for Contact

Customer contact is time consuming and costly. The first thing that you should do is to cut down the need for contact with a customer.

Research says that over 70% of customers require “Some degree of customer support while making an online purchase”. Quite often this is information that you should provide on your website. This information ensures that your messaging is correct for the customer.

Often this falls under the “conversion” umbrella. However it is not just critical to conversion. It is critical to your customer service for the reduction of contact.

The top reasons why customers abandon a purchase, or make contact, is that they are uncertain of some key information. Research shows that the following areas if information are involved, in order of importance:

  1. Delivery information
  2. Lack of product information
  3. Website security concerns
  4. Poor navigation
  5. Could not find an answer to a question
  6. Others — including ease of checkout

Take the time to ensure that these areas are correct. More than this, always determine what a customer needs to “hear” and how they need to hear it, in order to reduce contact. This should form a central part of your “conversion” and “customer service” policy.

2. Set Up your Team and Measure Performance

While most companies are fighting a battle for resources, you should not just aim for good customer service, but for great customer service. The way to do this is to ensure that you make customer service a priority in your company and operate a structure that is effective.

You must have a customer service manager. You need to measure his or her performance. Some measurements are subjective, for example your company's online reputation. But some of the core metrics are objective.

Most customer service metrics come down to how long it takes to resolve a problem or to respond to a customer. You should create a dashboard and include the following monthly figures:

  • Average order completion time
    This is the average length of time that it takes for an order to complete. Speed is the customer's number one priority. This may be the responsibility of the warehouse manager or logistics manager.

  • Returns percentage
    This is the number of returns per month as a percentage. This may indicate issues with the product, the product data or customer expectation. You want to minimise returns.

  • Customer lifetime value
    You should monitor this to understand the value of the customer. An increasing value indicates good repeat business and happy customers.

  • Time to respond to a customer contact
    This could be recorded for each of your communication channels: email, telephone, or even live support.

  • Feedback ratings from a third-party agency
    If this is available, you should record this information from companies such as Trust Pilot. This reveals how customers rate their experience.

  • A subjective assessment
    This might be based off your social media channels and a general reading of the customer service vista. It could mean asking your customer base to complete an online survey.

You should collect this data on a monthly basis so that there is a record of how the customer service operation is progressing.

3. Feed Back Information

Your customer service team needs to update their quality of service on an ongoing basis.

Once the operation is running and data is being collected, you should review how things are progressing. Pinpoint actions that can improve the metrics and the standing of the company's customer service.

You should offer incentives to your customer service manager to continually improve the operation and to record the actions they are taking to do so.

Basic Principles

In summary, there are several basic principles involved in good customer service that you should aim to adhere to:

  • Treat your reputation and brand with care
    Online shoppers have vast quantities of information about your organisation from third parties available at the click of a button.
  • Shoppers are also becoming increasingly involved in pre-purchase research, especially around price and the seller's identity. Evidence shows that shoppers will often consult in excess of 10 sources of information before making a decision.

    Even taking price out of the equation, now, more than ever, your reputation really matters.

    Therefore, you must dedicate time and resources to build and maintain your reputation for having happy customers. You need to strive continually to improve your speed of delivery and speed of response to customers.

    Treat all your customers as you would want to be treated yourself.

  • Reduce contact but keep the customer happy
    As discussed, you need to reduce contact as this frees up customer service resources to act on inbound communication.
  • Reducing contact includes using messaging and visual indicators on your website to answer common questions and fears. When contact is required, deal with the customer efficiently and effectively. Keep your customer happy.

  • Exceed expectations
    Great customer service means exceeding expectations rather than just meeting them. This can involve many things, for example giving the customer something extra for free. Perhaps give them an extra gift with their purchase.
  • Exceeding expectations can turn a customer into a powerful advocate of your company.

  • Display a telephone number on all pages
    This is a useful conversion tool that offers reassurance that you are a real company.

  • Ensure that you use good couriers
    This stands to reason. You will also find that certain countries have preferences for particular couriers. This is important to ensure timely delivery.

  • Publish a good returns policy
    Ensure that customers know your returns policy. Be clear and open about it. Aim to be generous with the time that you allow for a customer to return an item.

  • Understand your customer and meet their needs
    Deal with customers fairly. Try to be understanding and helpful. An initially dissatisfied customer could become a big advocate of your company if you treat them well.

  • Display awards and third-party affirmations
    Awards from third parties are important for building instant trust. Display these prominently on your website. Third-party affirmations from previous customers, via such as Trust Pilot, also offer instant assurance.
  • These are essentially conversion techniques that reduce the need for customers to send emails or make telephone enquiries.

While a complete list of customer service essentials would be extensive, the principles are obvious. You must ensure that your customer service manager continually improves all areas.

Speed is critical. It is important always to meet — and preferably exceed — your customer's needs.

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