Attracting a new customer is just too difficult and expensive to lose the relationship because you didn’t treat them right.
December 12, 2016 8 min read
Opinions expressed by Entrepreneur contributors are their own.
In today’s highly competitive business environment, there’s a constant and never-ending struggle that every entrepreneur must face. Those who can adapt will survive and thrive, resulting in near-boundless financial success and market saturation. Those who cannot see the proverbial forest through the trees, suffer a slow and inevitable death.
The struggle that exists today pits profits against the necessity for total customer satisfaction. The truth? Not everyone lives by the credo that the customer is always right. Not everyone is as concerned with customer satisfaction as others are. But it’s those who don’t relent and cave into the pursuit of profits above all else who ultimately win in this ruthless business climate.
Related: 8 Ways Customer Service Affects Your Business’s Bottom Line
Clearly, for anyone who is serious about “making it,” so to speak, it’s imperative to realize the utter importance of rock-solid customer service. It’s not just about the customer always being right. It’s about treating your customers like you’d treat your family. And that doesn’t happen by talking down to them or looking for any possible way to extract more money from them. It happens by truly going out of your way for them and adding enormous amounts of value to the equation.
Today, if you’re delivering sincere value to your customers, you’re all-but guaranteeing your own success rather than sealing your fate in a coffin of corporate greed and advancement at all costs. In fact, it’s the very foundational understanding that a business must deliver value in order to transform the good to the great. That’s what creates icons in the world of business. And it all starts by having the consumer’s best interest at heart.
Amazon, Zappos, Apple and other corporate bellwethers, all harbored the bedrock understanding that it’s the customer above all else. That’s how they grew into the behemoths that they are. Sure, Amazon gobbled up Zappos, but it was because of their emulation of the same values and beliefs that Amazon lived by that the deal happened in the first place.
So, if you’re serious about creating a monumental business, or you’re looking to expand your existing footprint, it’s exigent to understand the reasons why customer service is so important. With consumers facing so many choices with who to do business with, you need to set yourself apart from the rest.
What makes you different? What added value do you bring to the table? Why should a customer work with you rather than your competitor? We’ve all heard the horror stories of people dealing with poor customer service. Yet, we seldom hear the raving-fan stories. Why is that?
The reason? Bad news travels very fast. Think viral. Warren Buffett once said, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” No truer words have been spoken, yet not all businesses think that way.
Why is customer service so important?
Anyone who is serious about making considerable headway in business needs to understand why customer service is so important. It’s not just for all the obvious fiscal reasons. It goes far beyond that. It delves into the very existence of who we are and why we do the things that we do.
The way we treat our customers is indicative of the way we look at things in life. Are we short-sighted, merely searching for the next pay day, or does our vision give us a deeper understanding of the long-term implications of our actions? Clearly, if you want to make strides today, you really do have to place the customer on a pedestal.
And while there are ample reasons why any person should start a business in the first place, everyone needs to pay homage to the customer so that they can stay in business. The less short-sighted the approach is from any enterprise, the more likely it will be to achieve long term success.
1. Customer retention is far less expensive than customer acquisition.
On average, it costs approximately five times more to attract a new customer to your business than it costs to retain an existing customer. That logic on its own should highlight the importance of providing excellent customer service. Why risk losing a customer? It’s costly enough to locate new customers in the first place, and every business should do whatever it takes to ensure they stay happy and continue doing business with them.
Related Book: No B.S. Guide to Maximum Referrals and Customer Retention by Dan S. Kennedy
2. Existing customers are more likely to buy for you than new customers.
Aside from simply trying to retain your existing customers for sake of it being less expensive to do so, it’s important to note that selling anything to anyone new is also far less likely. For the most part, the probability of selling to a new customer hovers in the range of 5-20 percent, whereas selling to an existing customer resides in the range of 60-70 percent.
3. Great customer service results in a reduction of overall problems.
By treating your customers like gold, you are sure to reduce the overall problems associated with your business, sales and the potential for any legal issues that might arise. Treat your customers poorly, and you can almost be certain that you’ll run into problems at one point or another. And those problems can oftentimes lead to the ominous and untimely demise of your business.
4. Excellent customer service improves public persona and strengthens your brand.
If you’re interested in public perception, your reputation or the strength of your brand, you absolutely have to insure a high quality of customer service. Not only does this result in positive reviews, but it helps to solidify you in the minds of anyone searching for your type of products, services or information.
5. You’re more likely to retain your customers for longer.
When you offer a great customer service experience, your customers are far more likely to stick around and use your business any chance the moment arises. Even when it comes to ancillarly services, consumers more willing to work with a business that they’ve had a great experience with before than to find someone new.
6. Word-of-mouth advertising is the best kind of advertising that money can’t buy.
You absolutely cannot buy word-of-mouth advertising — the kind that can have a monumental affect on a business. It’s priceless. People are considerably more likely to listen to the advice of a friend than they are to heed the guidance from some online review or advertisement. Whether you’re trying to make money online or offline, great customer service will create an army of raving fans that will champion your business for you.
7. It improves employee turnover in your business.
Employees pay careful attention to how a company treats its customers. That resonates powerfully with people. When they see an employer treating their customers like gold, it delivers a sense of endowment, making them proud to be part of the team and making them more willing to stick around. When employees, on the other hand, are taught to undercut and discount customers for whatever reason, it does quite the opposite.
8. Great customer service opens doors for new partnerships and other opportunities.
Treating your customers like gold is infectious. It opens the doors for new partnerships, especially when other businesses see just how well you take care of your existing customers. It says a lot about a company and what they value when they care deeply about their customers. It’s something that you rarely find in business these days, but it most certainly paves the way for powerful parternships, collaborations and other opportunities.
Related: The Difference Between Customer Service and Customer Experience
9. It conveys strong moral values and beliefs in the company’s mission.
Taking care of your customers conveys a strong set of moral values and beliefs in the company’s mission. It means that it’s transcending the necessity for profits by focusing on building its tribe. It also means that there are greater forces at work here than mere profits. It’s indicative of a deeper desire to build something of value, to help others, and to somehow, in some way or another, change the world a bit by doing so.
10. It elongates the life of any business.
Today, only four out of every 100 businesses last through until the 10-year mark. That’s a massive 96 percent failure rate. When you ignore the needs of your customers, and you don’t focus on going out of your way for them, you’re cutting short the potential for longevity in business. With so many obligations and responsibilities, if you’re serious about your business, you have to focus on the core — your customers. Because, without them, you have no business at all.