According to Help Scout, a web-based help desk company, 84 percent of consumers quit doing business with an organization as a result of a bad customer experience. Fifty-one percent (51%) said that they would try to reach customer support only once before giving up on a purchase.
These figures clearly indicate that:
Poor customer support is the #1 reason businesses lose customers; and
Every customer interaction is crucial, there might not be a second chance.
So, with this in mind, it is imperative that businesses keep a track of customer service metrics that really matter, and watch out for signs of poor customer service.
In this article, we’ll take a look at seven indicators that your customer service efforts are not up to the mark, and could likely use an overhaul.
Rise in cost per transaction.
It costs 6 to 7 times more to acquire a new customer in comparison to retaining an existing one. An increase in cost per transaction is a direct result of an increasing share of customer acquisitions. The primary reason – decline in repeat transactions with existing customers owing to bad customer service. A dissatisfied customer will also spread the word, which again trickles down to a rise in marketing dollars to firefight bad word of mouth. It’s a never-ending cycle.
Decline in the number of customer complaints.
A decline in the number of customer complaints can be wrongly perceived as a product or a service win. In my experience, more often than not, it is a warning sign that the customer has stopped engaging with you.
Studies suggest that for every 1 customer complaint, there are 26 unhappy customers who never speak up. These are usually the ones who wait for you to contact them. But when you don’t, they simply stop using your product. A fall in the frequency of complaints can be majorly attributed to no logins from customers. It’s an indicator that most of them have defected to your competition.
Decline in average time spent on customer support calls.
It can be wrongly perceived that reduced ‘time spent on support calls’ means you are able to solve your customers’ problems faster. It is in fact an indicator that you are rushing in trying to find a solution for his problem, rather than actually listening to unmet needs.
A customer appreciates when a business spends time trying to find the cause of a problem, and then discussing the approach to solve the problem. It makes the customer feel involved. It fosters trust.
A staggering 73% of dissatisfied customers cited incompetent, rude, and “rushed” service as the #1 reason why they abandoned a brand. Customers who complain are demonstrating that they care enough to give feedback. Listen to them, ask for suggestions to improve your product, this is your best chance to build a healthy rapport with the customer.
Discounts and special offers go unnoticed.
Promotional emails with special discount offers usually get the highest open rate. But when your customers start ignoring your promotional messages as well, there’s something seriously wrong in your relationship. It’s a clear indicator that they have lost interest.
This usually happens when a client remains disengaged from your services for a long time, either because of poor product performance or a bad service experience. Such clients are quite hard to retain as well since it takes almost 12 exceptionally good service experiences to overcome 1 poor experience.
Decline in up-sells and cross-sells.
The line between sales and service has blurred for modern day businesses. It is extremely important to maximize customer lifetime value and minimize churn. Upselling is when you convince your clients, often with high quality service delivery, to opt for a higher priced version of your product.
Cross-selling is when you convince the clients to purchase a complementing product to the existing product or service they have. A decline in the number of up-sells and cross-sells is an indicator that your service department is doing a shoddy job at convincing your customers to spend more on your products.
A business with happy and satisfied customers should always be acquiring new customers through referrals. It is an indicator that your customer places trust in your business. Studies show that a satisfied customer will tell 2-3 people about his experience with your company. A dissatisfied consumer will share their lament with 8-10 people and some will push that number to twenty. A fall in the number of referrals is a clear indicator of poor customer support.
Loss of long-term customers.
Losing a long-term customer is seldom about price, or the product. This is someone who has placed trust with your business for a long time, and will always suggest a product improvement when he’s not happy with the product; or complain when the price is high. A customer is 4 times more likely to buy from a competitor if the problem is service related vs. price or product related.
The ability to retain customers increases significantly with the duration of the association. Loss of a loyal customers is a clear indicator that your customer service requires an overhaul.
This article has been edited and condensed.
Niraj Ranjan is the founder of Grexit, an app the lets you share Gmail labels with other Gmail users. Niraj works on programming, customer support and sales, and also contributes to design and UI. He’s a fusion music aficionado, loves to play the guitar when he can. Connect with @grexit on Twitter.