What is Cost of Lost Customers? 5 Factors for cost of lost customers

Hi!, this is {narrator name}. Customer retention is very important for a company if it wants to grow and reach its apex. However, many of these companies also lose customers over time. In fact, at the start of a business, more customers are lost then gained because of low trust in the product and the brand. So what can be the cost of lost customers? and also we will learn about What are Customer Service Goals?,What is it that you want your customer service team to do?
What is the best way to measure post sale happiness of customers in your organization?
If you were a customer and looking at your own organization, how would you want your organization to appear to the customer,Objectives of having Customer Service Goals.Hope you have now clear idea, what we are going to learn in this class.See you in the class.

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What are Customer Service Goals? How to reach your Customer Service Goals?

Customer Servicing is the art of meeting customer expectations by delivering their requirements and if possible giving more than what is expected.

As an integral part of brand building, customer service possesses the power to improve the brand image in the minds of consumers as well as ruin it; all in one go. Regardless of whether people are new consumers of a product or a brand loyal person, attending customers in a desirable way makes a big difference in the world of branding and communications.

A perfect example of high customer loss can be the telecom industry which is saturated with operators and is heavy on price wars. Thus brand loyalty is low and users switch their services over and over again. This frequency at which your customers leave your product / brand is known as the defection rate. The rate of defection in the telecom sector goes upto 25%.

Cost of lost customers

So what is it that the company can do to reduce the defection rate / reduce losing customers

1 – The company should actively measure its retention rate. If it is a magazine, then how many renewals did it get. How many visitors on my site are repeat visitors. How many of your customers are rebuying your products?

2 – Identify the causes of customer attrition / causes of customers switching brands. The best way to find out customer attrition is market research. Several such market researches have been done over time and it is found that more than 50% customers are lost because of lack of attention / improper service!! 15% shift because of new / better products being launched and 15% shift because of getting cheaper products in the market. The remaining might leave the business because of shifting to a new region or locality.

3 – Identify the profit lost because of lost customers – In business, it is customary to calculate opportunity cost. The same applies to lost customers. How much profit are you losing when you are losing customers? To go a step further, companies can also calculate the lifetime value of lost customers. For Example – A tailor loses one customer. If he would have given that customer an excellent service, he would have probably retained that customer for a long time. So what would have been the lifetime value of this customer? It would be huge!! Another reason to reduce your defection rate.

4 – The company needs to find out what will be the cost to bring back these lost customers. In other words, what is the cost of lessening the defection rate. If the cost of lessening defection rate is more than the profit, then there is no use in going ahead with the retention plan. Thus the company needs retention plans which are low in cost and high in profits. Generally sales promotion / updating their customer service does the trick for such companies. Both these methods are low on cost and high on profit.

5 – Customer feedback!!! If you listen to your customers in good times, bad times will never come. This is because you will be ahead of your market just by knowing what the customer wants. Several companies have third parties employed permanently which deals in mainly customer feedback. Many restaurants and hospitalities dealing mainly in services (intangibles) have made feedback forms mandatory wherever they are interacting with customers thereby improving their services over time.

By these five measures, you can find out what is it that the customer is missing, and thereby how to lessen the defection rate of your company. Once you gain back these lost customers, your profits goes up and your cost of lost customers goes down. A win-win situation.

What are Customer Service Goals?

Having Customer service goals is a result oriented approach to customer service. There may be different tasks given to customer service team. In some cases, customer service team is asked to get most positive feedbacks. In other cases, customer service team might be given the task to solve customer queries in X amount of time. In some cases like Consumer durable and automobiles, it is the task of customer service team to sell service parts as well.

Thus, customer service goals of a company differ from company to company. Depending on the type of your company, you can decide your own customer service goals.

  • What is it that you want your customer service team to do?
  • What is the best way to measure post sale happiness of customers in your organization?
  • If you were a customer and looking at your own organization, how would you want your organization to appear to the customer.

Some of the above questions can be answered by having specific customer service goals in place.

Objectives of having Customer Service Goals

Customer Service Goals - 1

1) Maintain Positive Brand Image Consistently

The customer service team is the face of an organization. No matter the quality of the product, if the team performs badly, the company is sure to lose its brand value and business.

Hence, to keep up the good brand values in the consumer mind and reserve a space in the heart, the work of attending customers online or offline assumes greater significance in the world of brand building.

2) Make New Consumers and Retain Existing ones Simultaneously

Efficient, professional and round-the-clock customer service not only satisfies existing customers but also ropes in newer ones. As present-day consumers are attention seekers, they prefer places where they receive more importance, get more valued and noticed.

Customer service, by virtue of its novel features and human appeal, is an important tool to make people feel special. Moreover, it addresses their psychological needs and develops an emotional connect with existing and potential consumers.

3) Improve Connectivity between Consumers and Brands

When customers talk with the service employees, they feel as if the brand is talking with them directly. This bridges the brand-consumer gap; people increase their connection with their brands and have quicker brand recognition.

It further extends to a situation when the consumer thinks ‘either this brand or nothing’ while purchasing any product offered by the specific brand.

4) Ensure Repetitive Customer Visits and More Business

Brand positioning is a continuous time-consuming process. What ads, product usage, and direct marketing do over a period of time, customer service, if properly executed; can position a brand in just a few seconds; thus overriding the effect of all the branding tools.

Therefore, when customers are impressed by the quality of service, there’s a default tendency to stick to the brand and only purchase its products; thus making repetitive visits to the brand store or online forums where the brand is available.

With time, it may so happen that even though the brand might not come up with commercials, the customer service team can keep the business running by doing all that it requires.

5) Rapid Spread of Word-of-mouth

Naturally, when customers get more attention and start liking the product, they immediately recommend it than others, who in turn recommend to twenty more. In this way, brand achieves rapid word-of-mouth and soon expands its consumer base and becomes a well-recognized name in the market.

6) Happy Customers!! Happier Brands!!

As the saying goes, if customers are happy, their brands are happier as it brings more goodwill, values and positive image to the brand name. What more does a brand want??

How can an organization reach its Customer Service Goals?

Customer Service Goals - 2

1) Designate Professional Customer Service Team

A 9 to 5 customer service team, equipped with the required skill set, dedication and professionalism is the stepping stone to achieve the goals of servicing customers. Besides employing dedicated staff, it is always recommended to have the chat box on websites where customers can post their queries, feedback, and complaints 24*7.

For a better quality of service, the employees can handle customers without being physically present at work. There are many apps which enable companies and their staff to stay in touch with their customers and answer their requirements on-the-go.

2) Train, Motivate and Monitor Customer Service Employees

Undoubtedly, the job is very monotonous and does not bring any diversity. So, to cheer up customer service employees and extract their maximum potential, companies must engage in periodical training, motivation sessions, incentives beyond work hours and monitoring and supervising their performances. Just like customers, the service employees need to be felt important, something which is ignored by most companies.

As an example, organizations can conduct weekly meetings for these employees where they shall be encouraged to come up with new ideas and concepts on customer treatment. In this way, they can promote innovation and add quality to customer service.

3) Take Specific Feedback from Customers on Service Quality

Most brands ask for product-centric feedback from consumers. Hardly any brand pays heed to generate an opinion about customer service. In fact, it’s a common perception that the work of this department is limited to talk with customers and handle their complaints and requests.

Belying all such perceptions, customer service has good potential, sometimes greater than campaigns and commercials. Hence, the need of the hour is to give more emphasis on customer service and ask people about how they feel about it and their views on improving the service quality.

To stand out in the market, the best that a brand can do is to generate views and opinions from both employees and customers; compare it and devise a good customer servicing strategy for best results.

4) Integrate the Customer Service Team with Marketing and Branding Departments

Feedback is not enough. The customer service team must always be connected with other product-specific departments so that they are aware of the product and the problems it is likely to develop.

Constant communication with other branding sections will widen their understanding of the product, which in turn will shape their customer interaction and will definitely be a bang on for best customer service.

5) Forecast queries from customers and makes the answers ready

Already in practice among the best brands around the world, predicting queries make the service staff 50% prepared. They know what they have to face and will, therefore, sound more confident during customer interactions.

Customer satisfaction questionnaire – Usage in feedback and idea generation

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Customer satisfaction questionnaire – Usage in feedback and idea generation

May 4, 2018 By Hitesh Bhasin Tagged With: Marketing

Customer satisfaction questionnaires are part of the qualitative research, usually conducted by companies to assess customer’s desires, perceived opinions and needs. They are the most freely available information source for the company, and these questionnaires can be a fantastic source of ideas and products for the company as well.

Questions such as will your customer choose you, should you target a different demographic? OR are people satisfied with your employees or services? OR what more do the customer want from the company? These are questions most of the times answered through the usage of customer satisfaction questionnaires.

Depending on the size of the targeted sample that managers try to analyze as well as on how many markets they are spread into, might result in quite an expensive data. However, this expense can be seen as an important investment for the growth of the company.  Nowadays, online surveys are considered the most cost-effective way of approaching the customers.

Customer satisfaction questionnaire

The customer satisfaction questionnaires can be employed by multiple marketing communication tools such as e-mail, mail, telephone or even face to face. By approaching the customers face-to-face managers get the advantage of being able not only to listen to the customer’s answers but they can also observe their body language that sometimes can tell more about what they are thinking than their actual words.

Basically, the most relevant question that a customer satisfaction questionnaire answers is on how well does the company deliver on the critical success factors and dimensions of the business as defined by the customers.

To increase the effectiveness of this kind of questionnaire, employees can also be included in the sample to be targeted. The idea behind this is to offer managers the opportunity to perform a gap analysis in order to determine differences in perceptions between the service providers and the customers.

Conducting customer satisfaction questionnaires can be perceived as a necessary tool in today’s highly competitive environment, where companies need an extra edge to enhance and build upon their relationships with the customers. Once the customers realize that their opinions, needs and perceptions are being cared about, they tend to develop brand loyalty. A high perceived customer value can deliver much more return on the company’s research investment.

Before preparing a customer satisfaction questionnaire, the metrics or variables upon which the business is related have to be clearly established. This is would be the first step in the designing process.

Such metrics or variables are called customer service dimensions and this can range from overall customer service, helpfulness, competency, knowledgeable operators, phone calls returned quickly, promptitude in dealing with customer complaints and attention to details to provision of poor support, inability to access the technical support, etc.

Prior to designing the questions for the survey, the business process should be determined in terms of what is the purpose of the survey, what is it trying to measure, what type of rating scale should be used and how will the manager know that the survey worked and that the data will be actionable?

After deciding upon the business process, the next step involves the actual designing of the survey. This step will being with the title and an explanation of the overall aim of the survey. It will provide general instructions to the respondents at the beginning of each question in order to aid to the correct completion of the questions.

There are some major tips on how to be successful in designing the survey and this include not to write ambiguous questions or “double-barred” questions, to use scalable questions ask customers to rank their responses on a numerical or qualitative spectrum and also include a few open ended questions to allow the customer to come up with further insights.

Nowadays there are different program to help companies in designing their customer satisfaction questionnaires. The most well known that I have encountered until now is called Survey Monkey.

The main common goals of this kind of survey include measuring customer loyality, helping HR department to train their staff effectively as well as to gauge customer service effectively.

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