Quality customer service always beats out pricing




Retailers often work hard chasing a balance between quality customer service and appealing product pricing. SHEP HYKEN explains why one is so much more important than the other.

“Is customer service more important than product price?” 

That’s the question we recently asked more than 1,000 people as a part of our customer service research. 58 per cent said “yes”.

Just to be sure, we asked a similar question later in the survey. “Would you pay more if you knew you would receive great customer service? Again, 58 per cent of responses were “yes”.

The messaging was clear. “Please take care of me, and I’ll even pay a little more.”
When more than half of your customers are saying that you must listen.

Customer trust

The online marketplace Amazon is an excellent example of this concept in action.

People trust Amazon, not just for its reliability, which is an important part of the customer experience, but also for the customer service.

Customers like the instant email confirmations, the ability to track a package, the notification you receive when the package is delivered, and the comfort of knowing that if the item is damaged or lost Amazon will take care of them.

Amazon generates trust with the quality of its customer service and as a consequence, price becomes less of a concern to the average customer.

You may be reading this and thinking, “Isn’t Amazon always the lowest price?” Surprisingly, that’s no longer the case.

At one time, Amazon was typically the lowest priced online retailer, but that’s
no longer the standard.

Today, products on Amazon are competitively priced, which means customers may find the same merchandise on another website for a little less.

Even so, customers often return to Amazon because they know what to expect.

The experience is consistent and predictable, and they know that if they need customer service for a problem, they’ll not only receive it, they’ll also be happy with the result.

Generational change

Younger customers are less price-sensitive than their older counterparts.

Interestingly, 62 per cent of Millennial customers (1981-1996) and 60 per cent of Gen Z customers (1997-2012) are willing to pay more for superior customer service compared with 46 per cent of Baby Boomer aged customers (1946-1964).

Offering the lowest prices makes sense for some businesses, but you can’t ignore the findings.

Quality customer service experience creates price tolerance. How much tolerance will depend on the industry? That’s up to you to determine.

You’ll have to experiment to determine the tolerance levels. Just consider the findings. When more than half of customers say they prefer quality service to favourable pricing, you can’t pass up
the opportunity.

The superior strategy

As a part of the same customer service research, we also posed questions on the kind of service that would most likely prompt them to return to a business.

The top answers: helpful and friendly.

Seems simple, right? All a typical customer wants is for someone to be nice to them, with a willingness to take care of them.

How hard can that be? It seems like it’s just common sense, right? Yet we’ve all heard the customer service horror stories that are the exact opposite of people being helpful and friendly.

Consider this from another angle.

We asked another question within the research, this time focused on complaints.

“When you have a problem or issue with a business or brand, which solutions do you prefer to help you solve your problem?”

“Kind and helpful employees” was the response received from 89 per cent of those surveyed.

Whether it’s a general interaction with a member of staff, or a problem or complaint you want resolved, those two words, ‘kind’ and ‘helpful’, are right at the top of the list of reasons why customers come back.

Apathy loses money

So, what makes customers want to stop shopping with a specific retailer and switch to another business? The opposite of kind and helpful, which it turns out is rudeness and apathy.  

The data says 75 per cent of customers are willing to switch businesses or leave a brand after experiencing rudeness and apathy from a member of staff.

When working with our clients on their customer service and customer experience initiatives we always preach the importance of the basics.

Advanced strategy means nothing if the customer ends up interacting with one of your employees and experiences anything short of a friendly, helpful interaction.

 

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