Discover the Importance of Top-Quality Customer Service for Online Retailers

Customer Service 6 min read

The importance of customer service for online retailers is growing. According to Microsoft, 54% of people say they have higher customer service expectations than they did just one year ago. These numbers become even starker when you look at younger generations. Microsoft also found that 66% of 18-34 year-olds said that their expectations for customer service have risen in the past year.

Online retailers have it especially difficult due to the amount of competition. As more people are shopping online, more online retailers are appearing to fit the demand. Ecommerce is expected to take up to 17.5% of all global retail sales by 2021, up from just 7.4% in 2015. To survive, online retailers will need to find a way to stand out from the crowd, and the solution is quality customer service. One study found that by 2020 customer service will be a bigger factor than both price and product when deciding between competitors.

But the benefit of delivering great customer service isn’t just about making your customers happy. Your business also gets some great benefits that make improving your customer service a worthy investment. Aside from improving customer experience, customer service is crutial for preventing involuntary chunr. Especially for subscription based businesses, it’s important to have a dedicated agent to monitor and prevent failed payments and unvoluntary churn.

Why is it important to deliver great customer service

Delivering better customer service provides your business with 3 distinct benefits. It will help you generate more return customers, increase your customer referrals, and increase your profits. And while there are other ways to get these individual benefits, improving your customer service is an easy way to get all 3 at the same time. Here’s how:

#1 – It Generates More Return Customers

To start, great customer service will generate more return customers. Repeat customers are essential for any business for a few reasons.

  • The probability that you’ll sell to a new customer is between 5 and 20 percent. For return customers, it’s between 60 and 70 percent.
  • It costs 5 percent more to bring in a new customer compared to keeping a current one.
  • Increasing your customer retention by just 2 percent can lead to a 10 percent reduction in costs.

To get these benefits, you need to provide quality customer service.

82% of consumers say they have stopped doing business with a brand after a poor customer service experience.

Another 73% of consumers said that customer service was an important factor in their purchasing decision.

And finally, 52% of consumers said that they purchased more from a brand after a good customer service experience.

#2 – Good Customer Service Increases Customer Referrals

Not only are customers more likely to come back after receiving good customer service, but they are more likely to refer you to others. And customer referrals are just as important as retaining old customers. According to one study, people are 4x more likely to become a customer if they are referred by a friend, and 77% of consumers are more likely to buy a product after hearing about it from friends or family. Another study found that the primary factor behind 20% to 50% of purchasing decisions is word of mouth.

But people aren’t going to recommend your business if they have a bad customer service experience. However, after having a positive experience, 77% of customers said they are willing to recommend it to a friend.

In fact, loyal customers are 4x more likely to refer your business to others than non-loyal customers. This clearly demonstrates the importance of customer service.

#3 – Improve Your Brand Image

Another reason to focus on quality customer service is that it will improve your brand image. Developing a good brand image is about more than just designing a new logo or coming up with a great slogan. Your reputation matters, meaning you need to focus on how well you treat your customers.

It takes only 10 seconds for a person to form an opinion about a brand. By focusing on customer service, you make it less likely that a person’s first impression of you will be a negative one. For example, let’s say someone sees a complaint about your product on Twitter. If this is the first time they’re hearing about you or your product, it will leave a negative impression. However, if they also see that you responded to the negative post and dealt with the issue, this would leave a good impression.

#4 – Customers Are Willing to Pay More for Great Service

Finally, customers will pay more for a product or service if they know your brand provides great customer service.

Did you know that 1 out of 3 customers will pay more to receive better service? And 86% of customers said they would pay up to 25% more just to receive better customer service.  Click To Tweet

Most customers know that their experience with a brand might not end after receiving the product. If something goes wrong, they don’t want to spend hours trying to get a resolution. So even if your competitors are able to offer lower prices, you can still outperform them by offering better customer service.

4 Quick Tips for Improving Customer Service

Now that we’ve seen how important customer service is to your online retail store, how can you go about improving it? Here are a few quick tips you can use:

#1 – Provide More Contact Options

A great way to improve your customer service is by increasing the number of ways a customer can contact you. Not every customer wants to have their questions answered via the phone – some want to email you, others want to reach out via social media, and some would prefer a live chat option.

#2 – Respond to Inquiries Fast

Just as important as giving your customers more ways to contact you is responding to them quickly. The moment a customer reaches out to you is a critical moment. They are currently thinking about your product and could be on the verge of making a purchase. The longer you wait to get back to them, the less likely it is that they’ll convert. Not only that, if a previous customer is reaching out for support, they likely don’t want to wait to get the assistance they need.

#3 – Make it Personal

When conducting customer service interactions, the customer wants to feel like you are dealing with them on a personal level. A few simple changes in your customer service approach can go a long way towards achieving this. For instance, start by using the customer’s name during your interactions. You can also keep a record of the conversation and their personal information so that if they reach out to you again later, or start chatting with a different customer service agent, your agents can use this information to provide better support.

#4 – Gather Feedback and Improve

Finally, perhaps the best thing you can do is directly ask your customers how you can serve them better. Do they find your website easy to use? How were they treated by your customer service agent? What suggestions do they have for you? Your customers are in the best place to tell you how to improve your customer service. Consider sending out a survey after each customer service interaction to learn more about how you’re doing. If you find you’re getting a low response rate, try offering a small discount in exchange for their feedback. Then once you’ve got a decent amount of responses, study what the top answers are and look to implement their feedback.

Wrapping up

For your online retail store to grow, it’s imperative that you place a strong focus on customer service. Competition is only going to increase and the importance of customer service will only rise. Focusing on your customer service efforts will allow you to start getting the benefits mentioned above and set you up for long term success.

To get started, here is a free copy of our over 100 tried and tested customer support phrases. Download it today, then start incorporating these phrases into your everyday conversations with customers.

Need a dedicated customer experience team ready to support your brand?

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Digital Marketing Manager @LTVplus Actively participating in the digital marketing world for more than 5 years. Currently making sure that our website content is up-to-date and our blog is filled with actionable tips and advice for online retail businesses. Very passionate about dogs, topics on spirituality and Unicorns.

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