How Excellent Customer Service Affects a Retail Business
Jennifer Lilley
Feb 26, 2021
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Customer service interaction at checkout
How many times have you thought of customer service as a secondary trait? Get the sales first, and
then
make sure your customers are happy. Few of us would probably admit to such a line of thinking, but if we’re being honest with ourselves, we often slide into a numbers-first mentality. Yet the key to strong numbers
is
great customer relationships. Here’s how excellent customer service affects a retail business.
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Retention
According to Paul Farris, author of , returning customers have an average conversion rate of 60-70%, which means you should be invested in getting customers back into your store. Yet 51% of customers will avoid a business after a single negative experience with them, according to Newvoicemedia.com.
It’s something to keep in mind every time a customer walks into your store, and it’s often something that needs to be addressed
before
the point of sale. A classic example of a customer experience half-effort is the grocery store checkout person: “Did you find everything okay?” Maybe they did, maybe they didn’t. But at that moment, when their order is already being processed and 5 people are waiting behind them, they’re not going to tell you. Rather, have a floor associate proactively ask them while they’re still shopping. If they find their stuff every time, they’ll be back again and again.
Reputation
Nothing cements a retail business’s reputation like customer service. Not prices, not presentation. Customers are vocal about their service experiences, which means free marketing for you. Unfortunately, this street goes both ways, and the way back toward poor reputation has more lanes. According to a study by American Express, Americans tell an average of 11 people about good customer service experiences, but 15 people about bad customer service experiences.
Excel in customer service and you’ll have an inside line on something companies spend millions trying to generate: word-of-mouth marketing.
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Revenue
Great customer service can give you an opportunity to raise your prices. We’re too quick to forget that all businesses are not online businesses. With online shopping, customers can do a quick search before ever interacting with sales reps, find the lowest price, and click
buy
. But with brick-and-mortar stores, customers have already invested time to physically show up. They care about more than just the lowest possible price. That means you have a little more wiggle room with pricing. According to another survey by American Express, 70% of American customers have spent more to shop with businesses that provide excellent customer service. Invest in customer service training and it will pay for itself.
Stellar customer service sometimes comes with a more direct profit, too— making sure customers have everything they need, AKA
upselling
. Nobody wants to make two trips. You can take practical steps to motivate your employees toward upsales. Check out our infographic, How to Encourage More Upsells & Cross-Sells in Wireless Retail for more.
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Jennifer Lilley
Jen is part of the Success team at Arcade.