Cost and customer service

How much does it cost to provide service to your customers?  Actually, the answer is it depends. It certainly costs time, and effort. But does it cost money?  Again, it varies.

Big organizations have customer service departments, with hundreds of employees set to assist customers. These departments cost lots of money to maintain, but as anyone who has had a bad customer service experience can attest, they also help you preserve money.

The return on investment (ROI) on customer service is quite large. Satisfied customers tend to be repeat customers. And if those customers never make a purchase from you again, there is still substantial ROI in positive experience, which helps company image. There could also be positive word of mouth.

Smaller organizations probably handle customer service directly. For instance, at a mom and pop shop, the customer that has an issue will most likely speak to the owner and the owner will take care of the situation. Here the cost is not dollars but rather time and effort. But again, the ROI is well worth it to make sure a customer is satisfied.

Columnist Jan Kantor addresses setting up a customer service strategy in his Naples News column on February 15.  As Kantor writes:

Giving great service to your customers is your key competitive advantage. Therefore, you need to find the best ways to meet customer needs and expectations. Think about it. What does great customer service cost in dollars? Very little. Creating a customer service-oriented company is a matter of focus and attitude.

Is there too much cost for customer service in your view? Or is it always worth the ROI?

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2 Responses

  1. I think the real answer is, it costs a lot to lose a customer and almost nothing to keep them, and the real problem is that most businesses don’t know they’ve lost that customer – they just don’t come back.

    The problem is that companies think they have to create “customer service departments” instead of creating a customer service culture in which every employee takes ownership of serving the consumer. All employees are in customer service – if they work for the company, they’re in, regardless of what their title is. It’s the same thing when I send out secret shoppers into my client’s retail matrix and those employees ask me who those secret shoppers are – I tell them that ALL of us are “secret shoppers,” and that we shop with our wallets – there’s no secret to that.

  2. Jonnie,
    That is a great way to look at it–costs a lot to lose a customer. You are absolutely spot on! We also agree with you regarding a customer service culture.
    Thank you for pointing these two crucial points out.
    ARMA

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