BUILDING BLOCK #3: Customer Service

In our overview of Growing your brand - 7 Things you need to have in place before you start growing your business, we mentioned that one of the key building blocks is customer service. Our focus in that overview was on some of the more obvious functions of customer service such as receiving orders, ensuring you have inventory to fulfill the order, communicating orders with your distribution center, arranging transportation, and invoicing. These are all critical processes, but there are other reasons why customer service is so important - customer retention and profitability.

You may feel you have great customer service, but do you? Research conducted by Bain & Company showed that 80% of business owners believe their business offers superior customer service. Surprisingly though, only 8% of customers believe they receive excellent service.

Another study conducted by NewVoice Media found that 93% of customers will take action after having a bad experience, with 44% of U.S. consumers taking their business elsewhere as a result of poor service. So, what kind of behavior makes a customer switch to another brand? Here are the top 5 reasons customers take their business elsewhere:

If you’ve traveled recently, there is a good chance you’ve experienced some of these feelings first hand and may have responded as I did during a recent trip.  What I thought was going to be a short flight home ultimately ended with multiple delays, a canceled flight, rebooking to another city with an extremely short connection, and a 3-hour trip being extended to over 8 grueling hours - and I was very eager to provide less than stellar feedback. This was on an airline that I have used for years with a high level of satisfaction, but this one experience resulted in my telling multiple friends just how terrible this experience was, completing a blistering survey sharing just how frustrated I was with the experience and perceived lack of empathy by all but one employee of the airline, and then receiving a $200 credit from the airline for future travel. This one experience has cost the airline a tremendous amount of credibility in my mind plus a significant percentage of lost profit in trying to appease me with their travel credit.

On the flip side, the NewVoiceMedia study also revealed that after a positive customer experience, 69% of consumers would recommend the company to others. Their research also found that 70% of Americans are willing to spend an average of 13% more with companies they believe provide excellent customer service. When you genuinely focus on improving the customer experience, you’ll improve relationships and increase revenue too.

So what does it take? Consulting firm Gartner introduced a framework for providing the level of customer service that drives loyalty and referrals. It’s called the Customer Service or CX Pyramid.

Being able to ascend the pyramid and consistently provide the powerful customer service experience summarized in the Gartner CX Pyramid requires 

(1) real-time access to accurate information

(2) a deep understanding of the various pieces of your supply chain and how they work together

(3) a thorough knowledge of the specific requirements of each of your customers

(4) trusted relationships with the various partners that make up your supply chain. 

With these in place, the team handling customer service can not only respond to a customer with meaningful information, but they can also resolve issues, know what information is needed, and oftentimes anticipate potential issues before they occur, which enables them to provide suggestions that prevent the issue from actually materializing.

It can take years to reach the peak of this pyramid - developing the systems, an understanding of how a supply chain and logistics work, experience to know what questions to ask of the partners that make up the supply chain, creating trusted relationships with each member of the supply chain, and having the ability to anticipate issues before they occur. As a result, companies that are wanting to successfully grow their business are faced with a choice of either hiring additional employees, building and training a team, developing an order management system, and creating and nurturing the supply chain relationships necessary or you can partner with a team that has the systems in place, has extensive experience in managing logistics, and has trusted relationships with various supply chain partners that have been in place for up to 30 years.

If you want to successfully grow your business, you must have a strong customer service strategy and resources in place to provide the type of service that not only satisfies your customers but that causes them to spread the word about how amazing your brand is and how easy it is to do business with you.

If you're interested in successfully growing your business, we'd love to talk with you about how using YourLogistics can enable you to quickly and economically have the resources in place to provide first-class customer service that drives loyalty and creates promoters of your brand. To schedule a call, please drop us a note at hello@yourlogistics.us.

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