4 ways customer service influences profit

When you’re running a small business it can feel like you don’t need a customer service strategy. I mean - you’re a nice person after all, you’re always friendly and helpful to your customers. Besides; does a customer service strategy really make a difference to your profit?

The answer is 100% yes! When you’re a small business building a great customer service experience is a fantastic (and normally cheap) way to increase profits. Even better - I have many stats to back this up. So let’s dive in!

Loyal customers are profitable customers

  • You are between 60% - 70% likely to sell to an existing customer, compared to an only 5% - 20% likelihood of selling to a new customer. (Marketing Metric)

  • Loyal customers are worth 10 times as much as their original purchase. (Help Scout)

  • It costs 6-7 times as much to gain a new customer than to retain an existing one. (Help Scout)

Biggest takeaway: Don’t JUST worry about bringing in new business. It’s also so important to nurture your relationship with your existing customer base.

Extra for experts

Positive word of mouth is free marketing

  • 3 out of 5 customers would try a new company for a better customer service experience (Help Scout)

  • 7 out 10 would spend more with companies that have superior customer service. (Help Scout)

  • Loyal customers will tell nine people about their experience - that’s 9 potential new customers. (Help Scout)

Biggest takeaway: When you’re a small business your biggest point of differentiation is how personal your service is.

Extra for experts

Poor customer service will limit your growth

  • 4 out of 10 customers will avoid a company for two years after a negative experience (Zendesk)

  • 68% will never return after they switch away from your business. (Customer Service Manager)

  • The top two reasons people will leave your business is because they felt poorly treated or because their problem wasn’t resolved in a timely manner. (Help Scout)

Biggest takeaway: Not having a structured customer service experience will cost you money and potential customers - and you may never know how many people walked away without saying anything.

The importance of resolving complaints

  • For every customer that tells you they’re unhappy 26 will stay silent - that’s a lot of potential bad word of mouth. (Help Scout)

  • 70% of customers will do business with you again if a complaint is resolved in their favour. (Help Scout)

  • 78% of people have decided against making a purchase because of a negative experience. (Help Desk)

Biggest takeaway: Have a process for handling customer complaints; make it a priority in your business.