Which is More Important: Communication or Products?
December 4, 2018
Regardless of industry or scale, every business needs to sustain and grow its customer base to succeed. However, there are two lines of thought regarding which factor is more important in attracting and retaining customers: communication or products.
Some argue that, in order to satisfy and expand their customer base, there are no substitutes for exemplary customer service and open lines of communication. A contrasting philosophy holds that maintaining a consistent stream of innovative new products (and attendant marketing) is essential both to winning over new customers and inspiring the loyalty of existing customers.
Although novelty, product quality, pricing and advertising can all motivate consumers to become customers, the reality is that exceptional customer support can be a major driver of business growth.
How customer support drives growth
When asked what advice he would give burgeoning entrepreneurs, Daymon John — FUBU founder and Shark Tank star — answers: “To over-deliver in service to a customer is by far the most valuable thing to a business.”
John’s rationale is that businesses ultimately have two options when it comes to optimizing operations — cut costs or improve sales. While businesses can take various steps to reduce their expenditures in the areas of materials, manufacturing, overhead, logistics, payroll and advertising, those fixed costs can only be adjusted so much. Moreover, companies have no way to stop their competitors from bringing a better mousetrap to market.
On the other hand, organizations can exert total control over the customer support experience they provide. Moreover, numerous studies and surveys have found that customer support is more important to consumers than other factors, such as pricing, speed of service or existing brand loyalty. Consequently, businesses increasingly view customer support to be a crucial factor in both customer acquisition and retention.
How customer support helps with acquisition
The most direct way customer support drives new customer acquisition is through is through word-of-mouth (WOM) advertising. Generally, when a customer has an exceptional experience with your company, they will recommend you to friends. In fact, studies have shown that WOM referrals are incredibly valuable.
A Nielsen study found that 92 percent of consumers trust WOM more than any form of advertising. Moreover, 91 percent of B2B buyers noted that WOM referrals influence their purchasing decisions. As such, top-level customer support can deliver a higher return on investment (ROI) than any other marketing channel.
Additionally, positive WOM can be very helpful in driving partnerships with other organizations. Such partnerships can lead to the acquisition of new accounts, as well as potentially opening up parallel market opportunities. If your company has developed a reputation for providing excellent customer support, that can be positioned as a key differentiator — and a marketable selling point.
How customer support helps with long-term retention
Customer support can also be highly effective at fostering long-term customer retention.
Retention, rather than acquisition, should be a priority for all organizations because of its cost-effectiveness. Also, it’s worth noting that repeat customers are nine times as likely to make a purchase as new shoppers.
Customer support can also be crucial in winning back the business of consumers who may have had a bad experience with your company. By reaching out to past consumers with discounts, upgrades and bundles, companies can win back almost 50 percent of former customers who didn’t make another purchase due to price.
Similarly, customer support plays a significant role in reducing the amount of churn a brand experiences. One report found that 68 percent of customers who abandon a company do so because they feel they have been treated with indifference.
Providing robust customer support lets your base know that they are valued. Ultimately, investing in a commitment to exceptional customer service and reducing your company’s churn rate by as little as 5 percent can increase profitability by between 25 and 125 percent.
How companies can offer the highest level of customer support
To best serve their clientele, it’s essential that companies understand what customer support actually entails.
At the most basic level, customer service means that customers should be able to contact your company anytime they need support. Customers should also be able to communicate with your business using a variety of channels, with phone and email being the most critical. As a growing percentage of consumers now expect live chat support via your website, that option might also be a worthwhile investment.
It’s also highly recommended that companies invest in a quality customer relationship management (CRM) software solution. A quality CRM application will not only give your company invaluable insights into customer behaviors, but it will also greatly enhance your long-term customer retention efforts by helping your identify customers who are at risk of severing their relationship with your brand.
Lastly, it’s of critical importance for organizations that operate in the online space to establish a customer onboarding program. Whether your company deals in products or services, it’s essential that your customers know how to use them correctly — and derive the most value from that usage. If customers are frustrated the first time they interact with your brand, they won’t stay customers for long. Worst of all, they’ll likely share that negative impression with their friends and family.
To combat negative first impressions, companies should offer clear-cut and comprehensive instructions with their packaging and on their website. Embedded videos demonstrating product and service use are also recommended. Welcome emails containing instruction links, contact information and frequently asked question (FAQ) information are also wise implementations. Helping customers understand how to acquire or directly benefit from your offerings is also vital. For that reason, companies should utilize secure and user-friendly payment processing.
The importance of quality payment processing
Whether your company sells direct to consumers or is a B2B operation, a quality payment processing solution is of the utmost importance. In today’s marketplace, consumers expect to be able to make secure payments online quickly and seamlessly. To meet that expectation, businesses should partner with a payment processing provider that offers comprehensive payment processing software solutions.
JetPay’s services include payment card acceptance, as well as HR and payroll services. That means that merchants, associations, healthcare providers, nonprofit organizations, financial institutions, government departments and educational organizations can efficiently manage their payments and human capital using our services.
We are also a PCI-compliant payment processing provider that utilizes high-grade encryption solutions. As such, our partners can rest assured that their customers’ sensitive data is protected from malicious hackers. Moreover, we offer 24/7/365 customer support so that partner companies can get the help they need with set up, transaction research and education whenever they need it.
If your business is interested in a state-of-the-art, cost-effective payment processing solution that can make a positive contribution to the experience you offer your customers, contact a JetPay representative today.
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