Customer Service: The Key to More Revenue,Repeat Customers, and Effective Word-of-Mouth Advertising

Companies are beginning to shift their focus toward improving the customer experience in an effort to keep current customers loyal to their brand and attract new business.

To Sell or Not to Sell

There’s a debate among companies and consumers alike that selling during a customer service call is taboo – and it can be. The conflicting statistics available only further complicate the concept of cross-selling as part of a positive customer service transaction. For example, in one white paper 88% of customers value service reps who suggest alternative products or services that better meet their needs.4 However, in a survey by AchieveGlobal, 40% of respondents said they get annoyed when employees upsell or cross-sell them during a customer service interaction.5 Digging into case studies and additional research, it becomes apparent that the happy medium comes in the form of a well-trained customer service team that puts customer needs ahead of “getting the sale.” Fifteen percent of customers actually want to hear about upsell offers, but only if done properly.6 This means upselling and cross-selling need to be based on the customer’s needs and done at the right time. The ROI of upselling and cross-selling as part of the customer service experience won’t be immediate, especially if a company measures success based on daily sales quotas. The financial return will happen exponentially over time in the form of repeat customers and new referrals from word-of-mouth advertising.

Zappos – A Customer Service Success Story

The power of great customer service is illustrated best by the success of Zappos. They have generated sales just above the $1 billion mark in less than 10 years and have become the poster child of e-commerce success. The key to Zappos’ insane growth is no secret, and CEO Tony Hsieh has never been one to shy away from discussing how Zappos managed to vigorously increase year-over-year revenue. In his own words, “Zappos is really a customer service that just happens to sell shoes.”

Shoes

Everything Zappos does, including the treatment of their employees, is done with customer service in mind – literally from the inside out. Hsieh has closed all of the entrances to the building except for one in order to increase the likelihood of chance encounters between employees. He believes that building employee camaraderie results in a willingness to help one another and ultimately customers.7

New contact center employees complete seven weeks of intensive training – if they make it past “The Offer.” After one week, new employees are given the opportunity to quit for the time they worked plus $2,000 in an effort to weed out those who aren’t committed to the core values of a company.8 Call center employees are not given a script, are encouraged to “have fun” on calls, and are truly empowered to do what they need to do to keep a customer satisfied – even if it means ordering a shoe from a competitor website if Zappos doesn’t have it in stock.9 The obsession with hiring the right people and then keeping them happy is creating a culture that is genuinely interested in helping others, and it’s paying off tenfold for Zappos.

The correlation between happy employees creating happy customers and increased profits is mind-blowing. Zappos projected a lofty profit increase of 77% in 2015, and they achieved that, ending the year with $97 million in operating profit.10 Hsieh has found the holy grail of success in a place few companies are looking – landline customer service – stating, “We believe that telephone customer service is a huge untapped opportunity for most companies, not only because it can result in word-of-mouth marketing, but because of its potential to increase the lifetime value of a customer.” 11 And the stats support Hsieh’s belief: 75% of Zappos’ purchases come from returning customers, and 43% of new customers heard about Zappos via word of mouth. “Opportunity” is an understatement considering revenue per media-spend was up by 488% (in 2010), and current customers are ordering 2.5 times every 12 months AND continually bringing new business to Zappos.12 This success doesn’t even include an upselling or cross-selling strategy. Sharpen reached out to Zappos to ask about their policy on upselling and if their customer service agents had any quotas. A representative for Zappos told us, “As far as up-selling goes, our reps are not encouraged to do any of that. Reps don’t get commission, and we’re never here to force a buy or bigger purchase. We are strictly here for customer questions and inquiries. No sales quota, or calls in a day quota.” Considering Zappos’ prices aren’t lower than leading retailers, they are living proof that customers are willing to spend extra money for good customer service.

75% purchases from returning customers. 43% new customers heard from word of mouth

What About B2B?

Providing great customer service to increase sales even crosses into the B2B sector; however, B2B companies have unique challenges. First, there’s typically a well-thought-out discovery process prior to every sale, and upselling is done during negotiations or with an account representative post purchase. The opportunity to execute salesworthy customer service presents itself during a potential buyer’s initial research in the form of personalized engagement via a convenient channel absent of high pressure selling. When you give prospects the ability to initiate a conversation and provide contact information on their terms, the result is a highly qualified, educated, and interested lead. The outcome is a shorter sales cycle and a better customer experience.

Equinix, a B2B technology company based in Redwood City, California, has always considered customer service the foundation of their success, winning the 2011 MarketTools ACE Award for Customer Excellence.13 In order to continually improve their sales process, Equinix needed to shorten their buying time frame of 12-18 months. Rather than reevaluate their sales process, they turned their focus to providing the customer with more resources. They wanted a way for potential customers to quickly ask discovery questions to determine if an Equinix product was a good fit for them. They ultimately decided to implement a live chat feature on their website. The objective was to generate high qualified leads via a more personalized approach to customer service. Equinix wanted to immediately instill trust in their leads, giving them the confidence to make a buying decision sooner.14

The addition of live chat to Equinix’s customer service strategy in 2014 has had huge benefits. The live chat has allowed sales agents to engage potential buyers directly on the buyer’s terms. This makes the initial conversation low-key and personable. Equinix was also able to gather data that was entered into Salesforce to eliminate redundant conversations in the future. The streamlined process has resulted in 16% of live chat sessions producing a lead submission, one of which resulted in a $1 million contract. The sales process has been reduced by one month, and Equinix has seen a 10-to-1 return on the investment.15

16% of live chat sessions produced a lead submission

Yes, Customer Service Can Upsell

In the B2C sector, there are companies that have toed the line of customer service and selling successfully. Their execution of cross-selling is done in such a way that it feels service oriented to the customer. One of the world’s largest financial services companies has mastered the delicate balance of upselling during a customer service call. Prior to changing their customer service strategy, the bank’s customer service representatives were duplicating offers each time a customer called and offering products to customers for which they did not qualify. These errors resulted in complaints from customers, and not surprisingly, falling short of sales conversion expectations. Acting on the complaints they received from customers, they knew they needed a way to make more personalized, smarter offers.

Customer service representatives needed some basic data about the customer they were speaking to in order to qualify them for various offers. The bank upgraded their system so that it immediately delivered basic account information to a representative when taking a call from a customer. Armed with more information, the representative was able to ask the correct discovery questions and then recommend a product that was relevant and beneficial to the customer. Empowering the customer service representatives with information allowed them to sell personalized benefits, rather than a product. The customer felt understood, which made the interaction feel more like a conversation and less like a sales pitch.

The bank adjusted their sales process to be more customer service centric, and this proved to be effective in increasing sales and customer satisfaction. Offer acceptance rates improved and revenue increased by 20%, and customer service increased the efficiency of each call. Short calls allowed agents to take more calls, which in turn gave them more opportunity to make sales. The bank saw an increase in customer satisfaction due to the more personalized experience, and customers reported feeling more valued. Due to the increased positive perception of the bank, 77% of customers said they would recommend the bank to a friend, further proving that happy customers can be powerful advertising.16

Happy Customers equal Powerful Advertising

Customer Service Is the Future

Despite all the data supporting the importance of customer service, a 2015 Temkin Group customer experience survey revealed that only 7% of companies achieved an “excellent rating.”17 Many companies are still missing the mark, but success stories like Zappos and Equinix are encouraging companies to invest more in their customer service. Notably, 63% of companies spent significantly more on the customer experience in 2014 than they did in 2013, which is up from 54% in 2012 and 46% in 2011. By 2020, the customer experience is predicted to overtake price and product as the key brand differentiator;18 therefore, the customer experience will continue to be a dominating focus for many companies. Forrester Research calculates that a 10% improvement in an enterprise company’s customer service experience score can translate into more than $1 billion in increased revenue.19 Happy customers spend more, advocate more, and bring new business to the companies that provide the best experience. Bottom line, customer service doesn’t happen as a result of sales, sales happen as a result of great customer service.

Omni-channel, cloud-native contact centers are scalable, agile, and robust enough to be modified to integrate with new technologies at the rate they are developed.

They are customer centric, while simultaneously providing a 360-degree view of callers for service agents, helpdesk managers, and even outbound sales representatives.

The most advanced contact centers work like large rivers with tributaries from various pools where customer data are collected. When new service channels pop up, developers and backend architects can integrate them into the omnichannel environment. Then, no matter which channel customers use, agents will be able to see all relevant historical information collected across every channel.

It’s hard to predict the new kinds of service channels that may evolve in the future. Wearables, virtual reality gadgets, new mobile devices or applications, and in-store outlets could all become service technologies of the future. The influx of technological disruptors and their rate of adoption today is quick. If wearables suddenly take off, only omnichannel contact centers will be equipped to flawlessly add service capabilities that will be needed.

1. Help Scout. 2010. “75 Customer Service Stats and Facts You Can’t Afford to Ignore.” Accessed June 13, 2016. https://www.helpscout.net/75-customer-service-facts-quotes-statistics/

2. Murphy, Emmet, and Mark Murphy. 2002. “Leading on the edge of Chaos.” Prentice Hall Press.

3. Beaujean, Marc, Jonathan Davidson, and Stacey Madge. 2006. “The ‘moment of truth’ in customer service.” Accessed June 13, 2016. http://www.mckinsey.com/business-functions/organization/our-insights/the-moment-of-truth-in-customer-service

4. Traut, Terence. 2006. “Cross-Selling – It’s About Connecting with Customers.” Accessed June 13, 2016. http://www.positivearticles.com/Article/Cross-Selling—It-s-About-Connecting-with-Customers/10579

5. Achieveglobal. 2013. “Why Your Customers Stay or Stray: Insight From Global Customer Experience Research.” Accessed June 15, 2016. http://www.customerservicegroup.com/pdf/CX_Report-Stay_or_Stray.pdf

6. Hess, Michael. 2011. “Are you Upselling or Just Upsetting Your Customers?” Accessed June 14, 2016. http://www.cbsnews.com/news/are-you-upselling-or-just-upsetting-your-customers/

7. Bengtsson, Ulrik. 2015. “Zappos success story as powered by excellent customer service.” Accessed June 16, 2016. https://betssonflash.com/2015/08/06/zappos-success-story-as-powered-by-excellent-customer-service/

8. Burt, Conner. 2014. “Why Zappos’ Training Program is Insane.” Accessed June 14, 2016. http://www.lesson.ly/blog/why-zappos-training-program-is-insane/

9. Working, Russell. 2013. “8 ridiculous ways Zappos keeps customers and staffers happy.” Accessed June 13, 2016. http://www.ragan.com/Main/Articles/8_ridiculous_ways_Zappos_keeps_customers_and_staff_47186.aspx

10. Snel, Alan. 2015. Zappos predicts massive profit growth for 2015. Accessed June 14, 2016. http://www.reviewjournal.com/business/zappos-predicts-massive-profit-growth-2015

11. Leslie, Sara G., Jennifer Aaker. 2010. “Zappos: Delivering Happiness.” Case: M-333. Stanford Graduate School of Business. http://faculty-gsb.stanford.edu/aaker/pages/documents/100823zappos.pdf

12. Herron, Christine. 2008. Zappos Shares Secrets of 75% Repeat Business. Accessed June 13, 2016. http://www.christine.net/2008/02/zappos-shares-s.html

13. Equinix. 2011. “Equinix Receives 2011 MarketTools ACE Award for Customer Service Excellence.” Accessed June 16, 2016. http://www.equinix.com/company/news-and-events/press-releases/equinix-receives-2011-markettools-ace-award-for-customer-excellence/

14. TouchCommerce. 2015. “Case Study: Equinix, Inc.” Accessed June 15, 2016. http://cd2.touchcommerce.com/touch-commerce-v3/our-resources/Equinix-cs.pdf

15. Tepper, Nona. 2015. “A global data center company calls on live chat to help expand into new markets.” Accessed June 16, 2016. https://www.internetretailer.com/2015/03/30/global-data-center-company-calls-live-chat-help-it-grow

16. IBM Australia. 2012. “Case Study: Growing Client Revenue in Financial Services with Predictive Analytics.” Accessed June 13, 2016. https://www-935.ibm.com/services/multimedia/analytics_blind_case_study_2012pdf.pdf

17. MacDonald, Steven. 2016. “7 Ways to Create a Great Customer Experience Strategy.” Accessed June 15, 2016. http://www.superoffice.com/blog/customer-experience-strategy/

18. Daniela. 2014. “20 Important Customer Experience Statistics for 2014.” Accessed June 17, 2016. https://fonolo.com/blog/2014/02/20-important-customer-experience-statistics-for-2014/

19. Leggett, Kate. 2013. “Customer Service: Why it Matters – And How To Do It Right.” Accessed June 14, 2016. http://blogs.forrester.com/kate_leggett/13-01-04-customer_service_why_it_matters_and_how_to_do_it_right You’re