A Brief Guide to Effective Customer Service

Customer service is more than just answering questions about products and accepting returns. Where large businesses often struggle is with their customer service. In the 1990s and up until recently, many US companies outsourced their customer service in an attempt to save money, but the result is that millions of customers have lost faith because service provided by non-native English speakers just isn’t there. Non-native English speakers lack understanding of cultural norms, and because they don’t understand the product or service and follow a script, they often sound robotic or awkward.

Where your business can capture market share is through providing fantastic customer service. Providing an excellent customer experience before, during, and after the purchase will go a long way in increasing customer loyalty and perception. Just as having excellent customer service can create lifelong customer loyalty, an equally lousy experience can lose customers. We’ll discuss some of the positive and negative consequences of having positive customer service in this article.

Let’s start with some of the consequences of having terrible customer service. Bad customer service can harm your business.

Having an unclear or poor return policy

Customers who shop online want to be confident about their purchases. They want to know that if they’re unhappy with their purchase, you’ll accept returns without hassles. Some companies you may recognize with fantastic return policies are Costco and REI–in fact, REI’s return policy was so generous that people have been able to return items over a decade old until REI changed its system due to abuse.

Here is REI’s return policy. Notice how it’s simple and instills confidence. Customers believe that the generous return policy implies the products are high quality.

A 2016 University of Texas at Dallas study revealed that more lenient return policies led to increased purchases. Also, extended return deadlines led to fewer returns. If customers have to go through fewer hoops to return their items, then they’re more likely to purchase from you again. More extended return deadlines, like REI’s one-year policy, may seem to encourage returns, but results from the same UT Dallas study showed otherwise. People were less likely to return an item when they knew they had a year. Make your return policy and process as simple as possible. You’ll earn a good reputation and customers can shop with confidence.

Additionally, customer return policies that are time consuming or tedious, like requiring pictures or calling for an RMA during business hours, will deter customers from purchasing from you in the future. Fortunately, all Amazon sellers have to abide by Amazon’s customer service expectations, and your policies can’t be worse than what Amazon has. That means you can’t say that you no returns allowed. Nor can you say that you offer only a 14-day return policy instead of Amazon’s 30-day policy. Doing so will not only drive customers away, but customers will ignore those rules since they know Amazon will accept returns within 30 days. You should be proactive about reducing your return rate.

A negative experience can mean bad publicity

Almost everyone today has some social media presence. Even without an active social media presence, everyone can create an account and leave a negative review. The ease with which a customer can air his complaints means that he has any number of platforms to drive business away from you. Websites like Yelp, Google Reviews, and Amazon seller and product ratings all factor in a customer’s decision to frequent a store or purchase a product. So you want to mitigate the potential for terrible reviews. A negative review, if appropriately shared, may even go viral, generating a lot of bad press for your business. For example, legal fees and social media pressure forced an Oregon bakery to close in 2013 after it declined to bake a cake for a same-sex couple.

That’s why you should always remain objective even when you suspect they are scamming you. Read here for some advice about how you should deal with difficult customers.

Word of mouth

A lot of businesses in the past gained customers through word of mouth. Small family restaurants, niche businesses, and professional services all benefit from word of mouth advertising. It’s no surprise that a negative customer experience will lead to the customer telling his friends and family about the experience. Small businesses, especially ones that provide services like mechanics, can suffer tremendously from this kind of advertising. When we look for professional services, we tend to ask people we trust–who is your mechanic? Who is your doctor or dentist? Word of mouth advertising is especially useful because it comes from people we trust instead of strangers on the internet.

Poorly trained customer service staff

When customers return an item, they’re hoping the process is as painless as possible. If you have unclear policies and vague training or communication policies, then you may end up with a scenario where your customer service members may misinterpret the policies. Poorly trained staff can lead to arguments and angry customers. Customers will then want to escalate their cases with supervisors, requiring more resources from your business.

In addition to clear policies and proper training, you’ll want happy workers. A worker who is happy will convey that emotion, giving customers a positive image of your business. Clear policies, a rigorous training program, and pleasant customer service representatives will all contribute to a positive business image and repeat customers.

Some customer service representatives may believe that they are doing your business a favor by discouraging returns or finding reasons to deny returns. Such reasoning hurts your reputation and will cost you a customer. Not only that, customers are always able to request credit card chargebacks, and a high chargeback ratio will lead to increased fees.

Now that we’ve discussed some of the negative aspects of bad customer service, let’s move onto the positives.

Have clear policies regarding service

We’ve seen what kinds of issue arise with unclear customer service policies. Depending on your business, you’ll want to develop clear systems, making it as concrete as possible. For instance, when customers contact you, you want to specify when they can expect to receive a response. Small businesses often ignore this aspect, getting around to answering emails whenever they can. Unclear response times might mean a customer will have to wait a few days before receiving a response–by then, he would have found a different solution.

Here are some areas where you can be clear about your policies:

  • How long customers will have to wait before receiving a response (24 hours? 48 hours?)
  • A detailed return policy that includes the process (RMA, shipping, packaging, partial refunds, or defects)
  • What you do with their personal information (do you sell to third parties? will you email them for any reason?)
  • Clear and easily accessible contact information: email, phone, or fax

Interact with customers on social media

Feeling welcome at a business is an essential step in gaining customer loyalty. When baristas greet us at our favorite coffee shop, we feel welcomed. When we go to our favorite restaurant and the staff knows what we’re going to order, we feel as though we’re part of a family. Some stores with a physical presence attempt to accomplish this with greeters and floor assistants.

Your business should strive to generate this feeling of welcome and familiarity through social media–interact and engage with customers when they tweet or mention your business. Or actively use social media to participate larger social groups. So long as the interaction is positive and relevant, your company will benefit from the goodwill that interaction generates. Be careful not to go overboard, or people will see you as spamming your business.

Be proactive and work to fix mistakes

Everyone makes mistakes. When you make a mistake, be proactive about it and make it right before the customer notices the error. If you’ve shipped out the wrong color of an item, be sure to let the customer know what to do with the incorrect order. You can offer discounts, free products, or even credits for your errors. If you own up to the mistake and work to fix it, customers will appreciate the effort you’ve displayed, and they’ll be willing to purchase from you in the future because they’ll know you’re looking out for them.

Providing excellent customer service is no easy task. There are so many factors that can go wrong that one mistake somewhere can lead to customers looking elsewhere. Having clear policies and a great staff can help your business in ways that can’t be measured. Even something simple like asking for a survey at the end of a phone call can be unpleasant for some customers.

Make your return process as simple as possible

Because shoppers can’t interact with an item online like they could at a retail store, online purchases have a much higher return rate.  A 2013 article in the Wall Street Journal claims upwards 1/3 of online purchases are returned. Your return policy should be simplified–do they have 15 days? 30 days? Who pays for shipping when the customer changes his mind? What about defective items? How long will the return process take? Be transparent about your returns policy so customers won’t have any doubts when they buy from your business.

There will always be a handful of people who are out to “game” the system, but these few “bad” customers are a part of doing business. Essentially, your excellent customer service will earn you more than it will cost you. Don’t neglect the power of good customer service. It’s far cheaper to retain a customer than it is to find a new one.