WHY THE INFORMATION & DATA WORLD SHOULD CARE
In May 2023 Queue-IT produced a wonderful report on the power of loyalty programmes and what it means to business success. The growth of data and information services has pushed automation into all facets of any business and while clients and consumers now have access to infinitely more services online things can still go horribly wrong, and that is when the human touch becomes a necessity.
Sadly as automation replaces humans it increases the influence of finance departments who focus on spreadsheets and little else. The numbers of front facing personnel drops leaving customer service to take up the communication challenge, which in turn becomes a higher cost relative to the business because they are people and not cheap machines.
What did Queue-IT find?
1.65% of company revenues comes from repeat business
2.It costs from 5 to 25 times more to acquire a new customer than maintain an existing one
3.77% of consumers stay loyal to specific brands for 10 years plus (I can attest to this and because of recent changes to my local airline’s frequent flyer programme am looking to move on after 25 years)
Queue-IT discovered a staggering 76 more statistics reinforcing the role played by customer service.
Yet still the priority placed by companies by investing in customer service, especially in a time of rising costs, appears to be declining, and this could prove a huge mistake.
MAP Communications – Businesses lose $65 Billion is the US alone because of poor customer service
To quote Jeff Bezos “If you do build a great experience, customers tell each other about that. Word of mouth is very powerful.” In market data back in the 1990s this was often the big differentiator between Bloomberg and its peers.
WHY DO COMPANIES LET THIS HAPPEN?
‘Penny wise, Pound foolish’ Bean counters prioritising cutting costs over investing good business. As noted above, 65% of business is repeat business, sales is hard, and when clients depart they take with them both a determination not to come back and a voice which has no reluctance to shout out their negative experiences to the roof tops. If that client opts to shout on the internet that gets an even larger audience, people seem to wallow in other’s misadventures.
We can also add from the front office replacing experienced sales with deep rooted relationships by cheaper rookies learning on the job.
Unfortunately for the client, many companies wait for the first mover to act then simply copy the strategy. They rely upon their clients fearing the grass is never greener on the other side of the hill. Just ask banks subscribing to the global Index Creators and Credit Rating Agencies.
It almost seems there has been a collective decision of “If we all provide bad customer service then we are just competing only on product”
Perhaps we should leave it to Jeff Bezos to have the final word, he seems to know something about business “We’ve had three big ideas at Amazon that we’ve stuck with for 18 years, and they’re the reason we’re successful: Put the customer first. Invent. And be patient.”
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Keiren Harris 25 July 2023
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