Customer service is often an under-appreciated function in a business. Consequently, it is also under-invested in by start-ups and expansion stage companies.
This often leads to younger companies adopting reactive customer service strategies that do not prioritize finding ways to systematically reduce customer dissatisfaction and, rather, just try to contain customer service issues. This approach almost always results in an endemic problem with high customer loss rates down the road and substantially higher long-term customer service costs. Both of these problems usually spell disaster for a startup or expansion-stage company.
So why is customer dissatisfaction such a powerful force that needs to be addressed in a company’s customer service strategy? Below are four customer dissatisfaction characteristics that highlight why adopting a proactive customer service strategy is the logical choice:
- Dissatisfied customers are much more emotional than satisfied customers, and consequently much more likely to share their experiences with others. Just think of the customer experiences you have had over the last year. Most people will find the majority of the ones they remember and shared with others were negative experiences. Additionally, negative customer experiences lead to much more substantial reactions than positive customer experiences.
- Customers rarely complain to service providers directly. In fact, most of the time customers opt to complain to others or take their complaints to the internet. With social media listening techniques much of this can be captured. However, once complaints have reached the social media waves they are public and no longer a private issue.
- The growing popularity of social media has amplified the reach of customer opinions. This effect has had a disproportionately large effect on customer dissatisfaction because negative sentiment is more likely to go viral. Just think about all the negative customer stories you can remember going viral on the internet over the last few years. One that remains clear in my mind is EJ’s AirBnB.com nightmare story that single handedly threw the company into disaster recovery mode. I bet you can’t think of a positive customer story garnering that kind of attention.
- Customer expectations continue to grow at an astounding rate. What was considered an adequate response time or handling of a service issue yesterday is today considered below expectations. Just a few years ago a 24 hour response time to a customer complaint was considered top in class performance in most markets. Now many customers expect immediate responses to their social media communications. These constantly changing market dynamics have made it difficult and costly for companies to maintain top performance levels. To make these new demands more manageable companies have to focus more effort towards eliminating systematic issues and not being more effective at resolving them.
For these reasons, startups and expansion-stage companies need to prioritize customer service and adequately invest in developing a proactive customer service strategy.
Proactive customer service strategies are the product of including a mixture of proactive and reactive customer service key performance indicators that the company tracks in its service division. By incorporating proactive metrics, you will encourage the service team to develop systematic approaches to deal with customer dissatisfaction, not just finding better ways to resolve customer issues and contain them. However, it is also important to develop a service-oriented culture across the company, as this will lead to a long-term focused customer service strategy.
If you would like to read more on managing customer satisfaction, I recommend reading my post from last year on 6 Net Promoter Score Mistakes that Derail Customer Management Process. Similarly, if you would like to read more on customer communication, I also recommend reading my previous post on customer communication strategy development.
Sign-up for our Free Weekly Newsletter to get the best new ideas for building technology companies.