Mine the Data for the Secret to Great Customer Service
In the past few years, we have been inundated by tales of poor customer service, and the real business impact that low customer satisfaction has on companies. According to the Genesys Global Survey, lost airline luggage, high bank fees, bad product experiences – and the maddening support interactions that accompany them – cost businesses $338.5 billion annually in lost business. That’s a staggering number.
Every company makes mistakes, but what can we all do to help prevent this from cratering our bottom lines? It turns out the secret comes in how we handle this adversity and deliver great service. Companies that invest in delighting their customers perform better. Welcome to the world of the Zappos Economy.
There have been countless articles and lists on how to delight customers. In reality, it boils down to a very simple formula: Customer Satisfaction = Scale * Efficiency * Quality. Put another way, if you can efficiently deliver high-quality customer support at a large scale, you will have satisfied customers.
This formula was derived from a global survey measuring customer satisfaction levels by industry, geography, and company size. The survey drew on a pool of 65 million consumers in 137 countries. Despite its appearance, the formula above is not a traditional mathematical one. Instead, think of it as a chemical formula where a change in the quantity of one ingredient can have a dramatic impact on the end result.
Now for the numbers. As drawn from the survey, the following are global averages across all companies in all industries:
- Customer Satisfaction rating of 86%
- 630 inquiries per month requiring human interaction
- First response times of 23.6 hours
This data comes to life when you break it down by industry – and provides some real surprises.
The Best and Worst Industries
Taking a closer look at customer satisfaction by industry shows some enlightening trends. Some you’d expect, and some that surprise.
The winners in the survey were predominantly service-based industries, where the personal touch is paramount. The top performers are:
- Real Estate: 96%
- IT Services & Consultancy: 95%
- Healthcare: 94%
- Professional Services 94%
- Personal & Business and Support Services 94%
- Financial & Insurance Services 93%
- Non-Profits 93%
Some may be surprised to see Healthcare and Financial Services on the list, but many of these companies have received the message and are striving to delight their customers more and more.
The worst performers are predominantly consumer-facing industries:
- Technology – Hardware 85%
- Manufacturing 85%
- Marketing 85%
- Retail & Wholesale: 82%
- Social Media: 78%
- Entertainment & Arts: 77%
Seeing Hardware on the list is disheartening, especially since Hosting companies (who are trying to put hardware companies out of business) perform so much better in customer satisfaction.
But the real surprise is Social Media. How can an industry that has enabled customers to demand service be failing so miserably in supporting their own customers? The answers come when you look deeper into the data. Social Media companies are drowning in high support volumes, and don’t have the maturity to handle these. Second, they typically offer support through only one communication channel – social media – so support via email, live chat, and phone suffer.
The Struggling Middle Class
Another cut at the data shows that customer satisfaction also differs by company size. The survey showed that smaller companies — those with one to nine employees — had a customer satisfaction average of 91%. Larger organizations, with a headcount between 500 and 4,999, had an average customer satisfaction rating of 93%. The largest companies (5,000+ employees) averaged 90% on the customer satisfaction scale.
But mid-sized companies fell short. Companies with 10-99 employees averaged 84%, and those with 100-499 staff posted 88% satisfaction rates. One possible explanation is that as customer demands grow as the company grows, they need to invest in better training and software to deliver faster response times.
How You Can Win at the Satisfaction Game
From the survey, three practices of best-in-class companies became obvious:
- Immediate response matters. Responding quickly to an inquiry has the single greatest impact on customer satisfaction. The Customer Satisfaction Index reveals that companies with an average first-response time of less than 10 hours have customer satisfaction ratings of over 90%.
- You have to be where your customers are. Today, it’s critical to be where your customers want you to be: your website, Facebook, Twitter, email, on the phone or via chat. Companies that support their customers across multiple channels drive higher engagement and respond faster to customer inquiries—all increasing satisfaction.
- Let your customers serve themselves. Companies that offer rich self-service customer support forums and FAQs have a higher level of customer satisfaction. Best-in-class companies often see six to seven times the number issue resolution through a self-service portal than through human interaction.
It boils down to this: there absolutely is a formula for success when it comes to customer service, and it’s imperative to be in tune with your customers’ satisfaction, or lack thereof. The average value of each lost business relationship in the U.S. per year is $289, making every single customer worth fighting for.
If you’re interested in seeing how your company compares to others in your industry, you can get the full Customer Satisfaction Index at www.zendesk.com/benchmark.