Excellent customer service matters: here’s why

Excellent customer service is very close to my heart. I hate poor customer service, and, to be honest, and transparent, I get a little tense when it happens. Not just because it’s happening to me, that’s irritating, but when a company clearly doesn’t understand the money they’re leaving on the table and the amount it costs them to be useless, that’s unforgivable.

One of the industries in my personal customer service hall of shame is the insurance industry, particularly car insurance. Whenever it’s nearing renewal time for our car insurance, I can feel myself tensing up and vague irritability suffusing me.

It’s the same every year; about a month before our renewal date, an email arrives in my inbox — the renewal email, which goes something like this.

Dear Simon,

Thank you for insuring your car with us over the last year. You’ve not claimed against your policy this year (great job), so we would love to continue to insure you and your vehicle next year too.

Below is your renewal quote for the following year. Don’t worry; you don’t need to do anything; we’ll amend your Direct Debit, and the first payment for your new policy will be taken as before on the 14th of the month.

Thank you for remaining with the UK’s most abysmal insurer (okay, I made that up).

That all seems friendly enough, doesn’t it? Then you continue down to the renewal quotation…

Thank you for choosing (insert any car insurance company name, they’re all the same) your monthly premium for the next year is £…

HOW MUCH?

It turns out for remaining a loyal customer and not putting the tiniest dent in their shiny policy; they’ve increased my premium by 20% to say thank you.

I’m sorry if I sound jaded, but really…

Now I’m going to have to waste half a day getting new quotes from other companies, who I know in my heart of hearts will do the self-same thing next year.

Consider this: it costs five times more to acquire a new customer than retaining an existing one. If you improve customer retention by just 5%, that can increase your profits by between 25 and 95%. One final fact to reinforce my point, the success rate of selling to an existing customer is 60–70%, but selling to a new customer only gives you a success rate of 5–20%.

Many businesses, big businesses with extensive customer service departments, don’t know what even average customer service looks like.

Have you ever taken the time to voice your exasperation to a company's customer service department when their product or service has fallen below the bare minimum that any reasonable person would expect? Enquired what they would consider doing to make you a happy and satisfied customer again, only to receive an empty, vacuous non-apology?

Something along the lines of: ‘We’re so sorry you feel that way’.

They're sorry that I’m ticked off with their poor service, that I paid for? That’s not an apology or a solution, just words they hope will satisfy me and get me off the phone.

In contrast, small and medium-sized companies are astonishing their customers with how important customer service is to them.

An example is a SaaS company I’m working with at the moment. They have a fantastic product that is changing the way their customers are using their business data. Though excellent, the product is only part of the reason their customers love them. As part of their monthly fee, they have access to their own data analyst. If they need additional reports set up or created, their data analyst sorts it out, often in under an hour.

If they need to, they can call every day, and whatever they need will be taken care of quickly and efficiently.

Their customers so value this service they have zero churn; that’s right, they have never lost a customer through poor service or product, ever.

Imagine if your business never lost a customer because they loved your customer service and aftercare so much they couldn’t contemplate going anywhere else?

Would that make a difference?

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