With price no longer an issue, customer service is the new battleground in acquiring and retaining customers across all industries, and particularly in the ecommerce space where customer acquisition and retention are major costs.
By consistently delivering a great service experience for customers, marketers can create a fierce loyalty to their brand that not only keeps the customer coming back time and time again to purchase from their site, but also deliver the kind of experience that makes the customer tell their friends and family. In fact, the White House Office of Consumer Affairs reports that happy customers who have their issue resolved tell four to six other people about the experience. Deliver a great service experience and your brand will reap the benefits over the long-haul.
Here are 7 essential ways customer service impacts retention rates:
- Price is not the main reason for customer churn, it is actually due to the overall poor quality of customer service. (Accenture global customer satisfaction report, 2008)
- Migrating just 1% of shoppers to returning purchasers could generate as much as $39 million in additional revenue per retailer. (The ROI from Marketing to Existing Online Customers, Adobe Digital Index)
- A 2% increase in customer retention has the same effect as decreasing costs by 10%. (Leading on the Edge of Chaos, Emmet Murphy & Mark Murphy)
- A 5% reduction in the customer defection rate can increase profits by 5% – 95%. (Bain & Company)
- Ecommerce spending for new customers is on average $24.50, compared to $52.50 for repeat customers. (McKinsey)
- Across retail verticals in the US, on average, 8% of online customers are repeat shoppers, and they make up 41% of total revenue. (The ROI from Marketing to Existing Online Customers, Adobe Digital Index)
- It costs 6–7 times more to acquire a new customer than retain an existing one. (Bain & Company)