Fulfillment

Did you know that a fantastic fulfillment and customer service strategy can grow your business faster than a good marketing strategy? Most business owners assume that business growth is all about marketing, and it is. But they forget that a business is always marketing itself.

No matter what you’re selling or who you’re selling to, your customers are always evaluating your business. They’re evaluating it before they buy your product or service. They’re evaluating it after they buy.

Marketing, in the traditional sense of the word, usually refers to the marketing that’s done before a sale is made. It’s about connecting with prospects and turning those prospects into customers. But the other side of marketing is turning your existing customers into loyal promoters.

That’s done, not through marketing, but through customer service and fulfillment. THIS is the secret to creating explosive business growth. It turns your customers into an army of the most trusted sales people money can buy…but you don’t have to pay them!

Let’s look at some data from Liveperson.com which was gathered from some consumer polls and surveys and see how your customers define great support and service…

The Facts on How Customer Service Drives Business Growth

Lack of customer support is a factor which contributes to high shopping cart abandonment rates online. According to LIveperson.com, 37% of online shoppers claim that they abandon their purchase because they couldn’t contact the vendor. 30% of them abandon carts because they have a hard time getting help on the website. These are probably sites which were well marketed, but poorly supported.

Customers also claim that speed is important during a customer service experience. Over 71% of consumers expect to get support in five minutes or less, 31% expect immediate assistance. 48% of shoppers who aren’t helped right away will go somewhere else to make their purchase. 56% of online consumers expect to have their problems solved in one interaction.

The statistics also show that hiding behind an FAQ page, email ticketing system or support forum instead of allowing your customers to talk to a live person via chat or phone is a costly mistake. Nearly 60% of consumers want to have a choice about how they contact brands online. Nearly 60% of online consumers also prefer to speak with someone over the phone.

That’s how great customer support can increase your sales and make your marketing more effective. Now, let’s debunk a popular myth about the “expense” of customer service.

Customer Service, an Expense or an Investment?

It’s a mistake to think of customer service as an expense. Sure, it costs money to provide live support. But it’s costing a lot more to let your customers abandon their purchases, never to return to your site again. And how about after the purchase is made?

If customers expect quick and efficient support during the sales process, how much more will they expect it after they’ve spent money with your company? If you spend money on marketing to get customers to your site, yet lose them because of bad support, your marketing dollars become less effective.

But if you invest in great customer service, you can not only increase your sales, your customers are also more likely to tell people about the positive experience they had with your company. A happy customer is a great sales person, and you never had to pay them a commission. It’s 100% done for you marketing.

So if you want to grow your business, invest your money into creating exceptional customer service instead of just marketing.

Customer service departments can be like disaster zones. Dozens, hundreds or even thousands of calls and emails flood in every day. Customer service representatives do their best to handle every situation using the resources they have. Some problems get solved, others slip through the cracks.

Other times, the problem gets solved but the customer still isn’t happy. The customer service team gets locked into survival mode, doing only what they can to keep customers from leaving.

Perhaps this is why, every year, poor customer experiences costs US based companies an estimated $83 Billion in losses per year (Source: Parature Customer Service Blog).

If you want to avoid being victim of this grisly statistic, here are three things you’ll want to do right away…

#1 Make a Price Increase

Increasing prices gives you higher margins. If you invest those extra profits into building, equipping and training your customer service team, you’ll get more business than you would by investing the extra profits into marketing.

Happy customers talk. They leave reviews online. Word of mouth marketing starts working on your behalf. Before you know it, customers are coming to you instead of you having to go out and find them. So a price increase is a great way to create a better customer service department and increase your profits.

Don’t worry about what the higher prices will do to your sales either.  According to the RightNow Customer Experience Impact Report 2011, 86% of consumers are willing to pay more for a better customer experience.  This data was gathered during the peak of the global economic crisis. People ARE willing to pay for value, and they measure value based on how you treat them.

How many times you have you gone to a competitor and even paid a higher price in order to get better service? The key is to “sell” the price increase to your customers by telling them that you’re doing it to invest more into creating a great experience for them. If you deliver on your promise, they won’t mind the higher prices.

#2: Get Better Systems

Even the best customer service agent can be confined to mediocrity if you don’t give them the right tools. Call recording and monitoring and archiving systems and a great system for tracking tickets and follow ups can make a stunning difference in your customer service team’s performance.

If you have any doubts about your systems for managing customer service procedures, a change probably needs to be made. Make it. Don’t force your customers and your representatives to settle for mediocrity.

According to the RightNow Customer Experience Impact Report 2011, nearly 90% of consumers went to competitors after having a poor customer service experience. Good customer service reps are also less likely to stay where there’s chaos.  So while getting by with faulty systems might save you a few bucks, maybe hundreds, it will lock your business into a purgatory of mediocrity.

But with great systems, you can create the economic growth which will justify the extra money invested in those systems.

#3: Clean House: Hire and Fire

Once you have the extra money to pay great customer service reps and once you have systems in place the will help them win, hire people who WANT to win. If you have people on your team who are comfortable with just getting by, get rid of them. Don’t try to motivate them. Find people who are naturally motivated, people who have customer service in their DNA.

When you work with winners, and you pay them well and you give them the systems that will help them win, chaos disappears.

Remember that bad customer service will cost you more money than bad marketing, but great customer service is 10x more powerful than great marketing. It will put customers to work for you. In the age of trust based marketing, this is the most valuable thing you can have going for your brand.

Have you heard what Kentucky Bourbon is doing? Apparently, they can’t keep up with their product demand, which means they’ve got a stand up product and some damn good marketing. But their solution is to reduce the amount of liquor used in their product. This will allow them to serve more customers and, assumingly, answer the growing global demand for their bourbon.

But I believe this is a prime example of a fulfillment disaster in the making. Here’s why…

Customer Fulfillment and the Law of Supply & Demand

When supply is down for a product or service and the demand is up, the price is supposed to go up. That’s how it works right? Unfortunately, some companies get lazy when they see a high customer demand and they start diluting the product or cheapening its value by cutting corners on fulfillment. They assume they can do this and still expect the same level of demand.

Their assumption is that the law of supply and demand only works on products which people need to survive. For example, demand for gasoline is up and you raise the price, people still have to buy it. So your profits won’t be reduced by people “quitting” the product.

But the same principle can apply for a luxury product or service because once people become accustomed to a luxury, they’re likely to treat is as a necessity. People who love Kentucky Bourbon and who spend money on it now aren’t going to stop buying it just because the price goes up.

In fact, they’re MORE likely to stop buying it if the company charges them the same price for a cheaper (or in this case, less intoxicating) version of the product. This happens because reducing the value of a product while charging the same price agitates customers more than raising its price would. It creates what Stephen MR Covey calls a “Trust tax.”

Trust is a big, BIG deal in customer fulfillment, especially in an economy driven by social media. A lot of companies miss this. They get their eyes locked on profits and assume that if they can cut cost on fulfillment that they’ll raise their profits, but not if you kill trust during the process of cutting costs. If you lose the trust of your customers, you’ll have a hell of a time earning it back.

Of course, it’s not always a good idea to just raise your rates because your “demand is too high.” Thankfully, there IS a way you can have the best of both worlds…

Increase Value to Justify an Increase in Price

Price increases can be a powerful fulfillment and customer service strategy, IF you justify the increase by doing something a little extra for the customers. For example, let’s assume Kentucky Bourbon DID decide to raise their prices to get their demand situation under control. Only, instead of charging more money for the same product, let’s assume they added value to it by enhancing the packaging or by awarding “Bourbon Bucks” to each customer for returning an unused bottle or just for making the purchase.

They could then secure a deal with a partner company so that the Bourbon Bucks could be used to purchase products in vertical markets. The partner company would then pay Kentucky Bourbon a commission for every sale that was made with Bourbon bucks and they’d create an entire new income stream.

Of course, adding this kind of value to their product would cost money. That’s why the price increase would need to make up for that…and then some. So maybe Kentucky Bourbon has been using a little too much of their own product, but I think their decision to decrease value is a bad move.

It’s going to cost them money in lost customer loyalty. Remember this the next time you’ve got a high demand for your product or service. Fulfillment is a strong part of your marketing strategy, and retaining customer trust is often more valuable than cutting cost.