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The equity of services
Creating service equity with customers helps you retain them in the long haul. This can be achieved by providing a fantastic experience throughout the customer lifecycle, being responsive to their complaints, and cultivating a shared sense of trust and partnership. Customer retention makes better business sense than acquisition, because loyal customers return, pay a premium, and even forgive mistakes. Businesses compete fiercely for new customers on products, pricing, and branding. But what makes customers return is a shared sense of trust, value, and belonging, usually accomplished by great customer service. Great services, therefore, create Service Equity.
Great services create loyal customers
‘They treat me so well, there’s no need to look for alternatives’. Organisations are golden when they hear customers saying this. Relevant services offered at the right time, not fancy features or low costs, are the most important element in a fantastic customer experience. Great marketing initiatives make customers curious, but great services make customers come back for more.
Retention is cheaper than acquisition
It is perplexing to see organisations investing massively in acquiring new customers, but doing much less to retain them. The truth is, customers are cheap to retain but expensive to acquire or recoup. A right product at the right price helps you acquire new customers, but once they are yours, they want to be well served and supported in order to stay with you.
Service equity is first gained by meeting basic customer expectations, then by going beyond with value-added, relevant and supportive services.
Services drive customer loyalty
Customers return because they like your product, but leave you because they detest your service. Although service is often not the core operation of an organisation, service experience has a disproportionately large impact on customer experience. Therefore, when well-designed services make the lives of existing customers easier, these customers are likely to spend more and stay longer with you.
It may seem unfair, but if an organisation has not built sufficient equity with customers, a single irritating experience is enough to drive away otherwise satisfied customers. On the other hand, an organisation that shows it cares and treats customers as partners can often be forgiven even for the worst blunder.
Be attentive to complaints
When customers complain about a problem, their biggest dissatisfaction is rarely the problem itself. It is usually the fear that the problem is not going to be properly fixed and that it will recur. They get angry and lose confidence in the organisation.
To build confidence and loyalty, organisations must take customer input seriously, invest in responding to their needs, and make sure customers know their feedback is appreciated and incorporated in future actions. If done properly and consistently, a negative experience is likely to be turned into a relatively positive one.
68% of customers leave because they are upset with their treatment from customer service staff.
Customers are your partners
Great brands manage to create a sense of shared purpose, value and trust with their customers. This can only be done when customers are valued beyond transactions, and when they feel they are appreciated.
For example, an organisation can demonstrate that it cares about its customers by making a simple online transaction even simpler. Both simple and complex service transactions offer ways to build a sense of partnership, because they engage customers with dialogue. When customers are actively doing something together with the organisation, the sense of shared purpose grows.
Beyond satisfaction scores
The value of a consistently great service goes beyond customer satisfaction scores. Building service equity with customers results in customers who return, pay a premium and even forgive mistakes.