The Unexpected Cost of Poor Customer Service

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The lost sale is never desirable, but many organisations would see that as a one-off. However, in reality, each customer that is lost through poor customer service can cost a great deal more than that. It is for this reason that businesses need to take advantage of whatever tools they can to make customer service a priority.

It costs five times as much to acquire a new customer when compared with retaining an existing customer. That means you need to invest five times as much in marketing for each customer, and cash flows will be disrupted as the sales cycle to onboard a customer is lengthier.

That’s just the start of the headaches that poor customer service can cause the business.

Poor customer service goes beyond “being rude”

The definition of poor customer service is straightforward and broad: a customer is going to feel like they’ve had poor customer service if their expectations are not met. For the HVAC industry, this can manifest in a number of ways, including:

  • A lack of transparency on when a service truck will arrive (or, worse, a scheduled visit being cancelled without notifying the customer).
  • Inefficient service (such as it taking too long to change filters, or arrange delivery).
  • Poor communication (the sales representative and on-site agent are unaware of the conversations that the customer had with other people in the business).
  • A lack of personal service (automated, irrelevant messages, or long wait times when making a call).

Most customers are not going to go out of their way to be upset by customer service, and most will understand if a scheduled maintenance time needs to be rearranged or a field agent is suddenly unavailable. However, customers do expect that the business is aware of their issue and is actively communicating with them in a transparent and empathetic way throughout the entire engagement.

Customers can be unforgiving and vocal

The first thing that every modern business should be aware of is that word of mouth has been amplified by social media. People have a global platform to air their grievances, and they will use it if the customer experience has been bad. Every negative comment on social media can cost a business, 30 customers. If for no other reason, every business should be fixated on customer service because very few can afford the exponential loss of customers following negative reviews.

To work out just how expensive this can be, calculate the customer lifetime value (CLTV) for your business. This number will account for more than the initial engagement, but ongoing service, repeat purchases and upgrades over time. Now multiply that by 30. That’s the amount of money that you’re potentially losing every time you disappoint a customer.

This effect is even more pronounced with large purchases, like HVACs. With large purchases like these trust means everything, and if the customer can’t trust you, then they will go to a competitor if people on social media tell them that they’re more trustworthy.

 Why technology is the solution

The right technology platform can boost customer satisfaction rates by ensuring faster and more transparent service, higher quality interactions, and better conflict resolution.

Technology can be used to monitor the performance of HVAC units in real time, and in many cases, flag problems before the customer are even aware of them. This allows the customer service to become proactive, rather than reactive. It is efficient and provides the customer with a positive experience.

Another key use of technology with customer service is with the CRM, such as Microsoft Dynamics 365. By centralising all customer interactions to one platform, every person within the organisation can be immediately aware of the full customer history. This helps with customer support itself, but it also assists the field agents (who can be made quickly aware of any past issues of the HVAC), and even marketing (who can deeply target promotions and offers based on the customer’s interests).

Technology can also help with the efficiency of the field team. GPS systems in cars can help customer service locate the nearest available agent, for a call-out, helping to minimise travel distances and times. Not only is this good for the bottom line, but if a customer needs rapid service, it can be provided in the quickest way possible.

Finally, customers have a better experience when they can get quotes and get work started quickly. If a field agent needs to collect details and then create a quote from the office, the customer will find the time delay frustrating and might look for an alternative. Leveraging the power of the cloud and the right platform, the field agent can provide an immediate quote on-site, and have a digital contract available to sign immediately.

Finding the right platform for customer service means finding a technology partner that understands the space and has a proven track record of delivering expertise to customers. For companies in the HVAC space, consider Nexon, and our Field Service Solution, which has been tailor-built for the kind of work involved in HVAC. For more information contact   here, or read more about the solution here.

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