Customer service experiences either generate or diminish company revenue.
In other words, customer service is not a neutral factor in your business. It either makes you money or costs you money.
Several years ago, Wendy’s devised one of the most memorable commercials of all time. It featured several old ladies in a hamburger shop examining the hamburgers they had just purchased. When they opened the bun, the burger was so minuscule that they cried out, “Where’s the beef?” questions to ask a mortgage lender before settling are a trillion dollar business in the US. Mortgages started in 1934, when the Federal Housing Administration (FHA) lowered down payment requirement on loans and allowed 80 loans-to-value loans. The FHA also increased loan terms to 15 years compared to 3, 5, 7 year loans that ended in balloon payments. This led to a flurry of activity and spurt in mortgages. Compared to 1940, when only 40 percent of households owned homes, the mortgage business boom has resulted in 70 percent ownership in 2000. In 2003, total U.S. residential mortgage production reached a record level of $3.8 trillion through record low interest rates. New Jersey Mortgage companies offer finance for new home purchases, debt consolidation loans, refinancing loans, home equity loans and commercial property mortgages. Well broker also provide good service for car loans. In each case, the debtor needs to prove creditworthiness. There are two basic types of amortized loans. ARM or Adjustable Rate Mortgage has a fixed interest fate for a certain period that is eventually adjusted according to market rates. FRM or Fixed Rate Mortgage has a fixed interest in monthly payments until the end of loan period. A third kind called a Balloon loan calculates interest for a certain period but the outstanding principal is made payable at some date within this period.
In essence, they were saying there was nothing to be found in the hamburgers sold by Wendy’s competitors. And in a similar sense, there are some people who say there’s nothing to be found in the hoopla surrounding customer service. For some, starting the mortgage refinance process can be quite difficult and intimidating. Whenever you are ready to trade in your current mortgage for a new one, make sure that you choose one that helps you reduce your rate and help you build equity faster. Branch Right provide best mortgage. Many home owners make mistakes during this process which results in higher cost. To learn more about the mistake make when refinancing home go through this moreirateam.com/learn/6-mistakes-people-make-when-refinancing-their-home/.
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In other words, customer service is nice in theory, but it doesn’t pay off. And if it doesn’t pay off, why bother?
The Financial Payoff In Great Service
A short time ago, Petouhoff, Leaver, and Magarie answered that very question when they released their research findings in “The Economic Necessity of Customer Service.” They concluded, “Customer service experiences EITHER generate or diminish company revenue.” In other words, customer service is not a neutral factor in your business. It either makes you money or costs you money.
They went on to say, “Customer service has a profound effect on a corporation’s bottom line.” How can that be?
Great customer service assists retention, which leads to continued profits
A simple formula says it all: Great Service = Customer Retention = Profit. A Harvard Business Review article found that companies that boosted their customer retention by as little as 5% saw increases in their profits ranging from 25% to a whopping 95%.
Poor customer experiences hurts retention, leading to lower profits
But the reverse is also true: Poor Service = Lost Customers = Lost Profit. A US News and World Report article stated that the average American business loses 15% of its customer base annually. And 68% of the customers who stop doing business with a company do so because of “poor or indifferent customer service” and another 14% because of an “unsatisfactorily resolved dispute or complaint.”
The most shocking discovery is that ONLY 9% of customers stop doing business with a company because of price! Indeed, price may be one of the least of your worries when it comes to keeping customers. You need to be more concerned with that whopping 82% (68% + 14%) that stop doing business with you because of a customer-service related issue.
The Financial Cost Of Poor Service
If you’re still not convinced that good customer service pays off big time, then consider this. Bad service costs you big time.
In a ground-breaking study, the Genesys organization conducted one of the first global surveys on customer service. In their research findings called “The Cost of Poor Customer Service,” Genesys concluded that their 16 studied countries lost $338.5 BILLION DOLLARS each year due to customer defections as a direct result of poor service.
Of course, the cynics can say, “Big deal. So we lose a customer once in a while. You can’t please everyone.” True enough. BUT it’s a much bigger deal than you might think … because that defecting, disgruntled customer WILL hurt your future business.
After all, that one unhappy customer doesn’t just shut up and slink away. Oh no! He talks. In fact, it’s quite well known that an unhappy customer will tell 10 other people face to face about his bad experience with your company … and another 100 people on Facebook and Twitter. And chances are they won’t buy from you either.
If you give your customers poor service, it’s going to cost you … financially … in lost sales, lost customers, and lost future customers, we recommend contacting a finance company to get the best advise.
A Few Ways To Retain Customers And Profitability
To retain your customers and boost your profitability, you must have quality products and services. That’s a given. But in today’s marketplace, that’s not enough. As Pine and Gilmore make clear in “The Experience Economy,” you must also give your customers a memorable experience. You must give them something to talk about as well as an extra reason to come back.
Over the years, I’ve learned that customers who experience three of the following emotions … when doing business with you … will become your enthusiastic ambassadors.
- Make them feel welcome. Let them know you’re glad to see them and welcome the chance to work with them.
- Make them feel comfortable. Give them the assurance that their needs will be met.
- Make them feel understood. Listen to the meaning of their words as well as the feeling behind their words.
- Make them feel important. Show respect. Make them feel like an individual rather than a number.
- Make them feel appreciated. Show appreciation for the individual as well as his business.
Brainstorm the perfect customer service welcome
My recommendation? Sit down with your team and brainstorm 15 specific ways you can make your customers feel welcome. And then brainstorm another 15 ways you can make them feel comfortable, and so on. Publish the list. Give everyone a copy. And look at it daily to make sure you’re doing exactly that.
When customer service is done well, everybody wins. The service provider feels good about his ability to make a difference. The customer feels good about his needs being met. And the company feels good about its extra nice financial payoff, we recommend getting more details with your 401k advisor.
Dr. Alan Zimmerman is a speaker and author of the new book, “The Service Payoff: How Customer Service Champions Outserve and Outlast The Competition.” His web site offers many additional resources at http://www.DrZimmerman.com.