How Customer Service Can Boost Customer Retention for Your E-commerce Brand?

In the “olden” days, most customer service departments had a simple and uncomplicated role of handling customers’ queries and complaints via email or over the phone. They did not have access to “instant” communication on their preferred channel or at their preferred time. And yet, many businesses managed to hold on to their customers and keep revenues coming in. 

Times have changed! Today, customer service is no longer about simply responding to customers’ questions or complaints. Rather, it is about fostering two-way communications and helping customers achieve value from the brand and its products. By offering high-quality, personalized, and omnichannel customer service, you can build meaningful customer relationships and inculcate greater trust in your e-commerce brand. You also get loyal customers who prefer your brand over your competitors and keep coming back to it. In other words, quality customer service has a huge impact on customer retention. 

This blog explains how customer service can help your e-commerce company boost customer retention. Let’s dive in!

Why is Customer Retention Imperative in E-commerce?

The presence of customer retention mechanisms in a firm prevents the customers from making a switch to another brand. Unfortunately, many companies prioritize customer acquisition over customer retention. However, customer retention should also be a key strategic focus of your e-commerce business.

One reason is that it’s easier, cheaper, and more profitable to retain existing customers than to acquire new ones. Research shows that existing customers are 50% more likely to try new products. Also, the probability of selling to an existing customer is 60-70%. Typically, they also spend more per purchase and are more willing to make repeat purchases. Since they will have a higher customer lifetime value (CLV), your e-commerce brand can expect to earn more revenues from these customers over time. 

Current customers will also be more receptive to your cross-sell and upsell efforts, thus helping to boost your sales and revenues. Happy existing customers will refer their friends and family to your business, helping you to acquire more customers free of charge.

For all these reasons, you need to improve customer retention by driving greater satisfaction and loyalty. And great customer service plays a vital role in this effort.

The Impact of Customer Service on Customer Retention

While product quality and prices do matter, your long-term revenues and profits depend on how you deliver on your brand promise. Here’s where customer service comes in.

According to HubSpot, American companies lose over $62 billion annually due to poor customer service. One reason is that 60% of customers consider switching brands following poor service experiences. But it’s not all doom and gloom. Research also shows that 69% of customers are willing to spend more and 93% are likely to make repeat purchases from a company that offers better customer service. 

When you offer great customer service that’s timely and personalized, you can build meaningful ongoing relationships with each customer. You can make a great brand impression and improve customer satisfaction and overall experiences. Ultimately, you are more likely to retain customers and ensure that they “stick” with your brand for the long haul.

Best Practices to Boost Customer Retention

So how can you deliver stellar customer service to boost low retention rates?

One customer strategy is to personalize each service experience to the needs of individual customers. Also, focus on convenience. Does a customer prefer service via a chatbot instead of via a phone call? Do they prefer to talk to reps in the late evening instead of during the day? Leverage data to understand customers better and generate actionable insights about them. Use these data-driven insights to determine their preferences and deliver service experiences that match these preferences and priorities.

It’s also important to listen to customers. Your service team should practice active listening and empathy so customers feel heard and appreciated. Service reps should also be authorized to take the appropriate action needed to solve issues so customers don’t get an unnecessary run-around that can frustrate and annoy them. This way, they are more likely to speak positively about your brand and stick with it for the long term.

Another good practice is to ensure that customers can easily find your help and contact info. Put this information in front and center of your website and on every email so they don’t struggle to reach your service team. If you make it easy for them to reach out, you will see an impact on satisfaction and retention rates.

Finally, make an effort to improve customer service. Solicit customer feedback to ask how you can improve their service experiences. Also, implement metrics to measure and improve your service capabilities.

Conclusion

Have you been ignoring your customer service function? This can be a big mistake for your e-commerce brand. Customer service is a crucial driver of customer retention in e-commerce. Great customer service can encourage customer loyalty while poor service will push them away. With personalized service experiences, you can make customers’ lives easier and boost your revenues.

If you want to improve your customer service function but are not sure how to contact Ergode. We’ll help you design outstanding customer experiences that increase customer retention and strengthen your bottom line.

 

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