Are customers willing to pay extra for good service?

Investing in high-quality customer service is now more critical than ever before. It’s how you attract and keep customers long after they’ve purchased from you. It’s also how you persuade them to tell their friends and family about your business. 

A study conducted by Microsoft found that 56% of people no longer do business with a brand due to poor customer service. While features of a product or a service can be worked on and price—fixed, the quality of customer service takes much longer to improve. Even when it seems like you’ve communicated to your customer support staff what’s expected from them, it still requires a team effort to implement the necessary changes.

The good news is that a whopping 86% of customers are willing to pay more for top-notch customer service. It gets better — customers who had great CX were likely to spend 140% more when compared to those who’ve been exposed to somewhat unsatisfactory customer service. This means that if you deal your cards right, you’re in for years of sustainable profits coming from satisfied customers. 

Customers are getting savvier by the day   

It isn’t surprising that the digital world we live in today has increased the competition in the marketplace. When the number of choices is seemingly endless, it comes down to the simplest details like unique product features and exceptional customer service that make or break a business. 

What’s more, present-day customers will go as far as to do their own product research before going through with the purchase. This is because a typical customer is well aware of his needs and wants and won’t compromise when there are infinite options available at the click of a button. 

Besides, it pays to know that rumors spread fast. We’re alluding to the common trend among social media users expressing their dissatisfaction with the customer support received via a quick Facebook or Instagram post.

If you want word-of-mouth to work in your favor and not against you, consider making notes of your customers’ pain points. You’re demonstrating that the experience your customers have with your brand matters by then incorporating them into the next product upgrade. 

Five benefits of the first-class customer service 

If you’re still not convinced that your customer service acts as your business card, here are five of the perks that might help you come to this realization sooner.

1) It gives you a competitive advantage

Not only does exemplary customer service help you differentiate yourself from your competitors, but it’s also often the deciding factor for prospects to purchase from you. Apart from having a unique selling proposition that makes you stand out from the crowd, companies that want to stay relevant should invest time and effort into honing their customer support which tends to be the first thing customers remember.  

Including customer service in your marketing strategy is a sure way to show your customers that you care about their happiness. Deliver on your promise, and your customers are likely to not even look in the direction of your competitors. 

2) It boosts your reputation 

No company is immune to occasional slip-ups. Having a reliable support system in the form of loyal customers helps preserve a good public image while fixing mistakes. Here’s where customer service comes in handy. 

Salesforce found that 78% of customers will forgive a company for its mistake if they receive excellent customer service. This safety cushion is instrumental to the superb company reputation when everything else goes south. Chances are, you’ll want your customers to be on your side and be openly telling their friends and family about how great your company is.     

3) It facilitates more sales and repeat business orders

Just think about it — a staggering 78% of customers have confessed to backing out of a purchase they intended to make after poor customer service. Safe to assume that offering good customer service increases customers’ confidence to hit that ‘buy now’ button and not look back. 

The same applies to repeat customers who cling to a brand that prioritizes customer support and doesn’t shy away from going an extra mile for its customers. Whether it’s a how-to video included in the pre-purchase email or a thank-you email sent after the purchase, your customers will appreciate your willingness to help.

4) It combats a high-end price tag

Speaking about customer service that sells, you might come to a roadblock where price tags can’t be your competitive advantage. This is particularly relevant for small businesses that don’t have the means to produce large quantities for reduced costs. Shifting to delivering great customer service can thus offset the somewhat high price tags.

This trick is a gold mine for every company looking for ways to justify their higher-than-average prices. Since customers are, in fact, willing to pay more for good customer service, you can rest assured that providing it will make your customers feel valued enough for them to dismiss the high-end price tag altogether.    

5) It saves you money on advertising 

Word-of-mouth is powerful, and there are plenty of advantages to leveraging it when trying to attract the right type of customer and increase your profits. One of them is to offer excellent customer service that gets people talking about your brand without you having to attract their attention via marketing campaigns. It’s a win-win for both parties. 

Typically, you’d have to allocate a good chunk of money for the advertising budget to not only break even but also gain some profits. With word-of-mouth that relies on exceptional customer support, this need becomes obsolete. Now you can save this money and invest it into the other areas of your business like R&D and operations.     

Deliver good customer service and reap the benefits of it ASAP

Depending on how you interact with your customers, you can either improve the customer experience they receive or make it worse. With technology making way for omnichannel communication, it’s easy to go to social media to learn more about customers’ needs and keep in touch with them. Show your customers how highly you value their experience with your brand, and you’ll be surprised by how willing they are to pay more for a good service.

On top of that, you’ll be able to improve your reputation, boost your competitive advantage, and even save money on costly marketing campaigns. Concentrate your manpower on meeting your customers’ needs, and a high-end price tag won’t faze them in the light of making a purchase from you.

Mikkel Andreassen is passionate about customer experience in every color of the beautiful customer engagement spectrum. He loves building great connections with his customers, which often lead to meaningful friendships that last a lifetime and inspire his work.

Driven by the genuine belief that CX is the pivotal force that drives a successful business, he is currently at the helm of Dixa’s customer experience strategy.

Photo by Adam Winger