Customer service matters more than ever

On Friday we were treated to the news that the UK economy is still in recession contracting 0.4 per cent between July and September 09. This economic data gives extra significance to some recent CPP research on the importance of customer service. Our research shows that one in four consumers would not use a company again if they were on the receiving end of poor customer service and we are quick to tell others about our negative experiences - nine to be specific!

Furthermore the rise in social media means that customers now have a world-wide audience through mediums such as Facebook, Twitter and YouTube to talk about their bad, and good, experiences. Social media is inherently a conversational channel that captures and communicates people's instant and spontaneous thoughts and feelings. Unsurprisingly, it is the young adults under the age of 35 who are most likely to talk about poor customer service online and their pet hates include explaining themselves numerous times, rudeness, inefficiency and that irritating telephone message about 'how important your call is.' Specifically an incredible 10 per cent of consumers would post comments about poor customer service via their Facebook homepage highlighting the influence of this single channel.

The research tells us businesses only get one chance to make a good impression and as consumers have been streamlining their spending in the recession, good customer service is more important than ever. We have all heard the statistic that acquiring a new customer is seven times more expensive than retaining an existing one and therefore customer retention is vital to company profits. Long gone are the days when someone would be a loyal customer just because their parents had used a particular service or brand and the internet means your competitors are only one click away.

However, the research is not all doom and gloom. 73 per cent of customers would recommend companies if they are on the receiving end of good customer service giving sales and profit a welcome boost. Social media is also a fantastic opportunity for businesses to win back dissatisfied customers. If you can manage these relationships online, you have an opportunity to engage with customers and retain their loyalty. Even if you cannot resolve the complaint, the fact that you are online speaks volumes about your commitment to customer satisfaction and post sales issues. Importantly, social media is not just about the individual taking part, but the wider online community who will be passively observing the dialogue and what you say. This leads me onto my final point that social media can be a fantastic source of customer feedback about your products or services.

It is fair to say no business can be 100 per cent perfect, we all make mistakes, but it's how you deal with social media comment that can make a huge difference to your organisation's reputation, which is arguably your most valuble commodity. People use online forums because they trust the collective comment and are happy to put their trust in user generated content. It's important, therefore, that businesses not only provide first-class customer service, but proactively engage and resolve any potentially damaging issues.