Extra Edition / Business Management

Research Shows Taking Care Of Customers Is No. 1

September 19, 2003
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You probably have read many times over that taking care of the customer and putting him or her first is essential for business success. However, this is not just an oft-repeated business platitude that sounds good but nobody can back up with fact. Business research indicates that, when it comes to buyer loyalty, what keeps consumers coming back has less to do with price and marketing prowess than with how well the company treats its customers, especially when they have a question or complaint.

A research study produced by the Society of Consumer Affairs Professionals (SOCAP) International talked to over 5,000 consumers to measure how their interactions with companies affected their future purchasing decisions. Conducted for SOCAP by The Center for Client Retention, the study found a direct correlation between buying intent and a customer's experience with a company's customer relations people. Specifically, 90 percent of those consumers who were pleased with their experience said they would continue to buy the product or service, while only 37 percent of the customers who were dissatisfied with their experience said they would remain loyal.

Courtesy, Professionalism First

At the same time, SOCAP’s Consumer Loyalty Study shows what customers want when they contact a company. The respondents ranked courtesy and professionalism by the company representative first (84.5 percent), followed by the amount of time the representative spends with the consumer (81.4 percent), encouragement to call again (80.7 percent), and the representative's expression of appreciation for the consumer's business (79.2 percent).

Emphasizing the importance of these "customer relationship" factors, the study examined the influence of these attributes on consumer loyalty and found a direct relationship. It indicated that 88 percent of those respondents who gave a company representative’s demonstration of "concern and interest" their highest ranking said they would be very likely to purchase the company's products again, while only 3 percent would be very unlikely to purchase again. For company representatives who "show enthusiasm," consumer reaction was identical: 88 percent would be very likely and only 3 percent very unlikely to buy the company's products again.

SOCAP’s research also found that when customers are satisfied with the way a company handles a question or complaint, they sometimes become even more loyal than customers who never experience a problem. According to the survey, approximately one in five consumers (18 percent) stated that they would buy more of the company's products as a result of their positive experience with a company representative.

Another way that customer service impacts future sales is through word of mouth, whereby consumers tell their family and friends about their positive or negative experiences with a company. In this study, 58 percent of all respondents told others about their experience with a company, with most telling three or more people. Charting the potential impact when word of mouth is positive, the study found that approximately three in four consumers (73 percent) would be more willing to recommend a company's products after a good experience with a company contact.

Positive Relations Equal More Dollars

Having made the connection between satisfied customers and their future buying decisions, the SOCAP study also documents the dollar impact of building stronger relationships between the company and its customers. Projecting the “loyalty dollars” that are generated by positive company contacts, the study’s figures estimate an average of $230 in loyalty dollars for a company for each contact that leaves a consumer satisfied.

As this research illustrates, it is vitally important that every person in your contracting business who is in contact with customers — receptionist, salespeople, installers/technicians, office manager, etc. — maintain a courteous, polite, and professional manner at all times. If there is a question or complaint, take the time to listen carefully and find out exactly what is needed or what is wrong. Be a solution provider; if you can’t provide an answer or solve the problem yourself, tell the customer that you will make sure the appropriate person gets back to them. Express appreciation for that customer’s business, even if they are giving you a hard time. Your professionalism and prompt response to their concerns could very well win you a customer for life.

SOCAP International, based in Alexandria, Va., is a worldwide organization of customer care professionals, providing members with educational and networking opportunities. For more information and additional research on customer care issues, visit the organization’s Web site at www.socap.org.

Publication date: 09/22/2003

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