“Sell good merchandise at reasonable profit; treat your customers like human being and they will always come back for more”- L.L. Bean
The essence of good customer service and relation to the survival of any given business couldn’t have been better portrayed than as it was with the above statement by Bean. It simply suggests customer services as an essential part of sales process engineering effort which plays a very important role in an organization’s ability to generate income and revenue.
Customer service which serves the central thesis of this discussion can be described as the art of providing services to the customers of a company or organization before, during and after purchase. It is a form of interaction, the success of which could be measured through the ability of employees to adjust to the personality of a customer and thereby creating in them an impression of self-fulfillment.
Customer services, however, are of several forms. It is either a customer/technical (for electronics or mechanical products) support which provides assistance such as planning, installation, training, troubleshooting, maintenance, upgrading, and disposal of a product to the company customers. Advancement in technology which had brought about an increase in e-commerce activities had also presented a new breed of customer care services often referred to as Automated Customer Service. Whichever of the services a company choose to maintain, it is geared towards sales promotion through customers satisfaction.
The success of a customer service system can, however, be measured based on how well it adjusts to the personality of a customer. A reason for which the development of a standard of measurement becomes pertinent. It is called the customer service index.
What are the Customer Service Indices?
To understand workflow and progress, measuring customer service success is a very important factor. Nature of business is also very important while consideration of which particular method of measurement (metrics) one should employ. These metrics are what we also refer to as Key Performance Indicator (KPI). The following are however few among the most used and most important business metrics: –
- Net Promoter Score: – this can simply be put as the measure of overall customer satisfaction with the use of a company product through their readiness to either recommend or dissuade other individuals or potential customers from making purchases. It is a feedback system which could be obtained either through live chat software or any other means applicable.
To calculate the net promoter score, the first thing to do is grade feedback gotten on a scale of 0-10 which in-turn determines the categorization of customers into three major groups. The group within the range of 0-6 is considered the unhappy and dissatisfied group who are likely to cause damage to the company reputation and products through negative altercations or campaign. They are called Detractors. Next is that whose score is 7-8 otherwise known as Passive. They are moderate, satisfied but unlikely to recommend the product and can be swayed by competitive offerings. The last group with rating 9-10 otherwise referred to as Promoters is considered the happy, enthusiastic customers who are unlikely to be swayed by competitive offerings and will keep buying, using and recommending the company product thereby enhancing more sale and fuel growth. Without considering for the Passive group, % of Promoters – % of Detractors = Net Promoter Score.
- Customer Retention: – one can simply refer to this as the major idea behind the creation of customer service as it starts with the first encounter a company had with its customer. It is a strategy which focuses on minimizing to the barest minimum the potential loss of customers to competitors through improved services and relationship.
To measure customer retention, three information needs to be considered within a specified time-frame. They include: –
- Total number of New Customers Acquired during the Period under Study (N)
- Total Number of Customers at the Start of the Period (S)
- Total Number of Customers at the End of the Period (E)
Customer retention rate (CRR) is thereby calculated as thus CRR= ((EN)/S)*100. Profit and customer retention, however, have a positive relationship such that improvement in the latter will cause a relatively greater improvement to the former. 1% retention improvement is likely to culminate in a 5% profit improvement per customer.
- Conversion Rate: – this is specifically designed to appraise the success of the automated customer service system. It simply suggests the calculation of the number of visitors an e-commerce site was able to convert to buyers on the site. Let’s assume a site received 300,000 visitors within a period among which 5000 made purchases, the conversion rate will then be 5000*100/300000= 1.67% which simply suggests conversion rate as being the number of sales/number of visits.
- Average Resolution Time: – this is simply used to test the efficiency of customer complaint resolution mechanism usually measured per hours/day. The extent it takes is dependent on the nature of product or service involved. It starts with the period complaint is lodged until the time it was closed. The formula for calculating Average Resolution Time is simply Total of All Resolution Times/Total of Cases Resolved.
- Customer Satisfaction Survey: – With the realization of how expensive sourcing a new customer is in relation to keeping an existing customer as well as the purchasing volume of both parties, keeping customers satisfied has become a priority for every business. The customer satisfaction survey is simply carried out through the instrumentality of one or more question with a degree of options targeting the extent of satisfaction derived from goods sold or services rendered. Note however that every question addresses different purposes based on the nature of goods and services as well as what exactly the business owners seek to measure. This will help such business to know where it is strong, which aspect they have to work on as well as what to give priority to among every other alternative.
- Customer Satisfaction Score or CSAT: – this is related to the customer satisfaction survey; but unlike it, customer satisfaction score is simply a grading system survey from customers which will help assess the overall satisfaction derived. Such could be as “How will you rate our overall satisfaction performance?” with a grading option of between 1-5 provided to choose from based on the extent to which customers expectation were met by the employees. It is simply a measure of satisfaction based on customer expectations.
Sam Makad is an experienced writer and marketing consultant. His expertise lies in marketing and advertising. He helps small & medium enterprises to grow their business and overall ROI. You can follow him on Facebook | Twitter
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