Maximize Sales & Loyalty: The Power of Investing in Customer Service

Providing your customers with excellent customer service shouldn’t be an afterthought. So let me be crystal clear: customer service is not about the number of tickets closed. Or the number of tickets received.

Customer service is an acquisition channel. It’s a way to grow the LTV of your customers significantly, and a powerful tool to drastically increase your conversions.

Many eCommerce brands are missing a massive opportunity when, instead of real customer service, they employ:

  • Bots for customer support

  • A skeleton team only available for certain hours, which also requires team members to multitask between tickets and chats

  • An FAQ page for customers to find their own solutions

What exactly is this missed opportunity? SALES. Lots of sales.

The Impact of Customer Service in eCommerce

Brands need to listen to their consumers. A 2018 survey from NewVoiceMedia shows that 75% of customers favor live agent support for customer service over chatbots and self-service solutions.

Yet, too many brands are still too quick to employ alternatives to actual customer service agents who give a damn. Neglecting a customer service team doesn’t just impact the quality of your small customer interactions. Not offering high-quality customer service results in lower conversion rates, higher churn, and missed sales.

I believe the reason is that brands still see customer service as a defensive game (i.e., support issues). But if you flip this mindset and see customer service as an offensive game (i.e., sales acquisition), you spend and invest in it differently. As a result, customer service becomes a variable, yet powerful marketing spend instead of a fixed expense.

Customer service is a bottom-of-the-funnel closing opportunity. Brands are already spending countless $$ on abandoned cart campaigns. And those produce a strong ROI. So why not do the same with live customer support, another ample closing opportunity? Again, the opportunity is immense — to the beat of 3X more returns.

When you leverage low investment tactics to close opportunities, you get low returns. Just look at this graph from 2PM demonstrating the ROI from high-investment customer service.

2PM’s graphic that demonstrates the ROI of investing in customer service.

in October of 2021, Watermark Consulting conducted a Customer Experience ROI Study that demonstrated a definitive financial return on delivering a high level of customer service. The study looked at the total stock returns for two model portfolios — comprised of the Top 10 (“Leaders”) and Bottom 10 (“Laggards”) publicly traded companies in customer experience. Here are the results:

  • Customer Experience Leaders outperformed the broader market, generating a total return 108 points higher than the S&P 500 Index.

  • Customer Experience Laggards trailed far behind, posting a total return 110 points lower than the S&P 500 Index.

  • Customer Experience Leaders generated a cumulative return of 3.4 times greater than the Customer Experience Laggards.

Why I (And Your Customers) Abandon Cart: A Real-Life Case Study

Recently, I was shopping online at a $50 million+ mid-market supplement store. Unfortunately, the site was slow, the checkout wouldn’t let me past Step 2, and I kept getting error pages.

I was ready to buy $600 worth of product, but because I couldn’t talk to anyone (there was no FAQ support, no phone number, and no agent online) — I abandoned my cart.

If I could have spoken to someone, I would have complained that the site is horrible. But after complaining, I would have placed the order and been a happy customer. But, of course, I’m not the only one. A study by Invesp found that 44% of online customers said that having questions answered by a live person while in the middle of an online purchase was one of the most essential features of an eCommerce site.

In a counter scenario, I’m a customer of Clive Coffee, who’s in a quickly diminishing industry (retailers of espresso machines and equipment). When my grinder wasn’t working correctly, I contacted their online agents, who said, “Hey – let’s hop on a video call. That doesn’t sound right.” They called me immediately, and within minutes, they shipped me a new grinder. I have since spent more than $1,500 with them.

While the above is anecdotal, the case is clear. When you invest in customer service, you not only convert high-intent prospects to customers. You also significantly increase the LTV of existing customers.

A Harvard Business Review study showed that customers with the best past customer service experiences spent 140% more than those with the poorest past experience.

Let me repeat something I said earlier: customer service is not about the number of tickets closed. Or the number of tickets received. It’s about closing sales and helping existing customers so that they come back to buy more.

Businessman and author Rob Kauffman once said, “Exceeding expectations is where satisfaction ends, and loyalty begins.”

Customer service is that opportunity to exceed expectations and see the returns via customer loyalty.

Here’s an amazing email I received after purchasing from a physical retail store that’s part of a DNVB brand, Mack Weldon. This kind of customer service made me feel that Alejandra was my own personal shopper. And now when I shop here, I will absolutely ask for her.

The personalized customer service I received at Mack Weldon.

It’s the level of customer service Alejandra offered that’s going to pay off in the long run. Not automated chatbots or figure-it-out-yourself FAQ pages.

When you truly invest in quality customer service, you will see returns via your customers’ satisfaction and lifetime value. Brands that deliver great customer service are the ones that customers want to interact with, the ones they recommend to their friends and families, and the ones customers loyally return to again and again.

Have questions about your eCommerce strategy? Reach out to us at Anatta.

If you’re debating what move to take on next quarter’s roadmap, feel free to get in touch with our team. We’d be glad to help you figure out what direction to take for growth depending on your situation.

You can contact us here.

  • avatar
    Nirav Sheth
  • Nirav is the CEO and founder of Anatta. Nirav received his engineering degree in 2006 from George Washington University. Prior to Anatta, he served as founder of Dharmaboost, a software company working with Cisco Systems, Hewlett Packard, and New Leaf Paper. He is also cofounder of Upscribe, a next-level subscription software for fast growing eCommerce brands.