The cost of acquiring customers is far more expensive than retention. If you don’t believe us, calculate your Customer Acquisition Cost or Cost Per Acquisition. Customers stay dead set on services or products that are attentive to their needs, making it harder for you to poach them and sadly requiring almost an arm and a tooth or a ridiculously clever marketing strategy to convince them to give you a try.

So what exactly do you do to battle this weak point? In this post, we’ll discuss how Customer Service can be your best assisting defence against the high cost of acquisition and low retention rate.

First, How it Works…

Your marketing team is one of  your mainstream contacts with your customers. They do the work when it comes to getting the product in front of your target audience. Churning campaigns that would convert your target audience into paying customers _at a cost that you’d have to discuss in your next reports meeting_

It’s a different ball game with Customer Service

There’s no one to offer support if you don’t have customers in the first place. Typically you’d think your Customer service team should only go in to defuse a situation, soothe an aggrieved customer, or explain why there’s a downtime. If you’re on this table, then you’ve been short-charging yourself with how effective your Customer service / support team can be.

Customers are much more difficult to convince and much less trusting of new services. 

If 8 out of 10, the only reason your paying customers are reaching out to your Customer service unit is to make a complaint, then you are cutting off bit by bit (but surely) an inexpensive route to customer acquisition and retention. This means you need to re-evaluate your approach to customer service and start to see it as a systematic approach toward increasing your ROI, although not rigidly.

With your support team, the work starts when there are paying customers, then they can have a clearer shot at increasing your acquisition and retention margin.

The Formula is Different

Ideally, you’d think of the funnel as starting from the very top, but TK Kader, a young founder and angel investor who sold his startup to Adobe for $4.75 billion thinks it should start from retention. After your marketing team has brought in paying customers.

With customer service, the AARRR funnel assumes a Venn diagram with “Paying customer” in the middle and Acquisition and Retention on both ends.

In a much simpler explanation, your Customer service team comes into a cycle of already existing users. Making use of tools, communication, and problem-solving skills to increase customer satisfaction boosting retention rate, and using that as an avenue to encourage acquisition.

Take a look at what should be your Customer Service team’s Venn diagram for an Increased ROI.

As originally intended, the marketing team initiates the start of their funnel, bringing users with the first touch point which usually starts with a campaign set in motion to acquire your target audience. This opens a channel for your customer support team to assist the marketing department in pushing the already rolling ball into the goal post.

Disclaimer: Your Customer service team is not a sales team. That just had to be said

For Retention, Here’s How:

Customer service when done well will cause 78% of your customers to still do business with you even after a mistake and 89% will make a repeat purchase based on good customer service (SalesForce Research). Yeah, you read right. Good customer service is rated one of the top ways to keep users interested in your product or service, ensuring that one way or the other they stay glued. To increase your retention rate, these are the things your CS team can do:

• Check with Paying Customers to know how well your product is serving them

• Offer them special discounts via call/text on special days like birthdays, anniversaries, etc

• Suggest other business packages that would better suit your customer needs when resolving an issue (and if possible throw in a discount to get the customer started)

• Suggest lower packages that would better cater to their needs. A paying customer is better than a churned user. Plus you have future opportunities to upsell than reactivate the customer.

• Have a dedicated channel or route for complaints and inquiries so they can dedicate time to each accordingly and reduce the response time for both.

N.B: This works distinctly for companies and industries. Factors like size and number of employees are also dominant determinants. However, companies that pay attention to providing excellent customer service witness 86% of their one-time customers turn into long-term brand champions (Khors). And trust us, there are statistics for a reason.

How Customer Service Helps Acquisition…

A satisfied customer would refer your service to people. 38% of consumers say that when they rate a company’s service as “good” they are more likely to refer that company to friends and family (Qualtrics XM Institute). Do the math. An entry into the cycle at 0 cost? Well, not exactly but this is what it would “cost you”:

• Nudging your customers to drop a review on your website or social media channels, which would aid social proof and make it easier to acquire new customers.

• One-liner invitations to existing customers to invite their peers to use your service because like CTAs, if you don’t ask how would they respond?

• Ensuring that 80% of complaints end up satisfactorily resolved. 72% of people will tell 6 or more people if they have a problem satisfactorily resolved. (Esteban Kolsky)

• Assigning your customer advocate time to respond to complaints on social media. They are skilled at communicating with empathy. This boosts brand presence online and can serve as a means of acquiring users.

Disclaimer: Your customer service advocate is not a social media manager.

Conclusion

Take it or leave it, customer support is one of the many ignored departments in business ventures. It is also one of the most complained about sectors of most businesses, with most customers opting for other alternatives due to terrible service. Optimizing your CS team gives your customers room to feel heard and you, the chance to groom them to the stage of customer loyalty. It all switches at this stage because a satisfied customer would always recommend your service or product. What if what you’ve been missing out on is great customer service?