Service is the new marketing: the future of customer retention

In today's business world, every customer contact is a valuable opportunity that must be positively remembered. This becomes particularly clear when you think of countries like Japan, where customer service is at an exceptionally high level. There, the motto ‘a once-in-a-lifetime opportunity’ is lived, meaning that every customer contact should be unique and unforgettable.

To give an example from my own experience: during my trips to Japan, I was always impressed by the friendliness and helpfulness of the people. Whether it was the friendly ‘Irasshaimase’ when entering a shop, the support of the staff in an onsen (hot spring) despite my tattoos, or the special birthday menu that a restaurant owner prepared for my wife – all these experiences have left a lasting impression on me.

These ‘magic moments’ or ‘moments of truth’ show that excellent customer service is a key element in customer loyalty. Companies that build a positive image through their employees and create long-term customer relationships demonstrably achieve higher sales. On the other hand, negative service experiences can quickly lead to customer loss and a bad reputation. In this respect, service experiences can be the new marketing, both positive and negative.

In Germany, too, there are more and more customer-oriented companies, but there is still a lot to learn. Today's customers not only expect round-the-clock service, but also quick solutions to their concerns. The number of contact channels is constantly growing, and the use of customer data plays a crucial role in ensuring smooth processes.

Recent studies show that over 60 per cent of 18- to 44-year-olds have already switched providers due to poor service. In addition, over 70 per cent of customers want to resolve their concerns themselves without contacting traditional customer service. This has significant implications: according to a study by Nielsen, 92 per cent of consumers trust the recommendations of friends and family more than any other form of advertising. A negative experience is shared with an average of nine to 15 other people about their negative experience.

Good service is therefore a strategy for the future. Almost 60 per cent of customers are willing to pay more for a product if the customer service meets their expectations. But how can companies adapt to these changing service expectations?

We see customer service as a journey through a maturity model – from a cost centre to a profit centre. Four steps are crucial:

• 1. Focus on metrics: The focus is on revenue and customer value. Self-service options such as chatbots or self-service centres are implemented.
• 2. Omnichannel transformation: Data-based approaches support service employees with suggested answers.
• 3. AI-supported functions: Voice recognition and real-time coaching based on relevant customer information.
• 4. Innovative further development: After three to five years, companies can further develop the service, for example by using robots in hotels or live location overviews for deliveries.

One example of innovative further development comes from Japan. There, robots are available in hotels to take over customer service – for example, concierge services. This is a unique experience that is sure to be remembered. A second example, which is already part of everyday life for many people, is a live location overview of a delivery or even the ordered taxi. This may sound trivial to many, but this transparency is a great added value in terms of being informed.

The role of social media in customer service

Social media has become an indispensable channel for customer service. Platforms such as Facebook, LinkedIn and Instagram offer companies the opportunity to interact directly with their customers and respond to their concerns in real time. This has several advantages:

• Fast response times: Customers today expect quick answers to their questions and problems. Social media enables companies to respond promptly, thus increasing customer satisfaction.
• Public visibility: Customer service via social media is publicly visible. Positive interactions can strengthen a company's image, while negative experiences can be resolved quickly and transparently.
• Feedback and improvement: Social media provides a platform for direct customer feedback. Companies can use this feedback to continuously improve their products and services.
• Engagement and loyalty: Through regular interactions and sharing relevant content, companies can build a stronger bond with their customers and foster their loyalty.

Why positive service experiences are talked about

Positive service experiences have a significant impact on customer behaviour and the perception of a company. Here are some impressive figures:

• 94 per cent of customers say that a positive service experience makes them want to buy from a company again.
• 82 per cent of customers would recommend a company because of excellent customer service.
• 77 per cent of customers say that excellent customer service makes them more likely to buy from a company again.
• 72 per cent of customers share their positive experiences with six or more people.
• 52 per cent of Americans are willing to pay more for good customer service.

Experience shows that modern customer service is a key factor for business success. It helps to retain customers in the long term – service is a marketing factor. At the same time, it is also a sales channel, as proactive service approaches, omnichannel support and self-service options make it possible to meet rising customer expectations while also increasing efficiency. This enables cross-selling and upselling. Just think of streaming options offered in a self-service centre.

Companies that adopt these modern service approaches not only position themselves as customer-oriented, but also gain a decisive competitive advantage in an increasingly digital and connected world.

Would you like to learn more about exciting topics from the world of adesso? Then take a look at our previous blog posts.