Great customer service has it's rewards, and one of them is referrals. Word of mouth doesn’t always come easy, yet when it does happen, those referrals are often some of the best opportunities a business can have for acquiring new customers.
Since advertising effectiveness has declined over the years, the one method that continues to deliver even today is referrals and word of mouth.
The key to getting your customers to do your marketing for you is not just about going above and beyond with an exceptional product or service, but also rewarding your best customers at the same time.
According to business experts at McKinsey management consulting, as much as 70% of a customer’s buying experience is based on how they feel they are being treated. If that’s the case, you’re in complete control. Ensuring the customer experience exceeds expectations is a road map for success.
It’s said that 80% of companies are convinced that they deliver "superior" customer service, but in reality only 8% of people think these same companies were able to deliver "superior" customer service. The takeaway? What you believe to be exceptional might not meet with expectations.
You have to be on the lookout for insight in order to take care of your customers. For every customer that even bothers to complain, it’s said that 26 others remain silent. That means you only hear from about 4% of the customers that are dissatisfied. These complaints are golden opportunities, because the few that do share their opinion present you the chance to not only become aware of any shortcomings, it also provides you the opportunity to address issues so you might delight them in the future. If you take care of things quickly, most will do business with you again.
A bad customer experience can reach twice as many ears as a good one. Nowadays, this is often amplified through online reviews and social media. Learning how to respond to negative reviews is an opportunity to demonstrate you’re genuinely interested in your customers. Many will see how you handle a situation, and this alone can draw respect or interest from a prospect that might become a customer. It’s also important to monitor customers reviews and comments to address things quickly.
On average, consumers that wish to complain online will take to social media or review websites when dissatisfied. In the case of social media, a response time of 60 minutes or less is expected from most. Surprisingly, only around 30% of companies actually ever respond to social media feedback or complaints.
With 84% of consumers trusting online reviews about as much as personal recommendations, creating advocacy around your product or service truly presents an opportunity for growing your business. With your customers at the heart of your marketing strategy, you should be able to generate glowing online reviews and referrals through word of mouth. But only if you remember to monitor, measure and manage your online reputation, along with your brand.
If you’re confident that your business delivers and even see evidence from existing reviews, it’s a good sign. Capitalize on the goodwill and hard work by implementing a strategy that will keep the positive reviews coming. They’re worth more than you might expect.
A Harvard study by Professor Michael Luca suggests that as little as a 1-star increase in a company's rating can lead to a 5 to 9% increase in revenue. In a Berkeley study published by Professors Michael Anderson and Jeremy Magruder, it was found that an extra half-star rating on Yelp caused a restaurant to sell out for 7pm bookings on from 30% to 49% of the nights it was open for business.
The Pareto principle (80 percent of the results come from 20 percent of the action) suggests that in business, your biggest advocates could be your most vocal customers, and those are the customers to engage with further. In one study, it claims that businesses which spend 5% on loyalty marketing are typically 25% more profitable.
To keep those reviews coming, it starts by asking for them, and follow up. Creating a process and how well you adhere to it will determine the success of review requests. As you can see, word of mouth and referrals pay off in the digital age as well. When you focus on resolving issues, you can turn customer pain for commercial gain that creates real opportunity.