This week United Airlines, America’s third largest carrier, has been at the heart of a customer experience and PR disaster rumoured to have resulted in a loss in business value of close to $1bn dollars. Following a catalogue of ill-informed customer management decisions, a man was recorded being forcibly removed from a flight, prompting global outrage and backlash against the company. The full impact of remains to be seen, but one thing is certain – the way United Airlines handles the coming days, weeks and months will be crucial.
In light of recent events, we wanted to take a look at the importance of customer service for building brand, boosting customer loyalty and maintaining reputation.
No customers, no business.
Let’s get one thing straight – Without a solid customer base, you have nothing. It doesn’t matter how great your product offering is without users, so customer experience should always be high on your agenda.
Putting your customers at the heart of your business strategy is about more than giving yourself that warm and fuzzy feeling inside, it impacts your bottom line. According to McKinsey & Company, improving customer experience can increase business revenues by five to 10 percent and, more importantly, cost 15-20 percent less over three years.
A happy customer is a loyal one and if you spend a bit of time and money early on to get the customer experience right, it’ll pay dividends in the long run. Whether you’re a start-up or well-established business, building your customer base should always be a core focus of your strategy. Remember though, adding new customers is only valuable to your business if you can keep your existing ones.
Your customers are your biggest advocates
According to BrightLocal, 88% of people trust online reviews written by other consumers as much as they trust recommendations from personal contacts. Moreover, 72% say that reading a positive review increases their trust in a business. You could spend all the money in the world on marketing, but the easiest way to quickly build your customer base is through recommendations.
Now let’s look at this the other way around. Did you know that it takes 12 positive experiences to make up for one unresolved negative experience (‘Understanding Customers’ by Ruby Newell-Legner)? Similarly, did you know that according to ZenDesk 95 percent of customers tell others about a bad experience? Bad news travels fast and if you get it wrong, you’ll certainly feel the effects on your bottom line as a consequence.
Negative customer experiences can be highly damaging to the growth of your business and, considering that it costs six to seven times more to acquire a new customer than to keep an existing one (White House Office of Consumer Affairs), it really makes good business sense to keep your customers happy.
Lessons from United Airlines
One over-booked flight. One customer removed against his will. One significant fall in worldwide shares. United Airlines has suffered the consequences of this incident both financially and reputationally, which could have a far longer lasting impact.
This incident is a perfect example of the damage that negative press and poor customer experience can do to a brand. Word of mouth marketing, or brand advocacy as we call it in the trade, is a powerful tool when harnessed correctly alongside exceptional customer service. A word to the wise though, get it wrong and you could feel the impact for many years to come.