May 13, 2016

The Customer Service Revolution

Jay Baer is an author, speaker, podcaster, president of Convince and Convert, and a recent guest on our podcast, B2B Nation: Smarketing Edition.

In the episode, we discussed:

  • How critics (or “haters”) are louder today than they were a decade ago
  • Whether the increase in social complaints will continue 

Below are some of the highlights from our conversation.*

Customer service is being disrupted the same way marketing was disrupted.

“All the things that have caused upheaval in marketing are now causing upheaval in customer service, but nobody’s paying attention. We’ve had this enormous shift in customer service from a world where most of our interactions with customers were private, to a world where an increasing number of interactions take place in public, on social media, discussion boards, and B2B forums, or even rating and reviews sites. But most companies are using a 1995 playbook to handle 2016 customer service issues. We have to stop this.”

Most companies are using a 1995 playbook to handle 2016 customer service issues.

Modern customers are infinitely louder.

“Bain research says that 80 percent of businesses claim to deliver a superior CE, which is impossible. It’s like the stat that 91 percent of people think they’re excellent drivers. Also not possible. Eighty percent say that, but only 8 percent of their customers agree. You have this fundamental disagreement about what is good customer service.

“For generations of businesspeople, there was no real benefit to being good at customer service. If you were really good 20 years ago, that might’ve made you feel good or might’ve been psychologically satisfying, and you might try to retain the customers who actually complain, but there was no amplification effect. If you delight someone on the phone or via a letter, they’re going to tell their friends, but how many people do they really know?

‘Now it’s the exact opposite. Now these interactions are taking place where customer service is a spectator sport. Tens, hundreds, or thousands of people can see this interaction occur. If you’re good at customer service, that benefits your organization exponentially. If you’re bad at customer service, it harms you exponentially. The entire cost-benefit analysts has changed but most people haven’t figured it out yet.”

Answering customer complaints increases advocacy.

“Not answering complaints decreases customer advocacy. It makes a bad situation worse. No response is still a response. It’s a response that says we don’t care about you at all; we do not deserve to keep you as a customer. That’s not a good way to run your business. Everybody in B2B knows the sales cycle is long, and customer acquisition is high; everybody knows it makes more sense to retain the customers you’ve already worked hard to get, but we don’t actually run our business that way.

Each year we spend $500 billion on marketing and $9 billion on customer service. That’s crazy.

“Each year we spend $500 billion on marketing and $9 billion on customer service. That’s crazy. The people who need to get behind this customer service revolution are in B2B, because you can’t afford to lose customers; it’s too hard to get them. This delusion that we’re going to continue to replace customers and not excel at customer service is really crazy.”

Customers will never stop complaining on social media.

“Our research found that people who complain in public only expect a business to answer 47 percent of the time. Most of the time, when people complain on social, they’re just kvetching to their friends. You post something to Facebook or Twitter, what you really want to happen is for all your friends to see it and empathize; you aren’t actually looking for a response.

“That’s the huge opportunity. If you answer a customer complaint on social or elsewhere, just one answer to one complaint increases that customer’s advocacy by 25 percent. Obviously, you have a retention benefit as well, but you have an actual advocacy bump. You don’t have to give them a free coupon or bend over backwards; all you have to do is answer their complaint, because they don’t think you’re going to do it. When you do, it blows their mind.”

You need to encourage complaints.

“There’s a restaurant chain called Le Pain Quotidien. They’re based in Belgium with 220 locations. Their director of customer service wanted to triple the number of complaints they get. She knows that most people, even if they’re dissatisfied, don’t complain. Only 5 percent of unhappy customers ever complain. If you can get that to 15 percent, you glean these insights into how you can operate better. If you’re smart, you use those complaints to change your system so future customers don’t have the same issues. I always explain it like this: if you want to get fewer complaints, you must first get more complaints.”

I set out to write an entirely different book.

“The original title of the book was Under an Hour, and the thesis was that speed is the most important thing — the killer app. We’re living in an environment where it seems like faster is better. But we did the research and found that’s not actually true. Speed is important, but it’s not the most important. The most important element of customer service is responding at all. That’s how we discovered a third of complaints never get answered. It’s not about speed, but about showing up to the party. It’s about emphasis, resources, and culture, and embracing customer service instead of treating it like a necessary evil.”

Customer service is going to be increasingly proactive.

“With big data, especially for businesses transacting online . . . we’re going to be increasingly predictive. I.e. the data says this customer is likely to be dissatisfied about one or more elements of the product or service we offer; therefore, we should reach out and make sure he or she is okay. That kind of predictive customer service is going to be huge. Some of it will be in the form of Facbeook messenger and WhatsApp, but there are even larger opportunities to mine customer data and say, ‘Hmmm. This person is on a web page looking at terms of service; maybe we should call them.’ Eventually, we’re going to see the balance swing more towards proactive. It’s a huge opportunity.”

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B2B Nation: Smarketing is a podcast for B2B sales and marketers, featuring expert opinions and advice on the most important topics in the industry. Check out our other episodes on iTunes, or follow us on Twitter: @B2BNation_Smar.

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*Some excerpts have been paraphrased to enhance readability.

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