Why Customer Service Beats Low Prices

If you wanted any more evidence that now – despite the rough
economy – is not the time to go cutting price, look at the results of the
latest poll published by Marketing Sherpa (see chart at end of this post).

It shows that while vendors believe price is the most
important factor in customer loyalty, the customers themselves (the only ones
whose opinions actually matter!) put customer service in top spot, with 40%
citing poor customer service as the main reason for leaving a vendor.

So instead of cutting price and hoping your customers are so
grateful they stick around, invest the money you save on customer service.

As this is a blog about customer newsletters, let’s see how newsletters can help improve
customer service – and hence customer loyalty.

  1. First,
    develop a customer service mindset. Remind yourself that without customers you
    are dead, that you are there to serve customers – and to treat them as you
    would like to be treated. (Thanks to Michael Port for emphasizing this upgrade to the Golden Rule.)
  2. Remember
    that the first transaction is just the beginning – you want them to come back
    multiple times.
  3. Use
    your customer newsletter as a tool to encourage them to come back. Sign them up at the
    first transaction and then use your newsletter to remind them of your existence
    (people easily forget!) and to make offers to encourage them to visit you
  4. Your
    goal is to create a genuine relationship with your clients, not just a series
    of transactions. Use your newsletter to extend the relationship-building you do
    in person to circumstances when you are not present.
  5. When
    choosing your newsletter content, consider what kind of articles will best serve your customers (rather than simply
    serving yourself.)
  6. Build
    the relationship by contacting your clients (in a non-threatening,
    permission-based) way on a regular basis, always offering something of value.

If you think that investing in customer service (and
customer newsletters) is expensive, remember the oft-quoted words of Frederick
F. Reichheld in The Loyalty Effect: