Proactive customer service drives revenue and retention

Proactive

This is a Guest Post from Chris Frascella

Earlier this year, Adrian covered proactive customer service in a three-part series on Forbes. In part one, he pointed to research that substantiates the idea that proactive customer service is more cost-efficient and more likely to positively impact customer retention than a strategy that is reactive only. In part two, he listed real-world examples of companies utilizing proactive customer service, and the benefits they attributed to it. In part three, he outlined the four-step process for implementing a proactive customer service strategy. So what more needs to be said about it?

For e-commerce companies, proactive customer service can directly increase revenue. For software applications, it can increase usage of (i.e. “stickiness” of) your product. Additionally, while many companies are coming to understand that the bar for customer service must be set higher than “satisfaction”, too few appreciate the extent to which that is true and the role proactive customer service has to play here.

In order to surpass the new norm of “excellent” in customer service and actually distinguish yourself as top-tier customer service organization, you need to effectively implement a proactive customer service model.

Understanding Proactive Customer Service

Before I get to talking about e-commerce and software organizations, I want to frame the conversation with three points from Adrian’s three-part series and one point from another customer service expert, Shep Hyken.

  • if “proactive customer service” is too hazy a concept (and you can’t relate to the examples from Adrian’s article), think about dining out at a restaurant—proactive customer service here would be the waiter noticing that your glass is less than half full and refilling it for you without you having to ask (and without it actually ever actually becoming empty)
  • proactive engagement needs to be delivered at the right time in a customer’s journey – that is to say, in and of itself proactive engagement is not necessarily valuable
  • the process of determining what proactive customer service looks like and continuously improving upon that model builds trust and engagement both internally (across functions and departments) and externally (with customers) – proactive customer service is not a line item, it is a way of approaching being a great company
  • piloting, adjusting and scaling (and adjusting, and adjusting etc etc) elements of your proactive customer service strategy is an excellent example of performance management – performance management is arguably just as essential a differentiator for companies as proactive customer service itself

Proactive Customer Service and E-Commerce Organizations

In the business live chat arena, Forrester has noted conversion rates are 20% higher and average order value 10% greater when a more proactive approach is implemented on ecommerce websites (read more about proactive chat specifically here). You may want to take a peek at Google Analytics to determine what pages customers are spending a lot of time on, or bouncing from—these might be good candidates for engaging those customers with proactive outreach (especially if they are checkout pages or product pages).

More generally, ecommerce as an industry is oversaturated with competition. In a matter of seconds, a customer could be gone, exploring a competitor’s site. Proactive customer service can help convert that customer on their first visit and give that customer good reason to stay loyal (repeat customers are more likely to spend more). It’s just a matter of experimenting with where, when and how you engage your customers and prospective customers (performance management).

Proactive Customer Service and Software Companies

It is now possible to automatically send emails to customers who have gone an extended period of time without logging in to your application or send in-app messages to free trial users who are poking around but haven’t used your totally awesome reporting (for instance).

By building a “habit-forming product” you help your customers cultivate within themselves an excitement to use your tool on a regular basis. For SaaS companies particularly this is valuable as it can reduce churn—“sticky” products are less likely to have customers scale down in use or decide not to renew their subscription altogether.

Rather than waiting for customers to announce their intentions to downgrade or cancel and trying to salvage your MRR (monthly recurring revenue) at that desperate point, you can equip yourself to prevent the conversation from ever even moving in that direction by identifying what customers might need help seeing value and by experimenting with how you can best demonstrate that value to them.

Next Steps

Whether your organization is primarily ecommerce or SaaS or something else entirely, by being proactive about engaging your customers, and by experimenting to find increasingly more effective ways to do this, you are differentiating yourself from your competition in three major ways:

  1. Exceptional service – creating customer advocates
  2. Perpetual learning/improvement – staying responsive to change and demonstrating a continuing commitment to excellence
  3. Being deliberate about protecting future revenue – strengthening customer loyalty

 

This is a Guest Post from Chris Frascella

About Chris

Chris Frascella

Chris Frascella is the Content Director at Velaro Inc., where he is responsible for promoting the improved performance & advancements of live chat software. Before joining the Velaro team, Chris was integral in the continued advancement & marketing of outcomes-oriented, case management software at Social Solutions Global.
Photo Credit: symphony of love via Compfight cc

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