Why Measure the Value of Customer Service?

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Many companies realize that customer retention is extremely important. They recognize that losing valued, loyal customers is bad for the company’s long term revenue potential and overall success. Even though this is understood on a basic level, few companies – especially those companies providing a service – seem to misunderstand what losing a single customer can mean to the business. 

Example: Auto mechanic

Auto mechanics are infamous for providing substandard service to their customers. Many customers have had interactions with auto maintenance companies whose employees have been nothing short of terrible – treating their customers as though they are fools for needing their help, making the customer feel second-rate. And in some cases, customers fall victim to being hoodwinked into paying for services that are unnecessary.

Car repair is a paramount example of how focusing on customer retention, and the value customers bring to the business, can earn an auto maintenance company increased profits and continued success. If auto maintenance companines recognized how much they lose in the long run with poor customer service, perhaps they would appreciate the value of good customer service.

Real-life example:  Mike took his car to an auto maintenance company for trouble with his oil gauge. Mike knows very little about cars, so he decided it would be wise to have his car towed to the closest auto maintenance company to be serviced. The mechanic on duty treated Mike with absolute condescension.  He acted as if Mike should know more about cars and how to check his own oil. He ended up charging Mike for 2 hours of service even though Mike had only waited an hour for his oil to be checked and changed.  It was obviously a bad experience for Mike, and he had no intention of going back to that auto maintenance company in the future, nor would he recommend their services to friends and family.

Six months later, Mike was about to leave for work one morning when he noticed his right front tire was flat.  After having a horrible experience with the auto maintenance company six months prior, Mike decided to have the car towed to a new mechanic that was friendly and approachable. The mechanic on duty charged Mike the fairest price he could, based on the work he completed. He even rotated the tires on Mike’s car for free.

A year later, Mike was in an auto accident. His car need over $4,000 in repairs. What auto maintenance company do you think Mike went to? You guessed it –auto maintenance company number two. Because of poor customer service and lack of value for their customers, the first auto maintenance company lost out on thousands of dollars in revenue.

Why measure the value of customer service?

The above scenario is a perfect example of why it is important to monitor both the long term value of a customer and the importance of communicating that value to employees. Gathering usable data about customers through regular administration of customer satisfaction surveys is a great way for companies to use that information to make important changes focused on customer value. Knowing exactly what customers want, need, and expect from your company, and conveying that information to employees is the key to retaining valued customers.

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