Customer Support Matters More than Ever
You cannot build a great company without loyal customers. In a world where goods and services from competitors are easy to discover, it’s more important than ever to retain your customers.
Yesterday morning I was reading Fred Wilson’s blogpost about growth vs. retention. While it focuses on early-stage user retention numbers and reaching product fit, the thesis of the blogpost applies to all companies: you cannot grow a valuable business unless you first nail customer retention.
Customer retention starts with a great product. I have written about launching businesses with more than just an MVP. After releasing a great product, you will invariably have some customers who need support. How you treat them may have more impact on their loyalty than the quality of your product.
A recent example of good customer service: I called American Express because there was a late payment fee on my statement. I make sure to always pay my credit cards on time but I was out of the country for a few weeks and had not seen the statement. When I called Amex to let them know I just returned to the country and will be sending the payment immediately, the customer support person said: “You have been a loyal customer for many years. You have never missed a payment date. I think we can delete that late fee for you.” I got off that call and thought; I love American Express and will continue to be a loyal customer.
Guiding principle of good customer support: treat your customer with respect and appreciation.
We all have many examples of bad customer service. My favorite recent example occurred at JFK airport. To start with, it’s never an enjoyable experience to wait on security lines and have people yell instructions at you. But on this particular day, the line was drifting a little when the TSA agent yelled "You guys don't even know how to form a line." Yes, it was insulting but it was such a textbook wrong way to speak to customers that I just had to laugh.
Guiding principle of bad customer support: insult your customer.
Yes, American Express probably cares more about customer retention than does the TSA. There are lots of reasons for this but the TSA should care more about how they treat customers.
Every business should care about customer support and retention. You cannot build a valuable business (nor feel great about it) unless you have loyal customers.
Full disclosure: I am not just a believer in the importance of customer service, I am also an investor in the space. I am an angel investor in a company called Directly which uses technology to help companies provide faster and more effective customer support.