Want your ecommerce startup to take off? Forget the discounts, push customer service

According to business consulting firm Lee Resources Inc, 91% of unhappy customers will not willingly do business with you again. The number one reason for their unhappiness is service delivery.

Service delivery has become a hotly debated topic in South Africa, and we have seen frequent examples where customers have taken to airing their frustrations on public forums. One only has to look at the anti-Cell C banner debacle that caused quite a stir in the media recently. The whole incident developed into something bigger because the customer felt that he wasn’t receiving the service that he deserved and decided to react with a name-and-shame billboard.

Whether the customer’s action was right or not, or if other avenues could have been pursued, is debatable. The point is that there was a breakdown in the service level agreement (SLA) between the customer and company, and this resulted in the relationship deteriorating.

An incident like that can do serious damage to a big brand like Cell C, but imagine how quickly something like that could — even on a much smaller scale — could destroy your small ecommerce startup.

Why are SLAs failing?
There are numerous reasons companies fail to meet their SLAs, and it has a lot to do with the principles of the business in question. For many SMEs, they are often under pressure and driven to find money to pay the bills – and service usually falls down the priority list in the process. For larger corporates, they sometimes lack effective customer experience management systems to find out where their processes are failing and what the customer’s needs really are.

Competitiveness isn’t a battle that is fought in the price and product offering realms anymore; realistically, there’s not much separating most companies from each other in terms of those factors. The real differentiator is quickly becoming customer-centricity – the companies that put the customer experience at the top of the priority list are hitting the mark. Businesses that are wowing with superior service levels are finding their customers are more likely to return over and over again.

Keep the discount; give me the service
Let’s look at another common example outside the startup space: Amanda signs up for a cheque account with her bank. Every month she experiences issues with charges and is left with unresolved queries. A few months later, her bank offers her a R30 discount for another service. The bank doesn’t understand why Amanda has said no thanks and also wants to shut down her cheque account.

The discount doesn’t make Amanda’s other problems go away, and that is what many organisations aren’t realising. There is a common tendency to focus on discounts and rewards as a way to appease customers, when the solution is to improve the customer service.

Companies need to begin investing in their service delivery processes, such as service desks and call centres, and being able to address and attend to all customer concerns and questions. When a well-designed service is being rendered and supported by a well-transitioned process, the marginal propensity levels are raised – and the customers are left satisfied, too. It’s a win-win for all parties.