How to Improve Customer Service in Retail Businesses

Good customer service goes hand in hand with brand loyalty. It is the starting point of an (hopefully) long-term relationship between a brand and its customers. But, just like with any relationship, miscommunication can cause issues between the two parties.

The biggest tell comes when looking at numbers. 71% of business leaders think that they provide better customer service than their competitors while only 10% of customers believe that the quality of service is excellent. (Source)

And that's not all there is to it. With automation becoming increasingly popular, the distance between company and customer keep growing.

This article will address the huge gap between the perceived and actual value that companies provide through their customer service. By outlining the issue and providing actionable solutions, you will understand how to improve customer service in retail.

The distance problem

Business leaders are often out of touch with the market. They either fail to understand how they perform against the competition, or they allow their overconfidence to hinder the quality of customer service. This creates a distance problem between the two parties.

To provide the kind of service customers expect, you need to understand them. When you step into their shoes, you are able to empathise with their problems, wishes and needs. Knowing this, you can tailor the customer experience based on their preferences and overdeliver.

But a good understanding of the target audience is only one part of the equation. The other consists of "unspoken" rules. One could call these the main “pillars” of effective customer service.

Elements Of Good Customer Service

Generally speaking, there are four pillars that create a strong foundation for every customer service strategy: 

1. Engagement

Engaging in meaningful conversations with your customers can only be done after you understand their needs and wishes. Adding to that, the friendliness of your staff, level of interest, and responsiveness are also important factors. 

According to Gallup research, engaged customers generate 23% more revenue. People that build a relationship with your brand will purchase more, promote more, and remain loyal. 

2. Respect

For every good relationship to survive in time there needs to be mutual respect. This can take on many forms, but comes down to personalization and empathy. When companies see customers as individuals instead of revenue numbers, it is much easier to handle unexpected situations and build a loyal fan base.

A recent survey shows that 75% of customers that feel disrespected would avoid that company in the future. 

3. Transparency and Honesty

Transparency promotes trust, which is the foundation of a positive relationship with your customers. With misinformation, fake news and faceless communication peaking, being honest makes a brand appear more “human”. As a result, the reputation of your company is strengthened and, in most cases, so are sales.

According to a study by SproutSocial, consumers believe that brands bear the greatest responsibility to be transparent on social media, rating them higher than politicians, friends, and even family. 

4. Consistency & connectedness

While this may sound self-explanatory, consistency and connectedness are the key elements to keep up with increasing customer expectations.

The best way to go about this is to consider implementing an omni-channel approach. In short, an omni-channel approach refers to the practise of being available and responsive on several different channels, including email, social media channels, chatbots, live chat, etc.

Here's what's even more interesting: 35% of business leaders, despite their efforts to provide great customer service, do not practise an omni-channel approach. According to them there are several challenges that hold them back, the most common of which is a lack of talent:

How To Improve Customer Service In Retail

Studies show that 79% of consumers want brands to actively understand and care for them before they consider a purchase. And there’s no better place to start doing this than improving your customer service. The following points are meant to improve your existing strategy and, in turn, the bond with your customers:

1. Focus on speed 

When asked about the most important factor of great customer service, all study participants agreed on speed. More specifically, the focus should lie on resolving customer problems quickly and responding to inquiries in a timely manner.

Implementation tips:

• Hire a dedicated employee or team of employees to take care of all communication channels that your brand is using.
• Create an SOP document to find fast solutions for common and uncommon problems (more on this below).

2. Get to know your audience

Personalization has shown to increase revenue and customer loyalty, no matter which industry you operate in. Implementing apersonalized approach is, therefore, extremely important for your customer service strategy and all other promotional efforts.

Implementation tips:

• Make sure that your customer service talent is well-versed in the industry you operate in and understands the struggles of the audience you are selling to.
• Provide a service that demonstrates an understanding of the customers’ unique preferences. This includes taking the time to understand problems from a customer-centric perspective, and asking followup questions.

3. Utilize automation technologies

Unorganized and disjointed experiences can lead to long waiting times and an unpleasant experience for the customer.

Thankfully, there is a plethora of software tools that can solve these problems. Introducing one or more of these tools in your annual retail customer service training will not only help your agents work faster, better, and more organized, but it will likely decrease the budget you need to allocate for customer service.

Implementation tips:

• Tools like Zendesk help you keep an overview when using an omni-channel approach.
• ‍Liveagent is a popular solution for small businesses and offers a free trial before commitment. 
• Zoho Desk is a solution for those looking to introduce Artificial Intelligence solutions to their customer service strategy (more on this below).
• Aside from customer service software tools, companies can also streamline their systems using simple organizing software like Google Calendar, Asana, or Trello. This can be especially useful when the team consists of many employees on irregular shifts.

4. Consider AI solutions and chatbots

In 2020, machine learning is increasing in popularity. As a result, many businesses invest in Artificial Intelligence (AI) and chatbots to improve speed and guarantee operational excellence. But this process can prove to be risky. Some companies choose to fully replace their human workforce with automated responders, removing the personalized approach. Ideally, you’d want to create a hybrid solution.

Implementation tips:

• Explore the benefits of AI and chatbots to create a strategy which will only require human interaction for the most difficult cases. This could be as simple as setting up an auto-reponder system that can answer the most common questions associated with your product.
• To get more ideas you could explore how your competitors are using similar solutions. Many big brands across different industries are currently using or plan to introduce AI for their customer service.

Building a customer service strategy in retail

If you don't have a customer service strategy for your business, or you are just now starting out, you can follow the steps below to get started.

Step #1 - Create a basic strategy and test it

To start, create a basic plan with the information and data that is available. This can be information gathered from your customers' buying experiences, common issues experienced with support agents, and any other bottlenecks that stand out. Once you have a strategy, you can test its effectiveness and fine tune it along the way. Then, you can train employees based on the findings.

Step #2 - Map out your customer journey

Once you have a basic strategy in place, it is time to create a Standard Operating Procedure (SOP) document. This document outlines how employees should behave according to common situations. To create this document, you will need to explore all the aspects of the customer journey. Once that is done (example in the picture above), you can think of potential issues that could arise and predict how customers would behave in response to it.

If you are ready to create an SOP document, check this article to get more information on the structure and chapters that should be included.

Step #3 - Hire qualified talent

When looking on how to improve customer service in retail, you should try to attract motivated employees with experience in the niche you are serving. Here is a useful 2-minute video that shows you how to do just that:

Once a small pool is created, screen applicants to ensure that they possess the disposition to effectively participate in a customer-centric business. Sadly, not everyone is able to interact with people on a personalized and helpful manner and this is easy to see with companies that stick to an extremely low budget.

Step #4 - Set quarterly/annual goals and measure performance

After your strategy is created and a qualified team starts the implementation process, you can set specific goals and conduct performance reviews. Goals can be quarterly, annual or even daily/weekly.

• Example of weekly goal - Answer all open tickets and emails by Friday at 15:00.‍
• Example of quarterly goal - Increase our rating from 3.6* to 4*
  

If the goals are not met, the manager in charge will need to figure out the bottlenecks and find a solution. It could be hiring more staff, or letting go of enthusiasm-lacking employees. It could also mean that the manager in question set too ambitious goals without considering external circumstances.

Conclusion

Knowing how to improve customer service in retail can offer an unfair advantage for your brand. While there’s no universal solution for everyone, we gave an overview that will help you improve your interactions and help you build a foundational strategy.

In closing, it is important to create your own definition when it comes to customer service in retail. In our opinion, it is all about understanding your customers and improving based on their feedback. After all, proper communication is a two-way street, and a long-term relationship is only built upon continuous improvement.