Considering the Cost of Customer Service

When is the last time you had a stellar experience at a shop or restaurant? What establishments come to mind when you think of fantastic customer service? Why don’t all companies value the client experience like we, the customer, think they should?

All great questions. But the answers are complicated. Some business owners have really hit the nail on the head. They get how important it is to make each customer happy, and above that, exceed expectations on a regular basis. But others see those exceeded expectations as too costly or not “worth it.”

So what is the true cost of good customer service*? Let’s consider both short-term and long-term goals. If your short-term goal is to meet your end-of-quarter budget, then sure, springing for that extra client incentive is going to compete with that. You might even struggle to offer loyalty discounts if you feel they’re reaching too deep into the yearly budget.

But let’s assume, for a moment, that your company is not so narrowly focused. Let’s assume you’re in this game for the long haul and you want your business to grow year after year. Then you have to consider long-term goals and the role good customer service will play in reaching them.

If you’re like most businesses, and you fall somewhere in the middle: you like the idea of focusing on the client experience but practicality weakens your ability to do so. If that’s you, then start by asking yourself a few basic questions.

1. How important is the overall client experience to the quality of our product or service?

I’d argue that customer service is important in every facet of business but that it is an even larger component in some industries than others. For example, if you’re in the hospitality industry, you better have your customer service/ experience down to a science. If you run an accounting firm, your client experience should be considered, but at the end of the day, people are paying you to manage their money, not to create a specific environment for their enjoyment.

2. How will you budget the cost of good customer service?

You might price the “cost” of customer service on an as-needed basis.  Maybe you have some general measures in place to ensure a consistent product or service, which means you handle the occasional unhappy customer with a budget that’s set aside for times of need. Or, maybe you decide to spend on the front end to make sure your customers are happy so the dissatisfied customer rate is far smaller. Every business can find a way that makes sense for their specific needs. There’s no one-size-fits-all approach when it comes to your unique client base.

At The Living Room, we pour our hearts into creating a unique experience for every client. From the aesthetic, flexibility and charm of our space, to our attention to detail in every interaction, we are deeply invested in serving each client well.  But despite those high standards already in place, we’ve still got a system to make sure our customers leave happy even if mistakes are made. Sometimes things happen that are completely out of our control. Sometimes, human error turns a situation sour. We know we won’t be perfect every single time, and neither will you. And that’s why we created the Benny Rule.

Benny Rule: In the event of a mishap, our fault or not, any Living Room team member can spend up to $100 dollars to fix the situation without having to seek approval first.

The main objective here is to give our team the freedom to spoil our clients even when things don’t go as planned. We’re able to treat each customer the way we would want to be treated without any of the red-tape or penny-pinching limitations other’s might have to negotiate.

Now, let’s be real. The Living Room is in the service industry. Whether we’re hosting a creative off-site meeting or a research project, or even our daily coworking partners, our client experience falls first on the list of priorities. Not every company needs a Benny Rule. But every company needs something in place to ensure you’re not cutting cheap corners that will ultimately put you out of business.

So what’s your true cost of good customer service?

*For the purpose of this article, we are using the terms “customer service” and “client experience” interchangeably. Customer service is no longer an 800 number we call when a product is defective. Customer service is how companies serve their customers, by delivering quality products, experiences, and solutions.