How can retailers know how much bad customer service is costing them?

How would you react if we told you that your business is losing £300,000 a year through poor customer service?

That’s what we had to tell a client recently.

It’s not our fault. They did ask.

Fortunately, that was only half the story.

We also told them how to fix it.

If no one can see you, who are you?

If you’re an online retailer, customers don’t get to meet you. They don’t get to see your immaculate brogues and fine tailoring. They don’t notice the twinkle in your eyes, or appreciate the way you hold the door open for people.

No, what they’ll see is someone you’ve probably never met.

The delivery man.

This guy is often your customers’ first point of human contact with the brand.

And it matters to your customers if he turns up on time. It matters if he follows their instructions to leave it round the side, just behind the laurel.

And, if it matters to your customers, it should matter to you.

‘Fine’, you say, ‘but it’s not that important, is it?’

Well, maybe you’re right. And you can always check. Because you already have the data that will tell you either way.

All the data was already there

Using text analytics software, we analysed customer comments for our client on an online review site.

We discovered that almost half (45%) of the comments talked about delivery. Some were good, but there was one delivery company that correlated with a ‘terrible’ service rating.

Worse still, this had a knock-on effect on our client’s product ratings.

We also showed that it affected how people perceived our client’s brand: using linguistic analysis of 7500 reviews we were able to show which customers shop with our client again.

When we looked at the expected life time value of these clients, we calculated that they were losing £300,000 worth of potential customers – almost 7% of their turnover.

That figure is actually conservative, because we didn’t speculate as to how much business they were missing out on through bad word-of-mouth.

Fortunately, because text analytics identifies themes, rather than just counting words like a Word Cloud, we were able to spot the precise cause of the problem. Our client was able to do the cost-benefit analysis, sell the change through the company and know exactly how much more it’s worth spending on better delivery.

The chances are, you’re sitting on data which is just as good. What do you think it would tell you?

We use a combination of quantitative analysis, text analytics and linguistics to help you identify where you can improve your brand. If that sounds like a good idea to you, email Chris.