How to Turn Your Customer Service into a Profit Center | HelpGrid

Thu, 12 Aug 2021

As we shared in our guide to the top 2019 customer service channels, customers have been paying more to companies who excel at customer service since at least 2012, so the return on investment in customer service seems pretty clear at first glance.

But then you start planning and budgeting, and realize you’ll either need to spend a whole lot more time improving customer service on your own, or you’ll need to pay someone to help you with it, whether you hire someone in-house or outsource. And it’s easy to start questioning how you’ll ever generate enough ROI.

The answer, thankfully, is simpler than it might seem.

So many companies are still providing such low quality service – Do you know anyone who doesn’t try to avoid calling customer service? – that it’s so easy to stand out and gain customer trust if you prioritize high quality service.

That trust is the getaway to deepening the relationship you have with people who already took the risk and invested in your business, which opens up the door to a range of ways you can increase profits… without increasing prices, developing new products, or breaking into new markets.



Trust with Customers Earns You the Option to Ask for a Bigger Sale without Risking Churn

Let’s start with the most obvious strategy, that many businesses already expect their customer service agents to do – upsell and cross-sell.

When you provide high quality customer service, you build an emotional connection with customers and gain their trust, which earns you the possibility to offer a bigger deal than the customer intended to buy.

If they trust you, customers will be open to your suggestions and more open to buying, and won’t be upset that you asked, even if it’s not a good fit.



What’s the Difference Between an Upsell and a Cross-Sell?

If you’re new to the terminology, upsell is when you get a customer to buy a more premium version of the product she intended to buy anyway. For example, if she intended to buy a 3 months subscription, but ended up buying a 6 months subscription after talking to you, that’s an upsell.

A cross-sell is when you sell a complimentary product, like batteries, when somebody buys a camera.

Or the famous McDonald’s question when somebody already seemed to order a full meal:




Do you want fries with that?



What’s More Profitable, an Upsell or a Cross-Sell?


When ContextSmith looked at 39 upsell statistics and case studies, the data was clear: If you need to prioritize one, prioritize upsells, as they drive significantly more revenue than cross-sells.

Apparently, it’s easier for customers to choose a more expensive version of the product they were already planning on buying – assuming you communicate the value, of course – than a whole other product they might not have considered yet.

That’s not to say cross-sells can’t drive additional revenue. If we use the example above, where someone buys a camera, chances are they need batteries too, so when it makes sense to the purchase, consider giving customers the choice to buy the complementary product. In the case of the camera purchase, you’re probably saving them the time and hassle of looking for batteries elsewhere.

But if you’re in a situation where you feel too many pitches will cost you the sale (which they might), consider going for the upsell (say, a bit more expensive version of the camera) instead of the cross-sell (batteries or a camera bag or an editing software).



Even if Customers Don’t Buy More Expensive Products, the Fact They Stick Around Can Double Your Profit and Significantly Increase the Return on Your Time and Money Investment

Whether you hustle doing “free” content marketing and networking on social media, or whether you run ads and sponsorships, customer acquisition comes at a cost.

Calculating it is sometimes easier than others (here’s a guide from KISSmetrics), but one thing’s for sure, the bigger the difference is between what it costs to acquire the customer and what the customer pays, the more profit you have left in your pocket at the end of the day.

In this example from KISSmetrics, $35,000 in acquisition costs that brought in 1,000 customers are an average of $35 to acquire each customer.


2014 CAC

Source KISSmetrics

If your average sales deal is $100, and you spend an average of $35 to land the customer, your profit is $65. If you get a bigger deal – say, you get a customer to buy at $150 instead of $100 – you increase your profit line.

That’s why so many companies prioritize upsells and cross-sells.

But that’s not the only way to do it.

Another option is to give customers such an outstanding customer service experience, that they’ll never want to leave. Even if they keep buying the exact same product at the exact same price – never going for any upsells or cross-sells – any additional sales increases your bottom line.

In this example from Punchlime, simply reducing customer churn by 50% over 5 years doubles your profits.


Success Metrics

Source Punchlime via Slideshare

Specifically in this example, the business model is a renewable subscription at the same cost every month, but even if all you get a customer to do is buy her bread from you – vs. the competing grocery stores – once a week, you’ll get the same results.

You already paid for customer acquisition costs – whether in work time or a direct expense (or both). The longer you retain them as customers, the more return you’ll see on your investment, even if they keep buying the same single product over and over again.

And that’s just the beginning, because something else happens when customers are so satisfied, they keep coming back: They tell their friends and colleagues about it.



Customer Referrals Land You Bigger Deals and Longer Lifetime Values, Because it’s a Type of Transaction that’s Rooted in the Trust They Already Have with Their Recommending Friends and Colleagues

As we shared on LinkedIn, one of the key benefits of driving customer loyalty is that loyal customers often bring their friends and colleagues to the party.


Business partners

Source HelpGrid’s LinkedIn account

That alone is happiness.

Not only is it a great feeling when customers qualify themselves, it also makes your life so much easier when customers come to you instead of you hustling to go find them, and it eliminates any customer acquisition costs (at least any direct acquisition costs – because you already paid to acquire their referrers and already invested in providing high quality service to these referrers, whether or not you were going to get the new customers).

The exciting news is that you can tap a huge portion of the market simply by making your customer service word-mouth-worthy.

In 2013, Forrester reported that “some 70% of US online adults trust brand or product recommendations from friends and family, and 46% trust customer-written online reviews, while just 10% trust ads.”

A 2016 survey by Harris Poll and Ambassador revealed that “82% of Americans say they seek recommendations from friends and family when considering a purchase,” and “67% say they’re at least a little more likely to purchase a product after a friend or family member shared it via social media or email.”

Source Harris Poll and Ambassador via Business 2 Community

But it gets better.

“Referred customers are also more loyal and have a 16% higher lifetime value – meaning they spend more long-term – according to researchers at Wharton and Goethe University,” reports Forbes.

As you can see, turning customers into brand advocates can be very profitable. According to Texas Tech, 83% of happy customers are even willing to do that for you – you just need to be proactive and encourage them to do so, or you’ll be left with the 29% who actually advocate for you… which would still be a great number, but why not get as many referrals as you can, so you can increase even more deals by 16%?

Plus, there’s an unexpected, wonderful side effect when customers become enthusiastic enough to recommend you – your customer service agents themselves start telling the world are great you are.

Here’s how that happens, and the significance it has on your bottom line:



When Customer Service Provides a Better Experience, Customers Become More Patient and Respectful Toward Agents, Which Reduces Agent Turnover and Creates the Unexpected Brand Advocates that Prospects Secretly Want to Hear from

As we previously explained, customers that expect low quality customer service from your team will call in when they’re already upset, even if they only have a simple issue to resolve.

Combine that with the freedom some customers feel they have to be anything from rude to racist when they’re not facing someone in person, and you get customer service agents that find their jobs emotionally draining, and are more likely to look for a different employer, leaving you with increasing hiring and training costs.

But when you create a service culture that’s more empathetic to customers, customers grow appreciative. After all, unfortunately, even today, that’s pretty rare. So as a result, they’ll be more respectful to your agents, and more patient with them if it takes a little time to figure out the best solution for the customer.

When agents feel more appreciated and happier to come to work, they might just start singing, like this cashier:




More importantly, they’ll probably share more favorable stories about your company with their friends and family members, and if you’re in the B2C industry, that could lead to referrals from a trusted source.

But even if your agents’ close environment isn’t your target audience, encouraging agents who don’t hate their job to help you advocate for your company on social media – where your target audience does hang out – becomes easier.

This “free” endorsement from team members, whose salaries you already pay, can end up a better investment than some of your corporate social media accounts.

In a roundup of statistics about the impact of user and employee generated content on companies, Tint reported that not only does “employee-shared content gets 8x more engagement than content shared by brands” and that “brand messages are re-shared up to 24x more when distributed by your employees instead of your brand,” but that “53% of decision makers have eliminated a brand or vendor from consideration because of something they ‘did or did not’ find out from an employee online.”

In other words, your customer service agents have power beyond the phone calls and emails they answer. If you want to harness that for the good of your company, it’s time to create a better customer service culture, that takes both customers’ and agents’ needs into consideration.

Of course, that’s easier to do when you work with highly trained and qualified agents, who understand the responsibility they have for your company once they decide to work for it.



If You Need Help Turning Your Customer Service into a Profit Center, We’ve Got You Covered

Yes, you do need a high quality product or service to get customers that stick around, buy more premium solutions and tell their friends about it, but that’s just the barrier to entry – because anyone can sell the exact product or service you’re selling.

The one element that customers consistently find challenging to locate is that high quality customer service, which will be empathetic to their challenges and be committed to help them succeed. It’s continually documented in market research by some of the biggest companies in the industry, at least throughout the past decade, and this metric is only growing in importance every year.

That’s why, here at HelpGrid, we located some of the most empathetic and responsible customer service agents around the world, got them properly trained, and made sure they’re available 24/7 to help our customers’ customers succeed. If you need anything from a receptionist to a full blown contact center, we’ve got you covered.

Contact us at [email protected], and we’ll give you a free consultation to help you figure out how to increase the return you see on your customer service investment. We can’t promise our agents will sing to your customers, but we guarantee they’ll make sure the customers you worked so hard to acquire will turn into fans.


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