Start-ups in growth mode tend to write off customer service as a cost-center to be dealt with "later." Founders Aaron Schwartz and Bhavin Parikh beg to differ.
Bhavin Parikh and Aaron Schwartz have totally different companies--one online, one physical product-based--but they both invest heavily in customer service. They explain why.
Companies often think of support for customers as something that sucks money out of the business with little-to-no return. And it tends to be those companies that make you, dear customer, wait on hold for 20 minutes when trying to reach a customer-service representative.
We've realized that exceptional service is crucial, regardless of the type of business you run--whether it's online, like Bhavin's Magoosh.com, or physical, like Aaron's Modify Watches. And instead of playing defense against customer complaints, we use personalized customer service to play offense.
Here are three reasons you should too:
1. You really need the feedback. And you can get it free.
Through support requests, you'll learn more about how your customers interact with your product than you could have imagined. But if customers are willing to send you an email or pick up the phone and call, you know that they have a real issue. You can use that information to improve your product or service for the next customer.
How it works at Magoosh: As an online test prep company, we receive a constant stream of emails from students who need additional help on questions. Not only do we respond within a few hours, but we also use that feedback to improve the question's explanation so the next student isn't confused. For every customer who submits a help request, we know there are ten that didn't, and we want to solve the problem for all of them. Using this approach, we've been able to halve the number of weekly help requests we receive per customer over the past six months.
How it works at Modify: Like many companies that sell a physical product, we collect feedback through Facebook, Twitter, and a "Help" inbox. We focus further on being proactive, and every week each member of our team has a 20-minute call with a customer. We've now done nearly 100 of these, and have made significant changes--updating our FAQ, pre-releasing designs, even fixing product issues--thanks to the insights we have taken from these phone calls.
2. You need to build love to (eventually) get forgiveness.
Let's face it, your business is going to make mistakes. Maybe you'll ship defective product or your servers will go down at some point. But if you've taken the time to provide exceptional service to your customers--complete with a personal touch--they'll forgive you when something goes wrong. Treat them well, and they'll treat you well.
How it works at Magoosh: Last year, our servers went down due to a severe storm on the East Coast on a Friday night. The team rallied to get the site up, but we were completely dependent on our hosting provider and couldn't do much. We didn't have a backup plan. We communicated with our customers via email, Facebook, and Twitter to keep them updated, taking full responsibility. Our customers were fantastic. They forgave us and many even thanked us for keeping them informed--apparently many other companies didn't communicate at all.
How it works at Modify: When we launched our new product in November 2011, everything went great. The watches looked amazing, and the water resistance and other features were a clear step up from our previous version. Six months later, about 5 percent of our watches started to die, well below the expected 1-to-2 year lifespan of our product. We discovered that the Seiko batteries in our watches had been tampered with, so we replaced all of the defective product--even those past the warranty--and added free product as a small token of appreciation to our customers. In customer surveys, those who had issues that we corrected ended up being happier about their experience than customers with quality products in the first place.
3. You need fans to be successful.
The best way to use service to your advantage is to create a passionate fan base. Customers love feeling appreciated and heard, so the extra mile by sending personalized thank-you notes after purchases and making sure your customers feel appreciated. After all, without them, you wouldn't be in business. Treat every one of them like a VIP.
How it works at Magoosh: We have a core value of "Wow is greater than profit." We focus on delivering "wow" service during every interaction, even though if often takes extra time. By doing so, we've increased our sales via word of mouth by 500 percent over the last year.
How it works at Modify: Since launching in 2010, we have included a handwritten note and a business card in the more than 5,000 orders we've shipped. It's to let people there is an actual team behind their product, people who are grateful for their business and want to hear from them. We want to know how we can do better at all times, and nothing says, "I'm here" like giving them your personal cell phone number! Excited fans have asked us to send extra business cards so that they can hand them out to strangers--requests that pushed us to create a complete "Referral Kit" for brand advocates.
In order to transition from being a budding start-up to a successful, sustainable business, you need to scale, and you need to scale fast. So invest in your customer service before putting a cent into marketing, public relations, or any other customer-acquisition tactic. By doing so, you'll learn how to build better products, create a level of forgiveness for when you make the mistakes that any small business might make, and collect brand advocates that will be influential to your growth.
Aaron Schwartz is the founder and CEO of Modify Industries, which designs interchangeable custom watches known as Modify Watches. Bhavin Parikh is the founder and CEO of Magoosh, which provides a convenient and fun way for students to prepare for standardized tests.
The YOUNG ENTREPRENEUR COUNCIL (YEC) is an invite-only organization comprised of the world's most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses. @YEC @YEC