One of the major benefits of eCommerce is that the business is operating and orders are coming in 24/7/365. Your business never truly closes and you can literally be making money while you sleep. While an eCom biz may sometimes feel like it can run on autopilot because of this, in reality there’s a lot that needs to be done to maintain your reputation while those orders are pouring in.
Customer service is an essential piece of the eCommerce puzzle and definitely not something to be overlooked or taken lightly. Not only do 98% of consumers feel that reviews are an essential resource when making purchase decisions [source], creating an outstanding customer service process will keep your customers coming back. According to Shopify, the average customer acquisition cost for a small ecommerce business with less than four employees is around $58.64, which shows just how important customer retention is for profitability.
DermWarehouse is our agency’s in-house eCommerce business that sells skin care and beauty products. We’re one of the only agencies who has built an eCommerce brand in-house that’s scaled to 7 figures in annual revenue. We practice what we preach and incorporate this into our eCommerce strategy for our clients.
DermWarehouse is rated as one of the highest beauty sites on TrustPilot, with 4.9/5 stars and over 8,000 reviews. In the last year, more than 50% of our customers have been repeat customers. These numbers did not happen by chance. They were developed over years of relationship building, strategy, training, and technology. The customer service experience on our site has always been instrumental in growing our business. This article will discuss why customer service is so important and go through the steps you can take to improve your eCommerce customer service experience.
Table of Contents
- 1 Why is a Great Customer Service Strategy So Important?
- 2 Tips to Improve Your eCommerce Customer Service Strategy
- 3 In Closing
Why is a Great Customer Service Strategy So Important?
We all would obviously rather have people saying great things about our business vs. terrible things, but customer service isn’t only important for your ego. The eCommerce customer service experience simply cannot be overlooked, as having a great strategy in place will increase your customer retention rate, your eCommerce conversion rate, and even your average order value.
Related Blog: Benefits & Examples of an eCommerce Loyalty Program
Customer Acquisition is Expensive
Too many businesses overspend on their advertising and customer acquisition and underspend on their eCommerce customer service process.
You’re spending a lot of money to get new customers in the door and as I referenced above, acquiring new customers is expensive. Guess how much you spend when a customer comes back to make a repeat purchase with you? $0. I know you can do the math here, but spending nothing on your repeat buyers is better than spending a lot on your new buyers.
Once you spend the money to get someone in the door, you want to do whatever you can to keep them around so that their second, third, and forth purchases cost you nothing! This means that as your business grows and you keep your customers coming back, your business will become more profitable.
Now you’re probably wondering what happens if you have a business that doesn’t get repeat business. Does this mean that customer service can just go out the window? No! Even if you don’t expect a ton of repeat business, customer service is just as important as it will help you acquire new customers. Unhappy customers leave negative reviews, and if you have a slew of horrible reviews about your business, acquiring new customers is going to be really tough.
Increase Conversion Rate & Average Order Value
Having a great customer service strategy in place builds trust among new customers. When a customer has a great experience with your company and leaves a 5-star review on your site, your new customers visiting your site read these reviews and they trust that they’ll be taken care of when they shop with you. Once that trust is established, not only will your conversion rate increase, your average order value will likely increase as well.
When DermWarehouse first started using TrustPilot we saw a huge increase in our conversion rate and a huge spike in our average order value. People were not only more likely to shop with us, they were more likely to place larger orders because they trusted they’d have a great experience with us like so many had before. At the beginning, customers would place small $30-$50 orders for only one product. It seemed as though they were testing the waters. Once the reviews started rolling in, our average order value increased to about $100. It wasn’t a coincidence that we were seeing increased conversion rate and higher average order value. In fact, shoppers visiting web pages with 1-10 customer reviews are 52.2% more likely to buy than those who visit pages without any customer reviews. Not only that, a single business review can lift conversions by 10%.
Tips to Improve Your eCommerce Customer Service Strategy
The thought of implementing a stellar customer service strategy can be daunting. While you may think that handling customer service will become more difficult and time consuming as your company grows, with a great process, fair policies, the right people, and the right software, your customers will recognize your outstanding customer service and it will keep them coming back to shop with you.
Review Your Policies
I know it sounds a little cliche, but treat your customers how you would want to be treated. As we were growing DermWarehouse, this was always my mentality. Each time a new situation arose, I would ask myself how I would want a situation to be handled if I was the customer. When I responded to issues or problems, I’d ask myself if I would think the response was fair if I were in their shoes.
I am not saying here that you have to be a pushover and give in to each and every one of your customers’ requests. Sure, the saying goes that the customer is always right, but sometimes customers try to push limits and ask for something unreasonable just to see what they can get.
Here’s an example: Our return policy states that customers can return products for up to 30 days. There have been a few times that we get a call several months (or longer) post-purchase letting us know that there was an issue with a product. We’ve learned that many times customers will order multiple products during a sale to stock up and sometimes they open a bottle months later only to find something is amiss. We of course will always help these customers even though they are far outside our return policy.
On the other hand, we once had a customer who called us 6+ months after they purchased a product and told us that the product gave them a bad reaction. This seemed reasonable to me at the time, and even though we typically don’t accept returns this late, I allowed them to return the product. When I received the product back from them, the bottle was completely empty. From here, I changed our policy to note that if a product is more than 50% used when it’s returned, we reserve the right to deny the return. People will sometimes try to take advantage of lenient policy, so it’s ok to set reasonable ground rules.
Think Big Picture
One of the biggest issues I see when it comes to customer service is that businesses don’t think enough about the big picture. We’re fortunate in that we sell a product that customers are coming back to re-purchase every three months, on average. Regardless of repeat purchase rate, a repeat customer is always a good customer.
So many companies put so much emphasis on the profitability of the initial purchase that they lose sight of what’s really important – customer retention. We are willing to break even on an initial purchase or even lose money if it means keeping the customer happy and increasing the chances that they’ll come back to us. 41% of the eCommerce revenue is generated by 8% of your repeat customers [source]. If we can make a great impression on that first purchase, even if that means going above and beyond and sacrificing some of our profitability, we know the customer will remember it and the likelihood of them coming back to shop with us again will increase.
We think about the big picture with every single transaction. Rather than focusing on how profitable we can be on that one order, we think of the potential average lifetime value of the customer. If a customer orders a product from us and hates it, for example, we don’t want to force them to keep that product, even if it means we’ll have to eat the cost of it. We want to make sure they end up with something they love because this increases the chances that they’ll come back to buy it again.
The same thing goes for lost packages. We make sure that we’re quick to replace missing or lost items so that customers know that they can count on us to resolve any issues that occur. This has built up a lot of trust with our customers over the years and this is precisely the mentality you should have when it comes to customer service.
Turn Negative Experiences Into Opportunities for Customer Service to Shine
When shopping online, there are a million things that can go wrong. While you always do your best to ensure all products are in stock, shipping is on time, packaging is perfect, and the mail gets to its final destination safely and punctually, the reality is that things happen. Mail gets lost or delayed, items get damaged, or customers just change their mind or don’t like what they purchased.
We’ve had some extremely angry customers at times for one reason or another but we always try to see these situations as opportunities. We do every single thing that we can to help the customer and make the situation right. Many times, we can turn the angriest of customers into the happiest ones just by going the extra mile and showing that we care. Customers remember this, and oftentimes, the ones who start off angry are the ones who end up being the most loyal because they’ve seen how you handle yourself when things go wrong.
In the review below, this customer was extremely anxious to get a scar product from her son. When her order arrived, she was very upset to see that the product was broken and unusable. Not only did we send her a replacement, we made sure to expedite this for her so her son would have his scar treatment ASAP. This customer started off as angry and upset, but we were able to turn the situation around. You can see in her review below that this situation made her want to continue purchasing from us.
Train Employees Thoroughly
When it comes to your eCommerce customer service strategy, training is extremely important. You want to make sure that your staff are handling customers consistently and in a way that makes the most sense for the business. Whenever someone new starts with us, the first thing we do is discuss our customer service motto and expectations to give them an overall understanding of where we stand. You also want to make sure that they know what to do in any possible situation that could arise.
We don’t outsource our customer service. We make sure our customer service reps are either full-time or part-time employees of DermWarehouse, extremely familiar with our brands and products. I can’t tell you how many solicitations I’ve received for outsourcing our customer service. This is the last thing I would consider doing based on the emphasis we put into having the best customer service.
As the business owner, you likely know your customers best. For several years, I handled all of the customer service for DermWarehouse myself. While I’m certainly not recommending you handle your customers without any help, it is important that you’re aware of any issues that could arise and document how to handle them.
We utilize Monday.com project management software for our business. You can see in the screenshot below that we have a board for our customer services resources. This goes through each software and scenario and provides both written and video instructions on how to handle situations.
Before I made my first customer service hire, I created a very long document containing every customer issue I could think of. I then wrote detailed instructions for how I would handle each of them. I wrote down even what seemed like the most obvious answers so that nothing would be left to question. I felt much better handing over the customer service reins to an employee once I knew that they had this documentation in place anytime they had a question or an issue arose.
Whenever a new employee starts, they begin by reading through this document so they can get a good handle on our process. Before they ever talk to a customer on the phone, they go through mock phone calls with other staff members, take a customer service quiz that I created to test their understanding of our process, and they always start with customer service emails rather than phone calls so we can check to make sure they have a good handle on how to respond. It takes about 2-3 months before most of our employees are really comfortable on the phones and can handle customers on their own. We continue to expand our customer service training document as we now have more people jotting down notes, questions and key information.
eCommerce Customer Service Software is Key
When we hired our first customer service rep, we were handling all customer inquiries through email. This made it extremely difficult for our team to keep track of everything going on. It also made it impossible to share responsibilities. Not only that, if someone left the company, we’d lose our records of any communication they had with customers. After about a year of trying to manage this, we realized that there must be a better way to do this.
After some research, we decided that a customer service software was necessary and we started using FreshDesk, a customer service ticketing software. It has been life changing and I couldn’t recommend it enough. Now all of our customer service inquiries come into one platform. Any time one of our agents logs in, they have access to all the tickets and they can see a full history of any issues. You can auto assign certain tickets to certain agents or use a round robin strategy. FreshDesk is also great for training because trainees can tag managers in any responses so they can monitor how they’re doing and give feedback.
One of the best things about FreshDesk for us has been the ability to create canned responses. Earlier, I mentioned that I put together a training document containing every possible customer service scenario with instructions about how to handle each one. With the canned responses in FreshDesk, I was able to create actual responses to any question a customer could potentially ask. We now have a library with more than 100 of these. If a customer emails to ask us why an order is delayed, for example, my staff can insert a canned response that was written by me. Even though I’m no longer handling any of the customer service for my business, more often than not, our customers are getting responses that came directly from me and were written in my own words. Anytime a new scenario arises, my staff lets me know and we work on a new canned response to add to the list.
We’ve loved using this software so much for customers, that now we also use it for all of our vendor communication as well. It helps keep us so organized and on top of everything. At about $200/month for 4 agents, it’s worth every single penny.
Below are our canned responses. On the left you can see all of the categories that we have responses for and on the right side you can see our responses just for returns and exchanges. Building up this library took a lot of time, but it makes our customer service process so much easier.
Having a great customer service strategy in place will increase your profitability, your average order value, and your conversion rate. Not only that, getting great reviews will boost your employees’ morale! We even send out a weekly email to our staff highlighting great reviews for the week. The bottom line is that your customers are the people who keep your business running so it’s extremely important to take great care of them. We do everything we can at DermWarehouse to keep our customers happy. We always try to go the extra mile and treat our customers like the VIPs that they are.