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How Great Customer Service Can Improve Your Customer Lifetime Value Image
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How Great Customer Service Can Improve Your Customer Lifetime Value

If there's anything that retailers have learned in recent weeks, it's the value of core customers. It's our core customers that are sticking around, even in midst of this current pandemic crisis, which demonstrates the importance of customer lifetime value (CLV). In this piece we'll cover how great customer service is the key to CLV.

When a brand increases customer retention rates by 5%, that brand’s profits will increase anywhere from 25% to 95%. And there are benefits beyond short term profit. As your business’s retention rate increases, so does the lifetime of an average customer, also known as Customer Lifetime Value (CLV). 

The CLV of your brand represents a customer’s value to your brand over a period of time, typically one year or more. Of course, the goal is to extend your CLV, because this means your brand will have continued business from a dedicated shopper. This in turn results in valuable shoppers that can provide ongoing data and feedback, and can help your brand to improve your customer experience overall. 

To gain the ongoing loyalty of your customers, you’ll want to cultivate a customer-centric business so that when you ask your shoppers, “will you be mine?” ...They’ll say yes, no matter what the season. 

Here are 3 customer service strategies that will help you to keep your customers coming back - long term:  

1. Embrace social media and messaging as a tool for customer service

Social media channels like Instagram, Facebook, and Twitter have become an important point of contact between brands and their consumers. In fact, 67% of customers report that they have used live chat, social media or texting to contact customer service.

These are channels that most people (Millenials and Gen Z especially) use on a regular basis to communicate with friends, family, co-workers and acquaintances. Because of this, users attribute a sense of human connection with social media and messaging channels. According to a survey by Facebook Business, the majority of respondents said being able to message a business helps them feel more confident about the brand. This suggests that having a strong social media care strategy can directly correlate with customer retention, and ultimately, your business’s CLV. 

So what are the keys to social media care that will inspire confidence in your brand? We’ve narrowed it down to three factors:

Aim for quick response time

Shoppers expect quick responses on social media. In one survey, 42% of respondents reported that they expect a response from a business on social media within 60 minutes! This means that your social media strategy should emphasize speed, because quick responses will keep your customers happy. 

Of course, for some businesses, limited resources and staff might mean it isn’t realistic to have customer service live 24 hours a day. In that case, it's recommended to address messages that have come in overnight or over the weekend immediately. 

Communicate in a branded voice and tone 

Voice will express the personality of your brand, and tone describes how this voice is applied. The combination of voice and tone used in communications over social media has a humanizing effect on your brand. Humanization is important because most of us don’t want to chat with bots. When there is personality in the communications of a brand, it's a subtle reminder to your consumers that they are speaking with real people. The result? A better sense of trust and rapport.

Monitor your social media 

Social media care involves more than just monitoring the inbox on your social accounts. It’s also important to monitor the conversations happening on these channels that are relevant to your brand. In some cases, they might even mention your brand directly. To find these conversations, search hashtags associated with your brand, or for your brand name on social media platforms. This type of social media care is called “social listening.”

When you find conversations that have to do with your business, add to them. If a user is expressing disappointment in a product, offer them help, or if they are praising your product, thank them for the support. Not only will this inspire confidence in that user, but it tells other users that your brand cares. 

Warby Parker’s impressive customer service has great results - many customers post to social media about their positive experiences with the company, which is a fantastic way for Warby Parker to amplify their brand: 

2. Empower your customer service team 

Your customer service team is in many ways the “face” of your brand, because they are the people who will actively engage with your customers - especially if your business is online only. It's important to think of them in the same way you would (or do!) think about your in-store retail associates: as an extension of your brand’s values and reputation. 

Whether your customer service team is interacting with shoppers over social media, email, text, or phone, it's important that they are empowered to interact with human-centricity in mind. Rather than sticking to scripted responses to queries, trust your team to interact with customers via various channels (social media, phone, email) and encourage them to communicate in a conversational, branded tone. This makes for an authentic experience for your customers. And let's be honest - it's less boring for your customer service team. 

The great thing is that an empowered customer service team benefits customer happiness, which results in retention - but there are benefits beyond this as well. Beauty brand Glossier was quick to discover that their customer service team, which Glossier calls the “gTeam” had fantastic insight into the experience of customers. 

In their daily conversations with customers, the gTeam discovered what customers like and don’t like about Glossier products, as well as information about Glossier's shopper demographic and persona. Glossier recognized the value of this information, and now their gTeam is integrated into their business strategy. The information the gTeam gathers is leveraged to improve the business both operationally, and for improved CLV. 

3. Leverage artificial intelligence for optimized customer service 

Artificial intelligence (AI) is taking strides in automating parts of the customer service experience, which means that your customer service team has more time to dedicate to authentic, human service for your shoppers. 

In ecommerce, AI chatbots have emerged as the leading optimization tool for customer service. A chatbot is a computer program that simulates conversation with human users to complete some sort of service - similar to Apple’s Siri or Google Assistant. 

It’s considered a “self service” tool, meaning that chatbots are tools that empower your customers to solve routine issues themselves using the guidance of AI (rather than a human customer service agent). According to research, many shoppers prefer to help themselves before having to reach out for support.

A user might rely on an ecommerce site’s chatbot to find out what their return policy is, or how long shipping takes to their region. While this information is typically available on one of the ecommerce site’s landing pages, a chatbot will deliver that information quickly. Chatbots can answer an unlimited amount of web users at the same time, 24 hours a day, with an instant response time, meaning that you can reduce costs on human customer service agents.  

The Shopify Bot is available 24 hours a day to help with common
questions and direct users to the right resources.


 Perhaps the most valuable benefit of using chatbots on your ecommerce site are the data insights they provide. As your chatbot interacts with site visitors, it gathers data on everything from common questions and concerns amongst your shoppers to more advanced insights into shopper behavior, pain points, and preferences. 

For example, if your data shows a pattern of customers that abandon their session after asking the chatbot what your store’s return policy is, you might consider reevaluating the return policy to better fit your customer’s needs. 

The versatility of AI chatbots in servicing ecommerce shoppers, reducing labour costs, and gathering data is why 80% of businesses said that they already use chatbots or plan to implement them in 2020. The fantastic thing about chatbots is that they don’t need to replace your human customer service team. 

Instead, you can leverage chatbots to reduce the routine questions that your customer service team encounters, saving their efforts for complex queries that need that “human touch.” The speed and 24 hour availability of chatbots will improve customer loyalty and ultimately your CLV because your customers will never be left hanging when they need help. 

Customer service will improve your Customer Lifetime Value

Embracing social media and web messaging, empowering your customer service team, and taking advantage of AI tools like chatbots are three strategies you can use to cultivate a customer-centric business that provides fast and personal service that keeps your shoppers coming back - especially right now, when most businesses are operating as ecommerce only. This loyalty is what translates into a strong customer lifetime value that will keep your core customers engaged even in tough times. 

Do you have questions about ecommerce? Let’s chat!

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