All small business owners working in the services sector know that great customer service is essential to success. However, does the importance of customer care fluctuate depending on the changing conditions of the wider economy?
A recent study conducted by Georgia State University argues that it does, with consumers weighing their past experiences with companies more heavily in times of economic prosperity. The implications for service businesses is that, perhaps contrary to what many may assume, it is more crucial to invest in enhancing the customer experience when the economy is doing well.
Economic conditions in Australia (and indeed most other countries) are unpredictable at best, as the latest measures of business confidence indicate. This suggests that best practice would be to focus time and effort into customer care at all times.
In the study, researchers from the university analysed purchase data from around 800 customers of a top international airline. This information was grafted with data from Gallup polls that measured people's perceptions of their well-being, which are often linked to the health of the overall economy.
Dr Nita Umashankar, assistant professor of marketing at Georgia State University and one of the authors of the study, concluded that people - regardless of personal income - usually focus more on price than previous experiences when the economy is down.
"When the economy is doing better, customers pay attention to other aspects of the purchase decision, including how satisfied they were in the past and whether the firm made an effort to fix anything that went wrong. They tend to weight their past experiences with the firm more heavily to inform their future purchase decisions when the economy is doing better," she added.
"So where does the firm get a bang for their buck in terms of investing in customer service? We would never advocate for firms to provide a poor experience to the customer, but you get a greater return for your investment when the economy is doing better."
Whether the economy is doing poorly or badly, however, it never hurts to deliver exceptional service - a surefire way to keep your customers coming back for more.
If you'd like to learn how Earlypay's Invoice Finance & Equipment Finance can help you boost your working capital to fund growth or keep on top of day-to-day operations of your business, contact Earlypay's helpful team today on 1300 760 205, visit our sign-up form or contact [email protected].