How Can the “Ripple Effect” of Customer Service Affect Your Bottom Line?

January 20, 2016

It is important that bookstores recognize the “ripple effect” of their customer service, not just the immediate profit from an individual purchase. The impact of every customer’s experience while shopping with you stretches much farther than that one transaction.
Let’s assume that a customer has a less than stellar experience while shopping at the bookstore. This may be because of prices, selection, or service. Let’s do the math.
A student will spend on average $288 per semester on textbooks and is at the school for an average of 4.5 semesters.* With this known, a student could potentially spend $2,592 on textbooks throughout his or her time at the school. Studies have shown that an upset customer will tell between 10 and 20 other people about that experience (some people will tell many more, especially with today’s dominance of social media). Let’s say, conservatively, that the customer tells 10 people about the poor experience.  The same study also says that those 10 people will each tell an average of five others about that experience.**
Customer = 1 person
Tells 10 other students = 10 people
Who tell 5 people each = 50 people
Total who heard about bad experience of customer = 61 people
If all 61 people who heard about the bad experience were textbook-buying students who decided not to shop at the bookstore as a result, the total amount lost over 4.5 semesters would be $158,112. Even if only half of those customers decided not to shop at the bookstore, the loss would be $79,056.
Although these numbers are alarming, they are fairly conservative. Some students will spend much more than $288 per semester in the bookstore, so losing a higher-dollar customer could quickly double these figures.
To avoid this negative ripple effect, you must ensure that your customers are having a positive experience every time they are shopping or interacting with you. A few ways to ensure this positive experience is to:


  1. Increase your social media presence in terms of customer service.
    Social media has become an online customer service platform and prompt customer service really does pay off in terms of peer-to-peer recommendations and in revenue-generating potential. Almost 70 percent of millennials are influenced by friends’ posts on social media when deciding whether or not to purchase products and services.*** I can’t stress enough that time is of the essence when responding to your customers. In fact, several studies have found that customers expect a response over social media the same business day. Of course this means that social media must be constantly monitored. I suggest assigning someone the task of regularly monitoring and responding via your social media channels. Or perhaps engage a third-party vendor whose system will alert you to any new activity on your channels as well as to any key words or phrases being used on those channels that you may want to know about and respond to, such as “cheap textbooks,” “rental textbooks,” or the name of your bookstore or mascot.

  3. Treat your customers like newspaper reporters.
    Peer-to-peer recommendations are the highest valued form of reviewing businesses. As we learned from the example above, bad word-of-mouth can have a huge effect on your bottom line. Treating all customers like they are going to go tell everyone they know about the products they bought and the service they received is a must. 

  5. Never stop improving.
    Study complaints and compliments. Every message from a customer presents an opportunity to improve customer satisfaction. Compliments show you what to reinforce while complaints point to new ideas and actions steps for improvement.
    Applying these tips you can help build a solid base of happy and repeat customers that will ensure the success of your store for years to come. 
    * 2015 Fall Crux Student Survey
    ** “Customer Service: Career Success Through Customer Loyalty” by Paul Timm

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