Smart business leaders know that retaining repeat customers is the most efficient and cost-effective way to drive business growth—and the data supports this. A survey from Bain & Company showed that just a 5% increase in customer retention rates can increase profits by as much as 95%, in part because acquiring a new customer can cost as much as five times more than retaining an existing one. A 2022 report from Think Impact, meanwhile, showed that roughly half of a company’s revenue is generated by the 8% of their customers who are the most loyal.
Strong customer service is a critical piece in the customer retention puzzle. Conducting a customer service audit can help you to identify areas for improvement in how you engage with customers that you might otherwise have missed. This makes it a valuable tool for improving your customer retention rate. Here are the steps to conduct a customer service audit and use it to build a more loyal customer base.
What is a customer service audit?
In short, a customer service audit is a process by which you evaluate and analyze the ways your organization interacts with its customers. The goal of this analysis is to spot the areas where you could be more responsive or serve your customers better.
The main way this is accomplished is by reviewing customer feedback to gain insights into the customer experience of your organization. It also often involves analyzing internal processes and attitudes related to customer service, in order to improve your team training and foster a more customer-focused culture across the company.
The value of this kind of audit is hard to overstate. Roughly 93% of customers say that they’re more likely to do business again with a company that provided them excellent customer service. Providing high-quality service attracts new customers, too, since you’ll be more likely to have strong customer reviews, testimonials, and other word-of-mouth advertising bringing them to your door.
Steps to complete a customer service audit
Step 1: Evaluate your current service processes and set goals for improvement.
Knowing what you’re aiming toward can help you get there effectively. This is why setting goals is a key first step of any successful audit. To do that, you need to know where you are currently, and how much you need to improve in order to achieve your ultimate aims.
A checklist can be valuable for assessing your internal customer service strategies and approach. Some great questions to ask yourself as you’re embarking on a customer service audit include:
- Do you have a clearly outlined and written customer service policy?
- Are your expectations regarding customer service clearly communicated to all team members?
- Is your customer service policy clearly communicated to customers?
- Do you monitor the performance of your customer service initiatives and strategies using trackable and measurable metrics?
- Do you monitor the performance and effectiveness of your competitors’ customer service strategy?
- Do you have a system in place to inform customers of changes or issues with the status of their order or service?
- Do customers have a clear and direct point of contact within your company that they can reach out to with questions or issues?
- Is customer service monitored and prioritized at all levels of the organization, including executives and leadership?
- Do you regularly collect and review feedback from customers about their service quality?
- Do you have quality control measures in place around your customer service policies?
- Do you have a system to promptly respond to and address customer complaints and issues?
- Do you have a process or system in place to monitor and manage the customer experience from start to finish?
If you answered “no” to any of the above questions, that is a likely area you’ll want to target when you begin your customer service audit.
Step 2: Gather feedback and data.
Once you know what you’re looking for, you can start to collect the information that will give you insights into your current service levels and where they can be improved. Some of this information already exists and simply needs to be collected in one place for evaluation. To perform a comprehensive audit, gather data from a variety of sources, including:
- Customer reviews, especially negative reviews, on sites like Yelp and Google business
- Support ticket data, including timelines for resolution and success percentages
- Responses to past customer surveys
- Customer service metrics such as Net Promoter Score (NPS), Customer Satisfaction Score (CSAT), Customer Effort Score (CES), average response time, average conversion rate, and customer churn rate
- Past customer complaints, messages, and other feedback that was given
In addition to these existing sources of data, you can solicit additional input by sending out a customer service survey to both current and past customers from your database. Offering an incentive for providing this feedback can help to increase the volume of input and responses. For example, you can provide a discount coupon on a future order for customers who provide their input, or run a raffle or prize giveaway that customers enter by providing their feedback.
Step 3: Analyze the data to find trends, patterns, and weak spots.
The more data and feedback you are able to collect, the more comprehensive and accurate the results of your analysis will be. Look at this data from a quantitative angle based on measurable metrics, as well as seeking qualitative insights such as recurring complaints, or areas of your process that are consistently highly-rated by customers.
Step 4: Pinpoint specific areas for improvement and develop a plan to make those improvements.
Part of this planning process should involve setting measurable, timely goals that clearly define what you want to improve, the methods you’ll use to make those improvements, and the timeline for doing so.
Often, a customer service audit will uncover multiple areas where you can be doing better. It’s often best to focus your energy on tackling one or two of these at a time. You can prioritize which you’ll target first based on the goals you outlined at the start of the process, as well as your resources and their relative impact on the customer experience.
Step 5: Implement your improvements.
Clear and transparent communication across the team is critical when you are making this kind of change. When you implement improvements, be sure to communicate the goals of the change, the benchmarks that you’ll measure to determine their effectiveness, and the policies and best practices team members should follow when applying the new policy.
Step 6: Track and evaluate your progress and set new goals for further improvement.
You never want to assume that new policies you implement will have the intended effect. Tracking your performance and progress can give you real insights into the effectiveness of these new policies, allowing you to further refine your customer service approach moving forward.
Once you’ve made a measurable improvement in one area, you can then move on to the next item on your priority list. Conversely, if the change you implemented hasn’t had the impact that you’d hoped, you can re-evaluate and refine your approach and try a new strategy.
By making incremental, targeted adjustments, you can elevate your entire customer service area, improving the experience of every customer that does business with your company. The rewards are well worth the efforts you make. Not only will your customers benefit, but you’ll see improvements to your customer retention and, in turn, to your business health and growth.
