Attracting new business is exciting, but did you know that 20% of your most loyal customers will likely generate the majority of your revenue? While visibility and attracting new customers are essential for growth, utilizing strategies like the power of empathy to improve customer retention can significantly boost your profits. By enhancing customer loyalty and engagement, you unlock a powerful potential for sustained revenue growth.
A 2024 Salesforce report found that 88% of people said good customer service makes them more likely to purchase again. And 80% of customers say the experience a company provides is as important as its products or services.
Customers want to be heard and understood, but technology often falls short in this area. People, on the other hand, excel at providing the personal and empathetic touch customers look for.
What can businesses focus on to improve customer retention?
Unlock the power of empathy.
Empathetic customer service helps you secure and retain customers. A compassionate and understanding customer agent can turn around even the most unfortunate client experiences, making customers feel heard, validated and important.
A lack of empathy sours the customer experience, regardless of how impressive your products and services are. Empathy is something you should always prioritize as your business changes and grows.
What’s the difference between empathy and sympathy?
Before we dive into the power of empathy, let’s take a closer look at what empathy means, as it’s often confused with sympathy.
In a nutshell, empathy focuses on connecting with someone’s emotional state that results from a situation. Whereas, sympathy focuses on understanding someone’s situation.
The difference is subtle, but speaking to customers in an empathetic way builds a stronger human connection.
Why does empathy matter in customer service?
Customers will find help elsewhere and may leave negative reviews if they don’t feel valued. Even the world’s biggest brands get complacent and sleepwalk into poor customer service. It’s risky to neglect empathy, as companies that offer exceptional customer service will always be attractive.
We saw it happen around 2010 when the ‘fintech’ (financial technology) revolution was born and a wave of challenger banks popped up across the US. These banks didn’t offer superior interest rates or generous cash sums for switching over to them. Instead, they attracted customers away from industry-leading banks by prioritizing customer service. They were far more empathic than the household name banks.
Customers were fed up with impersonal customer service, inconvenience, and a lack of transparency. So, the challenger banks tapped into the power of empathy and made it their competitive advantage. Banks like Chime, Current, and Varo persuaded millions of Americans to join them.
Few businesses have the luxury of having a unique product or service, which makes your customer experience even more important. Building empathy into your business will help you improve your reputation and customer retention.
How to show empathy in customer service
Empathy isn’t just a customer retention tactic when customers are frustrated. Empathy should be on the minds of customer service agents during every customer touchpoint.
Here’s how you can use the power of empathy when answering phone calls:
- Welcome customers with a warm greeting: Opening with a warm greeting and a positive mindset gets the interaction off to a great start. It’s difficult to turn it around if you answer in a flat or robotic tone. So, always go into a call with an optimistic attitude you can maintain throughout the conversation.
- Listen: Let the customer talk. Whether it’s a simple query or an angry complaint, let them talk and try not to interrupt. Interrupting or stopping them tends to make things worse. Let them talk as you listen and take notes.
- Empathize with them: Apologize for any issues or frustrations, and acknowledge the customers’ feelings and concerns. For example, “I’m so sorry we missed your appointment and had you waiting for a technician, [customer name]. That must have been frustrating. Let’s get this sorted. I will send a technician to you as soon as possible. When are you next available, [first name]?” Show the customer you understand their emotional state, that you care, and you’re committed to finding a solution ASAP.
- Provide a brief recap: Thank them for sharing their story. Repeat the main details of their case to ensure you fully understand the situation and avoid further mishaps down the line.
- Walk them through the next steps: Explain the actions you’re taking to rectify their situation. Provide a timeline if you can, too.
- Ask if there’s anything they need help with: This shows customers you value them and care about their customer experience.
- Follow up. Politely check in with customers a few days later to see if the issue has been resolved and that they have no other outstanding issues.
The power of empathy builds trust, strengthens relationships, and can turn furious customers back into loyal ones. There’s no reason not to be empathetic. Phone calls, live chats, and emails take the same amount of time whether you’re empathic or not.
How to be empathic across customer service channels
There are nuances between customer service channels, but customers want to feel heard, understood and cared for during every interaction.
How to show empathy over the phone and live chats:
- Answer quickly.
- Practice active listening and take notes.
- Empathize with customer issues.
- Provide a customized solution based on their experience.
- Describe the actions you’re taking to resolve the issue.
- Call the customer in a few days to ensure the issue is resolved.
Answering every phone call and live chat is difficult for SMBs operating only during office hours. But there’s a cost to missing calls. It irritates customers and costs you new ones, meaning every call missed is a missed opportunity. A 24/7 answering service can answer every call on your behalf.
Callers won’t know you’re using an outsourced service as a team of friendly virtual receptionists follow your protocol and brand scripts so they always sound just like you.
How to show empathy via email:
The same principles apply to email. Avoid sending a heavily templated response because the script can feel impersonal. That’s not to say you can’t template parts of your emails; you can. Just make sure to follow the same principles as the phone and live chat tips above.
Training customer service teams in empathy
You cannot ignore the power of empathy. Even during a training scenario, you can feel the stark difference between an empathetic customer experience and a lacking one. Practicing will help your staff learn how to show empathy in customer service.
How to train empathy in your team:
- Role-play. Simulate common customer scenarios to prepare staff to get comfortable handling cases empathetically.
- Record calls. Listen back to a mix of recorded calls to judge how they handle conversations and how they can make improvements.
Measuring the impact of empathy
Measuring the impact of empathy isn’t as straightforward as other metrics. It involves assessing a mixture of qualitative and quantitative factors. Assessing both will help you better understand how empathetic your customer service is.
How to measure empathy in your business:
- Customer complaints. Tracking the volume and reasons for complaints helps identify whether your company comes across as empathetic.
- Customer retention rates. Respectful customer retention rates signify that customers are happy with your service.
- Company reviews. Check out review websites like Trustpilot to see how customers rate your service.
- Net Promoter Scores (NPS) scores. NPS scores are a simple way to measure customer satisfaction and to compare performance against competitors.
- Customer Effort Scores (CES). See how easy customers find it to engage with your service to improve issues.
Conclusion
Tapping into the power of empathy gives you a competitive advantage. Build it into every customer touchpoint to ensure the benefits of technology don’t come at the cost of empathy.
AI and automation are incredible tools with clear benefits for productivity and efficiency. Just be wary of letting these tools overshadow the empathy that lets you build trust and improve customer retention.
