These will help you:
- Every interaction should be treated like a deal-clinching pitch.
- Be accommodating and respectful.
- Show genuine interest.
- Say, “Thank you.”
- Follow through with what you say you will do.
- Use social media as a customer service tool.
- Listen to what your customers are saying about you online, then respond to the praises and complaints using the right tone.
- Make great customer service an engrained part of your business.
- Done right, customer service can become your competitive advantage and your game-changer.
- Customer service pays its dues tenfold, by bringing people back and fueling long-term happiness.
Today’s customer is like that fearsome critic: clued-up, savvy, with high expectations and no patience for time-wasters. This is majorly because technology has handed them an unprecedented power to dictate the rules – comparison apps, review sites and the endless transparency of the internet leaves the ball very much in their court. Today’s customers know what extraordinary customer experience feels like. They don’t just compare service within industries; they compare service across the board. And so, they expect everyone to deliver the same immediacy, convenience, and personalisation they receive from their best brands. It’s high stakes!
[Read Also: How to keep your small scale business running]
Benjamin Franklin once said, “Well done is better than well said’’ and this is true in the context of customer management and service. Your customers respond better to what you do for them rather than what you say you’re going to do, and this is exactly why outstanding customer service needs to be part of your marketing strategy.
Even if your business does nothing else right, you need to nail customer service. This matters now more than ever. According to a survey from Temkin group, 86% of customers who rate a company’s customer service as “excellent” will repurchase from that company. It’s also worth noting that 77% of consumers who have excellent customer service interactions say they’re likely to recommend the brand to others, while only 7% of those who have poor experiences will.
From an acquisition standpoint, this data is huge. If your service is currently lacking, stepping it up could make a huge difference in how willing your customers are to spread the word about your business. And considering that those recommendations have the potential to translate into sales, it is clear that customer service can have a significant impact on your ability to reach your marketing goals.
Your customers will not compare their fast-food experience only to other fast-food experiences, they will compare their fast-food experience to their best experiences with their favourite network operator or favourite airline. The question will be, “If they can do it, why can’t you?” and really, why can’t you?
We invest way more trying to win over new customers than we do in keeping our existing ones happy — despite all the evidence showing that it should be the other way round.
Customer service can be your most powerful marketing weapon — if you know how to sharpen it. You don’t even need to spend a lot of money. Ask yourself “What is the average in my industry, and how can I consistently do better?’’ You don’t need to go to extraordinary measures to provide extraordinary customer support; you just need to consistently exceed expectations.
Reasons why customer service is the new marketing
Customer service pays for itself
It is natural to feel reluctant about investing heavily in customer service, as it can feel like a black hole in a company’s finances, burning cash at light-speed without a palpable return. That is why many companies respond to financial pressure by slashing the customer service budget first. It is winning new customers that will bring in the most revenue, right? The alternative? Think of customer service as a form of marketing, an investment that will pay for itself over time – not an expense that needs to be slashed.
A case in point here is Slack which was criticised widely for having five times more support staff than sales reps – yet it took them just over a year to move from launch to a $1 billion valuation.
The Ritz-Carlton Hotel Company is such a customer service advocate that each of its employees is authorised to spend $2,000 per day to improve guests’ experiences.
All these companies pay out for customer service because they believe that it pays off. And it does.
The bottom line? Customer service pays its dues tenfold, by bringing people back and fueling long-term happiness.
Customer service is affordable
Does your company have the funds needed to deliver an outstanding customer service? It almost certainly does. As counter-intuitive as it seems, being cost-effective and investing in customer service aren’t mutually exclusive.
Take it from customer service aficionados, Amazon, the most valuable company in the world today. Jeff Bezos is renowned for obsessing about customer satisfaction, demanding that his employees chase solutions and prioritising immediacy. For him, If it benefits the customer, keep it; If it doesn’t, cut it.
Customers do not care about expensive tools to calculate vanity metrics, or shiny offices, or ping pong tables, or if your HQ is in a major city. They do care about dealing with a happy, committed team. If you think creatively, there are plenty of tactics to keep costs low while maintaining high standards in customer service.
[Read Also: How Paga is replicating the Kenyan success]
Good customer service helps your company grow
How big does your customer support team need to be? No two companies are the same, so there’s no set playbook. That said, bigger isn’t always better.
And here’s a good rule of thumb: Don’t start scaling your team until you’ve got your values and customer culture firmly in place. When you first start a company and have only a couple of people handling customer requests, it’s much easier to communicate values and be customer-centric. It’s when you start scaling that your customer vision is at risk of being diluted, which is why it needs to be air-tight before you start hiring.
Nigerian Breweries leveraging, but stacking cash through rising input costs
The marathon continues for Nigerian Breweries with its 2020 financials.
Humanity might need more booze to survive the increasingly daunting intricacies of life, but Nigerian Breweries 2020 financial statement is proof that even the best can get caught up in the reality of changing business lifecycles.
Nigerian Breweries Plc had floored the market providing both alcoholic and non-alcoholic premium quality beverages across the nation. But with brands like Star lager beer launched as far back as 1949, Gulder lager beer launched in 1970, and even the family-friendly Maltina introduced as far back as 1976, it is only natural that both the old and new generation competition gives them a run for their market share.
Much like other old money companies, Nigerian Breweries has done its bit to remain relevant in the industry from creating new variants of existing favoured brands to paying dividends consistently annually for the past few years. Yet within the same period, the company’s financial statements have been a testament to its streamlined market share and reducing profits. The marathon continues with its 2020 financials. The industry giant may as well be setting itself up for a debt quagmire peradventure its projections do not match the true reality of events.
2020 financials: A tale of higher costs & larger debts
2020’s unfavourable financial/ business environment led to the increase in the prices of raw materials and disruptions in logistics for many Nigerian-domiciled businesses including Nigerian Breweries. Raw materials and consumables witnessed a 17% increase despite the marginal growth in revenue.
While the group’s 2020 results revealed a 4.35% increase in revenue from N323 billion in the prior year to around N337 billion, these gains were curtailed by a higher-than-par increase in cost of sales which had risen by 13.9%, from the N191.8 billion expended in 2019 to N218.4 billion as its 2020 financials reveal and interest rates going way up.
The company’s lower operating expenses were not enough to salvage the disruption caused by the raging interest expense following increased charges paid on bank loans and overdraft facilities as well as the significant increase in overall debt. Between 2019 and 2020 alone, long term loans and borrowings increased by 974% from N4.8 billion to as much as N51.8 billion. Even trade and other long term payables increased by 35%.
In its financials, the company noted that it has revolving credit facilities with five Nigerian banks to finance its working capital. The approved limit of the loan with each of the banks range from ₦6 billion to ₦15 billion (total of ₦66 billion) and each of the agreements had been signed in 2016 with a tenor of five years. The Company had also obtained Capital and Working capital finance from the BoI in 2019.
It is no news that the company is involved in diversified lease arrangements. Following reclassifications made in 2019 to some of its lease assets, the 2020 asset base also witnessed significant increase in Right of Use Assets which increased by 288%% from N11.1 billion to N42.9 billion. Yet, the fact that in one year, interest expense on Lease Liabilities rose from N19.7 million in 2019 and to a whopping N4.171 billion shows that the company is taking way more debt than its books require.
But what’s it using all the cash for?
Beyond rising material costs, borrowing costs have been huge and the annual interest payment by virtue of these loans make the possibility of higher profits for the company a mirage. That said, the overall increase in total liabilities might not have been such a bad idea if the funds were being used to increase revenue and profits. But having a huge chunk of all that money in cash creates a different kind of challenge. Cash and bank values in its statement of financial position significantly increased by 377% from N6.4 billion in 2019 to N30.4 billion in 2020.
Is the cash being held to mitigate possible challenges of the volatile economy or are they being used to pay dividends? Even at a share price of N52 per share, the company’s price-to-book value sits at 2.5816, testament of its dire overvaluation. Consequently, there is an ardent need for the company to come up with newer ways to attract the wider market and keep its book in the green with a little less external funding.
Secret behind MTN’s blistering performance
Despite COVID-19 disruptions, MTN Nigeria’s 2020 financials showed marked improvements compared to its 2019-year-end.
MTN Nigeria Communications Plc (MTN Nigeria) released its audited financial results for the financial year ended December 31, 2020.
Despite a challenging 2020 to individuals and businesses caused by COVID-19 disruptions, MTN Nigeria’s financial and non-financial information showed marked improvements compared to its 2019-year-end as well as prior quarters of 2020 results that were impacted by the COVID-19 pandemic.
Indeed, the evolving pandemic which intensified lockdown, remote working, and work-from-home procedures, appeared to have led to increased adoption of MTN Nigeria data and digital services.
Specifically, year-on-year on non-financial information, mobile subscribers increased by 12.2 million to 76.5 million; active data users increased by 7.4 million to 32,6 million while the company’s mobile money business continued to accelerate with a 269.2 % increase in the number of registered agents to over 395,000 and 4.7 million active subscribers from approximately 553,000 in 2019.
Year-on-year on financial information, service revenue increased by 14.7 % to NGN1.3 trillion driven principally by voice (with revenue growth of 5.9 %) and data revenues (rising by 52.2 % led by increased data use and traffic); profit before tax (PBT) grew by 2.6 % to N298.9 billion; profit after tax (PAT) increased by 0.9 % to N205.21 billion; while Earnings per share (EPS) rose by 0.9 % to N10.1 (N9.93, 2019).
Nonetheless, significant increases were noted in its operating expenditure as well as capital expenditure. First, there was a 2.3 % increase in operating expenses arising from the rollout of new sites and the impact of naira currency depreciation affecting the costs of MTN Nigeria lease contracts. Secondly, EBITDA margin declined by 2.5 %age points to 50.9 % (from 53.4 % in 2019) There were also other significant cost rises including a 25.4 % increase in net finance cost, and 19.4 % increase in capital expenditure which had a 11.7 % knock-on increase in depreciation and amortization costs.
On the back of the year-end result, MTN Nigeria has proposed a final dividend per share (DPS) of N5.90 kobo per share to be paid out of distributable income and brings the total dividend for the year to N9.40 kobo per share, representing an increase of 18.7 %. MTN Nigeria paid N4.97 as final dividend for the year ended December 31, 2019. This was in addition to an interim dividend of N2.95, which brought its total 2019 dividend to N7.92 per share.
The proposed dividend implies a yield of 3.4%. Having paid an interim dividend of NGN3.50 in 2020, the proposed dividend, if approved, will bring the total dividend per share to NGN9.40 or c.19% higher compared with 2019. We expect a positive reaction from the market due to the marked improvement in earnings. However, the market’s reaction may be dampened by negative investor sentiments on equities arising from the uptick in yields on fixed-income securities.
We expect that the introduction of additional customer registration requirements requiring subscriber records are updated with respective National Identity Numbers (NIN), and the continued suspension of the sale and activation of new SIM cards will affect subscriber growth.
MTNN share price remains unchanged at the end of trading yesterday at N174 per share.
Tade Fadare PhD, is an economist, and a professionally qualified accountant, banker and stockbroker. He has significant experience working or consulting for financial institutions in Europe, North America, and Africa.
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