Top ways customer service affects your vending business’ bottom line

No one would ever argue that good customer service is not of importance. Quite the contrary – most businesses would promote their products and services as offering outstanding customer experiences. Yet not many organizations take the time to try and quantify the effect of good/poor customer service to their turnover and profits. Oftentimes, the focus on customer support is justified by a gut feeling that it’s the right thing to do rather than by hard data. The problem with such an approach is that whenever other business priorities emerge, the focus on customer support gets shelved waiting for better times to come up in the spotlight again.

A Harvard Business Review study took a stab at quantifying how customer experience affects the bottom line. The results explicitly show that there’s a direct correlation between offering great customer service and generating higher profits. What’s more, a new level of customer-centricity demands that organizations provide an always positive customer experience across channels and time zones in an effort to build a competitive advantage and stand out from the crowd.

Customers who had the best past experiences spend 140% more compared to those who had the poorest past experience according to HBR’s study.

By proactively offering a great customer experience, companies actually manage to cut down the cost of customer support. Unhappy customers can be quite expensive in many ways:

  • They are unlikely to return to your product/service again, so their customer life expectancy is much shorter compared to your usual client base. Missed opportunities can also be quantified albeit with more difficulty. Satisfied customers use an organization’s product/service longer. The Harvard study shows that the latter are 74% more likely to still be customers a year later while only 43% who rate their customer experience as poor stick around for another year. (Source: Customer Think)
  • Happy customers tend to spend more. Just like we saw in HBR’s study, customers who had a very positive experience with an organization’s product/support team spent some 140% more than customers who had a negative experience.
  • In a globalized world where social media and user-generated content get more eyeballs than traditional media ever have, one unhappy customer sharing his dissatisfaction with your service may have a snowball effect by instantly reaching millions of potential customers. On the other hand, the so-called Word of Mouth effect, whenever customers share a positive experience, can do miracles for your business.
  • If you don’t deliver good customer service, someone else will.
  • Every sales rep would tell you that maintaining existing customers is far cheaper than acquiring new ones. Retention does matter. On average, a customer is worth ten times as much as their first purchase, but you would never realize these sales unless you provide good customer service to keep them loyal in the first place. (Resource:

So how does this all translate to the vending machine business?

All this is common sense, you might say, and it’s easier said than done when it comes to operating in an industry where you have a multitude of stakeholders that you need to keep happy: location owners and POCs, end-customers, suppliers, route drivers, etc. What’s more, the customer usually interacts with the machine while the vendor is away, preventing him from influencing the experience that very moment. Vending business owners rarely get to help customers real-time when they experience an issue with the machine, so clients’ frustration might accumulate causing a decrease in vending machine sales altogether.

1. Analyze who your customer is

The first thing you should do is to analyze who your customer is and at what steps of the vending process you can influence their experiences. When we say customers we usually think of the people buying the products from our vending machines, but is the location manager not a ‘customer’ in a way too? Is the mood and attitude of your route driver not affecting the customer service too? Map out each step of the vending process and analyze how you can foster better service and make each stakeholder happier:

a) Suppliers

One cannot but agree that this is a tough one. Suppliers of vending machine stock are usually much larger than your vending business, therefore, possessing the negotiating power. You can at least aim to make the process of dealing with suppliers more predictable and transparent. How can you do that? You need to closely monitor your sell-in/sell-out history, track inventory levels and product expiry dates at your warehouse and for each machine so that you always have the right mix of products available at the right time. If you could see at a glance the items that are getting dangerously low, you’d always know when and what to order, in advance, so that you don’t have to place last minute orders and bite your nails whether the supplier will be able/be willing to deliver on time. Regardless if you have a hundred machines or just a couple, vending management software can help you easily do all that and much more.

b) Location owners/managers

Once you’ve managed to secure a good location and have placed your machines there, you should aim at keeping a good rapport with your location owner/manager or whoever the point of contact (POC) is. Maintaining a good relationship with your POC is the key to securing the location for a longer period of time. Better yet, it might also generate a positive WOM effect which will help you land other profitable locations. A couple of things are a must-do when it comes to ensuring an always-positive experience for your location POC:

  • Keep machines clean and well-stocked: not only are empty vending machines a surefire way to miss on additional sales, they usually frustrate the hell out of customers who would complain to the location owner/manager. It’s a fair bet that the location owner is placing vending machines in the area to attract more visitors, help make visitors feel more comfortable (think workplaces, offices, airports, etc.). If he, however, cannot deliver on the promise, customers will be frustrated which will inevitably backfire on you. Unless you keep a very good history of what sells where it’d be very difficult for you to keep machines stocked at all times. Here’s where vending management software steps in again to help you stay a step ahead. VMS shows you at a glance inventory levels that are getting dangerously low, per machine and per location.
  • Keep machines working: as obvious as this one may sound, every VM business owner would agree that sometimes you need to have a crystal ball to be able to predict when a machine will go out of service. Yet, nothing causes more frustration than repeated problems with a vending machine. While machine vending companies recommend a servicing schedule depending on the type of machine, years of depreciation, etc., if it’s second-hand machines that you’ve purchased, you can expect ‘surprises’ at any given moment. If your machine accepts cashless payments, that would be a good way to understand pretty quickly when it’s out of order. The telemetry data can be fed into your vending management software so that you get a very quick idea once you stop recording purchases from a certain machine.

c) Route drivers

Regardless if you are the sole employee in your vending business or you’ve hired a dedicated driver to service and restock machines, route drivers are a vital part of the success of your business operations and you should try to keep them happy and make their work easier. Your driver will be grateful if you could calculate the quickest route to servicing all machines today and the precise number and type of stock he’d need to carry around with him. You can easily do that with vending management software. Tools like VendSoft will help you boost sales by optimizing your planograms. Easily define multiple routes to the vending areas. VendSoft VMS will automatically calculate and schedule the next service date for each location, maximizing service intervals and reducing machine downtime. Plus, drivers can use mobile apps to collect data from the vending machines when on-site and automatically sync it with your VMS once back in the office.

d) End customers

Customers are happy when vending machines offer what they want to buy. Again, easier said than done. Unless you have loads of spare time on your hands to keep track of what sells where and analyze what opportunities might arise from each location and for each vending machine. Here’s where VMS comes handy again as it allows you to see what sells where (real-time if you’ve plugged your telemetry data in too). This way you will get insight into things that sell out first and be sure to restock with more next time, keeping your customers happy and never missing on sales opportunities again. Plus, offering cashless payments is also a way to please customers and increase sales.

2. Fixing bad customer experience

If you fear your customers have had a poor experience for some reason, act as quickly as possible. To be able to receive and respond to customer complaints, be sure to leave your contact information on each machine. Phone on which you can be reached throughout the day would be the bare minimum but leaving contact info such as email address and the Facebook page would further increase your chances to talk to a customer and get an insight into his experience first-hand.

3. Measure customer satisfaction to achieve long-term results

The proactive way of dealing with customer negative experiences is to try to predict these before they even happen. By establishing a good rapport with your POC and by offering various contact options on the machines and at the location you will manage to secure a constant flow of feedback on how happy your customers are with product selection, machines, payment options, etc. In his article “Measure Satisfaction to Retain Customers” Jim Proebstle shares a number of ways to gauge user experience and act on it to sustain your sales and profits in the long run.

Ready to gain a competitive edge and secure a steady increase in sales and profits by improving your customer service? Waste no time, start your free trial of VendSoft VMS today.

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