What is (great) customer service?
You may come up with your own definition based on what customer services means to your organisation. But, broadly speaking, customer service is the support that organisations provide to both prospective and existing customer before and after they purchase a product or service. It encompasses all the ways in which your organisation interacts with customers, including how much parking is available, how you greet customers and how you handle service complaints. Ultimately, customer service relates to the measures you take to make customers feel valued, treated fairly and appreciated by your business. Let’s take a look at why it’s important to your business.
9 good reasons why customer service is important
1. It can increase your sales and revenue
One of the biggest reasons providing great customer service is important is that it can increase your revenue. This is because you can charge a premium for products if you offer a positive customer experience. A survey in the US found that 86 percent of buyers would pay more for product if it came with a better customer service experience.
Customer are also more likely to follow through with a purchase if they get the support they need. For example, if you sell products online, helping customers get the information they’re looking for will have an immediate effect on sales because they will be much less likely to abandon their cart.
2. It helps you retain customers
Happy customers are repeat customers. If they receive excellent customer service, they will keep returning to your business. And retaining existing customers is considerably less expensive than acquiring them. Plus, repeat customers often spend more money than new customers, making them even more valuable for your business. This means you’ll grow your customer lifetime value (CLV)—the total revenue you can expect to get from one client over their entire relationship with your business.
Increasing your customer loyalty makes your revenue more stable and allows you to make more accurate predictions. Retaining customers is particularly important for a small business with limited time and resources—losing potential repeat customers can have a big impact on your bottom line.
3. It can make or break your brand
In the age of social proof, you can’t have a good brand image without a good online rating. Regardless of what product or service a customer is looking for, they will be heavily swayed by the business’ online rating. Positive customer experiences play a huge role in creating a good brand image. Customers naturally want to tell their friends and family about their positive experience and leave a glowing review to support the business. Happy customers attract more happy customers, and the best part is that they will promote your business for free! The opposite is also true: people want to warn others about businesses that don’t treat customers well and are often highly motivated to write negative reviews. A one-star rating can negatively affect your business for months or more.
4. It can improve your products or services
Your customer service team is the crucial link between your products or services and your customers. They speak to your customers every single day, so, they can provide invaluable insights that can help you improve your offerings. For example, they can tell you how customers are using your products or services and highlight any problems they’re having, as well as any modifications or features customers would like to see. This will help you to design or source products that meet your customers’ needs.
5. It gives you a competitive advantage
When you run a small or medium-sized business, a great customer experience is what sets you apart from your larger competitors. Larger businesses may be able to offer lower prices, but customers want more than just a product or service. They want an experience and they want to build a relationship. That’s why people choose to go to a local café over Gloria Jean’s or The Coffee Club. Large companies can’t offer the same ambience or personalised experience. As a small or medium-sized business, customer service is your competitive advantage.
6. It boosts employee morale and reduces employee turnover
Providing great customer service starts with providing your team with the right tools and training to handle any issue a customer might encounter. Investing in your team will not only translate into better customer service, but it will also improve morale and keep employee churn down. No one enjoys constantly dealing with dissatisfied and frustrated customers. Conversely, being able to address an angry customer’s concerns effectively not only makes the customer happy—it makes the employee happy because they were able to help someone and achieve a positive outcome. The result is better team morale and lower employee turnover . And good employee morale will motivate employees to continue working hard to keep customers happy.
7. You can spend less on marketing
Loyal customers not only spend more in your business, they also bring in new customers, which means that you can spend less money on marketing. With every loyal customer, you will save money and time because they will happily be your best marketer, brand ambassador and salesperson—for free! And they’ll probably be highly effective. As good as your advertising might be, people are more likely to believe their friends and family than any marketing claims.
8. It can strengthen your marketing campaigns
While you might be able to spend less on marketing, surely you don’t plan to do away with marketing campaigns altogether. When you do decide to run a marketing campaign, you can strengthen your messages by highlighting your business’ reputation for customer friendliness. As you know, social proof is highly effective. So, including testimonials from satisfied customers in your promotional content will back up your claims about excellent customer service and, in turn, bring in more happy customers and more profit.
9. It creates a better company culture
Kindness and helpfulness tend to be infectious. So, when your customer service representatives are kind and helpful towards customers, this service-oriented attitude can easily spread to the rest of your employees and become an integral part of your culture and the way your business operates. The result is that everyone in your organisations works together better.
4 tips for providing great customer service
So, now you know why customer service is important and how it can benefit your business. Here are some tips to help you ensure that your business becomes known for great customer service.
1. Develop customer service policies
To provide consistently great customer service, it’s important to have a plan. Brainstorm all of the possible situations that a customer might experience and then develop customer-friendly ways to address them. Get input from your customer service team. Make sure that your policies are specific and cover everything that could impact on customer service. This can include anything from how long it takes to answer phone calls or respond to website or email queries; how many cashiers and salespeople you need to have on busy days and how to handle angry customers.
2. Hire quality customer service staff
Hiring customer service representatives with the right skills and experience will give you confidence that they will create positive customer experiences and represent your business well. When you interview them, ask plenty of situational questions, which require them to tell you how they would respond to various difficult situations.
See more: 8 Customer Service Representative Interview Questions
3. Provide customer service training
If you want your business to become known for its customer friendliness, it’s essential that your employees receive adequate training. Make sure that you continually train your employees so that they don’t fall into bad habits and you can identify any areas that need improvement. Use role play in your training sessions, with employees playing the roles of customer and customer service rep.
Also, train your employees to become product experts. They should know the products inside out. This will allow them to provide useful insights into the various features and possible uses, emphasising how the product can benefit the customer.
4. Survey your customers
Gauge your levels of service by asking customers to give open and honest feedback. You can do this via surveys, focus groups or an online or in-store comment box. Read your customers’ comments carefully and identify common themes that you can address with your staff. You can also ask your employees to keep you updated on the most common complaints and compliments they receive. Monitoring your service levels will help you continually improve your customer service. It will also help you to keep track of your return on investments for your efforts to improve your customer service.
