No matter how big or small, good customer service is important for every company’s success.

In this internet driven era, transactions and exchanges happen millions of times in an instant. Customers can search for almost anything they want, and buy or enquire about it online.

This quick sales cycle has caused the need for having quick, efficient and reliable customer service. 

Larger corporations invest millions in reliable customer service and people expect the same service from small to medium sized businesses too. 

Customers expect their queries to be resolved as fast as they can purchase.

Why customer service is important

In the world of business getting new customers is a challenge, and keeping them is even more difficult. 

It’s widely known that it costs you more to acquire new customers than maintaining  existing ones. The average cost of acquiring new customers is estimated to be almost 5 times more than that of retaining them.

Here are 5 reasons why customers support is important:

  • Free publicity 
  • Customer retention
  • Easier to up-sell/cross-sell
  • Make better business decisions
  • Get an edge over competitors

Customer service forms a key part of any business because customers expect prompt support for their problems.

Let’s look at these reasons in more detail.

1. Free publicity

Word of mouth is one of the best and most trusted forms of marketing. Customers that have a good experience tell their friends and acquaintances about your product or service, boosting your sales. 

The easiest way for customers to vouch for your business is to go beyond what they expect. Apart from having a great product, having great customer service is key to keeping customers happy.

On the flip side, unhappy customers will tell the world about bad service and this can damage your company reputation and affect revenue. Customer service teams can prevent customers from reaching this stage by solving their grievances early on.

2. Customer retention

One big influencer of churn is bad customer service. Satisfied customers are more likely to stay as loyal customers, improving your lifetime customer value.

Most customers usually look to address their problem with a customer service representative before expressing their negative experience publicly.

Having an effective customer service team is the easiest way to handle customer issues and keep them loyal to your company.

Some findings suggest that 82% of customers felt that their previous service providers could have done something to prevent them from switching.

3. Easier to up-sell/cross-sell

Customers that are satisfied with the level of service they are currently experiencing are more likely to purchase more from you.

This gives businesses a great opportunity for up-selling or cross-selling. 

Regularly keep in touch with your customers and ask them for their feedback on past jobs, and see if you can convert them from a satisfied customer to a delighted customer.

These customers will appreciate your concern, trust you, and buy from you again.

It is easier to sell to existing customers because they have an idea of the quality of service they will get. This is an excellent opportunity for your company to generate additional revenue.

4. Better business decisions

Customer service teams are in a unique position where they can interact with customers on a personal level. This gives them insights into the wants and needs of your customers which otherwise would be difficult to obtain. 

Customer service teams can tell you a lot about your customers, like what positives and negatives they found about your product or service, how they came to know about your company, what their experience was like, and much more.

To effectively capture this data you must prepare questionnaires/feedback forms so that your customer service representatives can help you get the data you want. This information is rich with qualitative and quantitative data which can be used by other teams to improve the work that they do. Product development, sales, marketing etc. can benefit from this data.

Once enough data is collected you can draw accurate conclusions from it, and this can help you to make better business decisions

5. Edge over competitors

In today’s competitive market, products and services at its core are often similar and customers differentiate between competing products based on brand and after sales support. 

Great brands become great because of excellent customer service.

Having a good reputation in regards to customer service is often a key differentiation point that can give you an edge over competitors.

What can you do to improve your company’s customer service?

Improving customer service levels can come from a number of different ways:

  1. Hiring dedicated customer service personnel
  2. Train current employees in best practices of customer service
  3. Having multiple channels of communication like social media, website, phone etc.
  4. Evaluate and measure current methods addressing customer service and improve them

Hiring a dedicated customer service representative may not be feasible if you are a small business with a few employees. However, if your business is large, having a dedicated employee is recommended.

Training your current employees is the quickest way to improve your customer service levels regardless of the size of your business. The cost of training is a small price to pay compared to the returns it generates.

There are many customer service courses available, but it’s recommended to learn from an accredited training provider with experienced trainers like the ILM Certified Customer Service Course 

With all the benefits that customer service provides, it’s no surprise that companies strive to  have excellent customer service.

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