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Top 9 Reasons Why Customer Service is Crucial

Published on April 24, 2023
Last modified on April 24, 2023
Top 9 Reasons Why Customer Service is Crucial - NeoDove

78% of consumers have bailed on a transaction or not made an intended purchase because of poor customer service. 

What this statement highlights is the importance of providing excellent customer service. 

Customer service is the backbone of any successful business. Most times it can make or break a company’s reputation in the eyes of its customers. In today’s competitive marketplace, providing excellent customer service is more important than ever before. 

That’s why it’s crucial for businesses to understand why customer service is important and how it can impact their bottom line. 

From building customer loyalty and trust to improving brand reputation, there are numerous reasons why customer service is important. These reasons show why customer service should be a top priority for any business. 

In this article, we’ll explore 9 key reasons why customer service is important and how it can help businesses thrive in a crowded marketplace. 


What is Customer Service?

Customer service is the provision of support and assistance to customers before, during, and after a purchase. It involves engaging with customers to understand their needs.

Moreover, it helps them to find the right product or service that meets those needs. Customer service can be provided in a variety of ways, such as in-person, over the phone, via email, or through social media channels.

What is Customer Service - NeoDove

You may have a small startup or a large corporation. But, understanding why customer service is important can help you build a loyal customer base and grow your business immensely.

Effective customer service goes beyond just providing information and answering questions. It’s about creating a positive and memorable experience for the customer that leaves them feeling satisfied and valued. 

This can include things like personalizing the experience, offering timely and relevant solutions, and showing understanding towards the customer’s situation.

In today’s competitive business landscape, customer service has become a critical factor in determining the success or failure of a business. Customers have come to expect a certain level of service. More importantly, failing to meet those expectations can result in lost sales, negative reviews, and damage to your company’s reputation. 


Top 9 Reasons Customer Service Is Important For Your Business

You may wonder why any company would want to provide good customer service. They could just refuse to deal with unhappy customers and call it “the cost of doing business”, right?

Well, let’s just say that ignorance is not the best card to play in such scenarios.

What we need to understand at a very basic level is that customer service is NOT an expense. Customer service is also not an option, given how informed today’s customers are. Customer service is an investment that brings returns.

If you’re still not convinced, here are 9 reasons why customer service is important:

1) Retaining customers is cheaper than acquiring new ones

The cost of acquiring new customers is greater for businesses than the cost of retaining old ones. A simple 5% increase in customer retention can result in a 25% increase in profits. This is because repeat customers tend to spend more on your business.

So when you invest in customer service, you decrease your churn rate. This in turn reduces the amount you have to spend on acquiring new customers!

2) Customer service reflects your company’s values

The way you think of your brand is different from how other people perceive it. It doesn’t matter if it’s via your website, social media handles, or through your current or lost customers. People can and will make assumptions about your business.

This perception, however, is more in your control when it comes to customer service. Creating stronger customer experiences through better customer service will help you win over customers. It will also strengthen the image of your company.

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    3) Customer satisfaction will lead to referrals

    Whenever you provide your customers excellent customer service, they are more likely to tell their friends, families, and colleagues about it. Statistics state that over two-thirds of customers will tell six or more people about their positive experiences. 

    Take a look at it this way: When you have a positive experience with a brand, you’re likely to tell someone about it. We all want our close ones to choose brands we trust!

    4) Quality customer service promotes customer loyalty

    Every industry is competitive with  your competitors offering similar products and services. This is why you need to offer excellent customer service along with exciting features. 

    By providing exceptional customer service, you set your company apart from the competition. So, build a team that understands customer needs, is patient and strives to build relationships that last a lifetime.

    5) Better customer service encourages customers to pay more

    In the present day, customers are willing to pay more for a company that provides exceptional customer service. In fact, 67% of customers are willing to spend more on a brand to get a better experience.

    Customer service is becoming a primary focus for companies. Any company that doesn’t prioritize customer service as much will be thrown off by the huge competition.

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      6) Customer service enhances customer lifetime value

      CLV, or customer lifetime value, represents the total revenue a company can expect from an individual customer. It is an extremely important metric, and growing this value indicates that your customers are purchasing more from you.

      One of the best ways to increase your customer lifetime value is to invest in your customer service. If your support team is great, customers are more likely to make repeat purchases. Or at least, they’ll let others know how good your customer service is.

      7) Superior customer service gives a competitive edge

      One bad experience causes 60% of customers to give up on a brand. But 67% of this churn can be prevented by resolving the customer’s issue on the first contact. 

      Providing excellent customer service helps you retain your existing customers. It also helps you win over your competitors’ customers.

      8) Excellent customer service will make customers more tolerant

      Only one in five customers is willing to overlook a bad experience if the company’s overall customer service is poor. Whereas, almost 80% will overlook a bad experience if the customer service team is considered very good.

      Customer service is a key factor in your success. Say you provide an exceptional customer service experience overall. Then, chances are 78% of your customers will return to you even if you make a mistake.

      9) Customer service contributes to revenue growth

      Positive customer experiences directly impact your revenue and growth. If you prioritize better customer service, you can grow your revenue between 4% and 8% above the market.

      Moreover, 89% of companies providing superior customer service perform more profitably than their competition.

      Although more points can be added to the list, the nine above touch on the core of the matter. The bottom line is that customers will either choose to stay or run to a competitor, depending on the quality of customer service you provide.

      Now that we’ve covered the reasons, let’s take a quick look at some of the types of customer service you can provide.


      The 5 Types of Customer Service

      Customer service is categorized in multiple ways. Sometimes it is categorized as reactive or proactive. Sometimes it is grouped under three broad headings: one-on-one, mass communication, and pre-recorded. But most of the time, the types of customer service are categorized by the support channel one chooses.

      The 5 Types Of Customer Service - NeoDove

      However, there are generally five types of customer service, which are:

      1) One-on-one

      One-on-one customer service is typically more personal and allows for direct contact with customers. A typical example of this is when customers go into your store and speak directly with someone who has the authority to help them. This is a lot quicker than calling over the phone to solve issues. 

      2) Email

      Email is a widespread way for customers to contact companies. Most people have email accounts, and customers can get in touch whenever they have a question. Email, today, is also the primary way through which companies usually assist their customers.

      3) Messaging and chat

      The majority of consumers prefer to communicate with brands through the same channels they communicate with family and friends. These include WhatsApp, Messenger, etc. 

      Moreover, messaging is convenient, more personal and secure, and businesses prefer it for the same reasons. 

      With the rise of messaging, chatbots and AI have also become increasingly popular. Using bots, you can provide 24/7 customer service and free your agents from simple and repetitive requests.

      4) Phone

      When it comes to resolving issues instantly, there is no substitute for a phone conversation. When customers call for assistance, agents can address complex issues more quickly and provide detailed assistance.

      5) Self-service

      One way of customer service is allowing customers to self-serve by way of an online community, help centre, portal, etc. By these ways you can simplify customer interactions, as well as improve efficiency and provide faster customer service.

      Moreover, high-quality self-service will increase customer satisfaction, lower support costs, and make customer service reps more productive.

      Overall, the fact of the matter is that you have to have a little bit of everything to provide the best customer service and experience.



      It’s not enough that your product or service is great – if you want a lasting customer base, your offering has to be great AND your customer engagement should be impeccable. 

      If a customer has a bad experience and no follow-up care, they’re unlikely to buy from you again. But say they call you with a question or concern and someone on the other end of the line is attentive and helpful. In this case, this customer service sets up an expectation for the next purchase. 

      If you want your brand to be associated with positive experiences, invest in good customer service!

      5 Types Of Customer Service You Can Offer - NeoDove

      Frequently Asked Questions (FAQs)

      Customer service plays a crucial role in building and maintaining a successful business. It is the provision of support and assistance to customers before, during, and after a purchase. 

      In today’s competitive marketplace, providing excellent customer service is more important than ever before, as it can make or break a company’s reputation in the eyes of its customers.

      Good customer service involves providing timely, effective, and personalized support to customers before, during, and after a purchase. It is about going above and beyond to ensure that customers are satisfied with their experience and feel valued.

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