Do you know what can cause your customers to leave your business for another one? 

Poor customer service, yes.

Customer service has the potential to completely change the way people view your company. In this article, we are going to go over what this game-changer is all about, the reasons why customer service is important and its types.

 

What is Customer Service?

Customer service has a lot of different definitions, but in general, it typically means building relationships with customers and developing strong customer loyalty through positive interactions and support. 

The main goal of customer service is to ensure the happiness of customers and prevent them from leaving unhappy, or worse – from spreading their dissatisfaction to others. 

If a customer feels as though their needs are being met, that they’re being listened to and that there’s someone who cares about them, then you’ve done a great job.

Now let’s delve more into why customer service is important.

 

Why Customer Service is Important

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

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, and also not an option, given how informed today’s customers are. It is an investment that brings returns.

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

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, which in turn reduces the amount you have to spend on acquiring new customers!

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 will make assumptions about your business.

This perception, however, is more in your control when it comes to customer service. Creating stronger customer experiences will not only help you win over customers but will also strengthen the image of your company.

Customer satisfaction will lead to referrals

Whenever you provide your customers with a great experience, 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!

Quality customer service promotes customer loyalty

As your company competes with possibly hundreds of competitors offering similar products and services, you need to offer more than just 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.

Better customer service encourages customers to pay more

In the present day, customers are willing to pay more for a company that provides exceptional 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, and any company that doesn’t prioritize it as much will suffer the consequences.

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 service is.

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 will not only help you retain your existing customers, but it will also help you win over your competitors’ customers.

Excellent customer service will make customers more tolerant

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

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

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 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.

 

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.

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

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 a lot quicker than calling over the phone. 

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.

Messaging and chat

The majority of consumers prefer to communicate with brands through the same channels they communicate with family and friends, 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 support and free your agents from simple and repetitive requests.

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.

Self-service

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

 

The Bottomline 

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 when they call you with a question or concern and someone on the other end of the line is attentive and helpful, it sets up an expectation for the next purchase. 

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