Why does customer service matter?

Customer service is often considered an interaction between a single customer and your business.

In a sense, it is.

But while these individual interactions are essential, combined, they can have far-reaching effects and potential consequences for business.

In this article, Andy MacGregor, managing director at virtual receptionist specialists Face For Business, discusses why customer service matters more than ever.

When did customer service become so important?

There isn’t a particular moment in time when customer service suddenly became important.

It’s always been important.

The biggest difference today is the sheer amount of choice customers have regarding products and suppliers.

And with most suppliers selling roughly the same products and most reluctant (rightly so) to start a race to the bottom on price, it leaves customer service as the main differentiator.

In fact, for many businesses, customer service has become the thing they now compete on.

For customers too, many have shown a willingness to spend more on the same product if it meant they’d get a better service.

This has created a perfect storm where customer service plays a central role in almost every part of the business and can benefit – or harm – several key areas.

Customer service results in more robust growth and finances

Customer service is a huge part of business growth because it can help increase your revenue and reduce the cost of winning new customers.

It’s widely accepted that it’s much cheaper to retain a customer than it is to win a new one.

And customer service is a central part of retention.

We’ve already agreed that customers will pay more for the same product with a better service.

It can also buy you goodwill with customers, so if something goes wrong and your customer service works as it should, there’s less risk you’ll lose the customer.

This means you can keep your MRR high if you’re a service business, or sell more of your products to repeat customers.

Customer service makes marketing easier

This one is particularly important for smaller businesses with limited resources, but it’s just as critical for big businesses.

Good customer service is often overlooked as a marketing function, but it can help reduce your marketing and cost of customer acquisition by increasing your chances of getting referrals.

Referrals are gold dust for businesses.

Having an existing customer recommend you to someone in their network means you’ve got your customers doing your marketing for you, so you can spend less (or continue to pay the same and generate even more results)

Customer service is essential for brand image

The problem of a bad customer experience from a brand perspective, is that bad experiences rarely stay between the business and the customer.

In fact 95% of customers are likely to share details of a bad experience they’ve had with friends and family, compared to around 87% who’d share a good experience.

And it’s just that they’ll share it with a few people.

Many people will now ‘call out’ poor experiences on social media, meaning potentially millions of people will see that you’ve provided a poor experience.

And while one or two might not be a problem (no one’s perfect after all) if you’re consistently being criticised for poor customer service, your brand image will suffer.

Customer service and morale

Finally, customer service can have a big impact on your team’s morale, particularly when it comes to customer complaints and churn.

Employees will always want to do the best for customers.

But it’s bound to bring morale down when they’re constantly faced with angry complaints, customers who aren’t happy, and other customers walking out.

This can become a perpetual cycle where teams are demotivated due to customer complaints and, consequently, deliver worse service and get more complaints.

In an environment where customers are happy with their service, your team is much more likely to be happy too.

Customer service has always been important – just more so now

A lot gets made about customer service today, like the business world suddenly woke up and decided that, finally, giving customers a good service was now worth their time.

The truth is it’s always been important but today, it’s more important.

Many customers now put a premium on getting a better service. And while many buying decisions will come down to price, there is an advantage to be found in being known as the supplier with the best service.