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Why is it Important to have good Customer Service?

why is customer service important

In the age of competitive marketplaces, customer service has risen to one of the important aspects of any business. Excellent customer service experience is a key factor to how purchasers of products and services view and trust a business. If they can keep their customer reputation high, they are more likely to increase their customer base and therefore overall business growth.

Why is it so important to have good customer service? Customer service represents a direct link between businesses and customers. Whether the service that a customer experiences is positive or negative, it will often determine if they will continue to use a company for their product or service needs again in the future. 

This in turn can affect the overall business image and reputation therefore good customer service acts like another marketing channel on its own. 

In this article, we will explain the importance of good customer service further and give a few key strategies in providing customers with the quality service they deserve.

Why Do Customers Expect Premium Customer Service?

In simple terms, customer service is a business’s obligation to provide quality customer experience at any point of business interaction with the customer.

These days, customers’ expectations for superior quality services are higher than ever before. These expectations are due to the rising competition in every market space and increasing access and usage of innovative technologies and designs.

It is therefore important that businesses acknowledge that it is their responsibility to not only provide products and services to satisfy customers, but also deliver customer service experiences beyond expectations.

As a business owner, providing customer service experience beyond expectations helps build strong customer relationships, increases customer retention, and creates a good reputation. All of these benefits are crucial for creating sustainable business products in today’s market.

Examples of Good Customer Service

Good customer service can be provided at every point of interaction between a customer and brands/businesses. some typical examples where good customer service can be rendered include:

  • On-site visits to diagnose and rectify issues
  • Customised solutions tailored to customer needs
  • Proactive support such as maintenance and repair reminders
  • Special events for customers
  • Customer loyalty and reward programmes
  • Regular customer satisfaction research
  • Actively seeking feedback regarding any issues
  • Simplifying customer service processes

How Much Should You Invest in Customer Service?

Although it may vary between business and the services they offer, investing in good customer service is essential and should be a priority for most businesses, as it is one of the main components required in retaining customers and creating a good reputation for brands and businesses.

Due to its importance, both money and time should be invested to ensure the business and its team is able to provide customer services beyond the customers expectations at all times.

This may include releasing funds to develop and run customer service training workshops, providing personnel with necessary resources such as up-to-date technology and software to respond quickly to customers’ inquiries, designing rewards or incentive programs for employees and hiring additional staff if need be.

Furthermore, quality customer service doesn’t necessarily have to be expensive money wise, but investing enough time and money in the right sections will be more preferable in terms of providing excellent experience for customers which will set any business apart from the competition within its marketplace.

What are the Financial Advantages of Good Customer Service?

Good customer service will not only provide new customers and improve customer’s loyalty, but also provide a range of financial benefits. Listed below are a few ways providing excellent customer service can benefit businesses financially.

Customers will Pay More when a Company Provides Better Customer Service

Customers are often willing to pay more for good customer service as they recognise the importance and value it provides them. Good customer service has the ability to improve customer loyalty and retention while increasing customers satisfaction with products acquired.

As customer demand grows, and their expectation increases, businesses need to be ready on their part to meet their demands and offer customer services that exceed the customer’s expectations to remain relevant and competitive in the marketplace. Having reliable and top notch service professionals who are knowledgeable and provide effective response at a fast rate can go a long way in retaining current customers and bringing in new ones.

Retaining Customers is Cheaper Than Acquiring Them

As it states, retaining customers is more cost-effective compared to acquiring new ones due to the fact that good customer service costs far less than marketing outreach, and good customer service can also serve as its own form of marketing outreach. Most companies do focus and spend the big bucks on advertising to acquire new customers, but spending money on customer service will surely reduce cost while still providing a chance of generic market outreach through retained customers.

Moreover, retaining customers allows companies to understand their target audience even better and provide well tailored products specific to the customer’s needs and expectations. Which in return, also improves customer satisfaction, repeat purchase and reduction in chances of losing customers. The investment in customer retention will make a substantial difference in terms of customer loyalty, value and cost reduction.

Creating Customer Lifetime Value

Customer lifetime value, also known as CLV, is a key metric for customer retention and customer procurement, while also giving insight to customer buying behaviour by providing customer buying trends. In simple terms, customer lifetime value takes record of the total consumer spending across the customer’s entire interaction with a business. Having positive and impressive customer service will also have a positive effect on customer lifetime value.

A company that invests both money and time in providing quality customer service can expect higher customer satisfaction rate, increased loyalty and good new customer procurement rate. And in turn, these factors will lead to a greater customer lifetime value.

Excellent Customer Service Assists with Marketing

A company providing excellent customer service, gains an asset that will act as a new marketing strategy and should not be overlooked. Listed below are a few ways customer service can enhance your marketing strategy.

Customer Experience Insights

Outstanding customer service will not only improve customer satisfaction and retention, but also provide accurate and invaluable customer insights. When businesses make interaction with customers through customer service representatives, they are more likely to gain valuable insights on the customer’s needs and expectations. For example, just having a polite and inquisitive customer service representative, will make customers feel more at ease and be more likely to open up and provide honest thoughts and reviews of the business product and service experience.

These business customer service reps can then incorporate feedback from the customers by informing departments like product enhancement, marketing’s department, and other related departments. By listening attentively to customer requests and complaints provides the business with a better understanding of how customers think and what they expect from the business.

With better and clearer insights, a business will be better suited to deliver products and services that exceed customer’s expectations and stay relevant to the marketplace.

Improving Online Conversion Rates

Well tailored and personalised customer service can also be a valuable asset when it comes to increasing online conversion rate. By personalising online customer service support with the right attributes, it encourages customers to return and bring other customers continuously.

Personalising customer service to meet customer needs efficiently gives customers the sense of being valued and appreciated by the business. This personalised customer service will improve customer satisfaction and convert leads to sales. It also sends a sense of trustworthiness and demonstrates the business’s commitment to providing customer assistance at all times.

Overall, personalised customer service works as both a customer retention strategy and a sales tool which will benefit any business looking to improve its online presence and conversion rate.

Positive Customer Service Representatives Create Satisfied Customers

Experienced customer service representatives that exhibit positivity are essential to customer service and customer satisfaction. The representative being the customer’s primary point of interaction, it is crucial the representative always aims to deliver pleasant, enthusiastic and excellent customer service experience.

These aims can be achieved by utilising clear and effective communication, positive mindset, an open approach to problem solving, and proactive customer care. Providing these ensures that customer problems and enquiries can be resolved quickly with minimal frustration and maximum satisfaction, which in return creates a positive customer experience and a sense of loyalty from the customer towards the business.

Customer Service Affects Brand Image and Loyalty Potential

Every interaction made by a customer with the business, forms an opinion and idea about the business brand, products, personnel and professionalism. Thus, if each customer receives helpful and excellent customer service and interaction with the business, they will be more likely to have a positive opinion about the business and speak positively about the brand to others.

On the other hand, if the customer service and business interaction with the business was not helpful nor excellent, the opinion and idea of the business becomes more negative than positive. Thus, hurting the business’s brand and image.

It is crucial then for businesses to ensure that all outlets and representatives who will be interacting with the public are experienced and consistent in delivering quality customer experience to maintain and grow customers’ opinions and loyalty towards the business.

Good Customer Service Leads to Referrals

Customer service is also an important factor to consider when a business is interested in increasing customer base through referrals. Delivering customer service that meets and exceeds customer expectations will potentially increase the spread of positive impressions of the business.

In order to increase and ensure customer satisfaction which will lead to referral, it is required the company focus on communication, punctuality, responsiveness and product knowledge.

Such considerations make customers loyal to the brand which in turn leads to increased customer referrals as they are more likely to recommend the business to others if they had a positive experience while interacting with the business.

Good Customer Service can Help your Company Retain Employees

Interestingly, investing in good customer service will also help in improving employee retention. Good customer service does not only improve the working experience and environment of staff, but also gives them a sense of value and appreciation. Thus, employees are likely to stay with a business longer.

Ensuring they are capable of meeting customer needs properly and promptly, employees are likely to be comfortable and stay loyal to the organisation. Employees’ morale is also likely to increase due to job security and customers acknowledging their effort in providing good services.

Furthermore, setting a proper customer service policy in place displays to employees that you rely on everyone involved at all levels of the business to keep customers happy and their experience positive. This collaboration between co-workers is essential for ensuring commitment from all contributors, leading to better retention rates.

Preserving Relationships when Mistakes are Made

Every now and again, it’s natural that businesses will make mistakes or errors while handling products and services. It’s how they handle these errors which will impact wether customers see them in a positive or negative light.

When errors occur or issues arise, customer service representatives should take the responsibility of assuring and repairing customer’s trust in the business.

This can be accomplished by the representative being honest and apologetic while interacting with customers and promptly addressing mistakes in a respectful manner. This may be to offer a full replacement / refund or some other gesture of goodwill and compensation.

Providing Omni-channel Customer Service Solutions

Omni-channel customer service solutions allow businesses and companies alike to offer seamless customer experiences using multiple channels and communication platforms. This is accomplished by integrating various functional blocks into a joint system so that all of the customer data can be seen in one place.

Omni-channel solutions also empower customers with quick access to helpful information, entertaining content, and effective solutions to their questions and complaints on the web.

Automation, AI bots, and omni-channel chatbots are all tools used to help simplify customer service interactions that would otherwise take up more time and resources, making omni-channel the best solution when it comes to providing effective and quality customer service.

Final Thoughts

The reason why good customer service is important and crucial for any business is because it creates a strong bond between your business and its customer with both sides benefiting from it.

Good customer service experience is a broad process intertwined as a series of interconnected experiences which help foster positive experiences and prove to customers that they are valued and respected.

Without providing exceptional levels of customer service, businesses run the risk of losing important connections, customer satisfaction, customer retention, and overall business image.

When businesses prioritise excellent customer service, customer satisfaction tends to increase which in return improves customer retention and referral while also promoting business image.


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