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Why is Customer Service Important?

Olga Rogacka

9 min read

May 11, 2023

Once upon a time, there was a small bakery called Sweet Delights. They made the most delicious cupcakes in town. Everyone who tried them raved about their unique toppings and perfect flavor. However, despite having a great product, Sweet Delights struggled to attract repeat customers.

One day, Sarah came into the bakery to buy some cupcakes for her kid’s birthday party. When she got home, she realized she received the wrong order. Instead of the dozen chocolate cupcakes she ordered, she received a dozen vanilla cupcakes. While it wasn't a big deal for her, her kids had a slightly different opinion.

Feeling frustrated, she called Sweet Delights to ask if she could exchange the cupcakes for the correct order. The person who answered the phone was rude and dismissive, telling her that it wasn't their problem and that they couldn't do anything about it. Feeling disappointed with the customer service, Sarah decided to avoid Sweet Delights in the future and shared her bad experience with other parents at the party.

What's the moral of the story from a business perspective? There’s more to business success than a good product. Even if customers love your product, they may choose to go elsewhere if they feel they need to be more appreciated or satisfied with the service.

How do you avoid that? And what other benefits can you expect from prioritizing customer service in your business?

Why is good customer service important to a business?

Let's recall the definition of customer service.

Customer service refers to the support and assistance a business provides its customers before, during, and after a purchase. This can include answering questions, resolving issues, providing guidance and support, and ensuring customer satisfaction.

In online business, customer service is particularly important because customers often need the opportunity to interact with a physical store or representative. Instead, they rely on digital channels such as email, chat, or social media to communicate with the business.

Customer service becomes a critical aspect of building a successful and sustainable organization. By prioritizing customer needs and satisfaction, you can build long-term relationships, improve your reputation, and ultimately increase revenue.

Great customer service can also set your business apart from your competitors. In contrast, poor customer service can harm your reputation and lead to customer loss and negative reviews - just like it happened with the once-beloved bakery. Did I mention that Sarah ended up baking the chocolate cupcakes herself? The kids loved them.

Let’s look at the benefits of prioritizing customer service in a company.

Benefits of great customer service for a company

1. Customer retention

Good customer service can be a key differentiator in a crowded market, helping you gain a competitive advantage. Thanks to creating a positive and satisfying experience for customers, you make them feel valued and appreciated. And you're one step closer to gaining loyal customers who will continue buying from you for a long time.

You build trust with customers by offering excellent customer service, resolving issues quickly, and demonstrating a personalized approach. Remember that it's always better to keep existing customers than gain new ones.

In fact, in recent years, the customer acquisition cost has increased by 60 percent.

2. Positive brand image and reputation

People mostly buy things online, and customer service agents are the people your customers mainly have contact with. No matter how many brand ambassadors you have, the customer service team is often the face of your company, and they set the tone for the whole organization.

When they offer excellent customer service, customers are more likely to perceive your business as trustworthy, reliable, and professional. This positive perception can help you build a strong brand image and reputation over time.

Think through your communication strategy and ensure every customer service rep knows how to communicate smoothly and consistently with the customers. Never leave customer service up to chance. It’s a serious job, so don’t forget that agents require proper product and online communication training.

3. Word of mouth

Positive word-of-mouth marketing can be a powerful tool in attracting new customers. Satisfied customers are more likely to recommend a business to their friends and family. As a result, businesses that offer excellent customer service are more likely to receive positive online reviews and ratings. Online reviews are often one of the first things potential customers look at when researching a business, and positive reviews can help build trust and confidence in the brand.

One company that has received enthusiastic online reviews for its customer service is Zappos, an online shoe and clothing retailer. Zappos is known for its commitment to delivering excellent customer service, focusing on making every customer interaction a positive experience. Zappos' customer service team is available 24/7 and is known for going above and beyond to help customers with their needs.

4. Attracting new customers

Zappos' commitment to customer service has helped attract new customers and build a loyal customer base. Customers rave about their positive experiences with the company on social media, with many sharing stories of Zappos' exceptional customer service. This positive buzz around the brand has helped to attract new customers and build a strong brand reputation.

If your customer service is bad, you can be sure you’ll hear about it on social media. Customers know they can expect a lot these days, and whenever your performance is poor, they are “happy” to inform the rest of the world about it. Can you blame them?

Bad customer service doesn’t even need to take place online for it to go viral. I guess we all know Comcast is famous for bad customer service. This video shows how a customer wanted to reach a Comcast representative and how it all went wrong.

Customers fight a lot to have their rights respected. Yet many companies hide behind policies or some invalid logic that is often not in the customers' interests. Eventually, when a customer threatens to describe the whole case on social media, a company backs down. Suddenly, agents change their attitude and meet customers halfway. It turns out what the customer wanted to achieve from the beginning was possible.

It is always worth going the extra mile for a customer to avoid bad word of mouth.

5. Priceless customer feedback

One of the best things customers can give you is feedback on your product. We all know that customer service agents, website developers, and all the people who work in a company look at the product in a certain way. But customers see it slightly differently. And that’s a good thing. They have a fresh look, and they can shine a light on something you might not see after working on it for so long.

You need to treat feedback wisely and not implement everything your customers ask for.

One of the best ways to gather customer feedback is through the everyday conversations you have with customers on chat. The other one I recommend is the Net Promoter Score. By simply asking one question, you can reach all of your customers and gain valuable insights.

Through this feedback, you will:

know what still needs to be improved in your product,
know how many customers are likely to leave and react at the right time,
identify the happiest customers who can become your advocates,
improve customer retention,
and get actionable insights to create a better customer experience.

6. Standing out

Many businesses are alike these days. A decent product, a proper website, and the same marketing talk. Since real people provide customer service, it’s one of the things that you can stand out with. You can be authentic when you help your customers on chat, through emails, or when you answer their tweets. Being natural is always received better by customers than having a stiff and official tone.

Here’s an example from our chat:

7. Create long-lasting customer service experience

Customers are no longer concerned merely with satisfying their basic needs. They want to create a deeper connection with the brand they’re buying from. That’s why you need to meet their needs rationally and emotionally. You have to create memorable lasting experiences. Customers are willing to pay more to get those. They regret choosing a cheaper store with a grumpy salesperson, which puts them in a bad mood (I always do).

Good customer service can help you achieve that. You want to run a store that people deliberately choose. Not only because of great products but because they know they can chat with amazing supportive reps.

The customer service team at its best

Providing great customer service is a must these days. But for everyone in the company to put customers first, they need to have a clear message from the top management that you have a customer-centric culture. Besides that, people need the right tools and permission to go above and beyond to satisfy customers. Managers need to ensure that agents know they can be flexible with the rules and policies, treat every case differently, offer a personalized approach, and show empathy no matter what.

When everyone is on board with that, it's time to focus on building a proud team to share those values outside. To achieve that, follow these steps:

Hire for the right qualities: Look for candidates with strong communication and problem-solving skills and a customer-centric mindset. It's easier to teach employees about your product than how to be empathetic or listen to people.
Train and invest in development: Provide comprehensive customer service training to new hires, and ongoing training and development opportunities to ensure your team is up-to-date on the latest customer service trends and techniques.
Empower and don't micromanage: Give your team the power to make decisions and resolve customer issues independently without constantly escalating to a manager. Permit them to be flexible with rules, treat every case differently, make returns, and offer a personalized approach.
Provide feedback and show recognition: Offer regular feedback sessions to your team and recognize what went well. Help them understand their strengths and areas for improvement to keep them motivated and engaged.
Offer tools and technology: Provide your team with the tools and technology they need to succeed, such as CRM software that helps them see all customer service cases in one place. Offer communication channels your customers use and make them easy to manage. One way to be present everywhere your customers are and offer help immediately is by integrating LiveChat with social media channels and communicators, such as Instagram, Twitter, and Facebook Messenger. This way, all customer inquiries land in LiveChat, and agents don't need to check other channels. They work inside one app and focus on the message they want to send to customers. Fewer distractions and one place to work mean better customer service.

Providing excellent customer service is possible

Today, the line between products and services is blurring, and customer service has become part of the product itself.

A good product without great customer service won’t bring success, and vice versa. Remember why customer service is essential and deliver happiness to your customers daily.

Why is Customer Service Important?

Why is good customer service important to a business?