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Top 10 Reasons Why Customer Service Is Important & Tips To Improve It

Why Customer Service is Important

For a business to thrive and succeed, it’s important to focus on developing and selling a great product/service and provide exceptional customer support to back it up. 

Great customer service is the key to improving customer experience, translating into improved customer loyalty, conversion rate, brand awareness, and positive brand building. 

As per one of the surveys, over 96 percent of businesses fail within ten years. One of the major contributors to business failure is poor customer support and services. Here we will discuss why customer service is important, why you should invest in customer support, and some customer service tips to integrate into your customer service mechanism. 

Before we go ahead and discuss why is good customer service important, let us first define –

What is Great Customer Service?

Great customer service aims to offer a seamless purchasing experience, including assisting and empowering customers throughout the buying cycle. 

Good customer service begins way before the customers make a purchase. From answering the questions and concerns of potential/existing customers to addressing any other queries throughout and after the buying cycle, customer service should enhance the overall customer experience. 

How to figure out ways to offer better customer service?

Primarily, you need to figure out the answers to the three most pertinent questions concerning customer service. It includes –

  • How can I help customers interesting in my products and services?
  • How can I improve and streamline the buying process for a seamless purchasing experience?
  • How can I improve the after-sale services?

Now, without further ado, let us dig into the important question –

Why is Customer Service Important?

customer service is important

Higher Revenue

Every business decision invariably revolves around increasing revenue. Businesses function to make a profit, and business profitability decides whether the business is a success or a failure (or going to be). 

One of the fundamental reasons why is good customer service important is its direct correlation to revenue. As per a survey, over 84 percent of the company that worked on improving customer service experienced higher revenue. 

Happy Customer Equals Better Reputation

Reputation is one of the cornerstones of business sustainability. Businesses with long-term vision need to focus on building a solid market reputation. A positive reputation leads to more leads, customers, partnerships, employees, sales, investors, and revenue. 

Great customer service always leads to a better reputation, leading to positive word-of-mouth marketing and improved market reputation. 

Customer Retention Is Related to Customer Satisfaction

While it’s important to focus on getting more customers, it’s even more important to hold on to existing customers. It helps strengthen business sustainability, ensuring a steady flow of revenue while you focus on growing and expanding your business. 

So, how is customer service related to customer retention? Nearly 75 percent of the customers would return to a company with great customer service. 

Better Customer Service Equals Lower Churn Rate

Churn rate can be defined by the number of customers who leave the company once they purchase. In other words, a higher customer churn rate means lower customer satisfaction levels. 

As per one research, around 90 percent of the customers would turn to a competitor after a bad experience. If you don’t want your customers to turn to competitors, improve customer service levels through better customer service. 

When Customers Are Happy, So Are Employees!

Just like the customers have options to leave for competitors, so do employees. It is well known how important it is to have good employees for improved growth. It is especially true in small companies and start-ups, where job satisfaction and happiness go well beyond a paycheck. 

It’s important to build a company with a focused mission where employees feel a part of the organization. 

When you embed such values into an organization and make the employees feel a part of the family, they will treat customers like you would – regardless of whether you’re watching over them! 

Make your organization a purpose-driven enterprise, and eventually, it will rub on the employees. It motivates your employees to offer better customer service and boosts loyalty among the employees. 

 Positive Customer Experiences Improve Brand Awareness 

One of the major reasons why is good customer service important is it helps with promoting your brand and boosts brand awareness. When your customers leave your business happy and with a positive experience, it invariably triggers positive word-of-mouth marketing. 

More than 50 percent of customers choose a company because of its great customer service and impeccable market reputation. Develop a brand awareness strategy that revolves around customers’ loyalty, and you’ll notice positive business growth. 

Better Customer Services Means Low Marketing Expenditure

When you offer existing customers great customer service, it makes them your advocates. Loyal customers help promote a brand more efficiently than any marketing strategy ever will. A loyal customer would not only buy more from you but would bring referral sales, inevitably helping with your bottom line. 

Remember, nearly 56 percent of the customers would prefer a company they’ve experienced good customer service with. So, before you think of spending more on marketing, look at the possibilities offered by good customer service. Maximize ROI by improving customer service and lowering marketing expenses. 

Improve Your Brand Value

Great customer service starts a snowball effect, resulting in a positive customer experience and creating a positive work environment. A positive work environment results in happy employees, meaning they would go the extra mile to keep customers happy. 

All these collectively help with improving sales and revenue, coming directly from better customer service. If you’re consistent with this strategy, it will help improve your brand’s value over time.

Better Customer Service Means Higher CLTV

CLTV or Customer Lifetime Value means the total amount of money a customer spends on a company’s products/services throughout their engagement with a company. Good customer service results in highly engaged customers. 

As per statistics, engaged customers buy more frequently, spend nearly 60 percent more, and spend nearly three times compared to other customers. 

Business Longevity Depends on Loyal and Satisfied Customers

Customer service is important for businesses to maintain momentum and ensure consistent growth. Nearly 20 percent of the businesses fail in their first year, and around half of the startups close down by their fifth year. 

The reasons for business failure range from lack of funds to lack of market understanding and from the inability to scale properly to poor quality products/services. 

If you look closely, you’ll notice that customer service directly or indirectly helps with these factors. 

Why customer service is important is because happy customers spend more, promote your business, provide customers’ insight, get referral business, engage more customers, boost customers’ loyalty, and promote brand awareness and building. 

If you want your business to not only survive but thrive, focus on customer service, and you’ll be glad you did. 

Should You Invest In Customer Service?

why invest in customer service

Now that we have gone over why customer service is important, it is important to look out for ways to improve customer service levels and overall customer experience. 

One of the key roadblocks in businesses that leads to poor customer service is negligible investments in customer service. 

As times change and the business landscape evolves, businesses need to focus on business fundamentals that lead to sustainability, growth, and higher revenue. And one of the key attributes that help build a sustainable and growing business is great customer service, and investing in it helps improve it. 

So, why should you invest more in customer service? Let’s dig deeper!

Reasons Why You Should Invest More in Customer Service

No matter how technologically advanced our world may become, the same old customer service continues to rule the world. The customers decide the fate of a business, and if you’re focusing on everything but customer service, the business is sure to doom sooner than later. This is one of the reasons why customer service is important and why we should invest in customer service. 

Investing in improving customer service directly influences the customer service experience. When a customer is happy with your business, they are not only likely to buy from you again but is most likely to share their experience with others. In other words, investing in customer service is as good as investing in generating higher revenue. 

There are many reasons you should invest in customer service, and here we will discuss some of them for your better understanding.

Better Growth, Consistent Experience

Improved customer experience begins with maintaining consistent, efficient, and reliable communication with your target audience. As per one of the research conducted by Salesforce, nearly 75 percent of the participants said they expect a consistent experience with a brand across various communication channels.

It includes over the phone, on social media, in person, and even on a website or mobile. Invest in having an active presence on various communication channels to remain accessible to your customers.

You should not miss an opportunity to show your customers you care by keeping them informed about new products and services. When the customers are happy with you, it becomes easier to improve the conversion rate, translating into higher business growth. 

Improved Customer Relationships

One other reason why good customer service is important and why you should invest in it is to improve and strengthen your relationship with customers. Focusing on and investing in a positive customer experience helps in enhancing customers’ loyalty to a brand. 

When customers feel they’re taken care of well by your company and are valued, the chances are less than they would switch to a competitor’s company. Retaining customers and improving customer loyalty help add sustainability to the business, which is undeniably the key to success in today’s volatile business environment. 

Trigger Word-of-Mouth Marketing 

As mentioned earlier, positive customer experience and robust customer service help with triggering word-of-mouth marketing. When a customer leaves your website or your physical store happy with the product/services and the overall experience with the brand, they will share their experiences with others. 

Customers share their experiences on various social media platforms, including positive experiences with your products/services. The trickle effect is visible in your sales figure. And which business wouldn’t want more sales?

Create Brand Awareness

One other reason why customer service is so important is it helps companies create brand awareness organically. This is linked to the earlier point of word-of-mouth marketing. How?

When too many people mention your brand online on various platforms, sharing positive reviews and experiences with your brand, it creates a positive and contagious atmosphere around your brand. 

The positivity surrounding your brand would penetrate your industry because that’s how the world of marketing works today. One of the important moving parts of this mechanism to work successfully is customer service, so you shouldn’t shy away from investing in customer service. 

Lower Customer Churn Rate 

Spend all the time in the world to improve your products and services but not at the expense of high-quality customer service. Offering good products and services backed by excellent customer service lowers customer churn rates and boosts customers’ loyalty.

And it is one of the major reasons why customer service is important. If your products and services are good but have bad customer service, the customers won’t think twice before switching over to your competitors.

How To Improve Customer Service?

Improve customer service

Keeping customer service as your top priority is important, no matter how big or small your business. Your business can only thrive if it wins the trust of your customers, and apart from excellent service and quality products, it is responsive and helpful customer service that can help do that. 

Make your customers feel valued and keep them happy, and it needs constant improvement in your team’s customer service skills. This is why you need to invest in customer service to ensure it can offer the highest levels of customer service to meet customer expectations. 

However, just investing in customer service is not enough, as you need to focus on improving it constantly. This is why we will discuss a few customer service tips you can follow to impress your customers and keep them coming for more!

Customer Service Tips You Need To Follow

Why customer service is so important has been one of the frequent questions asked in business circles. Pick from any successful companies you can think of the products or services you’ve personally used from the top of your head. Now think of your experience with the company. It is good, and probably that’s why you remember it!

Usually, the biggest brands know why customer service is important and have an extensive budget to spend on improving customer service and experience. Whether you’re a startup or a huge conglomerate, it will shine if you can integrate a customer-centric culture into your business. 

Let’s begin with the customer service tips!

Smile

Whenever a customer enters your office or store, greet them with a smile. When you smile, it automatically sets the tone of the conversation, improving your overall outlook as a company. 

Even if you’re in an offline business, know that your friendly approach with a smile on your face can be sensed over the phone too. 

Use The Right Technology 

In today’s world, it’s important to mix advanced technology with the human touch to enhance the customer experience. Some of the examples of the right mix of technology with a human touch are –

Overall, never doubt the use of technology but don’t forget to add the human element to the mix. 

Maintain a Positive Attitude

One of the key components of good customer service is having a positive attitude. Take away a positive attitude from customer service, and anyone can sense the half-heartedness. And such an approach is easily sniffed by customers looking for a company they can rely on. 

Take Apple, for example, which has mentioned in its customer service guidelines for its employees that a positive attitude is a necessity for customer satisfaction. 

Always leave a great last impression.

A great last impression can make a huge difference in the overall customer experience. Getting complacent may mean giving your competitors leeway to take over. 

If a customer calls up with an issue, go the extra mile to offer a resolution. Your effort will not go in vain! A simple ‘Have a good day with a smile on your face can make a customer think positively about your company.

Listen To Your Customers

Customers call to be heard, and it’s important to listen to them and take them seriously. When a customer calls, listen first and don’t stick to giving template-based advice.

It gives insight into the customers’ minds, helping you make tweaks and take corrective measures timely! It also offers answers to one of the crucial questions – why is customer service so important?

It’s a great way to get vital information you may not get through other sources. 

Offer Resolution without Redirecting Users

As surprising as it may sound, over 80 percent of businesses can’t solve customers’ problems on first contact. It showcases inefficiencies in customer service mechanisms and impacts customers’ experience negatively. 

Customers expect their problems will be solved on the first interaction itself. This is possible by improving and expanding IVR options, training the customer service team, and redirecting calls to the right people. 

Reward Loyal Customers

Irrespective of the size of your business, find a way to reward your loyal customers. Rewarding your loyal customers should be your priority as they form the backbone of your business. 

Devise a loyalty program that offers ‘real’ benefits to your loyal customers, and not only would they be thankful, but it would also help spread the word. 

It’s one way to showcase you take customer service seriously and why is customer service so important for your company. 

Treat Customers with Empathy 

Your customer service would only leave a lasting impression when provided with empathy. Listen to your customer, showcase empathy and concern, and work towards finding a quick and efficient resolution to their problems. 

Tailored and transparent communication with customers that’s personalized, fair, and quick is important to keep customers happy. 

Use Social Media For Improved Customer Service Experience

Social media is where your customers are and is a great place to field customers’ concerns, complaints, and other queries. Some companies have separate teams for various social media platforms and offer complete resolutions on social media channels, while others take them offline. 

Irrespective of how you do it, it’s important to be on social media and take it seriously. Through social media, you can –

  • Boost Brand Awareness
  • Improve Customer Engagement Rate
  • Share Relevant Updates & Content 

Consistency Is The Key

The customer experience you offer through your products and services should be consistent. Your customer service cannot be great one day and downright rude the next. It severely impacts your reputation, and your customers would leave with a grudge that would be visible everywhere on the internet. 

You don’t want that because the wrath of social media is difficult to handle, even for the biggest of businesses. Ensure that you have a system and quality checks to ensure the customer service offered is consistent, seamless, and result-oriented. 

Key Takeaway

Great customer service is always rewarded with word-of-mouth marketing, referral sales, brand awareness, increased market reputation, greater brand value, and much more. Happy customers would always come back and bring their friends and family with them. It is also one of the primary reasons why customer service is important in the first place. 

No matter how fast the business landscape transforms year after year, customer service will continue to decide how well the company is doing. Whether you’re a new or a legacy company, it’s important to focus on improving customer service to take your business to the next level. 

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