What is Customer Service? Hint: Business Success Depends On It

November 17, 2020

Table of Contents

Let’s begin this article with a bold statement.

Having great customer service is the most important aspect of running a successful business, regardless of industry.

Think about it. When was the last time you received great customer service? How did you feel after you walked out of that establishment? 

Maybe you purchased a digital product or ordered something online and received a great follow up email. How did that affect your opinion on the company you chose?

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Chances are, this high level of customer service left a lasting impression on you. One might even go as far as to say that you’d be likely to purchase from this company again, based on the service you received. 

But what is customer service, really? We hear the term thrown around constantly, but do we actually know what it’s all about?

Before we dive into customer service and all of the problems, challenges, and benefits associated with good and bad customer service, let’s attempt to define the term as a whole. 

What is Customer Service?

Lexico defines customer service as

“The assistance and advice provided by a company to those people who buy or use its products or services”. 

Seems pretty simple. However, it’s obvious that customer service goes much deeper than a one-sentence definition. 

The truth is, customer service is about building a relationship with your customers. 

And no, we’re not talking about the kind of relationship you’re thinking of. This is the kind of relationship between a company and its customers that makes them feel cared about and listened to. 

What this means is that proper customer service isn’t just about selling the product or service to the customer. It’s meeting the customer’s needs before, during, and after a purchase, in order to give them the best experience possible with your company. 

Types of Customer Service

Now, before we dive into the numerous different types of customer service, it’s important to note that the customer service you offer will depend largely on what type of industry you’re in. 

For example, a retailer can offer a help desk in-store. On the other hand, a SaaS company selling a digital product likely won’t offer something like this and will instead keep their customer service in the digital environment. 

 

Type of Customer Service

Pros

Cons

Telephone

  • More personal than other forms of customer service
  • Great for companies with a slightly older target audience 
  • Easier to relay points verbally than through text
  • Inefficient and requires constant monitoring by staff 
  • Younger generations tend to avoid phone calls

Social Media

  • Widespread usage of social media makes it convenient for customers
  • Most social media channels have direct messaging, giving customers access to your company at all times
  • Customer service inquiries can often be seen and answered by some of your other customers
  • Negative comments can easily be seen and shared by the public
  • Social media is relatively less popular among mature audiences

Live Chat

  • While not as personal as phone calls, customers can feel as though they’re valued by having personalized help
  • Allows one customer service agent to open up multiple conversations at once 
  • Quick, but not as quick as a phone call
  • Can’t properly assess customer feelings and emotions over live chat

Email

  • Allows automated responses to commonly asked questions 
  • Customers are able to send inquiries at any time of the day
  • Similar to live chat, indirect communication can lead to misinterpreting customer feelings
  • Can be more time consuming depending on the level of complexity

Why is Customer Service Critical To Success? 

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We’ve already discussed how customer service is likely the most important aspect of your entire business. 

In fact, up to 33% of people have said they would switch to a competitor in the face of just one lousy customer service experience. If that’s not motivation enough to take your customer service protocols and processes seriously, we’re not sure what is. 

But what is it about customer service that is so vital to the success of your business?

Well, let’s start with your reputation. First impressions last. There’s no doubt about that. When you provide customer after customer with a seamless, positive experience, you influence their outlook on your business in a positive way. Providing this excellent customer experience over and over again eventually leads to word getting out about your business. Whether it’s by word of mouth or social media, the public will learn about the level of customer service you provide and will be more likely to choose your business over a competitor. 

Next, there’s the fact that the customer experience itself is intertwined with the product experience. Think about when you buy an app on the app store. Oftentimes, you’ll notice the ability to put in a support inquiry designed into the app itself. This is because the company that designed your application knows that the customer experience is just as, if not more important than the product experience. 

The bottom line is that ignoring your customer’s experience leads to money being left on the table. Especially considering plenty of people are willing to pay more for a better experience. 

Common Problems Associated with Bad Customer Service

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Obviously, it’s a common goal for businesses in any industry to provide the best customer service and experience possible.

But what actually happens when your customer service level is sub-par? 

Brand Negativity

Once the outlook on your brand starts to take a turn for the worse, it’s incredibly difficult to get it back to the positive side.

We’ve already talked about how quickly word can spread about your reputation. When the poor customer service reviews continuously pour in with no end in sight, that spells disaster for your brand. The mere sight of your logo will spawn nothing but negativity in the public’s eyes. 

Loss of Profit

With a reputation for poor customer service comes an extreme loss of profit.

Thing is, you actually lose profit in one of three ways, depending on the industry you’re in:

  1. Losing a customer during the sales process
  2. Losing an existing customer (common with subscription-based services and SaaS companies)
  3. Losing a potential customer from word spreading about poor customer experiences

The first point is pretty self-explanatory. Maybe your customer’s experience while purchasing your product was convoluted and they decided to look elsewhere. Or maybe a salesperson was overly pushy and forgot about the customer relationship as a whole. Regardless, this type of profit loss is detrimental to your company. 

Losing existing customers is usually a scenario that subscription-based or SaaS companies find themselves in. A subscribed customer decides to cancel their plan due to a poor experience with your product. For example, they’re having technical difficulties using your service and haven’t had their support ticket answered in over a week. Once they churn, all the revenue that you would have collected from their subscription disappears. 

Losing potential customers due to a reputation for poor customer experiences is often the worst profit loss of all. In some cases, this could mean that you never get to interact with the customer in the first place, since they’ve already made up their mind about your company. One mistreated customer can cause a host of problems for your brand, considering how quickly word can travel. 

Customer Churn

This was touched on a little in the point above, but it’s so important that it deserves its own section. 

As we’ve mentioned, customer churn is typically a metric measured by SaaS companies. You can’t eliminate churn entirely, but you’ll certainly be increasing your customer churn rate with poor customer service and experiences.

The key here is that just because you’ve managed to make the sale, doesn’t mean the customer relationship should then be ignored. 

Think about it. You’re relying on a steady income from your customer’s subscriptions. They can choose, at any time, to cancel and go with a competitor who values the customer relationship more than you do. 

Remember that customer service and overall customer experiences are just as important in the SaaS industry. Neglecting the customer experience will quickly leave you wondering where all your subscribed customers went. 

Benefits of Exceptional Customer Service

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In the end, companies need to put a great deal of focus into their customer service efforts if they want to reap any sort of reward. 

So what benefits do you receive from killing it in the customer service department?

Increased Profits

Just like a negative first impression can quickly make its rounds, when you leave a positive first impression on a customer, it often sticks. 

Stories of exceptional customer service get shared on social media, detailed in customer reviews, and even told in person over coffee. When you build a reputation as a company that consistently provides exceptional customer service time and time again, you can expect to attract more paying customers. 

There’s no way around it. If you want a foolproof way to keep your profits high, evaluating your customer service and experience processes is a must. 

Customer Retention

Brands that are known for having fantastic customer service will always have repeat customers. That’s no secret. If a customer purchases a product from your company and you leave a lasting positive impression on them, why would they choose to go to a competitor? We already know that customers are willing to pay more for great customer service, so your chances of creating a repeat customer with your great customer service practices are high. 

The same can be said for SaaS and subscription-based companies. These industries require constant nurturing of customer relationships, and customers expect to be valued when they choose to pay a monthly or annual fee to use your service. 

When you are constantly addressing your customer’s needs and making sure that they’re happy with your company, you drastically increase your chances of keeping them around.

The world of SaaS is incredibly competitive. If you aren’t providing top-notch customer service, it won’t be difficult for your customers to switch to a competitor and leave you behind in the dust.

Positive Thoughts Towards Brand

Branding is important to any business in any industry. You want your company to become recognizable to the public. 

From there, if you’re known as a company that continuously provides next-level customer service, not only will it strengthen your brand equity, but it’ll also be closely associated with great customer service and experiences. 

Once you hit that point, making sales and increasing revenue becomes easier than ever.

How to Measure Your Customer Service

By now, you’re probably thinking:

“Yeah this advice is great and all, but how do I even figure out if I’m providing great customer service?”

Relax. While there’s no set in stone way to perfectly measure your level of customer service, there are several different ways to paint a clearer picture and get a pretty good idea of where you’re at and where you need to be. 

Response Time

Here’s an obvious statement: People don’t enjoy waiting for things. Even if it’s a product or service they’ve been wanting for a long time. 

Customers will often rate your level of customer service based on your response times. If you serve them quickly and efficiently, chances are it will leave them with a positive view of your business. Conversely, if your processes are inefficient, your brand will likely be viewed in a negative way. 

Also, when customers have product-related issues, concerns, or questions, they expect to be served in a timely manner. Who can blame them? They’ve decided to spend their money with your company, after all. At the very least, if you’re unable to get back to them right away, you should at least have a system in place that responds to their questions or concerns by letting them know that you’re on it. This way, your customers won’t feel quite as distraught with having to wait for help. 

Net Promoter Score (NPS)

To put it as simply as possible, NPS is the likelihood that a customer would recommend your product or service to someone else. This is measured on a scale from 1 to 10. 

Measuring NPS is going to require you to set up a short survey question for your customers to answer, but it’s absolutely worth it. You can do this quite easily with a website widget creating service, such as Getsitecontrol

Once you have a decent sample size, simply take the number of promoters (those who answered with 9 or 10), and subtract it from those who are unsatisfied with your service (answers from 0 to 6) and you arrive at your net promoter score. 

Customer Surveys

Customer surveys require a little more work than NPS questions, but they also provide you with more in-depth information if customers are willing to answer these questions.

When using customer surveys, not only can you gauge whether or not you’re providing great customer service, but you can also gain insight into potential changes that you can make. Your customers are free to inform you of what processes they like and which they don’t. 

The key to customer surveys is that while you want to gather as much information as possible, make sure the information is relevant. Having too many questions to answer will have customers heading for the door quickly.

Examples of Great Customer Service

Now that you’re informed about the ins and outs of customer service as a whole, why not look into a few examples of great customer service? 

One thing to note here is that even the smallest, most simple gesture can remain incredibly impactful. Don’t be stuck thinking that you need to move mountains at all times for your customers.

Adobe Addresses Outages in a Cute Way

Technology can be, well, temperamental to say the least. Most rational human beings are well aware that not everything will work 100% of the time.

The important thing as a software company is to make sure that these issues are addressed so your customers are fully aware that you’re on top of it. 

Not only does Adobe address their outage, but they also do so by adding a lighthearted puppy GIF. Who could be upset after seeing that? 

Simple, yet effective. 

Wistia Uses Video For Support Inquiries

On the outside, it makes sense for a video software company to use video in order to help their customers solve tech issues related to their product. 

However, it can be easy to forget just how much effort went into creating this support system. With many people being visual learners, having a simple FAQ and help center blog isn’t going to do much good. Wistia understands this and uses their video expertise to show people how to use certain aspects of their product instead of just telling them. 

The fact that Wistia is willing to make all of these support videos shows just how much they value their customers. 

Qualtrics Dream Team Engages Customers and Hears Their Ideas

This one is certainly a little over the top, but it just goes to show how much customers value companies that create amazing customer experiences.

Qualtrics, an experienced management company, sends their “dream team” to conferences that they attend. This dream team’s job, in short, is to provide conference attendees with the best possible conference experience. Whether it’s providing them with food, drinks, or even phone chargers, they really knock it out of the customer service park. 

They aren’t just there to provide refreshments, though. Qualtrics is also actively engaging their customers and listening to feedback and ideas. Their job is to make customers feel valued and listened to. If that isn’t at the core of customer service, then we’re not sure what is.

Not every company is able to make big moves like this one, but it’s important to note just how much of a difference these moves can make when it comes to your customer service reputation.

Customer Service Summary

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With customer service being as broad of a topic as it is, there’s certainly a lot of ground to cover. There are many benefits to great customer service, many problems associated with poor customer service, and even several ways to help you measure your own customer service. 

What you need to remember is that customer service, at its core, is all about valuing the relationship. 

Making customers feel cared about and valued should be at the top of your priority list. As long as you’re taking care of that, your company will always maintain a reputation for great customer service and experiences. 

Looking for More Customer Service Advice? 

Providing great customer service can be a chore. Even with all of this information at your fingertips, sometimes things can remain fuzzy.

Skiplino certainly knows a thing or two about customer service as it offers staff/branch performance analytics and immediate customer feedback in order to support businesses in providing excellent client service. Our queue management system and appointment scheduling software are designed with customer experience in mind. 

Why not reach out to us with any questions you have? We’re always here to help. 

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