5 Compelling Reasons Why Customer Service Is the Key to Business Success

Today’s business environment has become more competitive than it ever was. This puts a strain on entrepreneurs who already have to face an array of challenges to see their business succeed. 

In a competitive environment like this, only those who adapt fast and come up with ways to stay ahead of their adversaries will thrive. To do this, one must take advantage of all the resources available and pour them into processes that will help their business improve. 

Customer service is one of the most talked-about subjects for businesses, but not many entrepreneurs understand exactly how important it is for their business’ success. Sure, many companies with poor customer service continue to thrive, but these are established businesses, and most entrepreneurs don’t have the luxury to afford treating customers poorly. 

When customer service is done right, it can have a tremendous impact on a company’s wellbeing because customers appreciate when a business shows interest and does its best to help them. In return, they will become loyal to your brand, recommend it to others, and help your revenue grown. 

Below, we are going to explore some key reasons why good customer service is paramount for business success, so keep reading. 

Customers are willing to pay more for good service

Research shows customers have no problem spending more money, as long as they get high-quality service. This survey shows 7 in 10 consumers paid more money to do business with a company that provides good service and have no regret they did so.

The importance of good customer service has grown to be even more significant in the past few years, with the same survey finding people are now willing to spend 17% more on good businesses, compared to 14% a few years ago. This happens partially because of millennials, who are the most inclined to spend more money for better care. 

Consumers have gone through too many poor customer service experiences, and they are not willing to put up with companies that don’t care about them. Chances are you have also experienced this at least once in your life, so go back to that moment and try to remember how frustrating it was. Now, what if a different company offered the same products and significantly better customer service, but they charged 10% more. Would you be willing to pay the price? Chances are, most customers will as well. 

Helps you build customer retention

If you want your sales to increase, you need to focus on two aspects: customer acquisition and customer retention. In simple words, this means new customers and loyal customers. However, customer retention costs much more than customer acquisition, so your best bet is to make sure those who do business with you return.

Research shows a 5% increase in customer retention can improve a company’s profit by as much as 25%, which means your company will have to invest less in operating costs. This happens because customers who know a brand are likely to spend more on its goods and services than a customer who has just now discovered it. A whopping 67% more, to be precise. 

What’s more, a company that does not invest in customer service will have to spend more on customer acquisition, as you will have fewer loyal customers to recommend your brand or vouch for your services. 

It represents the values your brand follows

By now, you probably have a clear idea of what your brand represents and what are the values it follows. However, the only way for customers, especially those who are not familiar with your brand, to discover what these values are, is through the relationship they develop with your company. They will start marking assumptions based on a company’s advertising efforts, online presence, brand image, as well as the way it treats customers. 

Your customer service team should be your connection to customers, and you need to use it to promote your brand values. Something as simple as using on hold music for business calls, instead of making your customer listen to thin air while a customer service representative places them on hold to investigate their problem, can go a long way. 

When they are treated well, customers associate the good experience with your brand values, and start seeing you as a company that cares for them, so they will come back to do more business with you. 

It promotes word-of-mouth advertising

No matter how strong your marketing efforts are, word-of-mouth advertising is still one of the best ways to acquire new customers. That’s because people are more likely to try a new product if someone they know and trust recommends it to them.

When customers have a positive experience with a company, they will surely share it with others, and this means good publicity for you. After all, wouldn’t you want your friends to enjoy the same good experiences you did?

At the same time, if people have a poor encounter with a brand, they will tell their friends to stay away from it, and you definitely don’t what this kind of bad publicity. 

Customer service provides insightful information

As we mentioned before, your customer service department is the number one tool for communicating with customers and understand how they perceive your company. When customers call, be it because they have an issue to resolve or need some information, what they say becomes valuable feedback that you need to consider. 

Instead of using up valuable resources to survey customers, why don’t you have your customer service representative request feedback when they interact with customers? This way, you can get the answers to your most burning questions without having to use pushy outbound strategies. 

The insight you receive can give you a lot of information, which can be used to improve your sales, services, marketing, as well as establish more clearly-defined goals. What’s more, the conversations can also be used for employee training, to show new talent how to handle specific situations and request feedback.