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Why Customer Service is Important

Customer service is often undervalued as a marketing tool. However, it can provide competitive advantage and help you stand out in a crowded market when done right! Here's why...

Why do businesses allocate a team just for customer service? Do businesses nowadays rely on customer service to retain customers? Yes, they certainly do. You might think this is exaggerated, but businesses often underestimate the importance of customer service in helping their growth. While the quality of the business’s product or service may be the best selling factor, customer service has increasingly become an essential asset for companies to differentiate their products from competitors. If you ever find yourself questioning if you should invest in great customer service, take a look below.

How Customer Service can Benefit your Company

“Good Product sells itself.”

This popular belief may not be as relevant as it was in the past. Why so? There has been an exponential increase in businesses providing the same or similar products with increasing business opportunities. Most of these products are equally qualified to be referred to as a ‘good product’. With such a high level of intra-industry competition, the popular belief isn’t as significant anymore. What does your company do then? Well, that’s where your customer service team steps up! 

Increase sales

The primary objective of customer service is in line with marketing, which is to increase sales. While the customer service team has a different role than the marketing team, customer service often becomes a marketing strategy for a business itself. Proactive customer service can create various marketing opportunities, such as providing online support to customers that require help and introducing and promoting new products. Customer service offers customers or prospective customers information that may be important for their assessment. Best-case scenario: The information might convince them to buy the product or service they otherwise wouldn’t have purchased. 

Customer retention or Customer acquisition?

Customers are 69% more likely to recommend a company to others if they have a positive experience!

Groove HQ

It’s challenging to quantify how necessary customer retention is for any company. As a result, companies often focus on and emphasize acquiring as many customers as possible. Why do companies prefer that? Because it decreases sales dependence on each customer and expands the business’ target market. However, customer acquisition is relatively expensive and doesn’t have the best success rate. These points might often make it difficult for companies to decide between the choices. Customer service works to help increase both as they provide information to customers about any problems they’re encountering or any inquiries that potential customers have. Moreover, customers are 69% more likely to recommend a company to others if they have a positive experience. As a result, the importance of user experience should be further emphasized as it can help acquire customers without additional costs.

Brand Image, Mission and Values

Companies spend countless dollars on marketing to build a strong brand image. From catchy slogans to dozens of persuasive advertisements, companies put a significant effort into showing their target market their missions and values. However, it’s up to the customers to determine and make their assumptions on the company from these external marketing projects. Customer service can provide a degree of control towards these perceptions to the company. Employees in customer service are responsible for representing the company’s image as they directly connect with customers. Statistics show that 96% of customers agree that customer service influences their brand loyalty for any company. It helps customers feel more engaged with the company whose goods or services they are consuming. This would allow consumers to feel more convinced with the company’s quality over the competitors.

Insight on customer experience

customer service - insight into customer experience

Companies are expected to ask for customers’ experience and feedback to ensure the demands are met as perfectly as possible. There’s no better way to get these customer feedbacks than through customer service. Employees interact with customers constantly and so, can ask various questions that can help bring important feedback about the company. Do the company’s marketing ideas align with what customers want? Do the customers feel satisfied with the service the company’s employees have provided? 

Furthermore, there is research that suggests customer service can increase employee engagement rates by 20%. So, it can be a great tool to get insights on customer experience, inevitably leading to better business decisions and greater productivity. Win, win, win.

Customers are more than just a number, right?

Customers deserve to be treated as individuals. After all, without them, any business would not run. It’s vital that modern companies look at customers as more than just prospects to earn revenue from, and more towards individuals that want their needs to be met. Well, how do you do that? The answer is through customer service. Customers are increasingly demanding high-quality services and are less afraid to switch between companies due to unsatisfactory experiences. Subsequently, having an excellent customer-facing team isn’t just a complimentary service anymore; it’s a requirement. Customer service is required when customers need any help or if they need to be given a reason why they should buy from their company. Without customer service, lack of communication will worsen customer experiences, and customer retention will fall. 

Better Relationship with Customers

In contrast to what was previously said, customer service does provide companies with a competitive advantage. It may not just be a complimentary service anymore, but it can be an excellent differentiator for your company. Customer turnover has significantly risen over the past few years, mainly due to bad service. 60% of customers decide to stop doing business with a company after one bad experience. These margins may sound bad; however, they only show how meaningful good relationships with customers are for companies. By providing excellent customer service, whether by answering them immediately or providing them with the most appropriate response, companies can maintain a good relationship with their loyal customers and attract competitors’ customers. 

If you still don’t believe that customer relationships are essential, statistics speak for themselves. 78% of customers are likely to move on from company mistakes if they provide excellent customer service to make up for it. On the other hand, only 20% of customers are likely to carry on with the business after a mistake if the customer services were not good enough. Simply said, if you want to build a more significant customer base, customer service can act as a tool to enhance customer relationships with your organization.

Positive Reviews

One of the most significant leverages that loyal customers have with the company is the power of their voice in the form of online reviews. As companies start to market themselves electronically more and more, customers find a platform to review a business that the rest of the world can read. While positive reviews have a reasonable influence on prospective customers, negative reviews can have great power in driving potential customers away from the company. Customer service plays a huge role here, as customers are likely to review their positive experience with a company or their negative experience with their product and services. As a result, companies can often convert potential negative reviews to positive reviews simply through strong customer service.

Customer service in the 21st Century has become as important as any other business operation. Not only is it a tool for growth in revenues and customer base, but it also brings the customers and the business together. It’s difficult for companies to constantly provide excellent goods or services when the expectations are high, but they can make sure that there are no unhappy customers. It brings as much value to the company as the customer does. It can ensure customers feel more engaged with the company than dissatisfied, which would provide the business approximately 60% more spending per transaction and 90% more frequently than before. Therefore, if any customer is “sitting on the fence” between two companies, use your customer service team and find them the best deal you can give them. 

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