Q: Why is customer service important? A: These 7 reasons

The importance of quality customer service today can’t be stressed enough.

Not only do people have more choices than ever when it’s time to buy something, but they also have a lot more ways to publicly share opinions about their experiences, and as a small business you might not have the resources to weather a good, old-fashioned “Getting Canceled by the Internet.”

Plus, you’re also up against the behemoth that is internet shopping, and probably can’t compete on price, so you have to find other ways to stay in the game and keep every customer you win.

Let’s get going, then. (Did you think we’d leave you to worry about customer service all on your own?)

Today, we’ll look at:

1. 7 reasons why customer service is important for small businesses
2. Whether your employees care about customer service (Spoiler alert: they do)
3. How to jump-start customer service for your small business

⭐️⭐️⭐️⭐️⭐️ Ready to offer 5-star customer service? Get strategies for every stage of the customer journey with this free eBook.

7 reasons why customer service is important for small businesses

1. Service is the #1 reason customers stay.

Great customer service is the cornerstone of customer retention. People who feel warm and fuzzy about your company are more likely to buy from you again and become long-term, loyal customers.

Taking better care of your customers doesn’t have to be a big, scary task.

This makes sense, right? Treat people well, and they’ll keep coming back. Now’s a great time to ask yourself: what kind of vibe does your customer service strategy put out?

Sometimes customers may call you. Others might want to reach out on social media. Having an omnichannel platform, like RingCentral, can wrap up all these conversations into one neat package and let you respond to them in a single app:

2. It’s also the #1 reason they leave.

There is a flip side to those lovin’ feelings. But you probably saw that coming.

With a growing number of options for where to spend their money, people have little patience for being treated poorly. In fact, in an American Express survey, 78% of respondents said they’ve walked away from a company because of bad service.¹

You might have figured this out already, but one of the best ways to improve your customer service is to put yourself in your customers’ shoes.

Think of a time you walked away from a company as a customer: what made you leave? Based on the customer care you provide, would you keep doing business with your company today, if you hadn’t built it from the ground up and poured your whole life into it? We know it’s hard to be objective about your own baby, but try to be honest.

3. Customer care protects your bottom line.

Here’s a fun fact: losing a customer can cost five times as much as it would have to keep that same customer happy.²

Did we say fun fact? We meant scary.

Investing in a strong customer service strategy is the definition of working smarter, not harder. You might have to spend a little upfront, but the work you put in to train your team and give them the tools they need to make your customers smile can really make a difference in the long run.

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4. People will pay more for good service.

Yep, 86% of people surveyed by RightNow Technologies would pay up to 25% more for a product if they know stellar service is included in the price.³

That’s a serious chunk of change to shell out, just for better customer care. That’s because today, people are overwhelmed with choices, and sometimes the easiest way to decide between two similar products is to go with the place that responds more quickly, helps more readily, and generally treats you better.

In short, if you think it’s too expensive to invest in proactive customer service strategies, you might be missing the gravy train.

5. Good word of mouth is the Holy Grail of small business.

You’re in the small business game, so you know this better than anyone: good word of mouth rules the world. But we promise you this, you won’t have to fight a ridiculously persistent knight in the woods to achieve it.

The time and resources you invest in customer service can pay off in the most coveted source of new business: customer referrals and positive online reviews. Plus, with more happy advocates in your community spreading the good word, you might even be able to reduce what you spend on advertising.

How are you empowering your service team to turn customers into brand ambassadors for you? What are you doing to make them smile and rave about you to their friends?

6. When customers talk about you, they’re probably talking about your service.

Let’s face it: it doesn’t matter what you say in your ads or even on your website. The bulk of your brand is most likely decided by what people say about you. And when push comes to shove, people will almost always talk about how you take care of them and help them solve their problems.

Does your personal vision for your brand line up with how people experience it? Your service folks might have some interesting insights on this from their daily conversations with customers. Getting real can be tough at first, but better alignment can do wonders for your business.

7. Great customer service makes people want to work with you.

Let’s say you sell shoes (try saying that five times fast). One of your customers has a problem with her order and gives you a call. Your service team is able to fix her problem, lickety split and with a smile. She hangs up happy, totally jazzed with the service your team provided her.

As it turns out, that customer happens to be a high-fashion sock designer, looking for a new store in your area to sell her wares. Based on her positive experience with your business, she knows that fans of her socks would be treated well by your team. Next thing you know, you’re in business, and socks and shoes are flying off the shelves together, as nature intended.

TL;DR: People want to be in business with other businesses that treat customers well. It’s as simple as that.

P.S. Your employees care about customer service, too

Here’s an angle you might not have considered yet: customer service is important to your employees, too.

Service reigns supreme today, and your employees are consumers, too. The way you treat your customers impacts how they feel about working for your business and your brand in general. Placing value on positive, helpful customer engagement will make your team feel good, which might cut down on costly employee turnover.

An easy way to find out how your employees feel about the service you offer? Add a question about customer service to your next employee satisfaction survey.

3 customer service ideas from real companies you can steal

Wondering where to start on improving customer service? Here are some ideas from real-life companies that have centered customer care, and how you can copy them on a small business scale:

1. Craft a personal approach to service.

Maybe you can’t compete on price with some of the bigger names in your industry. But as we’ve shown here, a lot more customers are looking for a feeling than the lowest price around. That’s where small businesses can really get a foothold. Big-box businesses can seem less warm and personal, so find a way to bring the more intimate feel that customers crave to your service.

Who’s doing it well: Is there a grocery store with a bigger cult following than Trader Joe’s? If so, we don’t know about it, and they’ve done it by focusing on a small-town vibe for their brand. Based on their popularity, Trader Joe’s could double the size of their stores and do extremely well. But they stay small on purpose, so each store feels like a local market. They also offer a limited number of products that feel curated, instead of walls and walls of the same product under different brands:

How you can copy them: Lean into your smallness. Customers today crave intimacy, so try to create a breath of fresh air for people. Time to brainstorm:

• Sit down with your team and think about the big names in your market.
• Ask yourselves: what can’t they offer because of their size, and what frustrates customers most about that? Maybe it’s never being able to talk to a real person on the phone or no one knowing who they are when they walk in the door.
• Next to each con about the big stores, write down ideas for how your business can deliver the opposite experience.
• Maybe it’s a better communication tool that allows your team to answer requests more quickly or extra time spent by the whole office learning regulars’ names and their favorite products or services.
• Identify everyone’s favorite ideas and rank them, based on which ones are easiest to start now and which ones are longer-term wins.
• Flesh out the plans and put them into play.

2. Make things as easy as possible for your customers.

One big way you can start to improve customer service is to remember what it’s like to be a customer. Think of the companies you love to do business with. We bet they make the buying process super simple and enjoyable. And you’re not alone; with the growing number of tasks and interruptions on people’s plates, everyone is looking for the business who will make their life easier.

Who’s doing it well: If we told you to be more like Google, you’d be within your rights to roll your eyes and tell us you’ll be more like Google when you have Google money. But hear us out! Our one recommendation from their model that you can 100% steal: keep it simple.

Google is just a blank, white webpage with a search bar in the middle. You can order Amazon stuff with three clicks or fewer, thanks to the ability to save tons of addresses and payment information.

How you can copy them: Get an informal focus group together (either in person or via video meeting) with some of your customers—newbies and frequent flyers, if possible. Talk to them about what steps of your buying process are a breeze and where things get stuck in the mud.

Afterward, sit with your team to find some patterns in the feedback and come up with a game plan for how to fix the biggest kinks in your pipeline.

P.S. Offering a token reward (future discount on products or services, a gift card, etc.) is a nice incentive for participation.

P.P.S. Can’t get a focus group together? Try a super simple, anonymous email survey with two questions: one about what works in the buying process, and one about where you can improve. Leave the questions open-ended; you never know what great ideas one of your customers might have.

3. Expand the ways your customers can contact you.

One big way to make a difference quickly is to expand the ways your customers can reach you. Some people love to talk to strangers on the phone… while other people would rather have a root canal.

Who’s doing it well: Stratejm, a data and cybersecurity company, knew that delivering on the technical side alone wouldn’t keep their customers around, so they started focusing on customer service, too. That meant upgrading to a cloud-based business communications tool—a solution that allows customers to contact Stratejm via voice, chat, text, email, or video.

How you can copy them: If you’re going to open up more channels of communication, do it right by making sure you have the technology in place to make it successful. Try to find a tool that can manage all your customer communications in one place, so no one falls through the cracks.

Why is customer service important?

Without happy, loyal customers, no business can survive or—more importantly—thrive. Luckily, there are lots of ways to pour more love into your customer service strategy. And as you’ve seen in this post, a little effort can really pay off: in customer retention, employee satisfaction, and more money in the bank.

Want to learn even more strategies to improve customer service in your small business? Start here:

• Podcast: The Evolving World of Customer Engagement
• Blog: Meeting & Exceeding Customer Expectations: An In-depth Guide
• Blog: Customer Service Teamwork: How to Work Better by Working Together

Originally published Mar 31, 2020, updated Jul 01, 2022