15 Reasons Why Customer Service Is Important?

Customers are all that matters when it comes to a business’s success, and great customer service is the only way to ensure customers stick around for good. This article will share why customer service is important for business.

Table of Contents

15 Benefits Of Customer Service For Business

Every company says they provide excellent customer service. In research, conducted nationwide of three generations (Baby Boomers, Gen X, and Millennials) to see how they perceive customer service at leading companies.

What we discovered was that the majority of Americans are frustrated with service providers across all industries, from telecommunications and utilities to retail and even healthcare. Today’s consumers want a better experience – one that makes them feel valued. They’re willing to pay more for a product or service if they know it will deliver a great customer experience.

1. Customer Service Increases Loyalty

When customers have a positive experience with your company, they’re more likely to be loyal and recommend your business to others. In fact, according to a study by the White House Office of Consumer Affairs, American businesses lose $41 billion every year due to customer switching.

2. Customer Service Increases Sales

Customer service also has an impact on your bottom line. A study by the American Express Global Customer Service Barometer reports that U.S. consumers spend an average of $1,155 per year with companies they believe provide excellent customer service and one-third say they will spend 17% more for better service.

3. Customer Service Increases Brand Awareness

Customer service also provides the opportunity to build your brand and encourage customer loyalty. When you provide an excellent experience, not only will customers tell their friends and family about it, but they’re more likely to share positive experiences on social media.

A report by Nielsen found that 85% of consumers trust “recommendations from friends and family more than any other form of advertising.”

4. Customer Service Reduces Costs

Bad customer service can cost you money. A study by the Aberdeen Group found that companies with “best-in-class” customer service experience saw a 26% decrease in customer support costs, due to a lessened need for contact center support and fewer product returns.

5. Customer Service Improves Employee Morale And Loyalty

Happy employees lead to happy customers. When employees are treated well and feel appreciated, they’re more likely to go the extra mile for customers. A study showed that 50% of employees who receive recognition from their managers are more likely to recommend their company as a great place to work.

6. Customer Service Increase Revenue

As we mentioned earlier, happy customers spend more money with businesses that deliver a superior customer experience. Consumers are willing to try new products and services if the company providing them invests in excellent support.

7. Customer Service Decreases Turnover

Good customer service can impact your turnover rate as well. According to Balance, employees who feel appreciated for their contributions are less likely to leave their jobs.

A study by Gallup found that employee satisfaction is lower than ever today. About 29% of American workers strongly agree that they have the resources they need to do their job right and less than half of employees are engaged in their work.

8. Customer Service Helps Build Relationships

Customer service is all about relationships. By providing a great experience, you’re establishing a connection with customers that will encourage them to come back again and again.

According to research by the Advertising Specialty Institute, the average business gets the attention of 6 million customers, but only 2 million of those customers make a purchase. By making the extra effort to deliver great service, you can encourage more sales and brand loyalty.

9. Customer Service Reduces Employee Stress

Employees who are stressed out are less likely to provide good customer service. A study by the American Psychological Association found that stress can lead to physical health problems, such as heart disease and diabetes, and psychological problems, such as depression and anxiety.

10. Customer Service Reduces Public Relations Issues

When customers and clients complain, not only does it damage your reputation, but it can even damage your public relations. The best way to prevent this is by providing excellent customer service that exceeds expectations and limits negative issues from occurring in the first place.

You can do this by tracking trends and problems online, such as through social media monitoring tools like Sprout Social or Hootsuite. With Sprout Social, for example, you can set up brand alerts so that you’re automatically alerted whenever a certain topic appears on Twitter.

This allows you to take action quickly rather than waiting until someone has already taken issue with something. By acting proactively and solving problems before they escalate into public relations disasters, you’ll be able to avoid any negative press.

11. Customer Service Increases Efficiency

Having a customer service team is a good way to free up the time of other departments, such as sales or support. For example, if you have a customer service department that can handle your customers’ billing issues, this allows your sales team to focus on selling and improving the customer relationship instead of spending time on tedious tasks like canceling services or transferring customers from one account to another.

In addition, having people who are specifically trained to answer questions about your product or service helps ensure that you’re providing accurate information to potential customers. By allowing employees from other departments to focus their energies elsewhere, you ultimately increase efficiency and productivity across the board.

12. Customer Service Builds Trust

When customers have a positive experience with your brand, they’re more likely to trust you. This is especially important when it comes to online businesses. In fact, according to a study by Forrester Research, “customers who trust a company are more than twice as likely to buy from that company in the future.”

13. Customer Service Creates Loyal Customers

Happy customers become loyal customers, and loyal customers are more likely to stick around and recommend your business to their friends and family members. A study by the White House Office of Consumer Affairs found that “word-of-mouth is the primary factor behind 20% to 50% of all purchasing decisions”.

14. Customer Service Helps You Retain Customers

When customers are happy with your product or service, they’re less likely to switch to a competitor. A study by the Aberdeen Group found that “companies with strong customer retention programs achieve profitability levels three times those of companies without such programs”.

15. Customer Service Helps You Target New Customers

Great customer service can also help you attract new customers. A study by the Harvard Business Review found that “customers who have had a good experience with a company are more than twice as likely to buy from that company again as customers who have had a bad experience”.

The Importance Of Customer Service – Conclusion

Customer service is important because it benefits businesses in many different ways, such as by increasing efficiency and productivity and strengthening the customer-brand relationship. The 15 reasons above show how investing in improving your company’s customer service can lead to growth and increased profits.

However, the most important thing about customer service is that it improves people’s lives; when customers are happy with their experience, they’re likely to remain loyal customers for years to come.

References

Ayesha Akhtar