What is Customer Service and Why is it Important?

Saphyte Team

3 min read

Updated: August 28th, 2023

Customer service sets your business apart, especially in the digital age. Find out why customer service is important and why you should prioritize it in your business.

Service teams believe that customers today have higher expectations than ever. In fact, in a survey, 93% of service teams agreed that customers are now smarter and more skeptical, which makes it harder to retain them.

But businesses are left with no choice but to ensure that they keep customers happy. This is especially true in a COVID-19 economic climate, where customer service can make or break a brand.

So what is customer service and why is it important for businesses to acknowledge its role in business success? Read on to find out.

What is Customer Service?

Customer service is the assistance, advice, and service provided by a company to people before, during, and after a purchase of goods or services.

Examples of customer service are:

• Providing refunds to dissatisfied customers
• Thanking frequent customers with small gifts
• Listening to customer feedback
• Learning sign language for deaf/mute customers
• Sending personal mails/emails to customers

Why is Customer Service Important?

Companies put a renewed emphasis on customer service nowadays. Here are six reasons why:

1.  Customers have higher expectations now more than ever

A survey in 2020 found that 93% of customers have higher expectations now than in the past.

This is primarily because customers now are armed with more information and have more choices than ever. They can easily switch to your competitors whenever they want and a bad experience with your service could be a decisive factor why they would stop buying from you.

2.  Customer service helps establish customer loyalty and retention

Customer loyalty and retention are important because they guarantee repeat purchases in the future for the business. According to a study, a 5% increase in customer retention can result in a 25% increase in profit.

This is because repeat customers have been observed to spend around 300% more than regular customers. Retaining customers also cost less for the business compared to acquiring new ones, so establishing customer loyalty and retention are important priorities for any business.

3.  Customer service improves brand awareness and recognition

When customers are satisfied with your service, they are more likely to provide positive feedback, recommendations, and may even act as brand ambassadors to the public.

According to a survey, a positive experience will make 72% of customers share that experience to other people (six or more).

This helps you establish brand awareness and brand recognition to the public— all at zero cost.

4.  Customers are willing to pay more for better service

The pandemic has reshaped the way customers perceive brands and what they expect brands to do during a period of disruption. Expectations are at a record high and many brands fail to see the need to meet or even exceed these expectations.

However, with customers (around 67% of them) willing to pay more for better service, businesses should prioritize ensuring consumer welfare if they want to retain more customers and survive a turbulent business environment.

5.  Customer service allows you to know more about your customers

Your customer service employees are directly involved in interacting with customers— which provides them a lot of insights about your customers, their experiences with your products, how they came to know about your brand, and so much more.

This lets you identify points for improvement, which allows you to change your strategy and approach to improve your performance as a business.

6.  Customer service lets you take advantage of marketing opportunities

If you have the tools (like a CRM) that let you record details about your customers, it makes it easier for you to connect to them and offer personalized support. This opens up possibilities for your business to offer new solutions or market your products’ new features to them.

For example, if you’re offering a new insurance package for COVID-19 patients, you can use your CRM to look up for customers who have had COVID-19 or indicated an interest in the subject and offer that new package to them via your CRM’s ticketing system.

This allows customers to feel like the company cares about them at an individual level and is offering services fit for their needs and preferences.

Conclusion

Customer service is important these days as it allows you to stand out from the competition. It also makes customers feel important, which gives them a reason to stay connected with you and make repeat purchases in the future.

To improve your customer service, getting tools and technology can help you. CRM software allows you to know more about your customers and provide quicker and more responsive service to them. To learn more about how your business can improve its customer service through technology, click here to get started.