What Is Customer Service, and What Makes It Excellent?

What Is Customer Service?

Customer service is the support, assistance, and advice provided by a company to its customers both before and after they buy or use its products or services. Customer service is a critical factor in ensuring buyer satisfaction, retaining customers, and growing a business. Customer service is also considered a key aspect of servant leadership.

How Customer Service Works

At most companies, customer service representatives are the only employees who have direct contact with buyers or users. The buyers' perceptions of the company and the product are shaped in part by their experience in dealing with that person. This is why many companies work hard to increase customer satisfaction levels.

Successful small business owners understand the need for good customer service instinctively. Larger businesses study the subject in depth, and have reached some basic conclusions about the key components:

• Timely attention to issues raised by customers is critical. Requiring a customer to wait in line or sit on hold sours an interaction before it begins and can ruin their opinion of a business.
• Customer service should be a single-step process for the consumer. If a customer calls a helpline, the representative should whenever possible follow the problem through to its resolution.
• If a customer must be transferred to another department, the original representative should follow up with the customer to ensure that the problem was solved.
  

Benefits of Customer Service

There are many reasons why businesses should invest in good customer service. The following are just some of the main benefits of implementing a customer service program within a company:

• Customer retention: The first and most obvious advantage of having a customer service plan in place is to keep customers happy. It means listening to concerns, being empathetic, and easing issues related to product availability, payment, returns, and technical support. Showing that a company cares keeps customers loyal.
• Employee retention: Customer service isn't just for customers. It also helps keep employees with the company. When customers are happy, employees are, too. Individuals tend to want to work for a business that cares about its customers.
• Troubleshooting and problem-solving: Businesses have to take care of their customers' problems. But companies that take a proactive approach tend to do better. This means that it's important to reach out to customers before any issues arise. This shows that the company cares and is doing all that it can to ensure a smooth customer experience.
• Referrals: Consumers who have a good experience usually pass on that information to others, whether that's through word-of-mouth to people they know, customer reviews, or social media mentions. This often helps businesses generate new sales.
• Brand boost: Businesses that show consumers they care through customer service help increase their brand equity. This also leads to more referrals and, therefore, an increase in sales.
  
• Increased customer lifetime value: This refers to the relationship customer service helps establish and solidify with a single customer. When a company provides a single customer with good service, that person is more likely to add to the company's revenue by remaining loyal and making more purchases.
  
• Corporate culture: Customer service allows businesses to streamline their workflows and promote cooperation among different teams. This includes communication between agents and managers, technical engineers, and production teams. All of this is to help corporations achieve their goals of customer attraction and retention and increasing sales revenue.
• Competitive advantage: Having a good customer service base sets a company apart from its competition. It boosts the business's reputation and also increases its brand value by showing consumers and competitors that the business values the relationships it has with new and existing customers.
  

Traits of Good Customer Service

It isn't enough to have a customer service plan in place. It also needs to be effectively executed in order to reap the benefits. But before we look at how to be effective, it's important to explore bad customer service.

Bad customer service is any communication or experience where a consumer feels as though they are let down. This includes negative experiences, such as long wait or hold times, not being able to speak to an agent, being transferred many times, or not being heard. This can lead customers to provide negative reviews and/or begin shopping with a competitor.

So how can this be turned around? There are a few key traits that businesses can apply to their customer service to make it a better experience. Consider the following:

• Personalization: Tailoring the experience to each customer is an effective way of practicing good customer service. After all, not everyone is different and has the same needs. Listening to what a customer's needs are can help determine the course of action and the direction of the experience.
• Speed: Businesses should provide their service quickly. If there's a problem, it should be resolved as soon as possible. Customers don't want to wait to get an issue resolved or to have their questions answered. Having said this, there is a fine balance between speed and problem-solving—not getting the customer off the phone or brushing them off without a resolution. This means that efficiency and effectiveness may have to supersede speed in order to provide a great experience.
• Option for self-service: It's important to allow customers the option to help themselves, whether that's through an automated service or self-service through the checkout. Keep in mind that this should be done only if consumers want it. Forcing everyone to help themselves may alienate those who want to deal with customer service agents.
• Listening and empathy: Customer service only goes so far if the business doesn't listen and empathize with the customer. This requires training and skills, along with a certain degree of compassion.
• Being proactive: One of the key traits of good customer service is being proactive. It's always a good idea to reach out to customers first rather than waiting for a problem to arise. It shows that a company cares. This can be done with a simple follow-up email or phone call.

How to Deliver Great Customer Service

Studies of customer service have centered on creating the perfect online experience. The first and most difficult factor is the multiplicity of channels. Today's customers expect to get service through whatever app or device they happen to be using at the moment. That may be a mobile device or a laptop, a social media site, a text app, or live chat.

Once again, the focus has been on packaging how-to content and related resources that are designed for self-service. Increasingly sophisticated data analytics also are being used to identify dissatisfied or low-engagement customers. But, as always, the most effective customer service needs to incorporate human contact, if only as a last resort.

Customer Service Channels

There are a number of different channels to deliver customer service. Many companies, especially larger ones, use more than one way for consumers to reach them. Smaller businesses may use one or just a few of them. And in the age of social media, it's become even easier to get in touch with businesses to get questions answered and problems resolved.

The following chart highlights some of the most common customer service channels companies can use.

Customer Service Automation

For decades, businesses in many industries have sought to reduce personnel costs by automating their processes to the greatest extent possible.

This led many companies to implement systems online and by phone that answer as many questions or resolve as many problems as they can without a human presence. But in the end, there are customer service issues for which human interaction is indispensable, creating a competitive advantage.

Amazon is an example of a company that is trying to automate a vast and complex operation. It has to, given that it delivered a staggering seven billion packages with same or next-day shipping in 2023. Nevertheless, Amazon still offers 24-hour customer service by phone, in addition to email and live chat services.

Most successful businesses recognize the importance of providing outstanding customer service. Courteous and empathetic interaction with a trained customer service representative can mean the difference between losing or retaining a customer.

Customer Services Job Requirements

Much is expected of customer service representatives. Yet the pay for the job is low. The estimated total pay for as of 2023 is $42,135 per year, with an average salary of $39,599.

Some of the job expectations:

• Customer service representatives must be accessible, knowledgeable, and courteous. They require excellent listening skills and a willingness to talk through a resolution. Training in conflict resolution can be beneficial.
• Strong speaking skills are important. For phone staff, this means speaking clearly and slowly while maintaining a calm demeanor even if the customer doesn't.

The Bottom Line

Having a customer service plan in place can make or break a company. Putting in a good plan with the right people, proper training, and appropriate channels can lead to more sales, customer loyalty, and referrals. Even though things may be moving in the right direction, corporations shouldn't rest on their laurels. Keeping one step ahead of the game means continuing to find ways to improve and provide an even greater customer experience.