Why Customer Service Matters and How to Improve it

A bad experience with your business means customers are unlikely to come back.

We’ve all probably had terrible customer service more than once in our lives.

It might have been in a clothing store where the staff were more concerned about gossiping about their weekends than asking if they can help you. It might have been when you were put on hold for half an hour from a telecommunications company when you called up to change your plan.

It’s frustrating.

Excellent customer service means you are likely to come back, but a bad experience means you will probably choose another brand or business next time.

If you want to retain your customers, treat them better.

This article explores how a customer-orientated strategy helps businesses to get the customer experience right.

What Is Customer Service?

Customer service is the support provided by a firm or brand to the customers or potential customers of their product or service.

It can happen before, during or after customers purchase or use a product or service. Firms aim to meet these customers' needs, desires, and requirements by delivering professional and supportive and assistance to ensure a comfortable and pleasant consumption experience.

Customer service can be face to face in a store, over the phone, through digital activities such as text, social media messaging or email, or by automated means such as an ATM.

This interaction between a service organisation and its customers or clients is the service encounter. A firm can form an impression with customers every time they come into contact.

“Interpersonal interaction between an organisation’s employees and its customers… have a high “impact” on the consumer and the quality of the service encounter… thus a vital ingredient in the overall quality of service experienced by the customer.” (Lewis & Mitchell, 1990)

Why is customer service important?

Customer service is part of the promise brands give customers.

There is an expectation from modern consumers that businesses provide a certain quality of customer service, especially true in the services industry.

Even the local mechanic now needs to step up their game. Businesses need the ability to learn, identify and adapt to the needs and wants of consumers. Customer-oriented firms have a higher capacity to anticipate consumers' developing needs and respond with goods and services.

Customer service that is at least on par with competitors is critical to competing effectively. If it is better, it can give you a competitive advantage. Customers do not shop based on price as often as they used to. Instead, their overall experience is often the motivator.

“89% of companies now expect to compete mostly on the basis of customer experience.” (Gartner Research, 2014)

It is cheaper to keep existing customers than to acquire new ones. But it is not as simple as just having great products to retain them — your customer service needs to be on point.

Lousy customer service is enough for previously loyal customers to choose a competitor — if customers are not happy with the service, chances are they will leave.

The benefits of great customer service

Providing customers with an elevated level of service quality positively relates to brand performance and customer satisfaction.

Service quality is how well the delivery of that service matches customers’ expectations. Satisfaction has a positive relationship with repeat purchase, and this is particularly true for service industries. Customers are satisfied when a firm performs better than they expected.

Prioritising customer service support might increase a firm's costs by needing extra staff or tools/technologies, but few benefits should outweigh the investment.

Studies have indicated that over 80 per cent of people would pay more for better customer service.

Some other benefits of providing excellent customer service include:

• customers are more satisfied with their experience
• enhanced perceptions of the firm’s overall marketing strategy
• increased positive word of mouth and referrals attracting new customers
• increased customer loyalty and repeat purchase
• increased ability to upsell or cross-sell relevant services
• customers can be willing to pay higher prices for a better experience
• customers perceive products and services as having better quality
• customers perceive the servicescape as being of higher quality

The customer service of a firm or brand can ‘make’ or ‘break’ their reputation.

“…Organisational culture that stresses the customer as the focal point of strategic planning and execution… Such that employees consistently exhibit customer-oriented behaviours, and consumers thereby become accustomed to this philosophy.” (Brady & Cronin Jr, 2001)

Bad customer service

In the world of mobile phones and social media, it is hard to hide a bad customer experience.

People can quickly share a negative experience online, which can reach a large audience. With many people using Google search to check out a business, a couple of bad reviews can make a significant difference.

Customers are more likely to share a negative experience on social media or talk about it with their friends than with a positive experience.

How can firms improve their customer service?

Improving customer service means making every touchpoint great and not letting any interaction fall between the cracks. There must be consistency across the organisation in providing a great customer experience.

In 2021, it is not enough for firms to use traditional customer support over the telephone for customer support. Customers expect to reach organisations by whatever means they find convenient, whether by email or social media.

Therefore, firms must have a comprehensive approach and provide a range of customer service options to customers.

Businesses can also provide self-service support to customers to find the answers they require without needing customer support staff.

A customer-orientated strategy

Marketing has progressively moved towards a customer orientation since Leonard Berry’s seminal writing on Relationship Marketing (1983) and is now considered a fundamental marketing principle.

To be customer-oriented implies that a firm focuses on the customer as the centre point of their strategic planning and execution. They aim to identify and adapt to consumers’ needs and wants as a competitive strategy through learning from customer perceptions of their experience.

“Having a customer orientation has a positive influence on customer perceptions and, ultimately, the performance of firms.” (Brady & Cronin Jr, 2001)

Three factors determine a customer’s evaluation of the overall service quality: employee service performance, physical goods/service quality, and servicescape (place of business) quality.

Firms must be proactive in collecting and analysing customer data to understand better how they perform and the needs and wants of customers and act on this information.

Digital tools for customer service

In the digital age, consumers now have several methods available to communicate with customer service representatives.

Over the past few years, social media has become increasingly popular to request and receive customer service. It is expected to send a message via a major brand’s Facebook page with any questions or problems you may have related to their products or services and receive a prompt response.

Around half of the internet users now turn to social media for help.

Accordingly, many large organisations implemented dedicated customer service teams to respond to social media messages. Studies (see Xu, Liu, Guo, Sinha & Akkiraju, 2017) have indicated that users who message a brand’s Twitter account expect a response within an hour.

“Marketing is concerned with exchange relationships between the organisation and its customers. Quality and customer service are key linkages in this relationship.” (Christopher, Payne & Ballantyne, 1991)

Customer demand for an instant response and the time-consuming nature of manually addressing these requests lead to AI's rise in customer service on social media.

This demand for instant customer service led to creating chatbots to automatically generate user requests on social media and now on websites. These chatbots provide an opportunity for brands to offer individualised attention to consumers.

Summary

This article has explored customer service and the benefits of a great customer experience in enhancing a firm’s customer loyalty.

If businesses can implement a customer-orientated strategy, customers should keep people coming back.

I hope you enjoyed the content.

Dan

If you enjoyed the article, you might find value in this article about how a firm’s servicescape shapes customer experiences.