What is customer service?

Getting customer service right is vital for a new business.

Not only is it part of the overall experience your new business offers, get it right and you’ll enjoy revenue generated by repeat customers.

Most of us have experienced a range of good and bad service when shopping or buying services.

From pleasant staff in a local store willing to carry your purchase to your car to the frustration of dealing with obstructive support staff on the phone when trying to get help with a problem or order, you’ll likely have experienced many examples of both.

Customer care is everywhere and any time your new business deals directly with a customer their experience matters.

While customer service as a concept is relatively straightforward to understand, truly knowing what it is and how it can affect your business is vital for commercial success.

How should you define customer service?

In general terms customer service is the help, advice, and service that your business provides directly to customers throughout their purchase with you.

This is delivered in several ways, primarily through staff and also through systems such as phone services and online help and advice.

It also relates specifically to individual customers about their purchase rather than general marketing material or items such as product instructions.

Why should I focus on customer service?

Customers are the lifeblood of any business.

Unhappy customers are likely to take their business to competitors and dissuade others from buying from your business through word of mouth and customer reviews.

The reverse is true for satisfied customers and service plays a vital part in how happy your customers are.

  • Finding a new customer can cost a business around six or seven times as much as it costs to keep an existing customer, according to business strategists Bain, and American Express found that 78% of customers have abandoned a planned purchase due to poor service. Simply put, how you treat your customers can directly affect the revenue your business generates.
  • While local businesses used to rely on good word of mouth to drum up trade, today’s connected social world means that customers can tell hundreds and even thousands of friends about good or bad customer experience. Poor service is far more visible and with online reviews such as Reevoo, Feefo and specialist services such as TripAdvisor and Checkatrade, it’s easy for customers to tell others about good and bad customer care. According to Touch Agency one million people read tweets on Twitter about customer support each week and 80% of these tweets are negative or critical.
  • According to a 2011 survey by American Express 70% of customers said they would be happy to spend more money with companies that offer good client service.
  • Kate Zabriske, CEO of Business Training Works, summed up how important customer care is in a competitive landscape: “Although your customers won’t love you if you give bad customer service, your competitors will.” Research firm Gartner found that nearly 90% of companies compete mainly on customer support – compared to just 36% a decade ago.
  • Once you’ve sold a customer a product your interaction with them doesn’t stop there. Providing after-sales service means being available and responsive to help with their support questions.

What are the elements that define customer service?

today helping a customer is more than simply a smile and a ‘thank you’ to a customer when they hand over their payment – although that plays a big role.

A business’ relationship with its customers is actually made up of lots of elements.

Making all these elements a core part of your daily business activities will ensure that you know your customers better, can meet their needs and importantly can measure how successful you are at delivering for them.

  • Customer insights and understanding – fundamental to offering good client service is to know your customers, their expectations and the kinds of experience they’re looking for. Read reviews by customers using competitors or similar businesses to learn about common complaints or things that delight them.
  • Customer relationship management (CRM) – having a CRM strategy means knowing who customers are and knowing their preferences, and provides a way to contact them and build relationships in addition to the transactional part of the relationship.
  • Product and service excellence – a good understanding of your business and services, including stock levels, products and how they’re made, and which type will suit particular customers helps support your relationship with your customers. Customers are looking for expertise and advice to help them buy the right product and service for them.
  • Staff interaction – as your business grows customer care is primarily delivered by staff unless you’re a sole trader, in which case you’ll be primarily responsible for interacting with your clients or customers. Elements such as staff training, clear guidance and expectations, and the ability to monitor staff performance help deliver the right amount of service.
  • Customer feedback and customer support measurements – monitoring how customer care is being delivered and how successful it is allows you to tailor it to create more satisfied customers. Providing ways for customers to give feedback and using customer support measurement tools will help you understand your performance.

How to deliver good customer service

Good customer care should be part and parcel of your business from day one.

Making a customer feel valued will keep them coming back or spending more.

Supporting your customer is easy to do although it may involve some costs and a willingness to do things differently.

  • Empower staff – encourage staff to do all they can for a customer, even if that means going against some of your business processes. Staff who feel that they can resolve a customer issue by themselves without fearing repercussions will make the business more flexible and helpful to customers. There’s nothing worse than a customer running into a ‘computer says no’ or ‘it’s more than my job’s worth’ response when talking to a staff member. Share great customer stories with your staff and reward positive customer support so it becomes something to strive for.
  • Cut through red tape – as your business grows, you’ll naturally introduce processes and ways of working to ensure your operation is working as effectively as possible. The problem is when those processes get in the way of good customer care. Encourage staff to cut through these processes if it means delivering a good service, and regularly review your processes against customer feedback, and change them where they are not supporting good customer support.
  • Understand the long term value of a customer – make sure your business understands the long term value of a customer. The Ritz Carlton allowing any staff member to spend $2,000 to solve a customer problem might seem an incredible expense, but this policy was introduced when the hotel chain realised that their average customer spends $250,000 with them over their lifetime. That $2,000 suddenly seems a bargain compared to the risk of losing a valuable customer. Be sure to work out the value of a customer or types of customer, and attribute a cost for client service against this value.
  • Solve it quickly – make sure that customer questions and complaints are dealt with promptly, and monitor how quickly your business responds. Quick and knowledgeable answers to questions helps a customer feel confident buying from you, while quick responses to complaints will keep customers happy.
  • Go the extra mile – surprising and delighting customers by doing the unexpected can keep a customer for life. You can delight customers with simple tactics, such as including handwritten notes, sending unexpected gifts to say thanks, and remembering important dates such as birthdays or anniversaries when they first became a customer.
  • Keep in touch – the key to all the above points to make sure you keep in touch with customers, beyond simply a transactional relationship. Sending emails with advice and tips on are a good tactic, although resist the temptation to use them as a marketing tool to just promote your products.

How do I measure customer service?

Knowing how your service is being experienced by customers is vital for businesses.

According to Ruby Newell-Legner in Understanding Customers a typical business only hears from around 4% of unhappy customers – the other 96% simply don’t voice their complaints.

Alarmingly 91% of those unhappy customers vote with their wallet and simply take their business elsewhere.

Knowing how your service is performing is essential for any successful business.

Depending on the type of business that you’re running there are different kinds of metrics and methods for measuring how effective your customer care is.

Ways to measure customer support include:

  • Call monitoring – if your business involves customers calling your business or getting advice from staff on the phone, make a habit of listening into calls or playing back recordings. You’ll need to inform customers that calls are recorded for training purposes and use them to create a checklist that staff can follow, such as not interrupting the customer when they’re talking.
  • Customer surveysasking customers about the service they get from your business is useful. You can ask direct questions such as “How well did we handle your complaint?” and “How would you improve how we handle complaints?”
  • Time measurements – customers want problems solved quickly so measuring how long it takes to resolve issues can give some understanding if this is a weak area of your business. Measure how long elements of the service journey take – such as how long a customer has to wait until the phone is answered or how many customers abandon their call before you’re able to answer them – and then set targets to improve the scores.
  • Count complaints – at a basic level noting the number and type of complaints your business gets is very useful. Record and track complaints to see how they change over time and look at the areas people are complaining about.

Using a Net Promoter Score

A quick and easy way to measure customer care is to use a Net Promoter Score – a simple system that at a basic level gives your business a score out of ten.

It’s a score given by customers in response to the question: “How likely is it that you would recommend our company to a friend or colleague?” Customers scoring 9-10 are called promoters – they tend to buy more products from you and remain longer as customers.

Those scoring 7-8 are known as passives and can be developed into promoters.

A score of 0-6 is given by customers who are detractors – they are less likely to continue being valuable customers.

The trick to measuring your customer care is to understand what makes the promoters happy with their interactions with you and where it’s going wrong for the detractors.

A NPS score helps you identify promoters and detractors and adjust your communications and relationship with them accordingly.

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Disclaimer: While we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.

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