Is Customer Service Important?

Why is customer service important? The customer service is essential to grow and make a business profitable, as customers are vital to any business. It plays an important role to deliver products or services to customers.

The customer service is as important as the products or services of a company.

Customer is the most important visitor, because that is a source of income for a business.

A satisfactory service to the customers can help a business to grow rapidly and exponentially.

The customers’ satisfaction is the ultimate goal of a company and a customer service can help to increase that satisfaction.

The organisations should not overlook the importance of quality customer service.

The customer service builds a bridge between an organisation and the customers. Better the services, better and strong the link between them.

The role of customer service is equally important in business-to-business and customer-to-business (retail) environment.

What is Customer Service?

Customer service refers to an interaction between a representative of a company and a customer or consumer.

In other words, customer service is assistance, and advice provided by the representatives of a company to a customer, who wants to buy the product or uses a service of the company.

It starts from pre-purchase and goes beyond post-purchase. Some organisations also provide services after or post-purchase of the products.

You can find many other definitions of customer service, but the core subject will be similar.

It is basically an interaction between representatives of an organisation with customers to provide and deliver quality service, and assistance, before, during, and after meeting customers’ requirements.

Organisations also use other terminologies for customer service such as customer care service, customer support service which are more or less similar.

Also read: Communication Skills with Customers

Barriers to Excellent Customer Service

There are some barriers that prevent organisations from providing good customer services: They include

1. Failure to resolve customer’s complaint
2. Failure to listen actively to customers
3. Not identifying the causes properly to fix problem
4. Restricting the communication channels for customers that can be used by them to make a contact
5. Failure to define exactly what constitutes a customer’s complaint

The Importance of Customer Service

In this competitive era, producing products is easy but to sell them can be difficult and tough.

The organisations should not overlook the importance of excellent and quality customer service.

They must ensure satisfactory customer services to achieve goals and make business profitable.

Customer service can help businesses in many ways to grow and achieve desire goals and profits. That’s why customer service is important.

Poor customer services can be damaging for business and may cause bad customer experience.

Here, I highlighted the importance of customer service to flourish business.

1. Retention of Customers

For businesses attracting customers can be challenging, but retaining them for a long time can be more challenging.

The quality of products or services is an important factor to attract and retain valuable customers.

Customer service is important when it comes to retaining existing customers.

Organisations should not underestimate the role of quality customer service in retaining customers.

What is Customer Retention?

Customer retention means the ability of a company to retain existing customers for a long time.

In other words, it refers to engage existing customers to continue to buy your products or use your services.

Organisations use different actions and strategies to make customers continue to buy products or use services.

The businesses must ensure excellent customer services to increase customers’ retention.

When the customers’ retention increases, they are more likely and willing to spend on the company’s products.

To retain existing customers is less expensive than getting new customers.

Poor customer service can result in decreasing customers’ retention even if the quality of the product is satisfactory.

The customer services provided by an organisation really matter and play an important role.

Loyal customers will return when they experience good customer service.

The quality of your products or services may attract a lot of customers, but excellent customer services help to keep them.

2. Word-of-Mouth

Word-of-mouth has the power to flourish and benefit your business. People pass word-of-mouth about the products or services they use.

Happy the customer, the more they recommend your products to others.

Good customer service can help to make customers to pass positive word-of-mouth to family members, friends, co-workers, and other people around.

If the customers experience good customer service, they will share a positive experience with others.

An excellent customer service team is essential to satisfy and exceed the expectations of customers. And there are more chances a satisfied customer will refer the products to others.

The organisations can use word-of-mouth as advertisement or publicity, but they have to give a strong reason for doing it.

You can turn your existing customers into product promoters or advocates. And here comes the role of effective customer services.

With the help of customer service representatives, you can make customers your sales representatives by passing word-of-mouth.

3. Customer Service as a Differentiator

Quality customer service can make a huge difference. It can differentiate your business from others.

Many organisations produce the same products and there is high competition among them.

In this kind of situation, how do you treat your customers can make a difference.

Customer service becomes a differentiator when you serve your customers much better than your competitors.

Customers’ satisfaction can be a major differentiator. A satisfied customer is a sign of good quality and customer service.

The businesses must train their customer representatives to ensure great services, which in turn will lead to great customer experience.

A well-trained customer service team can make a huge difference in the cutthroat competition among companies.

4. Builds Reputation of Business

Business reputation plays an important role in getting higher profit and growth.

Reputation takes a long time to create but takes less time to destroy it.

Organisations consider reputation as important as other tangible and intangible assets.

Customer service can help to improve the reputation of any business. A good reputation attracts customers.

People also use corporate reputation, brand image, corporate image, etc as synonyms for reputation.

Your customer service representatives connect your business with customers. They represent your brand image or corporate image to customers.

Without a customer service team, an organisation has no means to communicate directly with customers.

Therefore, here comes the importance of customer service. They can influence customers for products or services.

There is a positive relationship between a company’s reputation and customer satisfaction.

Effective customer service creates positive customer experiences and that experiences turn into positive reputation of the company or business.

5. Adds Value to Product or Service

Producing a quality product or service is a half battle and good customer service is also important to win over competitors.

A quality product or service united with quality customer service increases the value of that product or service.

And the combination of these two will translate into increased revenue.

People will happily pay for a product or service if it comes with excellent customer service.

6. Provides Insights about Customer Experience

Organisations need marketing and sales strategies to sell products or services to make a profit.

For that, they have to know what exactly the customers need and what they like. Once you know the needs and choices of the customers, it becomes easy to make a strategy.

Sometimes, organisations spend a lot of time and money on making surveys to customers.

An excellent customer service team can be helpful to get information from customers. And also it will help to decrease the cost of surveys.

Organisations can use their customer service teams to ask questions from a customer which is important to form a strategy.

Customer service representatives can provide the organisation with a better insight into the customer experience.

7. Decreases Business Failures

Many businesses shut their doors because of poor customer services.

As mentioned before producing just products is not enough to make a profit, but you need excellent customer services.

When businesses don’t address customers’ problems and issues in an effective way, it causes frustration and leads to business closure.

To prevent business failures, they must ensure great customer services for treating customers effectively.

A focused customer service team has to focus on the problems of customers and resolving those problems to create a good relationship with them.

Customer service representatives should answer the customers’ queries and follow up on those queries to increase customers’ satisfaction.

8. Increases Customer Lifetime Value (CLTV)

Customer lifetime value, Lifetime Value (LTV), or Lifetime Customer Value (LCV), is the expected amount of money or revenue a customer will generate for the business.

For a business, it is an important concept to understand how much a customer is expected to spend.

If the CLV of a customer is increasing, it means that a customer is buying more or spending more money at the business.

The customer service team is a way to increase customer lifetime value.

If the representatives treat the customers in a better way, they will have a good experience and that will make customers spend more, and this way it will increase CLV.

Increasing customer lifetime value means generating more revenue.

9. Competitive Advantage

Whatever is the industry, every company there wants to get a major share in the market, and also to achieve a competitive advantage.

In this competitive environment, it will not be easy to achieve a competitive advantage over competitors.

But, excellent customer services can be an important factor to help organisations achieve competitive advantage.

It increases the customers’ loyalty and makes them interact with the company’s products again and again.

A customer served with respect and integrity will continue to spend money on your products and that can lead your business to a competitive edge.

Final Thoughts

Businesses should not overlook or underestimate the importance of customer service.

It helps the business to make a profit and achieve a competitive advantage.

It enhances the productivity, performance, company’s image, and as well as the value of brands.

Frequently Asked Questions (FAQs)

Why is customer service important?

Customer service is important in many ways. As mentioned in the article particularly helps in retaining customers. And you can refer to other reasons in the article.

What are the 3 things the most important in customer service?

I think these are the most important things:

1. Active listening
2. Patience
3. Empathy

What is the most important part of customer service?

I think the most important part is active listening, and then flexibility.

What is the importance of customer?

Customer is the entity which brings money or revenue to a business. Cash flows from a customer to a business.

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