A successful business needs more than just a quality product or service. In fact, quality service is often what attracts and retains loyal customers.
What is “good customer service”?
Not everyone has the same definition of “customer service,” let alone a consensus of what makes it “good.” Here, “customer service” means any interaction between a company and its customers, from direct real-time contact with a representative to static written information on its website. Each individual interaction in turn builds an overall “customer experience.”
“Good customer service” is what happens when a customer has a question, problem, or task that is effectively answered, solved, or performed in a way that leaves the customer satisfied.
Why is good customer service important?
Besides the intrinsic satisfaction that comes with having happy customers, good customer service also has a financial incentive. Satisfied customers translate into customer loyalty, word-of-mouth referrals, and increased revenue over time.
In fact, many analysts claim that quality customer service has a bigger return on investment than marketing. After all, good customer service requires only a little extra effort but has an immense payout in the form of increased customer retention.
As for why good customer service has such a major effect on retention, Joanna Lord at Entrepreneur explains that it triggers the social rule of “reciprocity.” Treating customers well creates the feeling that they “owe” something to the company, a feedback loop that fosters brand loyalty.
And, for a striking example of the importance of customer retention, take a look at Adobe’s analysis of its online sales. While 41% of Adobe’s web revenue comes from repeat customers — people who make three or more purchases over time — this group represents just 8% of all visitors. This illustrates why keeping existing customers happy should be as much of a priority as reaching out to new ones.
Understanding Customer Service
This quick rundown by Learning Heroes summarizes why good customer service is important, how bad customer service hurts your business, and strategies for improving the way your company handles customer service. It features additional statistics and examples businesses can use to create happier customers.
But doesn’t everyone strive for good customer service?
Although its importance may seem like common sense, that isn’t what’s reflected in the research. One report by the Economist Intelligence Unit found that, although 84% of companies surveyed viewed good customer service as important to financial success, very few actually prioritized customer service in practice.
What happens when customer service is poor?
Customers rightfully expect good customer service. When customer service drops below expectations, it cultivates a bad customer experience. Customers who have been on the receiving end of bad service avoid the offending business for years.
Despite the consequences, bad service is pervasive. One Consumer Reports survey found that half of those surveyed had left a store without making their intended purchase due to poor service. And that wasn’t over the course of the consumers’ lifetimes; that’s how many had the experience during just the previous year.
Just much revenue has your business lost to bad customer service?
But you don’t have to overdo it.
Keep in mind that good customer service is key; not over-the-top service. According to a study conducted by the Corporate Executive Board (now CEB Inc.), exceeding customer expectations with things like free services, refunds, and complimentary products made customers only slightly happier than simply meeting their expectations. When it comes to customer service, “good” is much more cost effective than “great.”
What traits does good customer service have?
While there is no truly effective one-size-fits-all approach to customer service, some strategies satisfy the vast majority.
1. Excellent first impressions
People make judgments within seconds of meeting someone, a truism backed up by research. Dr. Philip McAleer, psychologist at the University of Glasgow, has demonstrated its extremes: In one study, participants agreed on personality traits of strangers from recordings of just the word “hello.”
These judgments may not always be accurate, but they color all subsequent interactions with a person — or the company they represent. A good first impression will help make sure your first-time customers don’t end up one-time customers.
Sales associates and customer representatives should remember that each new customer is an individual. Employees may see hundreds of customers every day, but each customer only sees the face of a company for the first time once. It doesn’t matter to that customer if your service is “usually” on point, so ensure that “usually” is an “always.”
2. Quick follow-up
It’s important to have a general respect for your customers’ time, and this is one aspect of that philosophy. Be responsive!
For phone-based customer service, let’s break this down into a few specific points:
- Calls are answered as quickly as possible with little hold time.
- Customers experience minimal transfers to other representatives.
- Recorded messages are returned promptly. What “promptly” is depends on particular circumstances, but within 24 hours is usually acceptable. Urgent calls should be returned as quickly as possible.
For many industries, it’s become the norm to not return customer calls at all. Set your business apart by following what should be common courtesy.
3. Clear communication
Don’t overuse industry jargon, but try to keep customers well-informed. Explain technical details when asked and avoid dumbing things down.
When you don’t have the answer to a customer’s question, you have a few good options (and none of them are to just say “I don’t know”):
- If you have the time and resources, look the answer up.
- Find a coworker who knows the answer.
- Direct the customer to other resources that may be able to help. This is appropriate when a customer’s request falls completely outside the scope of your business.
Good communication also includes transparency. Be upfront about things that may make them unhappy but are necessary to know, such as return policies and shipping fees. Likewise, don’t overpromise or commit to something your company can’t fulfill.
4. Representatives who listen.
Whether on the phone or face-to-face, customers need to know they are being listened to and understood.
Make sure the customer has your undivided attention — and that they know it! Ask pertinent questions, occasionally repeating back information as part of your inquiries. When in person, maintain eye contact and nod when appropriate.
Remembering and repeating a customer’s name is an easy “in” that shows empathy and attentiveness, while forgetting or botching a name quickly leads to customer dissatisfaction. According to Dr. Philip Guo, Assistant Professor of Cognitive Science at UC, a person’s name is the “single most important word” for that individual. The customer should believe that it’s just as important to you, too.
5. Anticipated customer needs.
Knowing more about your customers helps you make them happier. Experienced sales associates and customer representatives can piece together probable narratives based on a little information, a solid customer service background, and a dash of intuition.
While personal experience is a great asset, data is also your friend here. Use it to figure out the answer to your customer’s next question before it’s even asked. For a popular example, determining which products and services are most often bought together and why is an effective strategy for need anticipation.
6. Extensive product knowledge.
Employees should know your company’s products even more thoroughly than they do your customers. This is one thing customer service training often gets right, but it doesn’t always sink in or get put into practice. Some employees may start out well but not keep up with new innovations and changes.
7. Pleasant, professional demeanor.
For some people, this is the definition of “good customer service.” Always treat customers with courtesy and respect.
How a customer feels they are treated frequently outweighs all other aspects of their experience. It won’t matter how effectively you solve a problem if you were rude while doing it. The customer is more likely to remember your rudeness than your technical expertise.
Good customer service professionals don’t let personal problems show in their customer service persona. Never take things out on the customer, whether through overt incivility or by not delivering your usual quality.
8. No canned phrases.
Customer interactions should sound natural. Most customers prefer an “authentic” social experience when speaking to representatives and sales associates.
As soon as a sentence becomes a retail cliché, it begins to alienate customers. According to marketing expert and author Steve Sammartino, good customer service avoids open-ended, oft-repeated questions, such as “Can I help you?” Instead, it uses observation to tailor openers to the specific customer and situation.
9. High adaptability.
Adaptable employees will never need to resort to clichés in the first place. They don’t need to think about making interactions sound natural or authentic; they already are.
A company itself also needs to be adaptable. To provide effective customer service, it must change with shifting demographics and new technologies.
Is a business process not satisfying customers? Change it. Are a customer’s needs different from what you assumed? Figure out how to address them, anyway.
This also includes using modern technological innovations when appropriate. As an example, many firms have found that live chat can reduce cart abandonment rates for online retailers. But if these innovations aren’t making customers happy? Drop them.
How can a business evaluate the quality of its customer service?
Customer service quality tends to correlate with the number of customer referrals, new customers, repeat customers, sales, complaints, and product returns. Analysts look for changes or patterns in these figures and how they relate to customer service practices.
Customer satisfaction surveys are a valuable qualitative tool but may need to be taken with a grain of salt. People are more likely to fill out surveys when they’re unhappy, less likely when pleased, are rarely when simply satisfied.
When using customer surveys, pay close attention to other statistics to make sure they’re in sync. Otherwise, you may try to address a problem that doesn’t actually exist, jeopardizing the effectiveness of strategies already in place.
What are some examples of good and bad customer service?
Now that we have a generic picture of what makes customer service good or bad, let’s take a look at some specific examples.
1. An aggressive, angry customer threatens to take their business elsewhere.
Good
The employee calmly asks the customer to explain the problem and what can be done to keep the customer. Then they work to find a solution. In many cases, simply trying to the best of one’s abilities is enough to deescalate a negative situation.
Bad
An employee with poor customer service skills explains that employees “don’t make the rules” or “can’t do anything about it” or transfers the call. Exceptionally bad customer service here escalates the situation by getting overtly angry in response.
2. A customer would like to purchase an item, but it’s either out of stock or the store doesn’t carry it.
Good
Here, good customer service is all about knowledge. The perfect sales associate knows whether the item is usually in stock, when shipments are received and the product may be back in stock, whether the store accepts rainchecks for sale items, whether the store does special orders, and/or a range of workable in-stock alternatives.
If the associate doesn’t know this information, they quickly find a coworker who does. If a coworker is unavailable, they offer to contact the customer later with an update.
Bad
Bad customer service is not only ignorance of the business’s products and policies but also leaving the customer’s problem unaddressed. A thoughtful but ineffective associate apologizes but ultimately offers no solutions to the customer’s dilemma. Exceptionally bad customer service is shrugging it off as the responsibility of another department.
3. A customer leaves a scathing comment on social media.
Good
In this case, good customer service is responding calmly and diplomatically. The company’s representative replies to the comment, expressing concern and asking for clarification about the problem. If the issue is a particularly personal one, they contact the customer through private channels.
Bad
Bad customer service is ignoring or deleting the comment. Exceptionally bad customer service is publicly flaming the disgruntled customer.
Sources:
- https://www.enkivillage.com/what-is-good-customer-service.html
- https://event.wavecastpro.com/returnonservice/service-2020-return-on-service/
- https://success.adobe.com/en/na/programs/digital-index/1209_13926_existing_customers.html
- https://stevesammartino.com/2013/05/21/can-i-help-you-why-retail-customers-always-say-no/
- https://www.salesforce.com/blog/2014/04/what-is-good-customer-service.html
- https://www.consumerreports.org/cro/magazine/2015/07/the-problem-with-customer-service/index.htm
- https://www.entrepreneur.com/article/228530
- https://www.pgbovine.net/on-names.htm
- https://hbr.org/2010/07/stop-trying-to-delight-your-customers
- https://www.npr.org/sections/health-shots/2014/05/05/308349318/you-had-me-at-hello-the-science-behind-first-impressions
