What is Customer Service? Definition, Qualities and Tips

What is Customer Service? Definition, Qualities and Tips
Understand what is customer service and its importance. Find out 10 ways to provide great customer service. To know more, visit Square.
by Square Mar 07, 2022 — 5 min read
What is Customer Service? Definition, Qualities and Tips

One of the most important responsibilities you have as a business owner is deciding which areas of your business to invest your money in, and the most tempting areas tend to be those that offer obvious returns, like advertising and marketing.

It’s true that marketing is key to business growth. But it’s also true that acquiring a new customer can be five times more expensive than retaining an old one. And the key to customer retention doesn’t lie in advertising – it lies in creating an positive experience through great customer service.

In this article we’ll be taking a deep dive into customer service; its meaning, why it’s important, what great customer service looks like, and how to deliver it.

What is customer service?

In terms of a broad customer service definition, it is the support you offer your customers both pre-and post-purchase.

The look and feel of customer service will change depending on your business and industry: whether you offer products or services, whether you operate as a B2B or B2C business, whether your store is online or brick and mortar.

No matter the size and shape of your business, customer service’s meaning, the reason you do it, remains the same: you want to offer the customer the easiest, most pleasurable and most enticing experience possible – one that will see you not just retain your customers, but create a group of truly loyal brand ambassadors who will buy from you regularly, and who will spread the good word to family and friends.

Where the customer experience was once limited to in-store experiences and the occasional phone call, modern customer service can be delivered in a wealth of ways, including email, text messaging, live chat, social media and video calls. It’s also about offering ways for customers to help themselves, like self-service portals where customers can find the answers to the questions they have at any time of the day or night.

Customer service represents the most direct connection between your customers and your brand. It is therefore as worthy (if not more worthy) of investment as any other part of your business.

5 reasons why customer service is important in business

Why should you invest in customer service? The reasons are many and varied, but here are five of the most compelling:

1. Retaining customers is cheaper than acquiring customers

As mentioned above, when all the costs are accounted for, it’s around five times cheaper to retain a customer than to find a new one. Repeat customers also spend 3x more than new customers, making them even more valuable. All told, increasing customer retention by just 5% can increase your bottom line by an incredible 25%!

2. Customer service can make (or break) your brand

We live in the age of social proof. Whether shopping for an Airbnb, looking for a restaurant, or hunting for a tradie to fix your taps, your gaze instantly goes to their online rating. The fact is that customers are more willing to share bad experiences online than they are to share good ones, and providing subpar customer service is the quickest path to a one-star review, which can affect your business for months or more. The opposite is also true: good customer service = five-star reviews = growth.

3. You can charge a premium for good customer service

With many businesses caught in a race to the bottom, cutting costs wherever possible to charge the lowest price, higher-end services are coming back in vogue. According to CEI, 86% of buyers would pay more for better customer service, though just 1% said that businesses consistently meet their expectations. This second number is good news, as it shows there is an incredible opportunity for those willing to make the necessary investment.

4. Happy customers attract more happy customers

The very best type of customer service is that which delivers an experience that sticks long in the memory for all the right reasons. These experiences are so enjoyable that many customers will feel compelled to share them, backed up by the fact that 72% of customers will share a positive experience with six or more people. Many of these will feel compelled to write an online review. Not only are happy customers your most effective salespeople, you also don’t have to pay them a cent!

5. Good customer service builds team morale

The blame for bad customer service doesn’t tend to lie with the representatives – more often it’s a symptom of a badly run company, and for workers, there’s nothing worse than going to work knowing you’ll be yelled at. If you invest in doing things right across your business and make a similar investment in your customer service team, everyone will be better for it, and you’ll grant yourself the opportunity to attract and retain the very best workers. Just as happy customers attract more happy customers, happy customer service reps attract more of the same.

What does good customer service look like?

Getting a clear picture of good customer service is difficult because different businesses will approach it in different ways. But in broad terms, good customer service:

10 ways to provide great customer service

1. Be friendly and personable

Sure, it might seem so basic that it doesn’t need to be said, but the tone of your customer service is so important to its success that it bears repeating. Your customer service must always stay friendly and personable, no matter the situation.

2. Be honest

Customers can tell when a representative is making things up on the spot. Hearing “I don’t know, but I’m going to find out” is far more reassuring than hearing something that has obviously been made up on the spot. Honesty is always the best policy.

3. Be empathetic

Your team needs to be able to put themselves in the customer’s shoes. This allows them to come from a place of understanding rather than apathy or belligerence. A business that has a culture of apathy cannot be successful. Empathy is a serious competitive advantage.

4. Have deep product knowledge

Training is critical if your customer service team is to offer the support they need. Train your team on the products and services you sell, and make sure they know them inside and out.

5. Focus on efficiency

While timely responses are arguably the defining feature of great customer service, there are only so many calls and emails a customer service representative can answer in one day… but with the help of technology, you can offer automated answers to the most common questions. Use FAQ pages, customer support portals, chatbots and automated emails to improve efficiency and communication.

6. Ask for customer feedback

How do you know how well you’re doing? You ask for feedback. A tool like Square Feedback solicits the opinions of customers in a private (and therefore more honest) way, giving you a clear picture of your current customer service situation.

7. Reward loyal customers

As we mentioned above, loyal customers are the most valuable customers. A key aspect of top-quality customer service is ensuring your best customers know just how valuable they are – a job that Square Loyalty has been expertly crafted to handle.

8. Take a team approach to customer service

Customer service isn’t just the responsibility of the customer service team. Everyone plays a part, particularly the other teams who have direct contact with customers. Ensure every team is trained in offering great customer service, and that other members of staff are ready to chip in when the customer service team needs help.

9. Measure, analyse, improve

The goal of your customer service team should be a constant improvement and the only way to ensure that is by tracking KPIs. Using a tool like Square Feedback, which offers deep customer service insights, allows you to measure, analyse and improve over time.

10. Invest in your team

None of the above is possible without investing the necessary money and resources. You only get out what you put in, so you need to ensure that your customer service team is appropriately funded.

While good customer service will never go out of style, it continues to be one of the most undervalued aspects of a successful business.

If you’re a business owner who wants to capitalise on the endless opportunity that high-level customer service represents, Square’s suite of service tools is ready to help you deliver it.

The Bottom Line is brought to you by a global team of collaborators who believe that anyone should be able to participate and thrive in the economy.


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