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  • Writer's pictureSsemujju Lewis E

Why Is Customer Service Important To An Organization?

Updated: Mar 28, 2023

Today's world is the most evolutional it has ever been, and customers are always expecting top-notch service from the organizations and brands they get in contact with.

Whether an organization provides customer service by phone, email, live chat, or social media, you ought to make sure that your customers enjoy the perfect experience, one that will make them leave good reviews about you. Many companies have gone ahead to provide self-service support so that customers can find their own answers at any time, day or night.

According to a study carried out by Hubspot on the state of customer service, a few realizations were made, and these are:

  1. Customer demand has increased. The level of service that might have been acceptable to a customer 10 years ago could now result in complaints. Customers are demanding answers in minutes, not days. They expect automated and self-service options, but they also want service staff to help with complex issues. And, they want every interaction they have with a business – whether it’s marketing, sales, or support – to be personalized.

  2. The customer service teams serve more value to the company. Customer service has always been a demanding job, and nowadays, it’s more challenging than ever. Customer service professionals are beginning to see themselves as the guardians of the customer experience. And, at a time when the customer experience is the key to growth, it becomes a differentiating value for many companies.

  3. Some companies mistake customer service for a cost center. What is more worrying is the growing number of companies that view customer service as a cost center. This goes against what consumers expect, as most prioritize a good customer service experience, which will make them stay with the company longer or recommend it. In the long run, it does not mean higher costs but more benefits.

Why should you have customer service?

1. Provide value to customers

When customers get in touch with your organization, they expect to get value for their time and money. Customer service personnel should treat customers well, answer questions, and exceed expectations while at it.

2. It is less costly

It is easier and cheaper to maintain and retain customers rather than set out to land new customers. An increase in customer retention of merely 5% can equate to an increase in profit of 25%. This is because repeat customers are more likely to spend more with your brand — 67% more, to be exact — resulting in your business having to spend less on operating costs.

3. Customer service represents your brand image, mission, and values

Much as you are acclimatized with your organization's mission and values, that is not the story with the customers. Customer service bridges the ignorance gap, informing the customer about what the organization is all about. Customer service is responsible for how the customer perceives your organization. In fact, 73% of customers say they stay loyal to brands because of friendly customer service reps.

A brand for a company is like a reputation for a person. You earn a reputation by trying to do hard things well.
Jeff Bezos (CEO of Amazon)

4. Increases revenue

Good customer service is almost always responsible for the increase in revenue. 84% of organizations working to improve customer service report an increase in revenue. While it’s harder to show the one-to-one correlation between customer service and revenue, customer experience analytics provide the framework.

5. Endorsements and referrals

One good turn deserves another. Customers who get a good treat are always willing to spread the word to their friends. Research shows that people often make purchasing decisions based on recommendations from family and friends vs. advertising messages. Here are four statistics:

  • About 97% of customers will tell others about very good or excellent customer service experiences.

  • Nearly 70% of people would spend more money with a company that has excellent customer service.

  • Approximately 24% of satisfied customers will return to a business two or more years after a good customer service experience.

  • Research shows that 59% of people would try a new company to receive better customer service.

6. Helps boost Customer Lifetime Value

Customer lifetime value is one of the core metrics to measure. It demonstrates the total revenue you can get from one client. If it grows, it means that a customer shops more frequently and spends more money on your business.

Improving customer service opens the potential for fine-tuning CLV. If a support team makes clients happy during their interaction, they’re more likely to come back for more. Besides, they can share their stories on social media, which builds rapport with your customer base.

7. Happy customer service, happy customers.

Stats show that 87% of employees who are happy with their jobs are willing to work extremely hard for their customers. Employees translate the energy they have at work into making their customers feel the same way. The disgruntled customer service personnel will have no interest in seeing anything good come from dealing with customers.

Final thoughts

Good customer service translates to a successful business. Success is the only result that makes everything worth it. Every organization needs customer service because customers need to feel appreciated to identify with an organization.

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