Customer service is one of those phrases you hear in every industry, and it’s become a significant factor in whether a business thrives. In an age of global competition, the importance of customer support can be seen on your balance sheet. In this article, we will focus on using customer service as a differentiator for your small business.
You’ll see how to improve customer service and set your small business apart in your niche to gain more customers. Then, you can use these practices to grow a thriving company in a highly competitive market.
What is customer service?
Customer service is how you support your customers throughout the process of buying and using your products. Customer service is paramount whether you’re selling something physical like cosmetics, digitally based software, or something in-between like a bookkeeping service.
Why is customer service important?
Why customer service is important has many answers. However, it often boils down to the fact that your customers expect good customer service. If your business doesn’t deliver, customers will find an alternative no matter how innovative your product is.
“Customers remember the service a lot longer than they remember the price.” – Adage of Unknown Origin
Retain existing customers
Good customer service keeps your existing clients coming back, which obviously helps your small business’s bottom line. When you’re a small business, the cost of finding and converting a new customer is often significantly higher than retaining an old customer. So your first goal of customer service should be to keep your current customers happy and returning, then focus on converting new customers.
Convert new customers
Generally, consumers don’t find a business on the internet and decide that it’s the perfect option for their situation. Instead, potential customers research. Your customer service team touches many aspects of that process before the potential customer even talks with you.
The reviews people read about your company online factor into their decision to contact you. Even when people have a problem with a product, if they receive good customer service, it’s likely they’ll show that in their review. Good customer service leads to positive reviews and leads to more people giving your product a try.
Get referrals from great customer service
When your existing customers love your product and receive solid customer service, they will talk about it with other people and share it on social media. The trick is that the entire experience has to be recommendation-worthy, including customer support. Otherwise, your company will miss word-of-mouth recommendations.
Fewer price objections
Good customer service can also make up for your price point to a certain extent. In fact, many customers are willing to pay more for the assurance that they have support if something goes wrong. So while customer service shouldn’t dictate your prices, your customers do see it as a factor.
Customer lifetime value
A well-supported customer also tends to have a higher customer lifetime value. This number combines everything the customer buys, the referrals they provide, and more, which is then distilled into a dollar figure. Whether it’s knowing you’ll refund their money if they don’t like something or that your team will help with usage or problems, customer service is a vital factor in that.
Good customer service also serves a purpose in marketing. An excellent customer service record adds to your company’s reputation and trustworthiness. These traits, in turn, enhance the receptibility of your clients to your marketing messages.
How to improve customer service
Most companies learn how to best manage their customer service through trial and error. Unfortunately, as a small business, you’re not in a position to have as much error. Taking these tips on how to improve customer service can help ensure your small business offers stellar customer service at all times.
Define a value proposition
A value proposition is a statement about why your specific products and services are the best available to meet a particular group of customers’ needs. Developing a value proposition helps ensure consistent messaging from your customer support team.
For example, say you’re a small business that creates toys for children with special needs. Your value proposition could be something along the lines of fun and affordable for everyone. With that in mind, your service team knows what points to emphasize while serving customers.
Identify the core messages for customer service
Core messages are things you want people to know about your product and company. Identifying your company’s core messages involves some introspection. Your core messages are not necessarily features of your product.
For example, imagine you own a homemade candy company specializing in healthy options. Your core messages can involve the healthy nature of the products but can also emphasize the care that goes into each product and your cause, healthy eating for kids.
Be the role model
Establishing or changing your customer service processes is a challenge, especially in a small business where everyone knows everyone. It’s critical that you, as the business owner, act as the role model.
While you should not place yourself on a pedestal, generally speaking, you can spend time demonstrating what customer service initiatives look like. You can also demonstrate how to improve customer service using them.
Empower your customer service team
It’s standard practice to write up a series of policies, procedures, and rules for the customer service team based on best practices. However, these are often too restrictive for what the customer service team needs to best serve customers.
Empowering your customer service team can be as simple as taking their feedback, or it can be more complex, like mentoring and trusting the team with decisions. These aspects of giving your team control ensure that they can best serve customers.
Adapt based on feedback
Your customer care team is the front line of your business. They understand your customers and how to improve customer service. When you receive feedback from the team regarding things that could work better, it’s important to listen, consider, and adapt.
For example, if several team members tell you that the resolution for returns is clunky and burdensome on the customer, then that process should be examined. You might decide you do not need a specific step, which lets your team better help customers get what they need once you implement the new policy.
Proactive service offers benefits for both your products and customers. Being proactive means you’re working to solve problems and add features that benefit your customers before you start receiving feedback.
For example, if you have a bookkeeping service, you may notice that some of your clients miss some of their expenses for recurring needs. So you decide to start developing a system to catch when a payment is recurring so that your service more accurately reflects cash flow and customers can make more informed decisions.
Even with tireless devotion to your customers, something will eventually go wrong. Whether that’s a misplaced order, a bug in your system, or something else, taking ownership of the error can set your customer service apart from companies that try to cover up their mistakes.
With this, it’s a little more than saying your company apologizes for the inconvenience. Instead, your small business needs to acknowledge the error, make it right quickly, and actively ensure it doesn’t happen again if possible.
Making customer service a true differentiator
While every company is focused on customer service, you can still make it a true differentiator for your small business. Combining exceptional customer service with a few things customers have come to expect from the market is a great option for your business to stand out from the crowd.
In recent years, technology has allowed every company to access personalization for their companies. Your small business likely already has the capability through your CRM or ordering system but may not implement it everywhere you could.
While things like greeting customers by name may seem too simple, they do make a significant difference to the customer. Other items like keeping track of customer history provide the background to make it all happen.
One of the biggest options through personalization is allowing your team members to go off-script. From simple things like asking about their day to tailoring the accounting process, customers remember being treated like individuals talking to other individuals and not robots or script readers.
While it may seem like customer service is all about communication, taking this to the next level can become your key differentiator. Customers expect more communication since we live in an interconnected world and they expect it to be immediate.
In the United States, this immediacy affects everything from email inquiry responses to shipping. For your small business, having a response time compared to large corporations is not always possible. However, ranking yourself based on the level of communication you offer is possible.
The key is to communicate clearly, often, and with your brand voice throughout the customer’s journey. These three characteristics help your company stand out as much as letting your customer service representatives deviate from the script.
An omnichannel customer service approach is a great idea. It doesn’t mean you have to be everywhere but instead refers to offering customers contact options that are a seamless part of their experience.
Using omnichannel customer support either involves a robust CRM or a team that can write a little after each interaction. CRM is more common, even for small businesses, based on the volume involved and the amount of data entry it would take to get comparable results.
With omnichannel, a customer can raise an issue via phone call, follow up via live chat the next day, and receive a resolution via email, for example. Ultimately, it’s convenient for the customer and allows your team flexibility to achieve the best results.
Customer service is an expected part of business, especially for small businesses, and you should always look for new ideas on how to improve in that area. However, you can also turn it into a compelling differentiator for your business.
Your small business can stand out in crowded niches by providing customers with personalization, communication, and omnichannel availability. Without effective customer service behind these changes, your customers may decide to look elsewhere.