Good customer service can have many positive impacts on a business. For instance, a customer is more likely to return as a repeat buyer if they have a good customer service experience. Excellent customer service is a vital factor that can drive business growth to the next level. Let's take a closer look at its potential impact on businesses.
Good customer service definition
To understand what makes customer service 'good', let's first take a look at the definition of customer service.
Customer service is concerned with meeting customers’ needs at the highest level of quality. The term refers to the entire journey of a customer’s experience from the stage of pre-purchase, to purchase, to after-sales services.
To ensure good customer service, there are several factors to consider.
In terms of products offered, these factors include the quality and reliability of the products and the safety factors related to the purchase and consumption of the goods.
Point-of-contact service personnel, customer engagement, good product information, after-sales services, and the maintenance of the premises are significant factors affecting the quality of customer services.
Besides these factors, managing customers’ expectations is vital. This means that the company needs not only to sell a good product or service to attract potential customers, but also to keep its promise by meeting and exceeding customers' expectations.
Good customer service skills and methods
There are many ways a business can approach good customer service (see Figure 1 below), including:
Product: the product itself has to be of high quality to meet customer needs and increase customer satisfaction.
Reliability: the product and customer service team should be reliable.
Safety: the safety of the customer buying a product should always come first.
Customer engagement: the customer service team should engage positively with the customer. This may lead the customer to feel positive overall about the business and the service they receive.
Product knowledge and information: the customer service team should have outstanding product knowledge to be able to respond to all customer questions and queries. The product itself should also contain adequate information about ingredients, materials, usage, etc. as customers like to know exactly what they are buying. This is especially important for food products, where the labels should contain all nutritional information, ingredients, and allergy concerns.
Post-sales service: the business should provide after-sales services for customers such as user training, helplines, and servicing to make sure that customers are satisfied with their product. The business should deal with customer complaints quickly and effectively, and repair or replace faulty goods to make sure they meet customer expectations.
Premises: the business, especially if it's operating in the hospitality industry, e.g. a hotel or restaurant, needs to make sure that its premises are maintained and clean.
Different payment options: certain customers may want to pay in cash, whereas others might only want to pay with credit or debit cards. Accommodating different types of customers by having a variety of payment options is important to keep all customers satisfied.
Good customer service examples
Although there is a theoretical definition of good customer service, its details vary depending on the type of business you operate. This is because customer expectations vary depending on the type of business they decide to purchase from, and the services provided for the sale of a certain type of good or service can be different as well.
Examples of customer service when purchasing goods
Let's take a look at some examples of customer expectations when purchasing physical goods.
1. Fast-fashion clothing retailer
At a fast-fashion clothing retailer such as H&M, a customer is likely to expect to find the clothes and sizes they are looking for quickly, so they would expect staff to be able to quickly assist them with finding sizes or pointing them in the right direction when looking for a specific item. Also, for fast fashion companies, clothing is usually not expected to last too long, so customers have lower expectations of product quality and tend to have less interest in the materials of the pieces as well. As long as customers find the product they are looking for, are treated nicely by staff and find prices reasonable, the customer experience will likely be perceived as positive.
2. Luxury clothing retailer
At a luxury clothing retailer like Dior, customers tend to expect more from staff and products. Some customers may regard the clothing pieces they are about to buy as investments, so they might like to know more information about the product, including materials used, sources of the materials, or the after-sales services provided, such as alteration services. Staff are expected to be able to introduce and explain the goods in detail perhaps provide customers with styling advice.
In terms of post-sales services, customers may expect high-quality alterations and unique pieces. In this situation, customer expectations of the service are higher, as they are paying high prices for products. Luxury clothing sales associates might be expected to lead the customer throughout the purchasing journey, including providing a variety of information on the clothing piece, showing different colours/materials, giving recommendations and styling tips, and attending to all customer needs for the customer to perceive the service experience as positive.
Examples of customer service when purchasing services
Purchasing services may also be interpreted as purchasing experiences. In these cases, it is often difficult to assess quality in an objective way due to the intangible nature of a service. Let's take a look at some examples of purchasing services.
1. A hostel
At a hostel, guests tend to look for affordable accommodation and quick access to the city centre. They might also look for basic utilities like wi-fi, kitchenware, or a place to work at affordable prices. Guests may often also be solo travellers or intend to stay for only a couple of days and look mainly for access to local travel services and famous sights. In this case, staff can provide good customer service by knowing the local transportation and leisure services well, so they can provide useful information to guests efficiently. On the other hand, they might not be expected to have in-depth knowledge about other hospitality services.
2. A luxury holiday resort
A luxury holiday resort may be located away from the city centre, and guests might have higher expectations of the type of service they receive in the resort. Guests in these circumstances tend to expect the resort to provide a full set of services including accommodation, dining, activities, and other leisure experiences.
To provide good customer service staff are likely expected to have a full range of knowledge about the resort, local activities, and food and beverages; provide exceptional dining experiences; maintain an exceptionally clean environment; and provide customisable services for each guest.
In addition, compared to the customer service at a hostel, staff at a resort may be expected to perform in a different manner, and the quality of customer service, rather than the speed, may be key here.
The importance of good customer service
Good customer service can eventually reflect positively on the business's performance.
On one hand, good customer service can help the business improve its competitiveness and make it stand out from its competitors. Good customer service will also increase customer satisfaction. A high level of customer satisfaction can lead to various other benefits for the business (see Figure 1 below), including:
Repeat customers - satisfied customers will be more likely to come back to purchase from the business.
Increased customer spending - satisfied customers will be more likely to buy more from the business or try other products and services offered by the business.
Profitability - if customers are returning more often and spending more money on average, the business will turn a higher profit.
Attract new customers - satisfied customers may share their positive experiences with the business with family friends or even on social media.
Increased market share - if more and more customers purchase from the business, its market share will likely increase.
Customer loyalty - businesses that meet customers' wants and needs will attract a loyal customer base (customers will prefer the brand/product over competitors' offerings).
Fig. 1 - Results of High Customer Satisfaction
Each advantage mentioned above should not be taken individually but as part of a continuous cycle of offering good quality customer service.
For example, by offering detailed information and high-quality food and providing good quality service at a restaurant, customers might be motivated to visit the restaurant again. Having a good customer experience might also lead to positive word-of-mouth, whereby customers may want to bring their friends and family to the restaurant in the future. This also leads to increased customer loyalty due to the presence of returning guests. As a result, the profitability of the restaurant may increase.
Customer service quality
On the other hand, when customer service is poor, the business will face various consequences such as:
Dissatisfied customers
Loss of repeat and loyal customers
Issues attracting new customers
Poor reputation due to negative word-of-mouth
Reduction in revenue
Loss of sales and profit
Additional costs.
Therefore, to maintain loyal customers and maximise profit, businesses should always aim to provide good customer service. If good quality customer service is not achieved, the business risks losing loyal customers and may even put its reputation at stake.
Good customer service - Key takeaways
- Customer service is concerned with meeting customers’ needs at the highest level. It refers to the entire journey of a customer’s experience from the stage of pre-purchase, to purchase, to after-sales services.
- Factors contributing to good customer service include the product itself, reliability of the product, safety, customer engagement, good product information, availability of different payment methods, and after-sales services.
- Having good customer service is important for improving the competitiveness of the business, which will therefore enhance its ability to gain market share and new customers. It also helps the business to strengthen its customer loyalty and raise its profitability.
- The risks of having poor customer service include:
- Dissatisfied customers
- Loss of repeat and loyal customers
- Issues attracting new customers
- Poor reputation due to negative word-of-mouth
- Reduction in revenue
- Additional costs.
- Causes of poor customer service may include poor resource management.
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