One of the most important focus areas for any small business should be providing excellent customer service.
Great customer service is vital when it comes to growing your business. Why? Consider these facts:
- 96% of customers say customer service is important to their choice of which company to buy from
- 50% of customers give a brand up to a week to respond to their inquiry before they stop doing business with a company altogether
- 48% of customers give companies 24 hours or less to respond to their question or complaint via social media
- After receiving a personalized recommendation from a brand or business, 49% of customers purchased a product they did not initially intend to buy
- 88% of customers are influenced by online customer service reviews when they are deciding to buy
- A positive experience with a brand is more influential than great advertising for 65% of U.S. customers
- 89% of buyers began doing business with a brand’s competitor after a poor customer experience
- 32% of customers would stop buying from a company they loved after one bad experience
Excellent service builds loyal customers who provide word-of-mouth advertising on behalf of your small business, spend more than they initially intended, and stick with your company long-term.
Conversely, when your customers receive bad or lackluster service, they tell 15 friends (on average) about their bad experiences and take their business to your competitors. When it comes to bad service, most customers hold a grudge. Often forever.
Below, you’ll find some common customer service opportunities and challenges for small businesses like yours and our 13 top customer service tips to help your small businesses retain customers.
Let’s dig in.
The Importance of Customer Service for Small Businesses
As customers ourselves, we already know why customer service is important for any business.
Who among us hasn’t had a frustrating experience that wasted our time, made us feel like a credit card number rather than a person, or didn’t solve our problem?
Unfortunately for some small businesses, customer service is often an afterthought, far down the list of priorities after focus areas such as marketing and accounting. That’s a mistake.
While there are some areas of your small business you can scale as you grow, creating a positive customer service experience isn’t one of them. Prioritizing and planning for exceptional customer service is one of the smartest investments you can make in your small business. Why? Excellent customer service:
- It is critical to attract and retain customers
- Increases the lifetime value of your customers
- It saves your small business money
- Provides real-time, real-life insights to help you improve your product, marketing, and/or services
Why is it so important to retain your existing customers? They spend more, for one—a lot more. A McKinsey study reported that eCommerce spending for new customers is, on average, $24.50, compared to $52.50 for repeat customers.
In addition, effective customer service lowers customer churn rate (how quickly your customers become your competitors’ customers.) This is important because your small business will spend significantly more to gain a new customer than to keep an existing one happy.
In addition, great customer service can improve your company’s brand awareness and turn your customers into evangelists for your business. Those customer referrals are more likely to convert new prospects into buyers than any other marketing or sales strategy.
According to an Accenture global customer satisfaction report, price is not the primary reason for customer churn — poor customer service is. Focusing on providing excellent customer service will keep your customers coming back and help you attract some of your competitors’ customers as well.
What Are the Qualities of a Strong Customer Service Team?
Understanding the qualities of a strong customer service team is vital to creating one for your own small business. Below are the most important skills your customer care team should embody.
Every day your service team will encounter many different types of customers ranging from happy and satisfied to inquisitive to frustrated and/or angry.
Dealing with happy and satisfied customers is generally a positive experience on both sides. In this instance, your team member will thank the customer for choosing your business and let them know they are willing to help if your customer has any challenges using your service or product.
It becomes more challenging for your team members to demonstrate professionalism when dealing with frustrated or angry customers. An effective team member should show poise, confidence, patience, and a willingness to help to show your customers that your small business respects, cares about, and values them.
Good Listening Skills
No customer likes to feel as though they are not being listened to. In fact, poor listening skills can often turn a small or medium-size problem into a big one.
Small businesses that wow their customers have excellent listening skills, allowing customers to feel heard and validated.
In addition to great listening skills, one of the most important characteristics your customer care team members can have is patience. While customer service can be a highly rewarding position, team members naturally inclined to be patient are especially talented at making customers feel heard and valued.
The most effective customer service teams have a people-first attitude. This means the customer is prioritized as the center of the entire teams’ operation.
Instead of viewing the customer as a sale or a problem to be dealt with, the people-first attitude ensures your customers feel heard and valued when they make a purchase or express a concern.
Your customers know when they matter to you – and when they don’t.
Training to Handle Complaints
Your business’s customer care team should be trained to handle customer complaints professionally and with empathy.
Excellent customer service means following up with your customers to learn:
- Did the solution you recommended work?
- What was their experience using your website, product, or service?
- What made your customer unhappy in the first place?
- Was their frustration or concern resolved appropriately?
Following up later to ensure your customers’ problems were resolved lets them know that you care about them and want them to have a great experience with your small business.
Customer Service Strategies
There are a wide variety of ways to delight your customers. Below, you’ll find six proven strategies to build a rock-solid customer care team.
1. Small Businesses Have the Opportunity
Small businesses have the opportunity to build a customer-focused company from the ground up and provide extraordinary customer service from day one.
This flexibility allows you to take a customer-centric approach to everything you do from the very beginning, rather than trying to manage and retrain hundreds or thousands of employees.
2. Do What Competitors Can’t or Won’t
One way to differentiate your small business in the minds of your customers is to go to great lengths to solve their problems or show them that they matter to you.
3. Invest in Customer Service Early
As you are building your small business, there is always a lot of focus on gaining new customers, but often less attention is paid to keeping them. While most businesses understand the importance of excellent customer service, it is often back-burnered in favor of customer acquisition.
However, when you look at customer spending and retention data, it is clear how important customer service is to your business’s success.
4. Involve the Whole Company
Amazing customer service should be the responsibility of every person who works for your business. Of course, your team members’ roles will be different, depending on your business and the skill sets of the individuals in your company. The key is to communicate that customer service is everyone’s job to every employee.
5. Audit Your Customer Service Processes
Once your customer service processes are in place, you’ll want to make sure that you are auditing them regularly to take advantage of new opportunities to delight your customers.
Auditing your customer service processes helps you spot areas that are not working as well as you would like them to and make improvements.
Stellar customer service requires a bit of trial and error. Some of your efforts will be more effective than others, which is to be expected. That said, you will want to limit the resources you spend on the processes that don’t work. In addition, customer service strategies working today may not work for your business months from now.
Regularly auditing your customer service processes helps you provide the most effective and efficient ways to resolve issues and delight your customers.
6. Listen to Your Support Team
Your customer support team speaks with your customers daily. They hear how customers are using your products and are familiar with the challenges they face and their successes.
Yet, when businesses seek to better understand their customers, they often rely on their marketing team rather than the people inside the company who speak with their customers every day.
Your customer support team is one of your company’s greatest resources to build better products and do better marketing. The most successful small businesses leverage that resource.
Top 13 Customer Service Tips
Now that you understand the importance of providing excellent customer service to the long-term viability of your business, here are 13 of our top customer service tips to help your small businesses retain and delight your customers.
1. Decide Which Channels You’re Actively Going to Cover
Most customers expect an omnichannel approach to customer service, meaning you are available not only on your website but also in the places they prefer to be, including Twitter, Facebook, and Instagram. While it is important to meet your customers where they are, it can be challenging to manage multiple social media platforms.
It’s a better strategy to provide excellent customer service on fewer channels than to provide lackluster support on every channel because your customer service staff is stretched too thin.
An outpost strategy can be an effective solution to this problem. Provide excellent customer service on the channels where you feel you can be most effective. On the remaining channels, simply direct your customers to the places where you’re most active in providing customer service.
2. Create Self-Serve Content ASAP
Self-serve options, including answers to FAQs and tools such as AI chat, have quickly become the preferred support method for many customers. The self-serve options:
- Allow your customers to get help more quickly
- Reduce support volumes, and
- Allow your team to focus on more complex issues
You’ll want to ensure you review your self-serve content every 6 to 12 months to ensure the information is up-to-date and relevant.
3. Have Some Structure in Place, Even if it’s Basic
It is paramount to keep track of your customer conversations and issue resolution, or your customers may end up getting multiple responses or no response at all.
Someone on your team will need to be the primary person responsible for customer service. While your entire team should be engaged in customer service, at least one person should be making customer service a priority and steering the ship.
You will also want to set specific standards for customer service and create a way to measure performance to make sure you are meeting your goals.
4. Never Underestimate the Value of Your Current Customers
A customer may just be a number to a large corporation, but the customer is a friend and a building block for a small business.
One of the most effective client retention strategies to cultivate repeat customers is providing a top-notch customer service experience.
According to Harvard Business Review, acquiring a new customer costs 5 to 25 times more than retaining an existing one. Not to mention, you are 14 times more likely to sell to an existing happy customer than a new one, according to Marketing Metrics.
Finally, Frederick Reichheld of Bain and Company found that increasing customer retention rates by just 5% increases profits by 25% to 95%.
Can your business deliver 5% better customer service for that kind of return? How about 10%?
5. Be Present on Every Level
Your customers want their issues resolved right away, which means it is important for your team to be present, from social media to email and everything in between.
If your small business takes hours or days to respond to your customers via phone, email, or social media, they will feel neglected and unhappy with your services.
This is why it is critical to have an action plan for each specific avenue of communication and ensure every team member is on the same page.
6. Pay Close Attention to Customer Feedback
Make certain your customers have multiple ways and opportunities to share their opinions about your business.
You can do this by:
- Sending your customers a survey
- Inviting them to review you on websites including Yelp and Facebook
- Sending them a follow-up email to ensure their issue was resolved to their satisfaction
When customers feel that you are listening to what they have to say, they are more likely to give you an opportunity to resolve their issues and buy from you again.
7. Hire Employees with Excellent People Skills
No matter the position in your company, hiring individuals with excellent people skills is one of the most important decisions you will make for your small business. Your customer service representatives are the face of your business, and it’s important to put your best face forward.
While employees can be trained to develop better people skills, it’s an easier road if you simply start by hiring people with those skills from the start.
8. Learn to be a Pro at Problem-Solving
You’ve probably heard the old expression, “The customer is always right,” which is still true today.
Who’s actually right and who’s wrong is not important. Finding your customer a solution to his or her problems is what’s important and is most likely to make a positive impact on your bottom line.
Pride has no place in customer service. Even if your customer is wrong, they have invested their time and money in your business and want to reach a solution.
The job of every person in your small business is to make certain they find the solution they’re looking for.
9. Don’t Make False Promises or Guarantees
Nothing feels more frustrating for your current or potential customers than a click-bait offer or a promotion with multiple stipulations in the fine print. If your company is honest and upfront about your promises, your customers will be happier and more satisfied.
10. Treat Your Employees the Way You Expect Them to Treat Your Customers
This may be the most overlooked secret of extraordinary customer service. As a small business owner, you should treat your employees with the same respect, transparency, and appreciation you would want them to treat your valued customers.
The happier and more valued your employees feel, the more dedicated they will be to the success of your small business.
11. Know Your Customers
When we know our customers’ pain points, we can provide them with products and services to ease that pain. This leads to higher sales, more sales, and better customer retention.
In addition to listening to what your customer service representatives have to say, provide your customers with an opportunity to give feedback, submit ideas for new products, and suggest changes to existing ones.
12. Reward Customer Loyalty
Repeat customers spend as much as 67% more in their third year of buying from a business than they do in the first six months.
Keeping your customers happy means rewarding the loyalty they have shown your small business. A few ways to thank your customers include:
- Rewarding customers to refer your business to friends or associates
- Inviting your best customers an early look at new product releases
- Offering a discount on products and services for customers who hit a specific spending goal, such as 20% off your next purchase when you spend $250, and
- Providing your customers with a loyalty card that allows them to get a free item after a set number of purchases
13. Go Beyond What is Expected
One of the best ways to provide excellent customer service is to go beyond what is expected.
A great example of this is the story of Joshie the Giraffe. Joshie’s young owner was distressed to discover he’d left his beloved stuffed toy at the Ritz-Carlton in Amelia Island, Florida. His father soothed the distraught child by telling him that Joshie had stayed a few extra days at the hotel for some rest and relaxation.
The father explained the predicament to the Ritz-Carlton staff, who not only located the missing Joshie the giraffe but sent him back to his owner along with a photo album documenting his extended stay at the Ritz-Carlton:
- Wearing sunglasses by the pool
- Getting a massage at the spa
- Driving a golf cart
- Making friends with other stuffed animals
- Enjoying his new temporary position and ID badge as an honorary member of the staff
The photos and story went viral, reinforcing the Ritz-Carlton as an exceptional customer service brand. The family has practically shouted from the rooftops how impressed they were with the staff and have vowed to return to the hotel again.
It is likely that the employees who made sure Joshie was sent safely back to his owner and put together the photo album of Joshie the giraffe’s “vacation” enjoyed what they were doing – so much so that they went the extra mile for their customer.
The beauty of this story is that your business does not need to have the resources of the Ritz-Carlton to provide this level of service. Joshie’s human family became customers for life because of the care, creativity, and consideration of the Ritz-Carlton employees.
Scaling Support for Small Businesses
Understanding why customer service is so critical for your small business and delivering great service to your customers are both of paramount importance. But how do you put the ideas into action?
To provide the best possible service to your customers, you’ll need a great team.
Building a top-notch customer service team can be challenging as your small business grows. Below are three common ways small businesses scale their support teams.
1. In-house Customer Service
Your in-house customer support team is composed of your permanent staff, either full-time or part-time. This is the most common setup for small businesses.
The advantage to an in-house customer service team is that permanent employees have a deep understanding of your products, services, and business. The longer these team members are with your company, the more they continue to build knowledge and become more valuable assets to your business.
If your business has a complex product or works very closely with a small number of clients, in-house staff is generally preferable to outsourced staff.
That said, small businesses often start with providing customer service in-house but find they need additional support as the business grows or during busy seasons.
2. Outsourced Customer Service
Depending on your products and business niche, having all of your customer service staff be permanent employees may not make sense. This is especially true if you work in a seasonal industry or your small business serves international clients.
In that case, outsourcing some or all of your customer service is a practical solution. Outsourced staff are often less expensive than permanent staff because you do not have to pay additional benefits or spend time and money on hiring.
One downside is that outsourced staff may not be able to handle technical requests because they generally have less training. In addition, your outsourced staff may handle additional clients as well.
If you consider partnering with a potential customer service outsourcer, you will want to address these issues upfront.
3. Hybrid Customer Service
A hybrid customer service approach simply means utilizing in-house and outsourced customer service teams.
A hybrid team can be highly effective – utilizing a core staff of permanent employees to focus on more complicated and complex issues and outsourced staff to handle more basic requests and frequently asked questions.
The hybrid approach can also effectively provide service to your customers outside your home country.
The quality of your customer service is an effective barometer for the success of your small business.
Excellent service creates loyal customers who tell their friends and associates about your small business, spend more than new customers, and stick with your business for the long haul.
When businesses fail to provide good service, customers are quick to spread the word about their bad experiences and buy from your competitors instead.
If you treat your customers with empathy, kindness, and a sincere desire to help them solve their problems, your customers will help you build your business by rewarding you with loyalty and referrals.