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What is customer service? Definition, importance, and tips

The ultimate guide to customer service: what it is, why it's important, and tips for improving it.

By Courtney Gupta, Customer Service Enthusiast

Published May 26, 2021 Last updated June 7, 2022

Customer service can make or break a business. But not everyone agrees on what it is or how to do it well. In this guide, we’ll share how to set your business up for customer service success.

The definition of customer service

Customer service is the act of supporting and advocating for customers in their discovery, use, optimization, and troubleshooting of a product or service. It's also the processes that support the teams in making good customer service happen. The objective of customer service isn’t just to find a quick solution to any one customer problem. It’s to build a long-term relationship, one where each customer interaction offers opportunities for deeper, more valuable engagement.

The main difference between service today and service 10 years ago is that customers expect premium service to be built-in from the first sales or marketing interaction and carry through to the moment they ask for help, post-purchase, and back again. To position themselves for success, businesses must integrate service into the journey at every interaction point.

Why is customer service important?

Customer service is now a key differentiator between companies, a top consideration for customers, and a profit-generating force in its own right.

And whether a company exceeds or falls short of customer expectations is often directly tied to business success. It’s a high-stakes game—61 percent of customers would now defect to a competitor after just one bad experience, according to Zendesk's 2022 Customer Experience Trends Report. That’s a 22-percent jump from the previous year. Make it two negative experiences, and 76 percent of customers are out the door.

Whether you’re a well-established firm or just starting to scale and grow, a successful customer service team can help attract new business, boost retention, and increase sales among your existing customer base.

Benefits of great customer service

For companies that succeed at wowing customers, the opportunities for growth are immense. It's impossible to overstate the importance of customer service.

  • 73 percent of business leaders report a direct link between their customer service and business performance.

  • 64 percent of business leaders say that customer service has a positive impact on their company’s growth.

  • 60 percent say it improves customer retention.

  • 47 percent report an increase in their ability to cross-sell.

  • More than 60 percent of customers say they now have higher customer service standards.

How to deliver excellent customer service

Whether you’re building a support team from scratch or you already consider yourself a pro, we’ve identified tips from our latest CX Trends Report to help you drive better customer service.

1. Make agent training a priority

Companies with high-performing customer support teams understand the need for more training, more empathy, and more investment to reduce churn and empower their people. Consider developing a tiered training plan that starts with basic technical skills, including product knowledge, and then advances agent knowledge at regular intervals.

High-performing companies are nearly 10 times more likely to strongly agree that their agents are of the highest calibre and over 6 times more likely to have plans to greatly extend education and training opportunities.

2. Automate repetitive tasks

Identify and automate the most repetitive tasks to free up agents’ time and improve performance. For example, high performers are nearly 3 times more likely to use AI-powered chatbots to help with agent workflows and it's paying off. 63 percent of business leaders believe chatbots are driving large cost savings.

61 percent of companies also expect the majority of customer service interactions to be automated in the future.

3. Personalize every experience

Give agents access to valuable customer information—beyond just the customer’s name—that they can use to improve experiences. 72 percent of customers expect agents to have access to all relevant information.

90 percent of customers will also spend more with companies that personalize the customer service they offer them. And 92 percent will spend more with companies that ensure they won’t need to repeat information.

4. Evaluate existing customer service channels

93 percent of customers will spend more with companies that offer their preferred option to reach customer service. Ensure that you have satisfaction metrics linked to every channel. Actively track and benchmark performance across channels to check for continuous improvement.

5. Focus on business impact

Create opportunities for agents to drive profits through upselling and cross-selling, informed by a deep understanding of the customer’s immediate needs. Establish a separate profit and loss statement that captures revenue generated by agents so the link between customer service and business growth is more tangible.

High performers are 7.6 times more likely to strongly agree that they view customer service primarily as a revenue driver and are 6.2 times more likely to strongly agree that customer service funding has kept pace with company growth.

6. Integrate systems

Integrate customer service and CRM platforms to monitor changes in customers and their lifetime value. Sharing data between these platforms can lead to the discovery of personalized, relevant solutions to customer issues that otherwise wouldn’t be considered.

7. Keep leadership in the loop

Ensure the core team provides regular updates to leadership so they’re aware of evolving customer service plans and metrics. Create opportunities for customer service insights to play a greater role in larger company policy and strategy. Leaders of businesses with the highest customer satisfaction scores understand the inherent value of their customer service teams. Not only are they more likely to prioritize funding of customer service initiatives, but they’re also more likely to keep a close eye on the business impact and make necessary changes along the way.

Companies that are leading in customer service have buy-in from top to bottom. Instead of a siloed customer service team, leadership takes an active role in monitoring performance and impact. And in many cases, the compensation of senior executives is directly tied to customer satisfaction.

High performers are over 9 times more likely to report that senior leaders view customer service metrics daily and nearly 8 times more likely to strongly agree that senior leaders immerse themselves in customer service.

4 examples of good customer service

We’ve all heard the stories of companies going above and beyond to provide their customers with incredible support. Morton’s steakhouse met a man at the airport with a steak because he asked for one in a tweet. Nordstrom’s accepted a set of returned tires even though Nordstrom doesn't sell tires. But good customer service is ultimately about the scalable ways a company meets customer needs every day.

Here are a few everyday examples of excellent customer service.

1. Providing fast first-response times

76 percent of customers say they expect to engage with someone immediately when contacting a company.

2. Meeting customers where they are

Customers want to connect with you on the same channels they use to talk to friends and family—so being able to help a customer on their preferred support channel is one of the best ways to create an excellent customer service experience. Channel preference can vary based on the issue type and customer need. 73 percent of customers also want the ability to start a conversation on one channel and pick it back up on another.

3. Helping customers help themselves

89 percent of customers will spend more with companies that allow them to find answers online without having to contact anyone, such as via a knowledge base.

4. Being proactively helpful

Reactive support used to be the standard: you wait for a customer to contact your business with an inquiry or issue. Proactive service, however, is now a crucial type of customer service—it means anticipating your customers’ issues and addressing them before your customers do.

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