News & Blog

March 6, 2023

customer service

Why Investing in Customer Service Pays Off

As a business owner, you understand the importance of maximizing revenue and profits. However, when it comes to investing in customer service, many business owners are hesitant to allocate resources to this area, seeing it as a cost rather than an investment.

With the rise of digital technologies, customers have come to expect a high level of convenience, speed, and personalization when interacting with businesses. They have more options than ever before and quickly switch to a competitor if they feel their needs are unmet.

Recent changes in airline family seating policies are evidence of the shift in company strategy toward a more customer-friendly position. United Airlines announced new seat map technology to help families with children under 12 find seats without additional charges. American Airlines added a step further and a guarantee to their customer service plan that says children will be seated next to an accompanying adult on their flights. Their competitors will most likely follow suit or make other changes to improve the customer experience.

So, what does excellent customer service mean to your bottom line?

CPA Perspective: Excellent Customer Service as a Competitive Advantage

One of the primary business reasons to offer excellent customer service is to improve customer satisfaction. This can be measured in various ways–from response times to the percentage of 5-star reviews. Tracking these types of KPIs is like taking your customers’ pulse; ultimately, they can help your business take meaningful action toward achieving its financial goals.

Let’s look closer and explore how investing in customer service can help your business grow and thrive.

Increased Customer Loyalty and Repeat Business

One of the most significant financial benefits of investing in customer service is increased customer loyalty and repeat business. When customers have a positive experience with your business, they are more likely to remain loyal and continue to purchase from you in the future. 96% of customers say customer service is essential in their choice of loyalty to a brand.

Reduced Customer Churn

Investing in customer service can also help reduce customer churn or the rate at which customers leave your business. This is important because it can be much more expensive to acquire a new customer than it is to retain an existing one. By providing excellent customer service, you can help resolve customer issues quickly and effectively, reducing the likelihood that they will switch to a competitor.

Increased Word-of-Mouth Marketing

Happy customers are likelier to tell their friends and family about their positive experiences with your business. Interestingly, data suggests that they are 5x more likely to purchase again and 4x more likely to refer a friend to the company.

Improved Product Development

When you invest in customer service, you’re not just improving the customer experience; you’re also improving your business. By listening to your customers and understanding their needs and concerns, you can use this information to improve your products and services. This can lead to increased customer satisfaction and higher sales and profits.

Lower Cost of Complaints

When customers have positive experiences with your business, they are less likely to file complaints, which can be time-consuming and expensive to resolve. Additionally, by resolving customer issues quickly and efficiently, you can avoid the cost of repeat calls, reducing overall costs and improving your bottom line.

Improved Employee Satisfaction

When employees are empowered to provide excellent customer service, they feel a sense of pride in their work and are more engaged in their jobs. This can increase employee satisfaction and lower turnover rates, saving the business time and money in the long run. Data shows that companies with initiatives to improve their customer experience see employee engagement increase by 20% on average.

Taking Action

Small businesses can enhance customer service and provide a positive customer experience, even with a limited budget. Start by listening to customer and employee feedback on your policies and procedures. Then, consider streamlining customer service with new technology, like live chat and automation tools.

Are you ready to examine your customer service performance and how it affects your bottom line? Contact us for expert guidance on your overall business plan.

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