10 reasons why customer service is important

GeneralCategory
5 min read
Will Stevens

You already know customer service matters, but do you really understand what an impact good (or bad) customer service can have on a business?

Here are ten reasons why providing a high level of customer service is a vital part of running a successful business.

1. Keeping customers happy is good business

According to the Harvard Business Review, attracting a new customer is between five and 25 times more expensive than retaining an existing one.

This means it makes business sense to invest in customer service and care. If you don’t, you could end up spending more on marketing your business to new customers anyway.

2. Happy customers spend more

It seems obvious that happy customers will spend more than unhappy customers, but the size of the difference in spend may surprise you.

According to Harvard Business Review research, customers who had the best experience with a business spend 140% more than those who had the worst experience.

That means that by investing in customer service, there’s a strong chance you’ll be able to increase the value each customer brings to your business.

3. Excellent customer service keeps people coming back for more

Loyal customers are the lifeblood of any business, so it makes sense to do everything you can to encourage repeat purchases.

Research by Hubspot reveals that 93% of people are likely to make repeat purchases from a company that offers excellent customer service.

More proof that investing in customer service can bring a real boost to your business.

4. Poor customer service drives people away

Businesses owners always worry about the competition but if you offer poor customer service, you’re probably driving people straight into the arms of your rival.

Microsoft research revealed that 61% of people have switched to a different brand because of poor customer service.

If your customers aren’t happy, the chances are they won’t be your customers for much longer.

5. And it drives them to your competitors

People who stop doing business with you because they had a bad experience don’t just disappear off the face of the Earth. The chances are if they still need a product/service like the one you offer, they’ll just get it from one of your competitors instead.

Research by RightNow revealed that 89% of people who stop doing business with a company because of poor customer service switch to a competitor.

If you don’t want people to leave you for your rivals, you need to focus on providing the best possible customer service.

6. People share experiences of bad customer service

Think providing poor service is something that will stay between you and the customer? Think again.

Salesforce research shows that 62% of customers tell other people about a bad experience they’ve had with a business.

That means bad customer experience has the potential to damage your reputation, making it harder for you to attract new customers.

7. You have a limited number of chances to get things right

Although a single bad experience won’t send a customer running to do business with a rival, you can’t expect people to stick around if you keep getting things wrong.

According to Hubspot, 93% of consumers will stop purchasing from a company after three poor experiences.

If you discover a customer has had a negative experience with your business, you may be worth going the extra mile to make sure they’re happy in future.

8. It’s hard to make up for a bad experience

That last stat might give you the impression that people are willing to forgive a business for one or two slip ups, but don’t be fooled into thinking that’s always the case.

According to Ruby Newell-Lenger’s Understanding Customers, it takes 12 positive experiences to make up for one unresolved bad experience.

That means if you get something wrong once and you can’t put it right, it’s going to take something special for a customer to trust you again. It makes sense to focus on offering good customer service in the first place.

9. Customer service is highly valued

Good service doesn’t just matter to people who have already become your customer, it also matters to potential customers.

In fact, according to research by Zendesk, 84% of people say customer service is important when deciding whether to buy from a business. That’s more people than who said they look at convenience and reputation.

If social media and review sites are full of people complaining about the poor level of service they got from a business, you can bet that potential customers will see this and find it off putting.

Be sure to monitor social media and review sites for mentions of your business, reply to people who have had a bad experience and do all you can to put it right.

If potential customers see you trying to address customer service issues, they’re less likely to be put off doing business with you.

10. Excellent customer service builds trust

According to research by Zendesk, excellence in customer service has the most impact on the level of trust they have in a business, ranking ahead of offering the best price.

That means if you’re in a sector where competing on price is tough, you can use customer service to make your business more attractive than your rivals.