Good customer service is just good business. But for small businesses in particular, quality customer service can lay the foundation for long-term success.
Customer service can be difficult to measure and easy to overlook for businesses of all sizes. Large companies with national name recognition may be able to afford to neglect customer service in the short-term, but the effects of poor customer service will always reach the bottom line eventually.
For small businesses, investing in good customer service practices doesn’t just protect against potential losses. Quality customer service can translate into measurable financial gains, benefiting your bottom line.
Benefits of Great Customer Service
1. Loyalty Means Repeat Customers
Business experts agree customer retention is more valuable than customer acquisition. Existing customers are more likely to spend more, over 3x as likely to convert as new customers, and the majority of consumers report that customer service quality factors into whether they will become a repeat customer or switch to a competitor.
When it comes to repeat customers, the benefits of retention are exponential. And the best part is, winning customer loyalty requires little, if any, marketing spend when consumers have positive customer service experiences.
2. Word of Mouth is More Than Free Marketing
Customer loyalty always pays off, but some industries may take longer to see repeat business than others. When it comes to seasonal purchases or costs related to specific life events, small businesses specializing in these areas will need to continuously expand their customer base to see growth.
In such cases, businesses traditionally lean into advertising to expand their reach. But Nielsen’s Trust in Advertising Study reports that trust in advertising is at a low among consumers—particularly in North American markets.
According to Nielsen’s report, 88% of respondents say that they trust recommendations from people they know more than any other marketing channel. This confirms what successful small business owners already know: word-of-mouth is one of the most viable, and valuable, avenues for growth.
There are strategies to increase word-of-mouth marketing, such as referral programs. However, incentivization won’t outweigh customer service. Few consumers are willing to compromise their credibility by referring others to a poor customer service experience—and those who are may not wield much influence to begin with.
Happy customers don’t need incentives to recommend your services to their friends and families, though they may appreciate the encouragement.
3. Opportunities Come From Open Communication
As a small business owner, you already know that customer service is problem-solving. Listening empathetically and reacting to a customer’s needs is the foundation of any positive customer service experience—but reactive problem-solving is just that, a foundation to build on.
The benefits of good customer service begin for your business when you are able to anticipate your customers’ needs before the customer is even aware of them.
Savvy salespeople know this as the upsell. But it may be as simple as offering a gift receipt or opting into order updates.
Proactive problem-solving makes for smoother transactions, which all involved parties can appreciate. But it also offers insight into your customer base that can be translated into other areas of your business. Whether you use your consumer insights to create new product bundles, explore a new target demographic, or eliminate extraneous touchpoints will depend on your business, but the actionable takeaways from these interactions are invaluable. Focus groups and consultants charge exorbitant fees to find out what your customers will tell you for free (and these third parties don’t always get it right).
Good customer service is a direct line of communication with your most valuable dataset—your loyal customer base.
Competing with large conglomerates can feel like an uphill battle for small business owners. It may seem like convenience and price-slashing governs the modern marketplace, but consumers say otherwise. Investing in good customer service practices is one of the most accessible and effective ways that small businesses can win customer loyalty and repeat business, increase growth through word of mouth, and stand out from competitors.
At Abby Connect, we understand the importance of good customer service for small businesses. Our professionally trained receptionists excel at making connections that leave lasting impressions. Each of our clients is assigned to a dedicated team of receptionists who get to know your business and your customers, so you never miss a call or an opportunity. Learn more about our live receptionist service, or get started today.