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Customer service: the key to growing your small business

When you own a small business, you have to compete with more prominent, more popular brands to attract your target market’s attention. These competitors likely already have their established brand identities, tried-and-tested processes and regular customers, all of which give them an advantage over you.

So, as a small business, what should you bank on to try and gain an edge over your competitors? The answer is customer service.

Excellent customer service can differentiate you from other businesses because consumers remember the brands that made them feel valued and cared for. They prefer to support companies that are easy to contact and are ready to help at a moment’s notice.

Shoppers don’t just want excellent customer service; they demand it. If you fail to meet this expectation, there’s a good chance that you’ll lose that buyer to a competitor with a better overall customer experience.

Below are the different ways good customer service can catapult your small business:

Why customer service is important


1. Good customer service encourages loyalty

Newly acquired customers are more likely to repurchase from you if the first transaction meets their expectations. But if they found your customer service lacking, then they’ll likely stop supporting your brand even if they think your products and services are worth repurchasing. Their reasoning is that they can buy the same products you offer from businesses with a better customer experience.

This is why people have their favourite restaurants, barbers and other establishments. They don’t go back just for the quality of the food or the haircut they get, but also for how fast the service is and how attentive the staff are.

As a small business, you need to generate regular customers because they’re the ones who’ll bring you steady sales. On top of that, loyal customers create brand evangelists who willingly promote your products and services to their peers. Evangelists not only help you generate more sales, but they also contribute to your word-of-mouth marketing, which is essential in building your brand reputation and credibility.

2. Customer retention is cheaper than acquisition

According to a study by global consultancy firm, Bain & Company, repeat customers bring you more money than newly acquired ones. Although the figures vary per industry, multiple studies indicate that acquiring a new customer costs up to five times more than keeping an existing one. Meanwhile, a mere five per cent increase in your customer retention can boost your profit by 25 per cent.

Repeat customers are likely to spend more with your brand since they’re already sure of the quality of your products and services. In the same study, they, existing customers spend 67 per cent more on each transaction than new buyers, which results in a significant revenue boost.

Another reason to invest in your customer service is that it lowers your customer acquisition cost (CAC). A HubSpot study found that good customer service helps decrease your churn rate, which in turn reduces the overall amount you spend on acquiring new customers.

3. Customers are willing to pay more for better customer service

Some small businesses hesitate to spend more on customer service because they’d instead allot the money for strategies that directly impact their revenues, such as new customer acquisition or advertising.

However, a study by Salesforce shows that 67 per cent of consumers are willing to pay more to get a better customer experience. This means that customer service strategies yield a decent ROI and directly affect your bottom line.

Additionally, 79 per cent of shoppers are ready to share personal information if it means receiving a customer experience tailored just for them. This, coupled with their willingness to pay for better service, provides enough impetus for businesses to improve their customer experience.

4. Customer service agents offer valuable insights into your customer experience 

Your customer contact centre provides vast amounts of data you can mine for insights about your customer satisfaction. Consumers often air their complaints, opinions, reviews and suggestions through customer service agents and channels. These types of feedback are precious to your business growth because they reflect the quality of your overall customer experience.

You can use this information to identify your strengths, weaknesses and opportunities for improvement in your customer service. Even negative reviews can be helpful because they point out flaws in your products, services or experience that discourage new customers from repurchasing.

Apart from giving you a chance to improve your customer experience, collecting feedback also makes your brand appear more trustworthy. Asking for your customers’ opinions about a product or service lets them know that you care about their feelings helps build trust and loyalty.

How to improve customer service

Below are some of the essential strategies for small business customer service:

1. Welcome customer feedback, especially the negative ones

As we’ve mentioned before, your customer feedback drives most, if not all, of your efforts to improve your customer experience. Customer feedback is especially crucial for budding startups trying to introduce a unique product or service to market. Only your end-users can accurately say whether your offering is functioning the way it should, so it’s essential to pay attention to your customers’ opinions, even the negative ones.

Although many customers voluntarily share reviews about your brand, you still want to reach out to them proactively. This allows you to ask specific questions about the products or services that you need for market research.

Small businesses can collect customer feedback through the following:

  • Customer surveys: This is one of the most cost-efficient ways for you to measure your customer satisfaction. You can have them rate your service from 1 to 5, for example, and ask which aspects of their experience they liked or didn’t like.
  • Social media: Social media customer service strategies have been growing more popular in the last few years, used by big and small businesses. The best part about collecting feedback through social media channels is that you can do so in a fun, engaging way. You can host games or contests asking users to share their experience with your brand and offer prizes to entice them to join.
  • Short pop-up surveys: Pop-up surveys often contain just one or two questions, so they’re perfect for newly acquired customers who may find long forms annoying. Many businesses use this method to ask for feedback about their online shopping experience, how the customer discovered their brand, or why the user abandoned their shopping cart.
  • Online review sites: Websites like TripAdvisor, Yell, and TimeOut are incredibly beneficial for small businesses with physical locations, such as retail stores and restaurants. These make it easier for people to share their experiences with your brand while boosting your searchability online. Consumers often search for reviews first before trying out a product or service. Signing up for these websites makes sure that people interested in your brand can find you online.

2. Be present on multiple channels

Customers have different preferences when it comes to contacting brands. Some find it easier to send a message to your social media accounts, while others love using the live chat feature on business websites. This means you have to offer various ways for customers to reach you to make sure you’re not missing out on any opportunities to collect feedback.

One of the biggest customer service trends in the last two years is chatbots. Chatbots quickly answer commonly asked questions without human intervention, which reduces your staff’s workload and lets them focus on more complex customer queries. This makes chatbots an ideal customer support tool for micro businesses with very few employees.

Phone support is another customer service channel you can’t afford to ignore. Many customers still prefer to talk to human customer service agents, especially when their problem is too complex to resolve through the chatbot feature.

We recommend replacing your traditional landline with Voice over Internet Protocol or VoIP phone system. VoIP technology makes your business phone system more easily scalable and cost-efficient. It offers advanced call features, reduces your cost per call and allows your workers to access the phone network remotely.

3. Set up a simple workflow for managing customer requests

Lastly, make your customer service workflow as simple as possible. Doing so will not only make it easier for customers to send requests, but it will also increase the efficiency of your customer service team.

Some of the common ways to simplify support workflow are by assigning dedicated support times to each team member and reducing the number of people the customer speaks to just to have their problem resolved. Having a dedicated phone line and email address for customer queries also ensures that you don’t miss any requests.

Small business customer service

The purpose of customer service is to foster deeper relationships with your customers by ensuring a pleasant experience with your brand. By meeting your customers’ demands and expectations, you’re proving that your brand is worth buying from again. This increases their chances of supporting you in the long run, which helps catapult the growth of your small business.

If you want to learn more customer service tips and tricks, browse through the Gamma blog. For enquiries about business communications solutions, fill out our contact form.