How to use customer service to promote business growth

When it comes to growing a business, it’s not all about expansion and profit margins. Customer service can have a profound effect on the growth of your business, if you get it right. After all, your customers are the biggest stakeholders and best assets you have.

In this article, we’ll look at how customer service can support the expansion of a business, and how you can use it to inform your growth strategy.

Why is customer service important?

To fully understand customer service in a business environment and how it affects growth, you need to understand its importance and how it affects your results. There are several reasons why customer service is key and each has a direct impact on your business.

• Increase customer loyalty – good customer service helps to improve customer retention and ensures your business has loyal customers that keep coming back to you.
• Stand out from the competition – if your product or service has intense competition, providing exceptional customer service is a great way to set you apart from everyone else.
• Build a positive reputation – by ensuring your customers have a positive experience when they shop with you, you can improve the reputation of your business.
• Increase profit – if a customer enjoys shopping with you, they are likely to want to spend more money with you, as the latest ESG report on CX maturity has highlighted. This therefore increases your revenue and maximises their customer lifetime value.

Customer lifetime value is a key metric for businesses looking to use customer service to grow. It considers the total amount of money that a customer will spend from the beginning to the end of their relationship with you.

You can calculate customer lifetime value by multiplying the average order total by the average number of purchases in a year, before multiplying this by the average retention time in years.

Showing your customer how important they are to you and leaving a lasting impression is a good example of excellent customer service. Going above and beyond ‘the norm’ and ensuring they have a positive customer experience every time they shop with you is essential.

How can customer service help a business grow?

Providing good customer service to your existing customers can only be a good thing. With positive customer service experiences, your customers are more likely to recommend you to their friends, helping to expand your customer base and grow your business. Here are a few of the ways you can ensure your customer service translates to business growth.

Listen to your customers

By listening to your customers, you can better understand their needs and tailor your products or services to meet them. Simply listening isn’t enough though. You need to share their feedback with the rest of your business so that you can translate it into actions.

Customer feedback is invaluable and many great business ideas have come directly from customer feedback. For example, in 2008 LEGO created ‘LEGO Ideas’ – a platform for co-creation with customers where LEGO fans can suggest product ideas. Since its launch, the platform has received over 26,000 ideas resulting in 23 LEGO Idea sets.

This is a great example of a brand listening to their customers to help drive growth and enhance the customer experience. By involving customers in the decision making process, you show that you value their opinion.

Listening to your customers is also cost-effective. Many brands have saved thousands that would have been spent on research and development by simply listening to the people who already use their product or service.

Ensure product knowledge is comprehensive

There’s nothing worse than speaking with a business’ customer service representative if they don’t understand your problem. Ensuring your customer support teams understand the products and services you sell is essential for good customer service.

We know that it’s impossible for one customer service rep to know how to fix every problem. That’s why you should have clear internal processes in place where your team members can escalate queries to team members who are better equipped to deal with them.

By establishing a collaborative customer service team that knows exactly where to direct a customer if they cannot help them, you can resolve issues quickly without damaging the customer experience. 

Focus on retention

You probably already know that acquiring a new customer can be more expensive than retaining a current one. However, it’s also extremely easy to lose a customer if you don’t provide good customer service.

By placing a focus on customer retention and providing experiences that promote customer loyalty, your business will grow naturally through referrals.

Word of mouth advertising is essential for growing businesses and it’s one of the most cost-effective ways to grow. A study by Bain & Company found that on average, a clothes shopper referred three people to an online retailer’s site after their first purchase and positive experience. After ten purchases, this increased to seven.

Exceed expectations

Going the extra mile for a customer should be a priority for customer service teams, especially if you are looking to grow your business. Solving their problem is great, but improving their resolution experience is even better.

For example, a customer might contact you about a faulty product. The standard response would be to apologise and send a replacement. But to exceed their expectations, you could send their replacement alongside a small ‘freebie’ to further apologise for the inconvenience.

Exceeding expectations also keeps you ahead of the competition, but they know this too. It’s therefore important to consider customer service benchmarking to assess and measure your teams’ performance against competing organisations. You could then provide customer service training in any areas that need improvement.

Be consistent

Consistency is key. Your customers want to feel important and valued, so it’s important that they have the same positive experience across every aspect of your business. Whether it’s in-store interactions, regular email communications or telephone customer support, make sure your service is consistently performing the way you want it to. 

To ensure consistency, you need to make sure your customer service teams understand the importance of customer service in business and how this directly translates to business success.

Where is customer service going?

Customer service is an ever-evolving beast, as customer expectations change and the effects of the COVID-19 pandemic continue to be felt. In the coming years, it’s expected that customer service is going to face several problems due to a shift in customer behaviour.

According to Gartner’s customer service and support predictions for 2021, 40% of customer service organisations will become profit centres by 2025. With more customers moving to digital-first channels, organisations can shift customer acquisition and retention to online self-service tools, digital content, and human or bot-assisted interactions.

With this in mind, you should consider how you currently provide customer service and whether this needs to adapt to meet changing customer expectations. Building digital competencies into your customer service function is going to be essential for successful customer service moving forward.

For growing businesses, customer service should be a major focus of your strategy, alongside utilisation of online tools that help you compete in a digital-first world.