Effects of Customer Service on a Business

Consumer patterns have changed over the years. The consumers of today have become more aware of their rights and that is why they are more cautious before doing any kind of business with a company. No matter how insignificant or small the product or service is, still today’s consumers spend a lot of time researching about a brand.

There are a few major factors that a customer wants to know beforehand about a brand, these components include the product quality, pricing, brand image, and level of customer service. These are the key focus points of any customer looking to do any type of business, whether it’s buying a product or subscribing to a service.

If we further classify in these terms and grade the importance that which component is the primary focus of any regular consumer, customer service is probably going to be the top contender out of all.

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Since it’s human nature that people like to play safe, especially when it comes to their hard-earned money. For this reason, consumers would compromise on the quality of the product and the pricing, but something which they won’t compromise on is how they are treated by their service provider to whom they are paying their money. And the department which is directly responsible for client satisfaction is customer service. So, customer service should be strong if a business wants to prosper in the long run.

We have quite a few examples of businesses that have grown due to exceptional customer service. One such example is Cox communications, the third-largest cable provider in the United States, they have reached this huge milestone only through superior customer service as their customer service agents are ready to assist customers 24/7 whenever the Cox customer service number is dialed. So it is evident that in order to build a successful business, strong customer service is required. But now the question arises that how customer services affect a business and what are the positive outcomes that can be achieved through it? This is something we are going to explore here.

Importance of Customer Service Post Pandemic

The crux of all the points mentioned above was to highlight the importance of customer service towards a business, but what if we tell you that this is not it. Yes, the importance of customer service has increased even further in the recent past and that is because of the pandemic.

After the pandemic hit the world, it not only affected our health but also had a major influence on the economy of the world. Because as a result of lockdowns and complete closure of business activities the whole economic sector was shut down, businesses were closed and suddenly the average consumer was out of a job. Those who still had a job were barely making ends meet. In times like these people resorted to cost-cutting.

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This drastic change in purchasing trends saw customers being extra mindful about where to spend their hard-earned money because it was already scarce to come by. This extra cautious approach forced businesses to provide a better price, quality of service, and efficient customer care in order to attract a customer and to make them stick with a product or service. Since there was an influx of products and services while customers were few and far in between. So customers of today have countless options to just switch, that is why there should be an extra edge or something special that can make them stick with your business, and that X factor can surely be good customer service.

How Customer Service Affects a Business

We had all the talks about the positive impacts of customer service on a business, now we will look at components that are directly influenced by customer service, and how these components impact the performance of a business. 

Customer Satisfaction

The primary task of all customer care departments is to keep their customers happy and satisfied with their service as well as all other consumer aspects. Customer satisfaction is the root of all customer-related issues and a customer’s all other buying decisions are directly related to this one single thing. Happy customers mean more revenue, and more revenue means a thriving business. A satisfied customer is an asset in itself and all the points mentioned below are only possible because of satisfied customers.

Customer Retention

The second thing that generates out of satisfied customers is that they stick with a brand. This in business terms means customer retention. The longer a customer sticks with a brand the better is for a firm. There is also a specific metric to measure this which is called CLTV or customer lifetime value. CLTV determines the value a customer has provided with a firm during the time period they were with a company.

Stats implicate that the cost actually spent to acquire a new customer reaches a breakeven point if that customer sticks with that particular brand for at least a year, and also retaining a customer is 2 to 3 times less expensive than acquiring a new one. So, customer retention is quite important for any business, and customer service strives to achieve exactly that.

Customer Loyalty

Customer loyalty is directly related to all the previous points mentioned above. A company is as strong as its consumer base. Any company which has a strong backing of loyal customers makes it big in this cut-throat capitalist society. Because it’s not very difficult to build a company or product the difficult part is to have a loyal customer base that sticks to a company and its products or services. A loyal customer base not only increases the overall CLTV but also cements the position of a corporation in a business landscape.

Improve Brand Image

This is what we talked about in the above section since customer service is directly related to customer satisfaction and satisfied customers improve the image of a brand. In today’s world, a company sells its product on its image. Why do you think brands like Apple, Nike, Netflix, Tesla, or any other big company make billions of dollars in revenue? Only because of their brand name. The image of a brand is everything, that’s what sells and that’s what customers buy instead of the actual product. A brand image is made through a loyal and happy customer base which in turn comes from good customer service.

Positive Word of Mouth

The last component is a culmination of all the discussions we did above. Positive word of mouth is how any company does business. No matter how much a company spends on marketing, the real marketing is done by your loyal customer base which is full of satisfied customers. Since nothing works better for a company than organic reviews of existing customers that spread positive word of mouth among their circle. This word of mouth not only drives sales but also decides the stock price of a company. So, to have a positive word of mouth a company should have a good brand image and a strong and loyal customer base which are happy and satisfied, and all this comes from good customer service only.

Summing Up

This whole article summed up the major effects customer service has on any business, and they are quite drastic, to say the least. We have written this piece to highlight how important customer service is because it’s taken very lightly and not something that is paid much heed. But as this written piece summed up perfectly, customer service is not something to be taken casually, and it’s about time businesses should start taking customer service seriously if they want to sustain in the long run.

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