Published August 8, 2021 What is customer service? Definition, types, benefits, stats

What is customer service? Definition, types, benefits, stats

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In the most simple terms, customer service is the ongoing actions taken to support customers. Take a deep dive into the types of modern customer service and benefits of it, customer service definition and strategy, what qualities make up great service, stats about the industry, examples of brands providing outstanding service, and much more.

What is customer service: Customer service definition

Customer service is the assistance and guidance a company provides to people before, during, and after they buy a product or service. There’s a direct correlation between satisfied customers, brand loyalty, and revenue growth.

Customer satisfaction has always been a fundamental part of business, but it’s more important than ever now. Consumers expect a lot from brands – and have eternal brands to choose from. Service needs to be part of each step of their journey, from initial interactions through post-purchase and beyond.

Simply put: Brands need to step up with great service that provides the experience customers expect or risk losing out to the competition.

The days of customer service being a number that you call to get help are gone. Today, service is a crucial element of any product, service, or business, and needs to be baked into all platforms and channels of your brand, including via:

  1. Phone
  2. Email
  3. Social media
  4. Your website
  5. SMS or text
  6. In-person/on-site support
  7. And yes, even traditional postal mail

More than pricing, and even the product itself, service is the biggest driver of customer loyalty.

Time and again, research shows that service excellence is essential to building customer loyalty and driving business growth. But customer service has changed dramatically over the years, expanding far beyond phone calls and email. There’s a lot to know and keep up with.

In a digital-first economy, customer service is critical to the customer lifecycle and loyalty. To avoid churn, sales and service must be able to work together in real-time – and efficiently (and securely) share information about each customer to gain insights and understand what’s expected from consumers:

Customer service vs. customer support and customer aftercare

Other terms often used interchangeably with customer service include:

  • Customer support
  • Customer aftercare
  • Customer care

There’s overlap with these and all are essential to customer experience, but it’s important to know the differences. While customer service encompasses the entire buying journey, customer support generally means providing technical help to a customer after a purchase, like installation help and troubleshooting.

Customer aftercare, or customer care, also takes place after a sale, but is broader than technical support. As the term implies, it means taking care of the customer. It goes beyond a one-time fix to a series of communications and actions designed to keep your customers satisfied.

Types of customer service

Customer service has come a long way from the days when a phone call or a visit to the store were the only options a customer had for reaching a brand.

Today, the explosion of e-commerce, mobile devices, and social media has created a multitude of ways for customers to connect.

Here are some of the types of customer service:

  1. Social media: Responding to questions, requests, and complaints on social media channels like Twitter, Facebook, and Instagram. Social media provides an immediate way for customers to contact a brand at any time.
  2. Chatbots: These online tools allow customers to get very quick answers to frequently asked questions or be directed to a customer service rep for assistance. They use AI to automate conversations, providing 24×7, cost-effective service.
  3. Self-service: Users get questions answered on their own without a service representative. Examples include chatbots, online, FAQs and product tutorials.
  4. SMS/mobile: People love texting, especially younger generations, so service via SMS has become commonplace. Brands text order, shipping, and delivery confirmations, and can also answer questions via text.
  5. Phone: It may no longer be the dominate type of service, but some customers prefer the option. Interactive Voice Response (IVR) and AI help answer common questions and route customers to the right rep.
  6. Email support: Responding to customers via email has its downsides (slower), but gives customers a way to clearly explain what they need.
  7. In-person (traditional, in-store): And of course, there’s still on-site service: Talking to live a human being, in-person. This type of service can make it easy for customers to learn about a product or service, and for service reps to build customer relationships.

INFOGRAPHIC: What is good customer service? The most important qualities of modern service

Every customer is unique, and will expect something slightly different based their preferences as to how they want to communicate with a brand. This is a crucial point for companies to understand when it comes to providing exceptional customer service. Good customer service involves a few key elements:

  1. Responsiveness – the quicker, the better
  2. Making sure the customer feels heard
  3. Positivity – while the circumstances for contacting a service rep are driven by a problem, positive outcomes must be the goal of the interaction
  4. Resolution – confirm that the customer is satisfied with the end result, and that their issues were solved

So, what are the key elements of great customer service? What brands are killing it? We’ve got the answers in this customer service infographic:

Infographic listing the key elements of customer service and the top brands with the best customer service via the-future-of-commerce.com

When embarking on a journey to plan your customer service strategy, don’t forget: Your first step must be understanding your customer.

To do this, you should ask two important questions: 

  1. Who are your customers? 
  2. How do they want to be treated?

Customer service strategy 101

Service is a core element of business, and can help companies thrive, or be their demise if service isn’t up to par. Here are the key considerations for a customer service strategy:

  1. In times of change, customers need support to help quickly answer questions and address any concerns
  2. Customer feedback through the service channel is an invaluable source of information about how your company is performing, and ways that you can continue to improve
  3. To be able to help, customer service agents need all relevant data at their fingertips
  4. Intelligent technologies help reduce contact volume and manual work so agents have more time to focus on customer interactions
  5. Customer service improves business resilience by smoothing the effects of change, supporting customers in all situations.

If you support your customers when times are difficult, it’s highly likely they’ll stick with you for the long term.

Show me the data: Service stats

Still doubting the importance of great service? Let’s explore hard data regarding how the modern consumer prefers to shop and do business. 

  1. More than half of consumers expect a response within an hour, even on weekends: This is a pure-play expectation by consumers, and must be built in to a brand’s CX strategy if they want to stay competitive. Most organizations provide this kind of service via AI and chatbots. 
  2. 76% of consumers think companies should understand their expectations + needs: Thanks to direct to consumer brands that completely customize and personalize their CX (including their customer service strategies) to the specific needs and wants of customers, consumers want more of this white glove treatment from anyone they spend money with. This is also an area where many legacy retailers are struggling to implement the internal change needed to address this new reality. 
  3. Email is the most commonly used customer service channel, with 54% of consumers using it: For Millennials, email and text messaging are the most two most convenient ways to deal with any customer service issues. For Gen Z, you’d better have customer service as part of your social media strategy. If you don’t have a team readily available or a nurture stream already set up to answer questions (bonus points for having an FAQ page that can answer most questions for people – 90% of consumers expect companies to have an online portal for customer service), then you’re behind. 
  4. 33% of consumers who ended their relationship with a company did so because the experience wasn’t personalized enough: To reiterate, if you’re not meeting customer expectations, you’ll lose them as customers.  
  5. 43% of Millennials contact customer service from a mobile device: It’s no longer enough to only have a website. You need that website to be mobile-optimized – in fact, it needs to be mobile-first. If people can’t navigate your mobile site to easily find what they want, including FAQs, how to contact you, service, etc., they won’t shop with you. 
  6. 79% of younger generations are more willing to buy from brands with a mobile customer service portal: If you do have a mobile customer service portal that’s easy to find, navigate, and use, younger generations are more likely to shop with you more often.
Omnichannel customer service

Omnichannel service is the name of the game for business success. Companies need to engage with customers on their terms, anywhere at anytime, but they also need to provide consistent, seamless experiences.

If a customer contacts a company via one channel – say a chatbot – but also calls about the same issue, the conversation should carry across channels.

The service rep should have the history of the customer’s communication, so the customer doesn’t have to repeat themselves and the rep can provide better, more personalized service.

While many companies provide multi-channel customer service by offering customers a variety of communication channels, omnichannel service is different. It goes beyond siloed service channels via integration that provides agents with a single desktop with contextual information about the customer and recommended solutions to speed resolutions.

Top benefits of customer service done right

A business benefits in many ways when it provides excellent service.

  1. Customer loyalty. When customers have a good service experience, they’re more likely to stick with a brand. Get it right, customers will keep coming back for more. But there’s little margin for error. A global study by PwC found that 32% of consumers will leave a brand after just one bad experience.
  2. Brand ambassadors. Loyal customers are likely to tell others about their good experiences with a brand. This word-of-mouth advertising is priceless, especially in today’s world of social media, which can quickly amplify that goodwill. Of course, consumers also are quick to take to a social platform to share a bad experience, ramping up the pressure on brands to get service right.
  3. Seal more deals. According to the PwC study, 73% of consumers say the experience that companies provide – including customer service – is a decisive factor in making a purchase. And many are willing to pay a higher price for a better experience.
  4. Upsell, cross-sell. When reps have a holistic view of the customer, they can spot opportunities to offer customers new products or services. The White House Office of Consumer Affairs estimates that the lifetime value of loyal customers, on average, is worth 10 times more than their first purchase.
  5. Competitive edge. Brands that deliver exceptional customer service differentiate themselves to gain market share against the competition.
  6. Boost the bottom line. Companies can learn a lot about how to improve their products or services from the issues raised by customers, and make improvements to drive more sales. Altogether, researchers have found that a business that delivers great customer service can have sales increases of 20% or more of total revenue.

Image of a food truck surrounded by customers of different ethnicities and genders. Over the truck symbols appear representing social, email, word of mouth, and location services representing the many facets of customer services. Customer service everywhere customers want it.

Be the food truck: Modern customer service requires that you go to the people, where and when they want, serving up the best that you can offer. If you do this, folks will begin flocking to you wherever you go. It’s a virtuous circle.

Examples of brands with the best service

Businesses with a reputation for delivering sparkling service include:

Chewy: The online pet products retailer has won over pet parents with its personalized customer service. Agents are trained to answer all kinds of pet questions, new customers receive handwritten notes, and all customers get holiday cards. Chewy even surprises customers with oil paintings of their pets.

Costco: The membership-only, big-box retail giant is known for its high-quality goods, warehouse prices, and generous return policy. Low employee turnover and high morale help drive great CX and service.

Five Guys: This burger chain beat out stalwarts like Wendy’s and McDonald’s to win the top spot in the American Customer Satisfaction Index’s recent restaurant study. “Five Guys outperforms the other burger chains in most customer experience benchmarks,” ACSI said in a blog post, citing the restaurant’s helpful and courteous staff, accurate food orders, food quality, speed, and reliable mobile app.

Nike: The footwear company scored high marks in ASCI’s Retail and Consumer Shipping Report, shining in the areas of store cleanliness and layout, and impressing customers with its in-store speed, staff courtesy, and mobile app.

Publix: The food retailer with nearly 1,300 stores across the Southeast ranked No. 1 in the supermarket category of Newsweek’s 2022 America’s Best Customer Service list. The company, which is the largest employee-owned company in the US, scored well in the areas of communications, range of services, and customer focus.

Ritz-Carlton: The luxury hotel chain is well-known for a culture focused on service excellence. The brand adheres to its Gold Standards, which includes three steps of service: a warm and sincere greeting by name, anticipating and fulfilling each guest’s needs, and a fond farewell.

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Marcia Savage

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