Last updated: What is customer service in 2023: Definition, types, benefits, stats

What is customer service in 2023: Definition, types, benefits, stats


Customer service has always been a fundamental part of business, but it’s more important than ever now. Consumers expect a lot from brands – and have several to choose from. Customer satisfaction needs to be part of each step of their journey, from initial interaction 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.

Let’s take a deep dive into the types of modern customer service, why it’s important, what good service looks like, customer service strategy, examples of brands providing outstanding service, and much more.

Man straightening tie, with abstract images behind him, representing a 2023 report on customer service by Harvard Business Review and SAP.

What is customer service?

Customer service is defined as 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.

In the simplest terms, customer service is the ongoing action taken to support customers throughout their journey and interaction with a brand’s product or service.

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

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Why is customer service important?

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

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

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:

What’s the difference between customer service vs. customer support vs. customer aftercare?

Other terms often used interchangeably with customer service include:

  • Customer support
  • Customer aftercare
  • Customer care

There’s quite a lot of overlap with what these terms mean. All are essential to customer experience, but it’s important to know the differences.

Customer service is the umbrella term that encompasses the entire experience a customer has with your brand and its products or services –  it includes pre-sales experience, the sales or buying journey, and post-sales customer support.

Customer support generally means providing technical help to a customer after a purchase, like installation help and troubleshooting. It’s ultimately about making certain that customers are successful in solving whatever issues they came to your business to help solve.

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.

What are the types of customer service in 2023?

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.

What does it mean to be customer service oriented in 2023?

Being customer service oriented means prioritizing the needs of the customer ahead of the needs of the business. A service oriented business understands that customer experience takes priority over profit.

A customer service oriented business recognizes that it won’t thrive unless it consistently improves customer focus and satisfaction at every stage in the customer’s journey or interaction with its products or services.

Being service oriented involves being friendly, helpful, empathetic, and effective in resolving customer issues. For customer service agents, being customer-orientated means having a positive attitude and being eager to help when working with a customer. It also means demonstrating a willingness to provide the customer with the best service possible.

Service strategy 101: What are the key elements of great customer service in 2023?

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 top considerations for a customer service strategy:

  • In times of change, customers need support to help quickly answer questions and address any concerns.
  • 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.
  • In order to be able to help, customer service agents need all relevant data at their fingertips.
  • Intelligent technologies help reduce contact volume and manual work so agents have more time to focus on customer interactions.
  • 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.

Many organizations today are turning to service cloud technology to help them deliver the stellar service experiences customers expect. They’re modernizing service by leveraging cloud software to boost efficiency, increase customer satisfaction, and drive business growth.

The key elements of great customer service in 2023 include:

  1. Easy access: be easily available to customers, and become accessible through various channels.
  2. Empathy: prioritize customer needs ahead of the those for the business, i.e. profit.
  3. Clarity in communication: first, understand the customer’s goals and roadblocks, then be clear and concise in communicating with customers to resolve issues.
  4. Professionalism: adhere to high ethical and professional standards by displaying a courteous and helpful attitude at all times when interacting with customers.
  5. Personalized attention: deliver personalized customer service experience by ensuring the business prioritizes quality over quantity.
  6. Adaptability: be flexible and responsive by willing to accommodate changing customer needs
  7. Speed & efficiency: find solutions to customer issues quickly and efficiently with genuine interest and enthusiasm.
  8. Technical competence: the quality of information received and whether questions were answered correctly with sufficient details and in a satisfactory manner.
  9. Continuous improvement: commit to continuously improving customer service delivery and customer experience through product, service, or process improvements based on customer feedback.

What are the 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 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 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.

Show me the data: Customer service stats

Still doubting the importance of great customer 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 service strategies) to the specific needs and wants of customers, consumers want more of this personalized treatment from anyone they spend money with. This also is 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 service portal: If you do have a mobile service portal that’s easy to find, navigate, and use, younger generations are more likely to shop with you more often.

Omnichannel service: Focus on the consumer across all channels

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 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.

Examples of brands with the best service

The American Consumer Satisfaction Index and Newsweek have published lists of companies with the best customer service for 2023.  Social media also provides insight into businesses with a reputation for delivering sparkling service. Here’s what we found:

Chewy: The online pet products retailer has won over pet parents with its personalized 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.

USAA: The banking and insurance services company, which serves those who served in the US armed forces and their families, scored nearly a perfect 10 in Newsweek’s list.

Trader Joes: The quirky grocery store chain known for its low-priced specialty food items and employees dressed in Hawaiian shirts topped ACSI’s list for 2023. Workers have a reputation for going out of their way to help.

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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Frequently asked questions (FAQs):

Without a doubt! Customer service is the foundation of any thriving business. It’s what sets you apart from your competition and creates a memorable experience for your customers. Whether it’s through face-to-face interactions, phone calls, emails, or chatbots, providing top-notch customer service is essential for building strong relationships with customers and keeping them coming back for more. Don’t underestimate the value of a positive customer experience – it’s the key to building a loyal customer base and driving business growth.

Customers aren’t only looking for quality products or services, but also expect a high level of support and care from businesses. To succeed as a customer service representative, several skills are essential.

11 key customer service job skills and how to develop them:

  1. Empathy and emotional intelligence: Empathy is the ability to understand and share the feelings of others, and emotional intelligence involves recognizing and managing one’s own emotions as well as those of others. These skills help agents connect with customers on an emotional level and handle difficult situations with care.  Practice active listening and try to understand the perspective of others. Take time to reflect on your emotions and how they impact your interactions with customers.
  2. Clear communication skills: Clear and concise communication, both verbal and nonverbal, is essential in customer service, as it ensures that customers receive accurate and complete information. Use clear and simple language, and avoid jargon or technical terms that may confuse customers. Use body language to convey empathy and interest in what customers are saying.
  3. Problem-solving and critical thinking skills: These skills are important in identifying and resolving customer issues effectively and efficiently. Customer service reps must be able to analyze problems, gather information, and evaluate different solutions. Practice gathering and analyzing information, and evaluate the pros and cons of different solutions. Brainstorm with others to generate creative solutions to customer problems.
  4. Patience and compassion: In customer service, dealing with difficult or irate customers is common. Patience and compassion enable customer service agents to remain calm in these situations, which can help defuse tension and resolve issues more effectively. Practice deep breathing and mindfulness techniques, and try to put yourself in the customer’s shoes and empathize with their frustrations.
  5. Attention to detail: Paying close attention to details is crucial in ensuring that customers receive accurate and complete information. This includes details such as order numbers, delivery dates, and product specifications. Check and double-check your work. Develop checklists to ensure that key details are not overlooked.
  6. Continuous learning and improvement: With change the only constant, service agents must stay up-to-date with product knowledge, industry trends, and new technologies to provide the best service possible. Attend training sessions, read industry publications, and seek feedback from customers. Set personal goals for improvement, and seek opportunities for growth and development within your organization.
  7. Sales skills: While not always required in every customer service role, having sales skills can be beneficial in upselling and cross-selling products or services. Be knowledgeable about your products or services, and develop persuasive communication skills.
  8. Technical skills: In a world that is increasingly dependent on technology, customer service representatives must have a basic understanding of relevant software and systems. Seek training and certification programs in relevant software and systems. Stay informed about new technologies and their potential impact on the industry.
  9. Multitasking: In customer service, it’s common to handle multiple tasks simultaneously, such as answering phone calls while responding to emails. Use tools such as to-do lists and productivity apps to stay organized and focused.
  10. Cultural competence: With the increasing globalization of business, service agents must be able to interact effectively with people from different cultures and backgrounds. Seek training and education about different cultures and customs. Practice active listening and empathy, and be willing to adapt communication styles to suit different cultural norms.
  11. Personalization: Providing personalized experiences to customers is becoming increasingly important. It involves understanding individual customer preferences and tailoring interactions to meet their unique needs. Companies should supply reps with data that enables them to deliver personalized experiences that demonstrate a deep understanding of their needs.
  12. Crisis management: In the event of a crisis or emergency situation, service reps must be able to respond quickly and effectively to manage the situation. These skills are developed through experience.

By cultivating these skills, customer service representatives can provide a high level of support and care to their customers, contributing to the success of their organization. Businesses should provide their reps with the right training and tools to empower them to deliver exceptional service.

If you’re looking to take your customer service skills to the next level in a customer-facing role, here are a few tips to get you started:

  • Be an active listener: Pay close attention to what your customers are saying and show that you’re engaged in the conversation.
  • Show empathy: Put yourself in your customers’ shoes and understand their perspective.
  • Communicate clearly and effectively: Make sure your customers understand what you’re saying and that they have all the information they need.
  • Stay calm under pressure: Customers come to you with a problem, so it’s important to remain calm and professional, even in challenging situations.
  • Learn continuously: Stay up-to-date on industry developments and best practices, and always be willing to learn and improve.

By following these tips, you’ll be well on your way to delivering outstanding customer service and building strong, long-lasting relationships with your customers.

If you want to know whether your customer service is a success, you need to measure the right metrics. Here are a few key ones to keep an eye on:

  • Customer satisfaction: Use surveys and other feedback mechanisms to gauge how satisfied your customers are with your customer service.
  • First call resolution rate: This metric measures the percentage of customer issues that are resolved on the first call and is a good indicator of the efficiency and effectiveness of your customer service.
  • Net Promoter Score (NPS): This metric measures how likely customers are to recommend your business to others and is a good indicator of customer loyalty.
  • Average handle time: The average amount of time it takes to resolve a customer issue is a good indicator of the efficiency of your customer service.
  • Customer retention rate: The percentage of customers who continue to do business with you is a good indicator of the overall success of your customer service.

By tracking these metrics and continuously improving your customer service, you’ll be able to deliver outstanding customer service and drive business success.

The world of customer service is constantly evolving, and staying on top of the latest trends is essential for success. Here are a few of the most notable trends in customer service right now:

  • Omnichannel customer service: Customers expect to be able to reach out to a business through a variety of channels, including phone, email, chat, and social media.
  • Artificial intelligence and chatbots: AI and chatbots are becoming increasingly popular for providing fast and efficient customer service.
  • Personalization: Customers expect a personalized experience, and businesses are using data and technology to deliver it.
  • Self-service options: Customers are increasingly looking for self-service options, such as online knowledge bases and forums.
  • Video support: Video support is becoming more popular, as it allows customers to receive help and support in real-time.

By keeping up with these trends, you’ll be well-positioned to deliver top-notch customer service and meet the evolving needs of your customers.

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