Customer Service Guide for Small Businesses

The first impressions your employees make on a potential (or returning) customer can have a lasting impact. That’s why focusing on providing top-notch customer service at all times is so crucial to customer retention and ongoing growth. Mastering some key customer service basics, and then adding your own spin to them with the tips in this guide, can transform your customer service and help you center this vital customer retention strategy in your business.

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Why is customer service important?

Among the reasons why customer service matters are that it:

  • Leads to customer loyalty. Attentive customer service shows how much you care about your customer, and it makes customer loyalty much easier to foster. Plus, it’s just human nature for customers who feel cared for to return to the source of that care – namely, your business.
  • Saves money on marketing. Retaining loyal customers is 5 to 25 times less expensive than acquiring new ones. Since excellent customer service is a straightforward conduit to customer loyalty, it’s also a great way to cut your marketing costs.
  • Encourages additional customer spending. Did you know that seven in every 10 Americans would rather spend more money for better customer service? When you perfect your customer service, you increase the chances of people buying from you again instead of making a first-time competitor purchase.
  • Leads to positive word-of-mouth referrals. Think about the last time a friend told you about a great shopping experience – didn’t it make you want to shop there too? Maybe your friend had such a great time because the customer service was truly excellent. When your business offers similarly high-quality customer service, you set up the potential for these highly effective word-of-mouth referrals.
  • Drives brand awareness. Chances are you’re intimately familiar with the biggest example of how customer service drives brand awareness. Namely, a large part of Amazon’s e-commerce dominance is its excellent customer service. As word spread of Amazon’s customer-first service approach, more people flocked to it knowing their concerns would be tended to with care. The result is that Amazon has developed a customer-oriented brand. With great customer service, your business can do the same.
  • Leads to quicker problem-solving. No business will ever be perfect, but excellent customer service can help you solve problems before they become catastrophes. When a customer who calls you with a complaint feels that their concerns were addressed, the issue ends there. And if you’re especially kind and offer a highly meaningful solution, you might even turn your worried customer into a repeat one.
  • Allows for higher prices. If your customer service is so good that customers just can’t get that level of attention from your competitors, you can raise your prices. After all, prices reflect both raw material costs and the amount you pay for labor and skills. And excellent customer service is both a type of labor and a skill that takes gradual refinement.
  • Improves employee morale. When customers are satisfied, so are employees. Great customer service means your reps are less likely to face an angry or unhappy customer that makes them unhappy too. The result is greater employee morale, which in turn leads to more engagement and productivity.

Types of customer service

There are five types of customer service you should incorporate into your strategy:

  • Self-service. When customers need problems solved but don’t want to interact with people, they’ll seek out self-service hubs. Here, customers can find FAQs, access informational forums, or read product manuals. The goal of your self-service hub should be to enable customers to solve their problems before contacting you becomes necessary.
  • Social media. One in every three consumers prefers social media customer service to phone or email. Social media customer service can mean using Messenger as a live chat tool or fielding customer questions in your Twitter mentions. To streamline your social media customer service, install software that directs all messages across all your channels to one inbox. This way, you’ll never miss a frustrated customer’s DM.
  • Live chat. Roughly four in every five customers view live chat customer service favorably given its rapid response times. To properly incorporate live chat into your customer service strategy, have employees ready to answer questions just a minute or two after receiving them. Train these employees to be as tuned-in and responsive as on a phone call.
  • Email. Of all the customer service methods, email is perhaps the easiest to track. Customers can include attachments and label or filter their emails to you in their inboxes. You can do the same for incoming emails. Additionally, all your communications will be clearly timestamped. Perhaps best of all, email lets customers contact you when your phone, social media, and live chat aren’t accessible.
  • Phone. For especially complex problems – or for customers who simply want to have an actual conversation – phone support remains the gold standard. You’re best off combining interactive voice responses (IVR) with live phone support. You can use automated IVR to direct customers to the right agents for their needs. From there, a thorough conversation can take place, and a meaningful solution can emerge.

Tips to have an outstanding customer service strategy

An outstanding customer service strategy involves teaching your employees all about your products, using appropriate technology, and solving issues on the first touch. It also means leading a team of empathetic customer service agents who don’t need to seek approvals from higher-ups to offer meaningful solutions. To check all these boxes, take the below four steps.

1. Set your customer service goals and metrics

Customer service goals can help you track your team’s performance in ways that lead to happier customers. And, of course, greater customer satisfaction means more potential repeat sales.

Any goals you set should be measurable, specific, realistic, and tied to a timeframe. You should also reevaluate your goals as you go to make sure they remain sensible and achievable. A great example goal might be going above and beyond for one customer per day. Doing so can distribute the most intense parts of your customer service workload over time. It also makes customers more likely to buy from you again.

To track your goals, use a wide variety of customer service metrics. Measure your ticket volume, resolution time, response time, customer retention rate, and more. These metrics should give you a strong sense of how well your team is addressing customers’ issues and maintaining customer satisfaction. It can also show you the relationship between great customer service and sales increases. And at the end of the day, both these goals are equally important.

2. Hire employees with the right skills

There are 10 key customer service skills all your agents should have the moment they start the job. These skills are:

  • Communication
  • Listening
  • Empathy
  • Patience
  • Positivity
  • Ability to learn the ins and outs of a product or service
  • Confidence
  • Persuasion
  • Conflict resolution
  • Adaptability

Even if your team comes in hot with these skills, you should regularly work to refine and improve them. Some ways you can do so include:

  • Focusing on certain touchpoints. Make sure your team pays especially close attention to the customer during product purchase or service registration. Do the same during training, implementation, and the entire duration of a free trial. All these touchpoints are common sources of customer complaints, so keeping in contact helps you solve problems before they arise. The result, of course, is greater customer satisfaction.
  • Using CRM software to track conversations. No matter how well you and your team think you know a customer’s wants or needs, your brain might go blank come conversation time. To avoid this obstacle, use CRM software to track conversations and document everything discussed. This way, you and your team have all the key points on hand to properly tend to customers when you speak with them.
  • Train your customer service team on all channels. It’s great to offer all five of the customer service types mentioned earlier, but a problem can arise if you’re short-staffed on one channel. If you ask some phone staff members to fill in on live chat, they might not be as well-equipped for the job. Train your staff on how to use all your channels to ensure no gaps in the quality of your customer service.

3. Improve your customer experience

It’s easy to conflate customer service and customer experience, but the Venn diagram between the two is far from a circle. Where customer service comprises interactions between customers and your employees, customer experience includes every interaction with your brand. As such, the customer experience ranges from how your customers perceive your logo to what they feel when they read your online reviews.

It’s understandable if, upon understanding how customer service and experience differ, you feel that the former affects the latter but not vice versa. That’s not quite the case. Put yourselves in the shoes of a customer having a bad experience with your product but not yet ready to call your team for help. Let’s say this customer looks through your reviews to see if others have experienced similar problems. The customer sees other complaints about not just this problem but your company’s lack of efforts to mitigate it. The customer could get angry.

Perhaps the customer feels angry enough to call your customer service line and demand a complete refund. Maybe you’ll grant them what they seek. If not, a bad review could follow. And then, this whole cycle of angry customers could continue uninterrupted. Your reputation will certainly take a hit. Of course, there’s an obvious solution to this all.

4. Always prioritize quality

Since your customer service is part of your customer experience, providing high-quality care is a surefire conduit to a satisfied customer base. High-quality customer service is likely if you:

  • Understand what your customers need. Consider what people with your customers’ lifestyles and demographics might need from your company. Then, make sure your customer service meets these needs. For example, if your customer base skews older and lacks internet access, put extra effort into your phone service and staffing.
  • Train your employees on consistency. Personalities vary, so customers may experience your company differently based on the agent to whom they’re speaking. This difference can be disorienting, and consistency training can solve it. Teach your employees the acceptable and unacceptable ways with which to interact with customers, then put them to work.
  • Make your channels accessible. Your website should have clear instructions on how to access all your customer service channels. Similarly, your social media pages should include links to your other customer service channels, as should your email signature. The goal is to give your customers easy access to their preferred method for contacting you.
  • Always respond quickly. Unless you’re contacted outside your operating hours, there’s no good reason to delay responding to customer concerns. Even with emails sent overnight, an immediate response the next morning is key. The sooner you respond, the less likely customers are to feel neglected, and the more likely they are to feel satisfied.
  • Fix problems. A customer service encounter full of positive interactions is all for naught if the customer’s issue isn’t solved. You should strive for all customer service encounters to end with satisfying solutions or at least proof of steps being taken to elevate the issue. Keep in touch as the issue is being solved to show the customer how much you care.
  • Treat your team well. A team that enjoys its work is much more likely to radiate that positivity outward to its customers. Conversely, a team with low morale or job satisfaction will likely come off interested and unhelpful. Great customer service truly comes from within.

Additional resources for mastering your customer service

The above steps can lead to excellent customer service, but perfecting your customer interactions is truly a never-ending pursuit. You should regularly set new goals, evaluate your progress, educate your team, prioritize the full customer experience, and assess the quality of your service. To that end, the SmartBiz Loans Learning Center is full of helpful resources. Whenever you have questions or need inspiration, look around – it’ll be easy to find.

WHAT YOU NEED TO KNOW: The SmartBiz® Small Business Blog and other related communications from SmartBiz Loans® are intended to provide general information on relevant topics for managing small businesses. Be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed. Please consult legal and financial processionals for further information.