Why Is Customer Service Important?

Good customer service is key to keeping customers happy, which increases their chances of purchasing from you again. It also maintains a positive public perception, which can attract new customers. 

Poor customer service has the opposite effect, leading to a negative reputation. Not only can this hurt customer retention, but it can also prevent you from attracting new customers. Ultimately, this impacts revenue, with global businesses risking an estimated $3.7 trillion annually for delivering bad customer experiences.

What Are the Benefits of Good Customer Service?

Creating a positive customer experience through good customer service has the following benefits:

  • Positive public reputation
  • Higher customer retention
  • Higher new customer acquisition
  • Increased revenue

Key Elements of Good Customer Service

Creating a good customer experience can involve many efforts across your business. However, the basic tenets boil down to knowledge, responsiveness, personalization and focus. 

Product Knowledge

A knowledgeable customer service representative can handle many customer questions themselves without forwarding them onto another team. If they are able to answer a question without involving another team or team member, that leads to a faster response time and a happier customer. 

To ensure that your representatives have the proper knowledge to do this, put new hires through a rigorous training program to give them first-hand experience with your business’ product or service.

Responsiveness & Accessibility

Give customers multiple ways to reach your support team (e.g., phone, email, chat). Be sure to advertise what the hours are for each channel on your website. You can also advertise average response times so that customers know how long they are likely to wait.

If you are unable to provide a solution right away, respond to their question letting them know you will get back to them in a few days. That way, they don’t get frustrated waiting a long time for a response. 


As technology advances, it’s not uncommon to see automation in customer service. Maybe you receive an automated reply to your email, or maybe you talk to a chatbot on the website. But, automation doesn’t work for every person and every situation. That’s why it’s important to consider when it is more appropriate to create a personalized experience. 

If it’s a complicated issue or a specific issue, the customer should have a way to reach a live person for a one-on-one conversation. This means offering phone, live chat and/or email support.

Focus on Customer Satisfaction

The ultimate goal of good customer service is to solve problems and improve experiences for customers. Sometimes, the solution to a customer’s problem may temporarily have a negative impact on a business’ bottom line. But, it keeps the customer coming back, which is actually better for business in the long run.

For example, maybe a repeat customer orders a product, but it gets lost in the mail. Your business can choose to eat the cost of sending the customer a replacement for free. This keeps the customer happy so that they continue to order more of your products in the future.

Customer Service Types and Channels

There are multiple ways to offer customer service, with some channels being better suited to specific industries, questions or customers. Regardless, we recommend offering several channels, as it gives customers the ability to choose the option that best works for them. 


Phone support is often a good option for more complicated questions or issues. Over the phone, customer service agents can respond to customers and collect details in real time, which can lead to quicker resolutions. That being said, product knowledge is essential for this channel, as agents can’t pause the phone call to ask another team member a question.


Next to phone, email is another popular customer service channel. Email usually takes more time to resolve an issue because there may be some back and forth between the agent and customer that spans hours or days. However, it gives the agent time to hunt for the solution to a complex problem. It also makes it easy for the customer to attach details, such as a picture of the defective product or a PDF of the shipment label. 


Many short message service (SMS) software platforms now allow businesses to manage customer inquiries via text. The platform has an inbox for incoming texts from customers. When an agent responds, it gets sent back to the customer as a text reply. This is a useful channel to offer if you already use SMS software for promotions, shipment details and other quick updates.


Many businesses have a live chat or chatbot on their website. This channel is useful for quick questions that don’t need a full email exchange or phone conversation. However, if the question ends up being more complicated than anticipated, you can set up the chat to convert the conversation into an email to continue there.

Social Media

For businesses with large social media followings, those accounts can turn into a place for customers to send direct messages (DMs) with their questions and concerns. Social media is on the edge of customer service. Some businesses may choose to hire a social media, community or marketing manager to handle all social media interactions, including publishing posts and replying to DMs.


Brands with more complex products or services tend to get a lot of the same questions from their customers. To save their customer service agents from repetitive requests, they often set up an online knowledge base or help center for customers to find answers to frequently asked questions. Some businesses even have a community forum for users to share their solutions. 

In Person

For businesses with physical store locations, in-person customer service usually involves hiring a receptionist or cashier. Speedy, effective communication is important with face-to-face customer service, as the receptionist or cashier has to respond immediately.

Customer Service Industry Best Practices

Customer service best practices can vary depending on the type of business or industry, but here are a few that apply across the board:

  • Document processes: Create a document that gives your agents step-by-step instructions on how to resolve issues. Agents should first review this documentation during onboarding and then have it handy if they need to reference it in the future. Standardizing this process ensures that every agent knows what to do and that every customer receives a similar experience.
  • Create metrics to measure success: Choose metrics to measure the success of your customer service efforts. A few common ones are retention rate, churn rate and average response time. Communicate these metrics to your team so that they know what to work toward. 
  • Implement a CRM: A customer relationship management (CRM) tool stores your customer information in one place. You can also track progress against your metrics, send emails to customers and more depending on the tool you choose. 
  • Focus on customer satisfaction: The ultimate goal of customer service is to solve problems for your customers, making them feel like they made the right decision by purchasing from your business. Listen actively to come up with an empathetic solution that is best for the customer. Even if it’s not the best for your company in the short term, it will lead to better retention, which is how you remain successful in the long run.
  • Understand when to use automation: Automating certain customer service flows or processes can save time. However, it’s important to consider when speaking to a real person might make for the best customer experience. 
  • Provide several channels: Offer multiple ways for customers to contact you. Some requests may be simple enough to work with a live chat or social media DM, while more complex ones may require a phone conversation.

Customer Service Challenges

Americans are becoming more and more unsatisfied with the overall customer service they receive. They are frustrated with:

  • Long wait times
  • Automated, impersonal messages
  • Lack of product knowledge from representatives

It can be challenging to juggle customer service with other aspects of your business. However, it is important to note the above frustrations and limit them within your company. 

The Bottom Line 

Customer service is an essential part of a business’ success. Responding to customer needs promptly and professionally can not only create loyal customers but also draw in new ones with your improved public reputation. 

Quality customer service requires product knowledge, responsiveness and personalization. Your team should prioritize customer satisfaction and be cautious about automating too many touchpoints. You also want to give customers several ways to reach you so that they can choose the channel that works best for them and their question.

Frequently Asked Questions About Customer Service

Some of the most important qualities of good customer service are product knowledge, responsiveness, accessibility, personalization and prioritization of customer satisfaction. Handling customer requests efficiently and professionally makes for a positive customer experience. 

There are many key performance indicators (KPIs) or metrics that businesses can use to measure the success of their customer service. They include:

  • Average response time
  • Churn rate
  • Retention rate
  • Customer satisfaction score

Some examples of good customer service include:

  • Acting on customer feedback: Responding to a negative review with a solution for that customer and a process change to prevent that problem from happening to future customers
  • Being proactive: Communicating important updates, such as out-of-stock products, with customers before they become problems
  • Going the extra mile: Adding extra perks, such as discounts, to customer requests or purchases to surprise and delight them

A customer service agent or representative is a person who assists a business’ customers with questions or problems. They are the first point of contact for customers who need help with the business’ products or services.


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