What Is Customer Service and Why Is It Important?

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Whether you’re just stepping into the business world or simply trying to improve your presence there, one thing is obvious: Making your clients or customers happy should be the primary goal. Regardless of industry, age, product, or service, there are numerous benefits to going above and beyond for your customers. Plus, when you invest in your business’s customer service, you don’t just support your patrons. When done well, you also demonstrate that same level of support for your employees, boosting sales in the long run. I could go on about the many other reasons that customer service is so important, but, in the meantime, if you haven’t heard the term before — or if you’re fuzzy on the details — you’re probably asking, “What is customer service and why is it important?”. 

In short, customer service is the support you provide to customers before, during, and after the time of purchase. Because of its continuous nature, customer service is especially important in sales. After all, better service means happier customers who are more likely to recommend you or return for additional purchases. 

So, what is customer service, in a literal sense? That’s what this guide is all about! Here, I’ll break down the types of support generally described by the term “customer service” and what good customer service looks like. Keep reading to learn more! 👇

What is customer service?

What does customer service mean for the average business? Some might say customer service is the department of a business that handles customer questions or concerns. However, I would argue that it’s a component of every department. That isn’t to say that service-oriented roles shouldn’t exist – they absolutely should – but truly effective customer service comes from consistently high-quality support from everyone on the team. Yes, everyone. 

Customer Service Definition Graphic - Brittany Hodak

Take a restaurant, for example. When you enter, you’re greeted by a host and shown to a table in a timely manner. From there, a waiter or waitress ensures that your orders are placed correctly. They also check in to be sure you receive any drinks or amenities offered by the restaurant. At the same time, chefs prepare your meal to meet the standards of the restaurant and accommodate any special requests. By the time your meal makes it to the table, you have been served by a minimum of three people. In fact, in most cases, that number is far higher, as other staff in the restaurant supervise or provide support to their fellow employees. That way, no matter who is serving you, you have a pleasant experience. 

In the same way, in your own business, customer service isn’t a single place or experience. It’s a consistent standard of assistance and support, upheld by everyone on your team. Because of that, answering “What is customer service for my business, specifically?” can be tough. The most important thing to remember is that serving your customers starts the very first time they interact with anyone on your team. From that first exchange to their last, your team’s aim is to make them feel valued and justified in paying the cost of your products or services.

What does good customer service look like? 

That brings us to the next piece of the puzzle: “What is customer service for the companies that do it best?” Before I answer, it’s important to note that customer service is really part of a larger system of customer interaction. This system is described as the “customer experience,” and, in most cases, a good experience originates with good service. It makes sense, right? 

In light of this system, ensuring good customer service is key. Like a machine, if one piece breaks or falls out of place, the entire mechanism grinds to a halt. Consequently, if you want your business to run like clockwork (See what I did there?), you have to make sure to invest in every opportunity to provide excellent service to your customers. 

For the companies that handle it best, customer service comes down to three main sections of the customer experience. The first comes pre-sale, during which time you want to be available to answer questions and transparent about your business. The second part, the time of sale, focuses on convenience. Being clear and reasonable on price, making the experience convenient for the customer, and avoiding pushy sales tactics are vital in this stage. Finally, post-sale, focus on being available and being genuine. Every customer should feel that they can come back to you with any questions or concerns, confident that they will be treated with respect and happy to purchase from you again.

Many companies neglect the third stage of customer service. In fact, many treat prospective customers better than they treat existing customers. However, in the long term, that is a terrible customer service strategy, especially since it costs about five times more to earn a new customer than it does to retain, or sell another service to, an existing one.

Why is customer service important?

Ultimately, teaching your team the answers to “What is customer service?” and “How can I be exceptional at it?” is incredibly important. Because it never truly ends, serving clients is a sure way to create a positive experience for everyone associated with your brand, inside and out. This means there are countless reasons to invest your time, energy, and money into it (all of which are guaranteed to pay off). Here, we’ll focus on nine of these reasons. That way, you can pass them on to your team and start building the consistent standard of service that will make your brand stand out. 👍

Customer service reinforces your company’s values.

First and foremost, customer service isn’t just support for your customers. It’s also a real world application of your company values. If you’re all about efficiency, providing clients with a streamlined experience is a great way to show that. If you’re big on honesty, you can show others simply by answering customer questions or concerns transparently. In essence, while it’s also a great way to boost your sales numbers, customer service also allows you to “put your money where your mouth is” and show that your company values aren’t just jargon for your sales team. They’re a real code of conduct for your entire organization.

Core Values Graphic - Brittany Hodak

One example of this is virtual productivity app Asana. Since it was launched in 2008, Asana’s mission has been to “help humanity thrive by enabling the world’s teams to work together effortlessly”. Although they accomplish this partly through their software, they also reinforce it through their customer support. Within the app itself, a simple question mark button in the upper right corner makes it easy to find help when you get stuck. Outside of the app, their support directory and YouTube channel provide additional information, if you’re more of a “find it myself”-er. Either way, regardless of the avenue you choose, Asana is a great example of providing service in a way that is both convenient for the customer and accommodating for their learning preferences. With “clarity” and “mindfulness” among their values, they aren’t just trying to sound good. They’re putting those values into action, too.  

Likewise, when you ask yourself “What is customer service?” remember to also ask “How can I demonstrate the values of my company through our service efforts?” Just like good customer service will help you stand out, staying true to your values will help you grow.

Customer service can build your reputation (or ruin it).

Speaking of growth, another important part of customer service is its ties to your reputation. By now, we’ve all seen the videos of people throwing a tantrum in a retail store. For some in these videos, this behavior leads to unemployment or even arrest. In others, the subject of the video is called out by members of their community. While not necessarily fun to watch, this outcome of increased access to technology in recent years is undeniable: If you behave poorly, millions of people can potentially find out. 

However, on the flip side, we’ve also all seen heartwarming videos of people doing good. Think neighborhoods rallying to support a family in crisis or kids raising money for their community. In these cases, exposure usually means greater support for their cause or even donations to their fundraising efforts. In the event that a community group is highlighted, a positive viral video can even mean lasting impact on their growth. These examples demonstrate the opposite outcome of a video: If you behave exceptionally, millions of people can potentially find out and support you because of it.

Although these examples are mainly focused on people’s personal lives, the same potential exists for behavior in business. This is where customer service comes in. Just like asking how customer service ties into your values, it’s also important to ask “What is customer service as a component of reputation management?”. However, unlike the aforementioned videos, your business’s reputation doesn’t just depend on you alone. It also depends on the actions of your teammates and anyone affiliated with your brand. Because of this, training for high service standards is critical. Trust me – it won’t just ensure sales growth. It will also ensure reputation growth, as customers are more likely to support brands they agree with. 

Investing in customer service employees makes them less likely to leave.

Besides reputation management, another benefit to high-quality customer service is employee retention. As customer service reinforces your company values, it’s imperative that you serve your team members as well as your customers. Whether it’s allowing them freedom to share feedback, giving them extra vacation, or rewarding work/life balance, everything you do for your team should reflect the level of service you want for your clients. After all, it’s impossible for unhappy employees to provide the best possible service, making it impossible for companies with unhappy teams to create superfan customers.

Employee Retention Graphic - Brittany Hodak

Looking back on Asana, for example, their values of “clarity” and “mindfulness” are easy to see in their customer service. However, you can also see them in their company culture. Past and present employees, for instance, describe working for Asana with glowing reviews, saying “The care, empathy, and authenticity my coworkers and managers bring to the table every day is inspiring.” Furthermore, in 2017 and 2018, they appeared on Glassdoor’s lists of Best Places to Work. Sounds like the kind of reviews every company wants to have, am I right? 

In your own business, reviews like these not only show dedication to company culture. They also show the level of care you strive for with people – period. In the long run, this level of care means a better working environment for your team and, consequently, less employee turnover. If employees are happy, their customer service improves, leading to greater sales and more revenue to invest back into the company. Ultimately, the question “What is customer service?” should also be viewed as “What is customer service for members of my team?” From there, you can start investing the necessary time and energy into your team and creating this feedback loop of happiness. 💓

Insights from customer service employees can guide company adjustments.

In addition to internal company growth, customer service is also important in marketing. With any marketing team, the primary goal is to get in front of the right people at the right time. This is why ads for candy corn start appearing every year in October (at least in the U.S., that is) or signs for Boy Scout evergreen wreath fundraisers pop up at the end of November. By providing good customer service one year, businesses in each of these examples are able to see when customers are most interested in their products. Then, the following year, they can better time the launch of their product-specific advertising, so that they sell more than the previous year.

Additionally, besides cyclical sales, practicing good customer service can also produce key insights around company structure or position. Following the Black Lives Matter protests of spring 2020, for example, feedback and insights from their fans led country music group The Dixie Chicks to change their name to “The Chicks”. Other examples include the rebranding considerations around food companies Aunt Jemima and Uncle Ben’s. For each of these brands, feedback from the people they serve led to changes in how they present themselves and reevaluation of company biases. 

Similarly, customer service for your own customers isn’t solely a way to please them in the present. It’s also a magnifying glass over your target market, helping you adjust and please them again in the future. Plus, listening to customer insights goes back to the very definition of customer service. Even if it leads to some tough conversations and growing pains, good customer service means taking criticism and using it as an opportunity to grow. That way, your sales, your team, and your client base won’t suffer from the same mistake twice. 

Customer service rewards customers for their loyalty.

Continuing on, the sixth answer to “Why is customer service important?” focuses in continuity. For this topic, think of your local grocery store. If you’re like the average shopper, you may visit the store as often as a few times a week. Whether it’s for a few items or the entirety of your weekly list, you also likely have a favorite store that you visit more frequently than others. As a customer, you know this means you can rely on the same products available. You also know you can rely on the same level of customer service. 

Customer Rewards Graphic - Brittany Hodak

Similarly, for the store, providing customer service on a regular basis presents the opportunity to reward you for choosing them over their competition. Looking at grocery stores near me, for example, few of the stores that offer rewards are Kroger, Whole Foods, and my personal favorite, Publix. 💙  For each of these stores, I might visit initially for the food available and the customer service. However, because of their similarities, the loyalty programs for each store present some of the largest differences between the three. They also incentivize customers like me to continue choosing one over the others. This is especially true if my rewards compound over time, monetarily, or if I gain additional perks from being a long-time customer. 

In the same way, customer service is an ongoing effort, whether you’re in retail or not. Although it’s important to provide high-quality customer service before the point of sale, it’s also crucial to build that service into a reason for each customer to become a regular. By doing so, you not only create a happy customer who loves your brand. You also add to the previous point of reputation management, as stores with many repeat customers look inviting to potential customers.

Customers are willing to pay more for high-quality service.

At this point, you might be wondering, “At what point am I going to get something in return for all of this effort?” It’s a fair question, and one of the simplest answers is the fact that, as a customer, you get what you pay for. While this is most commonly applied to products, it also applies to customer service. That’s where the reward for you comes in! Providing great customer service can be tiring at times, especially with tough customers. But, once you’ve mastered it, the vast majority of customers will be willing to pay extra for your offerings compared to those of your competitors. This means a monetary reward for you as well as a repeat customer.

Personally, I live this constantly, as being a professional speaker typically demands travel. As a result, I usually have to stay overnight near the location of the event for which I’m speaking. While I could stay in a motel or a less expensive hotel near the event center, nine times out of ten, I’d rather pay a little extra for a more comfortable room with greater customer service. After all, walking around for a day is tiring! I’d rather spend more and be comfortable afterwards than save a few dollars and regret my choice of location. And, I’m not alone: 68% of consumers are willing to pay more for better customer service.

In short, going back to the question, “What is customer service?”, the best businesses spin the question also into “What is customer service in terms of investment?” In the long run, providing great customer service gives you the opportunity to prove your worth and, in doing so, create a repeat customer. Again, the more you invest in your customers, the more they’ll give back.

Happy customers means greater lifetime value for each customer. 

Similarly, number seven on the list of customer service benefits is about lifetime value. If you haven’t heard the term before, lifetime value is essentially the total amount of money a given customer will spend on your products or services during the course of their lifetime. In terms of customer service, most businesses see an increase in the lifetime value of their average customer as they level up their service. This isn’t entirely surprising as, again, happy customers are more likely to return. 

Customer Lifetime Value Graphic - Brittany Hodak

A common example of this can be seen in virtually any technology company (no pun intended…okay, maybe it was intended a little!). Because technology is ever updating, expanding, and evolving, tech companies are in a unique position to approach past customers with new products on a regular basis. Think about Apple or Samsung phones or updates for apps and software. For each new release, these brands have the opportunity to get in front of past customers again. From there, all it takes for one company to stand out is (a) a better product or (b) better service for their customers. That’s the degree to which customer service matters.

As you manage your own business, even if you aren’t regularly releasing new products or updates, the same rule applies. Previously, we mentioned that great customer service makes customers more likely to return. However, what we didn’t cover is how this repetition compounds over time. This leads to a greater lifetime value and a greater likelihood of them buying your product or service again each time they choose you. In other words, their dedication to your brand increases as well as the money they’ve spent with you. What’s not to love about that, right? 🙌

happy existing Customers will refer new customers.

The eighth reason customer service is important is referrals. It’s no secret that happy customers are more likely to tell others about their experiences. Because of that, your goal with every customer should be to provide service so good that they have to talk about you. Knock their socks off with wow-worthy service, so they just have to tell their friends. To get started, think about the last time a brand went above and beyond for you. How did you feel? How many people did you tell? And, how likely are you to spend money with them in the future? In your own business, that’s the kind of experience your customers should have, too!

Generally, there are a few common ways you can encourage referrals in your business, if you aren’t doing so already. Below are a few of the ones that pop up the most: 

  • Collect and display customer reviews
  • Offer an affiliate program for existing customers. For each customer they refer, they get a coupon or reward. 
  • Ask outright, when a customer mentions how happy they were with your product or service. If you’re unsure how to ask, the following works well: “If you know of anyone else who could benefit from this, just send ‘em my way! I’d be happy to offer them a discount, as a friend of yours.”

These options aside, however, the easiest way to get referrals is still to provide great customer service. Looking back on the question, “What is customer service in terms of investment?”, providing great customer service doesn’t just mean ROI from the customer in question. It also means a greater likelihood that their connections will turn into customers, racking up that ROI even more. With potential that great, the cost of customer service is more than worth it. 

Practicing good customer service makes you stand out from your competitors.

Competition Graphic - Brittany Hodak

Finally, the last thing to remember is how much good service makes you stand out from your competition. Nowadays, with the incredible amount of information out there, brands rip off each other every day. Maybe it’s a product design, a social post, or a website. Maybe it’s a sales or marketing strategy or an approach to a current event. Either way, what this comes down to is the simple reality that anyone can copy anything about your company except for the way you treat your clients. Even if one of your competitors looks the same, functions the same, even sells the same as your company, providing exceptional service can mean customers don’t even look at your competitors, let alone buy from them. After all, they already love you and your brand so much!

For now, that just about wraps up this guide! Moving forward, the next time you hear someone ask, “What is customer service and why is it important?”, just remember: it’s all about supporting your clients and team members in return for the support they give you. It’s that simple (and well worth the effort every time). 👍

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