For any successful business, developing and selling a good product or service is only half the battle. Providing your customers with good customer support is just as important.

After all, shopping is as much of a transaction as it is an experience.

By providing good customer service experiences, your customers will associate that good feeling with the transaction. They will then be more likely to come back and transact with your business again.

Video of why good customer service is important

Here at Moment, we will break down 9 key reasons why customer service is important and how it can further increase the revenue of your business:

  1. It adds value to your product or service
  2. It increases customer Retention and Recurring revenue
  3. Results in positive reviews and brand image
  4. It boosts your employee's morale and reduces turnover Costs
  5. It adds value to your brand
  6. Builds customer trust and loyalty
  7. Sets you apart from your competition
  8. Makes it easy for customers to do business with you.
  9. Encourages word-of-mouth marketing.

Did you know that 96% of businesses will fail within 10 years? One of the contributing factors is due to bad customer service! So let's get into it!

What is Good Customer Service?

First, let’s quickly review what makes customer service good.

Good customer service will effectively assist and empower your customers through the entire purchasing process. From pre-purchase, through their purchase and all the way to their post-purchase experience.

Here are three questions that will help you figure out how to provide better customer support in your business.

1. How can I better assist customers who are interested in purchasing my product or service?

Can you quickly provide accurate answers to your customer questions? Are your support reps highly educated about your product offering? Are you able to provide trials or deals for customers who are “sitting on the fence”?

2. How can I better assist customers during the purchasing process?

Is it easy to submit an order to your business? Are you able to accommodate custom requests? Can you efficiently solve errors with orders? Can you provide the customer with order details such as package tracking?

3. How can I better assist customers after the purchase has occurred?

Are you able to quickly and easily fix any issues with faulty products or errors in service? How do you make it up to the customer in such cases? Are you educating your customers on how to get the most value out of your product or service? How easy is it for your customer to send in something for repair? Are you rewarding your customers for their loyalty and repeat business?

As you can see, good customer service is an easy yet complex subject. Plus, it varies from industry to industry. What might be considered a good customer service practice in one industry, might not be helpful in another.

Now, on to the meat and potatoes, why is good customer service so important anyway?

9 Reasons Why Good Customer Service is Important

Now that we know what good customer service is, let's show you 9 reasons why great customer service is important to improve it!

9 reasons why customer service is important:

  1. It adds value to your product or service
  2. It increases customer Retention and Recurring revenue
  3. Results in positive reviews and brand image
  4. It boosts your employee's morale and reduces turnover Costs
  5. It adds value to your brand
  6. Builds customer trust and loyalty
  7. Sets you apart from your competition
  8. Makes it easy for customers to do business with you.
  9. Encourages word-of-mouth marketing.

1. It Adds Value to your Product or Service

Like we mentioned earlier, a good product or service can only get you so far. If you add great customer service to the equation, the value of your offering immediately increases.

86% of consumers will pay 25% more for better customer service

And added value can translate to increased revenue. In fact, most people will happily pay more for the same product or service if it comes with great customer service.

Good customer service can justify a higher price tag on your product or service.

2. It Increases Customer Retention and Recurring Revenue

It’s always cheaper to retain a current customer than to acquire a new customer.

Therefore, providing good customer service is an effective way to keep your customers coming back and purchasing your products. It’s also cheaper and more effective than advertising and marketing to people who don’t even know about you in the first place.

It costs 5 times more to get a new customer than to keep an existing one

Plus, every customer that decides to stay doing business with you is also one less customer leaving and doing business with your competitors.

Read more on customer Retention:

3. It Results in Positive Reviews and a Positive Brand Image

What’s the first thing a customer might do when they have a negative customer service experience with your business? Write a negative Facebook post tagging your brand, a 1-star yelp review for the world to see, or worse, a full-blown blog post ranking for your brand’s name on Google.

Funny customer review on amazon
Source: https://www.wordstream.com/blog/ws/2014/04/15/funny-amazon-reviews

Not only are these scenarios preventable, but you can turn them around into positive reviews and posts by providing each of your customers with great customer service.

Even when a customer has already left a 1-star review, following up and assisting them further can be what they need to turn that 1 into a 5.

4. It Boosts Your Employee’s Morale and Reduces Turnover Costs

Customer Service employees love to effectively and quickly help your customers. After all, if they make the customer happy, it means they have done a good job.

On the other hand, no one likes to be the bearer of bad news or be at the receiving end of an angry rant from a displeased customer.

Providing your Customer Service staff with the proper tools and training to solve any issue a customer might face is the key to boosting their morale and reducing turnover (... and turnover can be very expensive!).

This also goes beyond your customer service staff and applies to all employees. In fact, people don’t like to work for companies with a negative reputation or that is flooded with negative reviews and criticism.

1 in 3 people declined a job offer because of bad online reviews

5. It Adds Value to Your Brand

By now, you might see how the 4 previous points all add up to increase the value of your brand.

Customers have positive experiences, which turn into a positive company reputation, which turns into a positive workforce. This workforce then is motivated to work harder and offer even better customer service experiences.

All of this occurs while also boosting your revenue from customer happiness

Over time, your brand name will be synonymous with positive customer experiences, increasing its value.

This can be advantageous when launching new products, expanding into new industries, valuating the company for investors and more.

6. Good customer service builds trust and loyalty

When customers are happy with the service they receive, they are more likely to trust and be loyal to that company. Good customer service creates a positive experience for customers, which can result in repeat business and referrals.

Good customer service is the lifeblood of any business. You can offer promotions and slash prices to bring in as many new customers as you want, but unless you can get some of those customers to come back, your business won’t be profitable for long. Good customer service is all about bringing customers back.

If you have good customer service, you will increase the likelihood of doing repeat business with your customers over time because they will be more satisfied with their overall experience with your company. This means they are also more likely to refer others who need the services or products that you offer.

7. It sets you apart from your competition.

In a world where it's all too easy to switch brands, good customer service is key to keeping customers loyal. If they feel valued by their current provider, many are more likely to stay put, even if competitors offer lower prices or better deals. Why? Because the quality of customer experience matters for brand loyalty and profitability. A recent study showed that 70% of consumers said they'd be willing to spend an average of 13 percent more with companies they believe provide excellent service

If you have good customer service and your competitors do not, that can set you apart in the market. Customers are more likely to choose a company that provides excellent customer service over one that does not.  Why? Because good customer service results in trust and loyalty, which are vital to a company’s long-term success.

If you can provide better customer service than your competitors, you will be more likely to attract new customers. Why? Because a positive customer experience is one of the key factors that influence people’s buying decisions.

8. Makes it easy for customers to do business with you.

Good customer service makes it easy for customers to do business with you. When customers have a positive experience with your company, they are more likely to come back and do business with you again.

Good customer service also makes it easy for customers to recommend your company to their friends and family. Why? Because a positive customer experience is one of the key factors that influence people’s buying decisions. Why? Because good customer service results in trust and loyalty, which are vital to a company’s long-term success

9.  encourages word-of-mouth marketing.

Positive word-of-mouth marketing is one of the best forms of advertising. When customers are happy with your company, they are likely to tell their friends and family about it. This type of marketing can help improve sales and profits.

Good customer service encourages word-of-mouth marketing, which is one of the best forms of advertising. Positive word-of-mouth marketing can help improve sales and profits by encouraging people to tell their friends about it.

Word-of-mouth marketing is a win for everyone involved: It’s free for you, it helps you get new customers, and it makes them feel good about recommending your product or service!

When someone tells another person how much they like something (or even hate something), that person might tell two other people who also like what they heard – that’s three more potential customers.

Now that you know why customer service is important, take action!

If you keep thinking about it, you can probably find more ways in which good customer service can snowball and have a great impact on a company’s revenue.

Now that you realize the impact of providing good customer service, then the next step is to figure out how to provide it.

Luckily, we've written an in-depth guide on how to provide customer support via live chat.

You may also be interested in reading our beginner''s guide to A/B testing

Originally published Nov 11, 2019, updated February 1, 2022