What Is Customer Service? Explained In Simple Terms

Picture this: You're the owner of a pet goods online store. You've just received a disheartening email from a customer regarding returning a bag of unopened dog food as their dog has passed on. What do you do?

Sure, you could offer your condolences to the pet owner. Or, you could amp up your customer service by giving the customer a full refund, asking them to donate the food to a dog shelter, and sending flowers with a gift note. Which is exactly what Chewy did:

This is quite possibly the best example of exceptional customer service in action.

So, What is customer service?

Customer service has become more well-rounded today - it is not simply resolving customer queries. It is about preempting their needs. It is not just about answering questions; it is about taking on an advisory role to wow your customers.

It is not simply about saying sorry and calling it a day. It is about empowering customers with timely and personalized communication at every step of the customer journey.

In other words, customer service—good or bad—can define an organization's success and growth. Right from initial conversations to post-purchase follow-ups, companies that embrace customer service as their true North dominate the market share and (user)mind share.

In this guide, we will define customer service, understand the importance of customer service, and provide an in-depth explanation of customer service in terms of benefits and best practices. We will also learn how brands can step up their game.

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Meaning of customer service

Let's start by understanding what are objectives of customer service.

Customer service refers to the direct interactions and the support provided to customers before, during, and post their interaction with a company.

Good customer service involves the following:

• Engaging customers in a positive, helpful, and professional manner
• Meeting customer needs
• Resolving issues
• Building strong relationships and fostering loyalty
• Ensuring overall satisfaction

Evolving in nature, customer service is constantly shaped by changing customer expectations and technological advancements.

Historically, customer service revolved around face-to-face interactions and limited communication channels (think: in-person visits or phone calls). With the advent of digital communication, customer service has expanded to include email, online chat, social media, and self-service options.

Today, customers expect more than just basic assistance. They seek personalized experiences, quick resolutions, and round-the-clock support. Plus, the rise of social media has made customer service more visible and immediate. Customers can share their experiences and opinions with a global audience.

Additionally, automation and artificial intelligence have introduced chatbots and virtual assistants. This enables businesses to provide 24/7 support and handle routine inquiries efficiently.

Four key elements of effective customer service:

• Communication: Clear and effective communication involves the following:
  • Actively listening to customers
  • Understanding their needs
  • Responding promptly and appropriately

To that end, customer service representatives should use easy-to-understand language. They should offer accurate information and keep customers informed throughout the process.

• Empathy: Empathy plays a pivotal role in creating positive customer experiences by helping customer service agents to:
  • Understand and share the feelings and emotions of customers
  • Demonstrate genuine care and concern for the customer's concerns and frustrations
  • Put themselves in the customers' shoes, validating their experiences
  • Build trust and goodwill among the user base
• Problem-Solving: A proactive service approach to problem-solving is the bedrock of excellent customer service. Its representatives should:
  • Be equipped with the knowledge, skills, and resources to address customer problems efficiently
  • Actively seek solutions, take ownership of the situation, and work toward a resolution
  • Leverage creativity, flexibility, and a commitment to finding the best outcome for the customer
• Personalization: Personalization is about tailoring the customer service experience to meet individual customer needs and preferences. Brands should have an in-depth understanding of the customer.
  
  This includes their preferences, purchase history, and previous interactions. This data paves the way for the following:
  • Customized recommendations
  • The ability to anticipate customer needs
  • Delivering personalized assistance

The role of customer service

While often used interchangeably, customer service and customer support mean different things. They are:

The significance of customer service in building customer loyalty cannot be overstated. It can leave a lasting impression on customers and convert them into brand advocates.

By providing prompt, efficient, and personalized service, businesses can demonstrate their commitment to customer satisfaction. This leads to increased trust and loyalty.

Types of customer service channels

To deliver effective customer service, it is essential to leverage a cross-channel mix and be present where your customers are.

Some commonly used types of customer service include:

• Phone Support:

• Email Support: Email doubles up as a written communication channel. This is where customers can detail their issues, and customer service agents can respond with thorough answers. ASOS' email below demonstrates proactive customer service for an order that is running late.

• Live Chat Support: Live chat is an ideal tool for offering convenient and immediate responses to customer queries. It also helps in engaging with customers in real time.
• Social Media Support: This type of customer service involves addressing customer concerns, inquiries, and feedback. This is done through public or private messages on platforms like Twitter, Facebook, or Instagram. Starbucks leverages its Twitter handle to iron out customer issues and engage customers in fun, loyalty-building conversations

Building a customer-centric culture

A customer-centric culture is paramount for organizations. It places customers at the heart of business decision-making. So, every product you roll out, every interaction you have with the customer, and every feature you enhance is done keeping the end-user in mind.

On the employee side, a customer-centric culture ensures every employee understands the significance of delivering exceptional customer experiences. It also ensures that every employee is aligned with the organization's core values and helps deliver omnichannel customer service.

Strategies for fostering a customer-centric culture within an organization:

1. Commitment by leadership

Creating a customer-centric culture starts with buy-in from the leadership. Consequently, the senior stakeholders should:

• Demonstrate a strong commitment to placing customers first and lead by example
• Establish clear goals and expectations
• Incorporate customer-centric values into the organization's vision and mission
• Emphasize the significance of exceptional customer experiences and set the tone for the entire organization

2. Employee training and empowerment

Organizations must equip employees with the necessary skills and knowledge by:

• Conducting comprehensive training programs that are customer-focused and demonstrate empathy
• Empowering employees to take ownership of the customer interactions
• Helping employees to understand their roles--and the impact they have--on customers

3. Feedback and continuous improvement

Regular feedback from customers is a treasure trove of insights for organizations.

This is why organizations must focus on implementing a robust feedback mechanism (think: surveys, reviews, and customer satisfaction metrics) to gather actionable information. This data can then be used to identify areas for improvement and drive continuous improvement.

Four key customer service metrics and how to measure them

Want to analyze the quality of your customer support efforts and make data-driven improvements? Start by tracking these four important customer service metrics:

1. Customer satisfaction (CSAT) score:

Definition: It measures customer satisfaction levels based on a survey or feedback system.

How it works: You ask customers to rate their satisfaction with a recent interaction or overall experience.

CSAT score: Number of satisfied customers/Total number of survey respondents x 100

2. Net promoter score (NPS):

Definition: It measures customer loyalty and the chances of customers recommending your business to others.

How it works: It asks a simple question: "On a scale of 0-10, how likely are you to recommend our company/product/service to a colleague or friend?"

Respondents are categorized as promoters (9-10), passives (7-8), or detractors (0-6).

NPS score = % promoters - % detractors

3. First response time (FRT):

Definition: FRT measures the time it takes for a customer to receive an initial response from the time they first reached out for help.

How it works: It refers to the number of minutes/hours that have passed since the customer has lodged a complaint and an agent has responded to it.

Average First Response Time = Sum of first response times/number of contacts x 100

4. Average resolution time (ART):

Definition: It measures the average time it takes to resolve a customer's issue.

How it works: This metric comes in handy for tracking the efficiency of your customer support team.

Average Resolution Time = Total duration of resolved conversations/number of customer conversations

5 Effective customer servicing strategies

Customers today seek personalized experiences and prompt query resolution. To meet their evolving expectations and resolve customer complaints, adopting effective customer servicing strategies are key.

Providing exceptional customer service requires a strategic approach that focuses on the following

1. Prepare for customer interactions:

Actionable tips:

• Implement a customer relationship management (CRM) system to collect and track customer information.
• Train your team to review customer profiles before interactions to understand their preferences and history.

Use-case: Sephora Singapore routinely rolls out unique events, such as a free skin analysis for customers to provide personalized service

2. Drive knowledge and information management:

Actionable tips:

• Create a centralized knowledge base accessible to both customers and employees.
• Regularly update it with relevant information, troubleshooting guides, and product details to empower customers to find answers independently.

Use-case: HubSpot has set up a vast knowledge base. This base provides customers with comprehensive product information, reviews, and frequently asked questions. This empowers customers to make informed purchase decisions

3. Anticipate customer needs before they arise:

Actionable tips:

• Leverage robust customer data analytics to identify recurring patterns and anticipate customer needs.
• Offer personalized recommendations that are based on unique customer preferences and past behavior.

Use-case: Netflix employs sophisticated algorithms to anticipate what viewers may want to watch next.

This makes the viewing experience unique to each and every subscriber.

4. Engage with customers qualitatively:

Actionable tips:

• Train your customer service team to engage with customers politely and empathetically.
• Encourage active listening and motivate agents to establish a strong rapport with customers.

Use-case: Nike has a dedicated customer service page on Twitter to handle customer issues on the go:

5. Laser-focus on the team's communication techniques:

Actionable tips:

• Train your team to use clear, jargon-free language when communicating with customers.
• Ensure the team's responses to customer queries are instant, relevant, and concise.

Use-case: Apple reinforces clear and concise communication across all the communication touch points. The brand's customer service representatives can leverage useful self-paced, online courses to upskill and hone their capabilities:

Harnessing technology for customer service

Technology plays an instrumental role in modern customer service today. Technology is everywhere, from AI-powered chatbots that deliver instant support to advanced data analytics for driving personalized recommendations.

The three key aspects of harnessing technology for customer service are:

1. Customer relationship management (CRM) systems:

CRM systems help businesses manage and analyze their customer interactions. Customer service solution like DevRev enables you to:

• Get personalized help in real-time using natural language-generated answers
• Reduce response times with automated answers and ticket clustering
• Prioritize customer impact with swift analysis
• Boost visibility for end-users by automating updates and real-time progress

2. AI-powered chatbots and virtual assistants:

AI-driven chatbots are leading the way in providing instant 24x7x365 support. These chatbots do not tire, take breaks, or make errors.

For instance, Amtrak uses an AI tool "Ask Julie," that can answer travel-related queries in real-time:

Julie is a jack-of-all-trades. She provides information on ticket details and train schedules. She can also answer frequently asked questions.

What is amazing about using an automation tool is that your team will be able to handle a high volume of customer queries while maintaining a positive customer experience.

3. Self-service options:

Self-service options -- FAQs, online forums, and knowledge bases -- empower customers to find solutions and answers independently.

Airbnb's extensive community forum and knowledge base is an example of this. This allows users to access information about their payments, property listings, and bookings in one click

Users can quickly find answers without waiting for direct support and wasting time with Airbnb's self-service approach.

Importance of customer care in the digital age

Here are three important aspects that define customer service in the digital age:

A. Digital transformation

Digital transformation is revolutionizing customer service by introducing new channels and capabilities into the mix.

Customers now expect seamless, contextual, and efficient interactions through a myriad of digital platforms such as websites, mobile apps, social media, and messaging apps.

This tectonic shift has enabled businesses to provide 24/7 support without compromising on response time. They can also collect and analyze useful customer data and gain deeper insights into what makes their customers tick.

2. Omni-Channel customer service:

Omni-channel customer service is the superpower that allows you to deliver consistent, integrated experiences across channels.

Customers can now choose their preferred channel for communication, whether it's a phone, email, live chat, social media, or self-service portals. For instance, 93% of customers will spend more if companies give them an option to reach customer service through a preferred channel (ex: chat)

Organizations must ensure a unified and seamless experience. This means helping customers to switch channels without losing context or having to repeat information--a must-have for 92% of customers.

3. Personalization and customization In the digital era:

Research indicates that 90% of customers will spend more with companies that personalize their customer service. So, if you want your customers to feel understood and valued by the business, leverage advanced analytics and personalize your product recommendations, marketing campaigns, and support, among others.

Where is customer service headed?

Halfway into 2023, it's high time brands realize that a 'one-size-fits-all' approach to customer service will not cut it.

Businesses need to adapt to the rising customer demands byintegrating automation and artificial intelligence (AI) into their day-to-day processes. Otherwise, they risk letting the customers fall through the cracks.

Data claims, "61% of customers are now willing to walk away after just one bad customer service experience."

Plus, while automation and AI play a significant role, the human touch remains central to customer service. After all, human agents bring problem-solving, critical thinking, and creativity to the table. These are qualities that AI tools still cannot replicate.

The writing is on the wall: Businesses must focus on blending human skills with automation. This hybrid approach will empower customers with the best of both worlds: the convenience of automation and the empathy of human conversations.