8 Reasons Why Customer Service Is Important and a Priority

By Indeed Editorial Team

Updated July 14, 2022 | Published October 27, 2020

Updated July 14, 2022

Published October 27, 2020

GettyImages-867405726

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A call center representative speaks to a customer over the phone while looking at their computer.

If you're looking for ways to increase company profitability, your customer service department is a good place to start. A well-trained customer service team can reflect a positive company image, as well as help you attract and retain customers.

In this article, we’ll discuss eight specific reasons why customer service is so important.

What is customer service?

Customer service is how your company interacts with its customers, both in daily transactions and also as a problem-solving solution when issues arise. It has a direct and meaningful impact on your company’s profitability as your customer service team serves as the front-line response to your customer’s needs and is crucial for long-term customer retention.

Related: Customer Service Skills: Definitions and 17 Examples

8 reasons why customer service is important

Here are eight reasons why customer service should be an important priority for every company:

1. Helps you retain customers

If a customer has a good experience with a company, they’re more likely to return, and the more loyal customers you have, the more your company can grow to its full potential. For instance, if your customer service team has a seamless procedure that makes online returns quick and simple, you’re more likely to retain customers and build a loyal customer base that appreciates your no-hassle return policy.

Read more: Understanding Customer Retention With Strategies

2. Boosts employee retention

Employees want to work for companies that treat their customers fairly. When your employees see that your company is focused on delivering exceptional customer service, they will be more likely to become advocates for the business. They are also far more likely to remain with the company and be fully engaged in their work.

Read more: 10 Benefits of Employee Retention

3. Reinforces company values and brand

Your customer service team communicates with customers on a daily basis, which means that they are directly responsible for representing your brand's mission and values. Great customer service can result in positive reviews and word-of-mouth recommendations for your business that can lead to new business. A positive public persona can strengthen the way people see your company, products or services.

Related: 9 Ways To Provide Excellent Customer Service

4. Generates referrals

Positive word-of-mouth referrals come directly from previous and existing customers that have had a great experience with your company. They tell their friends, relatives and colleagues and may even post to their social network about your friendly and helpful customer service. Their contacts, in turn, feel encouraged to buy from you. Word-of-mouth advertising is often a company's best and least expensive form of advertising.

Related: Organic Traffic: What It Is and Why It’s Important

5. Increases customer lifetime value

Customer lifetime value (CLV) represents the total amount of revenue your company can expect to receive from a single customer over time. By increasing the CLV, you can significantly increase your company's revenue without having to spend more on marketing. An increasing CLV means that your customers are spending more money each time they order or they are buying more often.

Customer service is a great way to increase CLV. If customers have a positive shopping experience, they'll be more likely to buy from you again. It’s also easier to market new products to existing customers. Return customers are more likely to trust the products and services your customer service team is recommending because they’ve already had a great experience.

Related: 11 Methods for Building Customer Loyalty

6. Proactively addresses customer issues

Proactive customer service is when you reach out to customers before they know that problems exist. By being proactive with your customer service approach, you can let customers know that you're working to improve the user experience for them.

For example, if you have a group of customers who had a common problem and released a new product or feature that resolved that issue, you could use your ticketing system to identify those customers and then reach out to let them know about the new feature or service. This approach can be effective because customers recognize you're trying to resolve problems for them.

Related: Net Promoter Score (NPS): Definition and How To Measure It

7. Strengthens company culture and streamlines processes

When everyone at your company shares the same end goal of customer service, you promote a more streamlined workflow. For example, your engineers may be more willing to help the sales team, or the production team may be more willing to listen to the customer support representatives. Ultimately, by making serving others a priority, you can create a culture of helpfulness within your organization.

Related: 20 Exciting Customer Service Training Ideas

8. Gives you a competitive advantage

Great customer service does more than just win over new customers and retain loyal ones. It also sets you apart from the competition. By offering best-in-class customer service, you are attaching values to your company’s brand, strengthening your reputation in the market place and showing by example that you care about the people who purchase your product or service.

Related: 10 Most Common Customer Service Interview Questions

In this video, Sinead reviews the 10 most common questions that recruiters ask in a customer service interview with examples for how to answer.


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