When it comes to growing a business, few things are more important than excellent customer service. Most brands consider customer service a necessary expense to handle customer issues. But in reality, customer service is important because it has a huge impact on your revenue.
Especially in the current landscape, strong customer experience — which depends on good customer service — has eclipsed customer acquisition as the most reliable path to growth. VP of Shop at Shopify, Carl Rivera, says, “Customer acquisition costs have risen to enormous levels. The clear solution for brands is to increase their repeat rates and increase customer lifetime value.” Thanks to repeat purchases, reviews and organic social media mentions, and word-of-mouth advertising, return customers are 300% generate more revenue than first-time shoppers.
In this article, we'll explore 12 unique ways that excellent service can be a differentiator for your brand and help you grow your business to new heights.
12 reasons why customer service is important to your bottom line
Businesses that focus on the customer experience are more profitable than those that don’t: Research finds that customers who have good experiences spend 140% more than customers who have bad experiences.
From generating more referrals to increasing your average order value, there are several ways that a great customer service experience can provide your company with a competitive advantage. Here are the 11 biggest reasons why high-quality customer service is a key part of growing an online business:
1) Bad customer service repels customers faster than just about anything
According to Retail Dive, a whopping 73% of customers won’t return to your brand after just a couple of poor customer service expenses. And difficulty retaining customers is just the beginning: 30% of upset customers will share a bad customer service experience with others, according to the Sitel Group’s Customer Experience (CX) Index.
Your customer service agents are your brand’s frontline representation. Whether you’re a small business or a large enterprise, reps have the capacity to enable sales — but they also have the capacity to drive new customers away and dissolve relationships with current customers.
2) Solid customer service increases customer conversion rates
Customer service doesn't just mean addressing customer issues after the customer has an issue with a purchase. In many cases, customer support reps act as sales agents by answering pre-sales questions and offering discounts to get customers to place an order.
Proactive customer support solutions such as live chat apps enable you to guide customers through the checkout process, offer personalized product recommendations, and more. Proactively targeting anyone who visits your website with personalized support can be a big boost to your site's conversion rates, evidenced by the fact that 38% of customers claim to have made a purchase due to a positive live chat experience.
3) Customer service boosts first-time customer confidence
New customers are often hesitant to trust a company that they have never done business with before. For example, consider the fact that 18% of consumers who abandon their cart do so because they don't trust the website with their credit card information. Great customer service is one of the best ways to improve customer confidence.
Your customer support team can create self-service resources like an FAQ page or Help Center to educate customers about your return policies, shipping practices, and the quality of your materials or ingredients. And by proactively during the pre-purchase process, you can provide first-time customers with the answers they need to make a purchase.
Take a look at Brümate’s Help Center (built on Gorgias), which answers key pre-sales questions about each product, plus frequently-asked questions about payment, shipping, and more
4) Creates an organic referral initiative
It goes without saying that happy customers are much more likely to recommend your brand to others than customers who have a poor customer service experience. Given that 94% of U.S. shoppers will recommend companies with service they rate as “very good,” boosting customer satisfaction via high-quality support is something that can empower an organic customer acquisition strategy. If you would like to take full advantage of word-of-mouth marketing, offering better customer service to meet customers’ needs is a great place to start.
5) A great customer service experience gets more reviews on public forums
Along with increasing the likelihood of organic referrals, a great customer service experience also increases the likelihood that a customer will leave a positive review of your product or service. Whether it's on Amazon, Google, Yelp, or your product pages, positive reviews offer an immense amount of value thanks to the power of social proof.
Ninety-five percent of customers report reading online reviews before making a purchasing decision, showcasing just how important these reviews can be when it comes to attracting new business. While great customer service isn't the only factor that can generate positive online reviews for your company, your reps can play a big role in soliciting reviews from happy customers.
6) Satisfied customers have higher average order values (AOV)
According to data from Shopify, businesses that offer proactive live chat customer support generate a 10%-15% higher AOV than those that do not. By addressing any questions or concerns that may be preventing a customer from making a purchase, proactive customer support can both boost your conversion rate as well as grow your AOV by encouraging customers to purchase additional products that they might not have bought otherwise.
According to Gorgias data, repeat customers make up only 21% of the average brand’s customer base but generate 44% of that brand’s revenue thanks to these higher cart values:
Another effective way that customer supports boost AOV is the fact that it provides your sales team with upsell and cross-sell opportunities that they can use to generate more revenue from existing customers.
7) You can attract and engage customers on many channels
When building an online presence for your brand, it's a good idea to leverage as many different channels as possible, including text (SMS), live chat on your website, and social media. When you are able to engage with customers across numerous social media channels, it becomes much easier to grow your customer base. While there's a lot that goes into building a brand image across numerous channels, offering multi-channel customer support is a great place to start.
With customer support solutions such as Gorgias, companies can communicate with customers across a variety of channels from a single unified dashboard. Offering multi-channel customer care helps you build an online presence that generates higher revenue for your company. Companies that offer multi-channel customer support report 4.6% higher gains than those that do not.
8) You’ll notice a better customer LTV thanks to customer loyalty
Microsoft finds that a staggering 95% of U.S. consumers use customer service quality as a factor when determining whether or not to do business with a company. By generating more loyal customers for your company, excellent support can reduce churn and improve your customer lifetime value (CLTV).
One well-known rule of business is that attracting new customers is always more expensive than marketing to your existing customer base. By prioritizing customer relationships and positive customer experiences, you can ensure that the customers you attract remain loyal to your brand and offer as much value as possible over the full course of their relationship with your business.
9) Great customer service means you can reduce marketing spend without sacrificing growth
Between social media, content, advertising, and SEO, marketing can get very expensive very quickly. In fact, these expenses cost many small businesses thousands of dollars every month.
Great customer service that generates word-of-mouth referrals, positive reviews, and repeat customer service is a much more cost-effective and sustainable path to growth for your brand.
Great customer service also improves customer retention and enables you to draw more value from your existing customers rather than spending money trying to attract new ones. In these powerful ways, increasing your focus on customer service initiatives may be able to reduce how much your company spends on marketing while growing your sales.
10) Customer expectations include excellent customer service – and they’ll pay more for it
There's no better proof of how much today's customers value quality customer support than the fact that customers are willing to spend more on products and services backed by a great customer service team.
67% of consumers say that they would be willing to spend more on a product or service for high-quality customer service. This means that offering great customer support can provide your company with a significant advantage over its competition even in the cases where your prices are a little higher.
11) Proactive customer service reduces cart abandonment
Roughly 70% of all online shopping carts are left abandoned, marking a massive amount of unrealized revenue for ecommerce companies. Of the top reasons why customers abandon their cart, many can be mitigated with proactive customer support. Issues such as a complicated checkout process, questions about product pricing, and problems with payment are all common causes of cart abandonment that live chat support agents are able to address proactively.
By walking your customers through the checkout process and being ready to answer any questions they might have along the way, you can eliminate many (if not most) of the reasons why your customers might abandon their cart.
12) Personalized customer service improves conversions and customer loyalty
According to a report from Salesforce, 97% of marketers report an improvement in business results due to personalization. Customer service is no exception: Including customers' names, avoiding asking for the same information multiple times, and providing customer-specific recommendations all help build customer loyalty.
Your customer support platform should make personalization easy by showing a customer’s order and conversation history with your brand, so reps have the full context when speaking to customers:
Plus, if you use Gorgias, you can build variables into your templated Macros, which automatically pull customer data into your messages (like names, order numbers, shipping addresses, etc.) so you can give personalized support without having to dig and copy/paste that kind of information:
Transform customer support into your new growth engine with Gorgias
Your customer support (or lack thereof) is impacting your revenue, whether or not you’re aware. Your job is to make sure it keeps people loyal to your brand rather than driving them away. We built Gorgias to help.
Gorgias is a customer service platform designed specifically (and exclusively) for ecommerce. We help online stores deliver great customer experiences to drive revenue. With Gorgias, you get a comprehensive suite of cutting-edge customer support tools, including:
- A central view of support interactions from all your channels
- Live chat support widgets (including proactive chat campaigns)
- Customer self-service tools like help centers and self-service menus
- Deep integrations with Shopify and other ecommerce platforms to quickly cancel, refund, and modify orders
- Rules and Macros for automating tedious customer support tasks
- Detailed and flexible reporting and analytics features
Want to keep learning about the impact of customer experience on your revenue? Check out our CX Growth Playbook, which shares 18 tactics to improve customer experience and boost revenue by up to 44%.