Small Business Customer Service Advice

Why Great Customer Service Still Matters to Small Businesses

Small business owners have always known that great customer service is a competitive advantage. But how important is customer service to consumers? We've got the numbers you need to decide for yourself.

Unable to compete with larger companies on price and other factors, there is a reason why many small business owners aim to dominate in the area of customer service.

Importance of Customer Service

Historically, customer service has been a key point of differentiation for startups and small businesses, delivering a loyal customer base to companies that are outgunned by their competitors' economies of scale, massive marketing budgets and brand awareness.

But the big question is whether or not consumers still care as much about customer service as SMB owners hope they do. In an era characterized by tight personal budgets and sophisticated brand connection channels, do consumers still value customer service enough to transfer their loyalty to smaller firms?

As it turns out, customer service has never been more important to consumers than it is right now. According to a survey released by the American Express® Global Customer Service Barometer:

  • Six in ten American consumers feel businesses have failed to increase their focus on providing good customer service -- an increase of 5% from 2010.
  • 78% of consumers have not made an intended purchase based solely on a poor customer service experience.
  • A majority of Americans (59%) are willing to try out a new company if they think they will receive better customer service.
  • An overwhelming number (81%) of consumers agree that small businesses do a better job at customer service than large companies.

Customer Service Lessons for Small Businesses

For small business owners, the takeaway couldn't be more clear: Good customer service doesn't just improve your ability to compete; it can also deliver higher closing rates and a buying experience that hits home with today's consumers.

According to Jim Bush, Executive Vice President, World Service, "Getting service right is more than just a nice to do; it's a must do. American consumers are willing to spend more with companies that provide outstanding service, and they will also tell, on average, twice as many people about bad service than they will about good service. Ultimately, great service can drive sales and customer loyalty."

But despite its potential benefits, effective customer service won't happen unless company leaders make it a company-wide priority and equip employees with the skills they need to exceed their customers' expectations.

In some instances, better customer service may mean empowering front line employees with the authority to resolve customer complaints directly; in other cases, a first-rate customer service experience may necessitate improvements in response times or product knowledge.

For most small businesses, the starting point is to solicit feedback from your customers. The information you receive will prove invaluable in shaping the direction of your customer service efforts -- and ultimately, in enabling your small business to better leverage customer service as a competitive advantage.

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