How does customer service drive sales and profits

The Role of Customer Service in Driving Sales and Profits

Customer service has mostly remained unassociated with marketing and brand image. However, as time passed and with the proliferation of the internet technology, brands have started taking it seriously. The reason was that  bad word of mouth could affect your reputation easily.

On the other hand it was discovered that the companies that provided better customer service did better than their competitors. So, what once was seen as out of the main picture now become an intrinsic part of it. Customer service is now being linked with brand image, brand equity and profitability as well.

Competition has increased in the 21st century leading to higher focus on customer attraction and retention. Customer relationship management has risen as another important area which can yield great results. So much focus on forming strong relationships with customers is because it reduces the customer acquisition costs as well as creates a better image and gives rise to better word of mouth.

Overall, customers are now the central focus in terms of business. Every company needs and wants positive word of mouth and great customer service is one of the simplest tools to drive higher loyalty and stronger relationships. A satisfied customer can be retained for longer and he will refer several more. So, one strong relationship can lead to many. Customer service can help you obtain several major benefits.

Advantages of great customer service:

1. Higher customer retention:

Customer service is not just about addressing the customer issues and solving your customers’ problems. It is also about retaining your customers for longer. It is about providing your customers an overall better experience. Customer service is therefore an important part of your business strategy. Retaining your customers for longer is like adding to your customers’ lifetime value.

While every customer is valuable, you would not like seeing any of them dissatisfied. Dissatisfaction among customers leads to higher churn rate. To create highest satisfaction, you must focus on better customer service.

It is also a way to understand your customers better and lets your customers know that you truly care. There are a few important things regarding great customer service and one of them is communication. Communicate with your customers to keep them engaged and thus retain them longer.

2. Opportunity for promotion of new products:

Customer service also provides you some attractive new opportunities to grow your relationships with your customers. While addressing a concern or issue, you can promote your new products before your customers. You can promote new packages or warranty extensions or even delight the customers with special savings and promotions. This will help grab new sales and create higher customer loyalty as well. Customer service if taken seriously opens doors for new opportunities before brands.

3. Word of mouth:

Word of mouth is a great tool for marketing your brand and there are several examples in the industry which show that it can be a powerful weapon that can maximise your brand recognition. Starbucks and Apple have used this tool with great skill and success.

Delivering best customer experience gives rise to better word of mouth. It affects sales directly through acquisition of new customers. The bigger benefit is that your customer acquisition costs are automatically getting lower. In this way, you can turn your customers into your sales reps.

The customers would vouch for your services and this will lead to higher trust and growth in customer base. Now a days a customer first goes through a  review of your services before trying them. If your customers post positive reviews of your brand and talk about you on social media, it’s a great sign. Your fame propagates faster and you get to create a positive image among your customers. Several major brands have been able to increase their earnings through customer referrals. When your customers are satisfied, their chances of referring others are higher.

Customer service should not be seen as distinct from sales and marketing but as an opportunity for more marketing and generating more leads. Amazon is a unique case that proved how brands could grow extra large just through excellent customer service.

More and more brands are focusing on the quality of their customer service to grow their reputation and retention rate. It is now a proved remedy for high customer churn rate. You must complement your marketing with excellent customer service. Apart from creating satisfaction, you will get an opportunity to attract new prospects and benefit from extended CLTV.

Abhijeet Pratap

I have studied Marketing and English Literature and like to write on topics in Business management, Marketing, literature, latest technologies and other areas. I also like to spend my time learning coding.