Why Service is the New Competitive Advantage



In many cases there is a true disconnect between businesses and consumers regarding the reasons that customers become dissatisfied and leave. Although many businesses tend to think that price is the most critical factor in terms of customer loyalty, the research shows that customer service is generally the most pivotal component. I hope to offer some tips and thoughts on how to ensure that your business’ customer service can be improved, and how you can ensure that it becomes a competitive edge.

Customer service is key, there is an abundance of research out there to highlight this, a compiled version below demonstrates the fact.


What this shows is that although the departing customers consider numerous factors when leaving, customer service is most often their “make or break” factor.

Many of us can relate to this, I can immediately think of two obvious examples in my personal life. In the first, I had ordered a gift for my father on a website that I had previously had good experiences with, however with no updated information, I was informed a week after ordering that they had accidentally oversold the item, and that there was nothing they could do.

I emailed customer service, frustrated, but polite, and told them about how this effected me and that as a result I no longer would have a gift in time due to their lack of prompt communication. Their response was “canned,” a $5 discount on future orders, and nothing more. At this point, I didn’t care at all about the discount or any specific compensation, what I really wanted was acknowledgement and an apology – of which I got neither. I never returned, and told them why.

The lesson here is that good customer service is empathetic, and knows when to apologize and attempt to rectify a mistake. Your customers are human beings also, they understand mistakes happen, but when you don’t explain and empathize, compensation won’t go very far.

Another example in the “physical world” comes from a visit to a jewelry shop. There was only one customer representative working the room at the time, and she was with another customer at the time. As I walked in with my girlfriend, the sales person didn’t say hello or acknowledge us. We spent a few minutes walking around looking, all without any greeting. So we left. We didn’t need a red-carpet welcome; all we wanted was a quick hello to feel welcomed. I went on to buy my gift at the neighboring shop.

The lesson here is that you need to make your customers feel welcomed and wanted. This is easier to do in the physical world, and it’s fundamental. Online, this means including welcoming and appreciative messages in everything that the customer receives, while keeping the access to the people involved with your company as open as possible.

It should be easy to find the contact information for key people, and it should be easy and pleasant to reach somebody. Even if the online customer doesn’t contact, simply having the information and the human-element of the business more transparent makes them feel more comfortable and implicitly welcomed.

The key recommendations: 

– Always acknowledge and empathize with any problems that your customer encounters.

– Be welcoming and appreciative of the customer’s presence and business.

– Make it easy and comfortable for customers to reach out when they need something.

– Keep communications quick and personal.

– Add a personal touch to everything that you can, even if it’s just a one-line addition to a template email – authenticity rules.

– Offer to communicate through whichever channel is most convenient for your customer not you. (i.e. Skype, phone, email, IM, etc.)

This list could go on for days, but I truly believe that the aforementioned provides a solid foundation for any customer service strategy. Obvious things like: “make sure you are polite and well tempered” shouldn’t require mention – if you can’t get things like this sorted out, then you deserve to lose business. Although the customer isn’t always right, they are the one paying your bills – never forget that!

Reprinted by permission.


About the author: Maxim Wheatley

Maxim Wheatley is a recent graduate of Georgetown University, having studied Cognitive Science & Psychology. He is currently working to become an iOS development guru. His interests center around startups and new ventures, he has already been involved in three different startups, and started two small businesses before he graduated college. Currently based in Washington, DC, Maxim is always interested in talking about ideas and opportunities wherever they might be.

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