How Customer Service Can Help Your Business

How Customer Service Can Help Your Business

Posted by HR Division of Propel HR on 12/1/22 1:30 PM
HR Division of Propel HR
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Posted on: December 1, 2022

In the competition for customer dollars and loyalty, delivering a winning customer service experience is a top business strategy. 

Choosing the Right PEOWhat is Customer Service? 

Customer service isn’t just about answering questions and addressing complaints and issues with a smile. Customer service is a critical part of doing business that can impact your bottom line and brand reputation.

AdobeStock_536677677_01What makes it good? While customer service starts with developing a set of policies on how you and your employees interact with customers, it’s the level that your business that ensures your customers feel valued and appreciated that separates your business from the competition. According to a McKinsey study, 70% of buying experiences are based on how customers feel they are being treated. Therefore, creating a positive, high-quality customer experience is just as important as delivering the product itself. 

The Cost of Customer Service

The importance of delivering excellent customer service can be found in the numbers: 

  • Customers will pay 17% more to purchase from a company with a reputation for great service.
  • 96% of customers say customer service is important in their choice of loyalty to a brand.
  • 73% of consumers say a good experience is key in influencing their brand loyalties.
  • 87% of customers who say they had a great experience will make repeat purchases from the same company, compared to 18% of customers who had a negative experience.
  • Customers are likely to spend 140% more after a positive experience than customers who report negative experiences.

Delivering poor customer service costs more than you think. Not just in dollars but also in terms of time, reputation, and future business. Studies show that $62 billion in the U.S. is lost each year due to poor customer service, and 91% of unhappy customers will leave without complaining and quietly take their business straight to the competition.

Ways Customer Service Impacts Your Business

AdobeStock_517542860_01Increases Sales & Builds Business. Positive experiences pay off. The proof is in the numbers. Customers remember good service experiences and, as a result, will reward the businesses that treat them well. In fact, according to an American Express® Global Customer Service Barometer study, 7 in 10 customers say they spent more money with a business that delivers top-notch service. One in four customers is also willing to spend up to 10% more with a company in almost every industry if they know it means they will receive excellent customer service.

For businesses that put customer service at the forefront: 

  • 84% of companies that work to improve their customer experience report an increase in their revenue.
  • Customer-focused businesses are 60% more profitable. 
  • Businesses with a customer service mindset drive revenue 4-8% higher than companies that don’t focus on customers. 
  • Delivering a high-quality customer experience can lower the cost of serving customers by up to 33%

Strengthens Customer Loyalty and Attracts New Customers. When a business delivers a positive experience, customers are far more likely to stick around. An unhappy customer is four times more likely to buy from a competitor if the issue with the business is related to service rather than price or product related.  

Loyal customers are profitable. Returning customers are five times more likely to purchase again and four times more likely to refer a friend to your business.

AdobeStock_542866444_01Reduces Employee Turnover. Your employees are watching and paying careful attention to how your business treats its customers. Employees working with satisfied customers are more likely to remain long-term versus those required to deal with the stress of handling unhappy customers. 

Businesses that invest in initiatives to improve their customer experience see employee engagement increase by 20% on average. And employers with engaged employees outperform the competition by 147%.

Impacts Your Brand Reputation. Word-of-mouth is powerful. 73% of consumers say a good customer service experience ranks at the top when it comes to influencing brand loyalty. 

The impact of word of mouth also has a long rippling effect. Study after study shows that during the buying process, customers will trust personal recommendations over all other sources of information. Customers will share a positive experience with an average of 9 people, but they will tell 16 people about a negative experience. And it will take 12 positive customer experiences to make up for just one negative experience. 

➡️➡️Read more:  How Outsourcing Benefits Small Businesses

For the customer that walks away? The stakes are high. An American Express survey found that 78% of consumers backed out on an intended purchase due to a negative experience. In the same study, 91% of unhappy customers won’t do business with the company again.

And the costs? Expect to pay up. New customers are not so easy to replace. On average, it costs approximately five times more to attract a new customer than it costs to keep the customer you already have. 

May We Help You?

With all of the compelling reasons to make customer service a top priority, why risk losing even one customer? One of the few ways small businesses can outshine the competition is by delivering excellent customer service. While larger companies may have more resources and greater reach, customer service is a space where small businesses can excel and compete. 

Do you have a customer service experience that stands out? The good news is that delivering a four-star customer service experience doesn’t have to blow your budget. Do it right, and your efforts will be rewarded with more business, an enhanced reputation, customer loyalty, and word-of-mouth referrals which will result in long-term success.

Choosing the Right PEOAbout Propel HR. Propel HR is an IRS-certified PEO that has been a leading provider of human resources and payroll solutions for 25 years. Propel partners with small to mid-sized businesses to manage payroll, employee benefits, compliance and risks, and other HR functions in a way that maximizes efficiency and reduces costs. Visit our new website at

Topics: Featured, Customer Service

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