Why Is Customer Service Important? (With Examples)

By Indeed Editorial Team

Published 24 November 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Companies that want to maintain a positive relationship with their clients while they expand may consider establishing a customer service department. Customer service professionals can provide a variety of benefits to both colleagues and consumers to help develop successful relationships. Learning more about the importance of customer service may help companies cultivate a positive public image and potentially increase their client base. In this article, we explore why customer service is important by reviewing its benefits and including examples of these practices.

Why is customer service important?

Learning the importance of customer service can help you better understand its role in a company's structure. As companies expand, they typically interact with a larger number of customers in shorter periods. Companies that strive to service large numbers of clients effectively may want to hire professionals who specialise in handling external communication in a friendly and productive way.

Growing companies may create customer service departments to meet buyers' needs. Management can allocate customer outreach to these professionals so that other company employees can focus on their areas of expertise. For this reason, a dedicated department for customer concerns can help ensure that the company uses its workforce efficiently. Effective interaction can help the company increase its profits and possibly continue to expand.

Related: What Is Good Customer Service? Definition and Guideline

Benefits of customer service

To help you learn more about the value of customer service, consider reviewing how it can benefit a company:

Develops sustainable relationships with clients

For many customers, an important aspect of doing business with a company is the knowledge that it maintains a valuable relationship with them after the initial purchase. Professional relationships that offer long-term value can convince customers to return to the same company multiple times, as they've had previous positive interactions with the company. Customer service can provide this benefit by offering communication lines with existing purchasers that make future transactions faster and more personal.

Example: A company called FlexCorp sells packaging material in a competitive industry. As a method of creating a unique brand identity to reach a broader market, its customer service department regularly sends emails containing coupons. This reduces the price of the company's products for existing clients and encourages them to continue purchasing packaging material from FlexCorp instead of a competitor. As a result of the efforts of the customer service team, the company achieves higher monthly sales.

Related: Top 20 Customer Service Skills

Improves employee retention

A company's employees may also appreciate how customer service improves the buying experience for new and existing clients. By treating customers fairly, the department can show the company's commitment to good business practices. Employees may be more likely to promote the company if they feel it treats the public well.

Example: An employee at FlexCorp may recognise that its customer service efforts make the buyers' lives easier. Upon understanding this, the employee may feel pride in working for a company that shows its desire to improve the individual's purchasing experience. The employee may decide to stay with the company for longer and become a more effective employee. This employee may engage more effectively in their work because they know the company's products benefit many customers. This also means that FlexCorp retains a trained employee.

Related: What Does a Customer Service Executive Do? Role and Skills

Establishes company values

Companies that actively seek to improve customers' purchasing experiences may show values to the public that can help define a positive public image. Customer service can play a significant role in presenting the company's values in every contact with its clients. As a customer's primary contact with a company, good customer service representatives appreciate the impact of their actions on others and ensure they're always considering ways to improve.

Example: A customer service representative for FlexCorp may understand that a core value of the company is to help purchasers save money. So, when they speak with a customer, the representative offers a free coupon for their first purchase, which the customer accepts gratefully. This interaction can show that the company wishes to provide more value than competitors, which could encourage repeat business.

Related: Customer Service Assistant Skills: Definitions and Examples

Encourages positive referrals

Customers that have a positive experience with a company may be more likely to express their appreciation to others. This means that positive customer experiences can encourage greater numbers to recommend the company to friends and family. Individuals who recommend a brand may make others more likely to use that company. Customer services can ensure that as many customers as possible have positive experiences with the company by meeting their needs.

Example: A customer service representative for FlexCorp may speak to a potential client who's considering changing suppliers. The representative may provide a free sample for them to test for themselves. They can then use the product and determine that the quality and value are superior to alternative brands. This could encourage customers to convey their positive experience with FlexCorp to other business associates looking to buy packaging products.

Related: 35 Customer Service Manager Interview Questions with Answers

Increases potential customer value

As a result of encouraging buyers to make repeat purchases from the company, customer service can increase the lifetime value of each customer. This means that each one may be more likely to continue purchasing products from the company. Developing a solid repeat customer base can help the company establish a reliable income source, allowing it to expand its client base.

Example: A customer service representative at FlexCorp offers a coupon for free packaging material to a new purchaser. They appreciate the high quality of the product and remember how accommodating the representative was. This instils a feeling of goodwill towards the company, which helps convince the client to make further purchases in the future and increases revenue.

Related: How to Write a Customer Service Representative Resume

Provides solutions to customer issues proactively

A common aspect of customer service is its direct communication with the company. Customer services can provide additional value by tracking common issues that buyers report. Using this information could allow the department to advise clients on how best to use a product to avoid these issues.

Example: FlexCorp uses recycled material in its packaging to reduce its carbon footprint. As a result, the product may warp in high heat or wet conditions. To help lessen this issue, the customer service department could inform customers of this and ask them to ensure the areas in which they're storing the package are dry and cool. With this knowledge, fewer clients encounter issues with the packaging warping. This reduces the number of complaints the company receives and increases customer satisfaction.

Related: A Guide to Writing a Customer Service Resume Summary

Expedites company processes and changes

Customer service can act as a symbol of company values for other departments. If they prioritise the customer's needs, it can encourage other company members to do the same. Maintaining a common goal can help departments align their values and ultimately improve their ability to collaborate.

Example: The customer service department at FlexCorp prioritises helping to save money on a high-quality product. Suppose the engineers in the company maintain the same goal. In that case, they may try to adapt the manufacturing processes to ensure that the product's price is as low as possible while still retaining its quality. Members of accounting may suggest that business clients fill out paperwork to receive a tax refund for their purchases.

Related: How to Write a Customer Service Manager Resume Objective

Provides an additional value item for customers

Ultimately, customer service can act as an added value item that customers can utilise and appreciate. The company can advertise buyers' high level of satisfaction when interacting with its customer services team. This can further improve the company's ability to broaden its client base.

Example: FlexCorp's customer services team may perform its role exceptionally. As a result, customers recognise it as a company that provides excellent service. This can help the company discover new clients who want higher-quality customer service when purchasing packaging products.

Related: 35 Customer Service Manager Interview Questions with Answers

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