Bad customer service: What does it cost your small business?

As a small business, you can't really afford to miss any opportunity. And yet it's surprising how many businesses fail to see how important good customer service is to their bottom line.

Often, when seeking ways to grow, improve margins or become more efficient, small businesses look at introducing new products, extending services or branching out into other markets.

In fact, your business can sometimes make the biggest impact just by doing things better with the customers you already have, and improving the way you bring new customers on board.

By looking closer to home, you can get more spend from your existing customers, ask them to refer you to others, and build a reputation that will bring new customers to your door.

Retention and growth

Retaining existing customers leads to a growth in profits. Why?

• Existing customers are already happy to buy from you. You've done the hard work.

• You can upsell and cross-sell to existing customers far more easily than new ones.

• By offering exclusive offers, rewards, deals or referral awards, you can encourage existing customers to shop again, and to tell others about you.

• Existing customers have already set up accounts, meaning less work for both you and them.

• Encouraging loyalty means your customers are less likely to slip away to your competitors, and more likely to weather a price increase or supply problems.

Considering this, it's easy to see why putting a bit of work into good customer service can pay dividends.

What good customer service looks like

A really good customer service model covers all the ways that a customer may come into contact with you. That's everything from your Twitter account to your website, to your phone support, and your after-sales care.

If you're a product-driven business, it matters:

• how quickly your product arrives

• how it's packaged

• what information comes with it

• how easy it is to return or change

• how responsive your customer service team is

If your business provides a service, you need to:

• keep your promises

• deliver the service when customers expect it

• make sure the quality is better than people anticipate

• offer add-ons or extras that make the experience even better

Research shows that people who experience great customer service will pay more in to get it. Customers want to feel confident in their suppliers and certain of the service they're going to get. They'll reward that certainty with more spend and increased loyalty.

What good customer service makes use of

Understanding customers' needs

The more you know about your target customers – including where else they shop, their budgets and expectations, their needs and their demands – the more closely you can match your customer experience to what they're looking for.

Targeted training

Anyone in your business who deals with customers needs to be trained in customer service training. This will allow everyone who works for you to deal with customers at any time, including dealing with initial complaints or issues.

Everyone in your office should be an ambassador for your business, and giving them the right training will help you to keep your customer service on track.

Using technology

Today's customer expects technology to work for them, so your website must be clear, mobile-responsive and easy to navigate.

You might consider developing an app so people can buy from you more easily, or you might use technology to keep in touch with customers to offer rewards or incentives to buy again.

Many larger companies use really good online help pages to answer most customer questions. Not only does it reduce the number of phone calls coming in to the business, but it allows customers to continue buying (because they've been able to find the answer to their query with ease).

Measuring success

Customer service is a measurable target for your business and it should be at the heart of your continuous business improvement.

Remember that for every customer who complains, more than 20 other customers simply go elsewhere. Learning from your customers is an important part of developing your business, and you ignore this at your peril.

Being empathetic

Most of the time, you're a customer too. You know what good customer service looks like and feels like.

Remember that when you're putting together customer service guidelines for your own business. How do you want customers to feel about you? What is the most important thing for them to take away? What can you do to make them come back to you?

Are you paying enough attention?

It's always worth taking a fresh look at your customer service to see if you can improve things. A positive attitude towards your customers not only encourages people to buy; it encourages them to buy again and again.

These customers are the most important ones to your business, so it makes sense to spend time making sure you're doing the very best for them every time.

Relevant resources

• Customer service: Golden rules for small businesses

• Three ways to empower your customers, so they keep coming back

• Lunch and Learn: Why customer focus is important to your business