Five stars. Yet another glowing review on TripAdvisor.

I'm scrolling through comments about my good friend's restaurant in New York. And despite only opening last year, it's fully booked every night.

It's a great place: beautiful decor, a fantastic chef, and fresh ingredients. But my friend maintains that the true secret to her success is her one motto that translates all the way from the maître d' to the waitstaff: Treat every customer as if they were a high-profile restaurant reviewer.

Whether they're friendly, polite, or downright rude, all customers get the kind of service that's reserved for someone with the power to make or break your career.

And this adds up to an outstanding customer service experience.

My own business, JotForm, doesn't have any tables to be waited on or free dessert I can offer during times of inconvenience. But like my friend, I credit its success to the way we treat our customers -- as important guests, good friends, and informed experts.

The New Customer Service Dynamic

Customer service gets a bad rep: traipsing through endless menus, getting put on hold for hours at a time, being passed on to someone else (again, and again), reaching gated ‘contact us' forms.

But times are changing.

Today's customer is like that fearsome restaurant critic: clued-up, savvy, with high expectations and no patience for time-wasters.

That's because technology has handed them unprecedented power to dictate the rules. Comparison apps, review sites and the endless transparency of the internet leave the ball very much in their court.

Plus, they know what an extraordinary customer experience feels like. They don't just compare service within industries; they compare service across the board.

And so, they expect everyone to deliver the same immediacy, convenience, and personalization they receive from Google and Amazon.

It's high stakes.

But done right, customer service can become your competitive advantage and your game-changer.

In fact, research predicts that by 2020, customer experience will overtake price and product as the key differentiator between brands.

It doesn't need to be hard, complicated or expensive. Customer service is the new marketing because it brings in more revenue, more talented employees, and more word-of-mouth marketing that makes companies stand out from the rest to become loyal favorites.

6 Reasons Why Customer Service Is the New Marketing

1. Customer service pays for itself.

It's natural to feel reluctant about investing heavily in customer service. It can feel like a black hole in a company's finances, burning cash at light-speed without a palpable return.

That's why many companies respond to financial pressure by slashing the customer service budget first. It's winning new customers that will bring in the most revenue -- right?

A glance at the numbers tells a different story. It's 7X more expensive to acquire a new customer than it is to retain an existing one, and just a 5% increase in customer retention can be responsible for as much as a 75% increase in revenue.

Despite this, we invest way more in marketing to new customers than to keeping those we already have happy: on average, we spend $500 billion on marketing a year, and only $9 billion on customer service.

And this imbalance costs: in the US alone, $62 billion a year is lost to poor customer service.

The alternative? Think of customer service as a form of marketing, an investment that will pay for itself over time -- not an expense that needs to be slashed.

Slack was criticized widely for having five times more support staff than sales reps -- yet it took them just over a year to move from launch to a $1 billion valuation.

The Ritz-Carlton Hotel Company are such customer service advocates that each of their employees is authorized to spend $2,000 per day to improve their guests' experience.

And who could forget Zappos, famous not only for their products, but for making customer service the cornerstone of their business (and consequently get named-dropped in articles like these).

All these companies pay out for customer service because they believe it pays off. And it does: 80% of customers are willing to pay more for a better customer experience, and companies who nail it grow revenues 4-8% above the market

The bottom line? Customer service pays its dues tenfold, by bringing people back and fueling long-term happiness.

2. Customer service is affordable.

Does your company have the funds needed to deliver an outstanding customer service?

It almost certainly does.

As counter-intuitive as it seems, being cost-effective and investing in customer service aren't mutually exclusive.

Take it from customer service aficionados Amazon, the most valuable company in the world today.

Jeff Bezos is renowned for obsessing about customer satisfaction, demanding his employees chase solutions and prioritizing immediacy.

But when it comes to anything that doesn't value to customers, he favors a more parsimonious approach, under the motto that "Frugality breeds resourcefulness, self-sufficiency, and invention."

In a nutshell: If it benefits the customer, keep it. If it doesn't, cut it.

Customers don't care about expensive tools to calculate vanity metrics, or shiny offices, or ping pong tables, or if your HQ is in a major city.

They do care about dealing with a happy, committed team. But do they need to be under one roof? No. Outsourcing staff (without skimping on the support they need) is a good place to start.

If you think creatively, there are plenty of tactics to keep costs low while maintaining a high-standard customer service.

3. Good customer service helps your company grow.

How big does your customer support team need to be?

No two companies are the same, so there's no set playbook. That said, bigger isn't always better.

And here's a good rule of thumb: Don't start scaling your team until you've got your values and customer culture firmly in place.

When you first start a company and have only a couple of people handling customer requests, it's much easier to communicate values and be customer-centric. It's when you start scaling that your customer vision is at risk of being diluted -- which is why it needs to be air-tight before you start hiring.

When I founded JotForm, I was CEO, dishwasher, developer -- and a customer service team of one.

All through my day, I took calls and emails to solve customer queries. I didn't have any support staff, snazzy help desk software or CRM. And that was OK.

It meant I could look into the problem, dig into the root and diagnose a solution pretty quickly. I chatted and soothed and apologized. I knew their names, and they knew mine.

I certainly didn't always get it right. But I was consistent.

When it became abundantly clear that I had more customers than I could deal with on my own, I made my first hire. A Big Day! We became a team of two. Then five. Our group crept upwards slowly, coinciding more-or-less precisely with our (slow) growth. We never felt under or overstaffed, because -- as a bootstrapped company -- we never had to push for aggressive gains.

And as we grew, I didn't distance myself from the front line. I still chat with our customers regularly and answer queries myself.

Different stages of development represent different challenges. But you can build an exceptional customer support experience no matter the size of your company.

4. It becomes easier to hire customer service staff.

Hiring a developer? Check out their programming experience. UX expert? Pore over their digital portfolio.

When it comes to, support staff, it's a little trickier. Yes, previous experience matters, but it boils down to finding a personality match for your business. Being a ‘people person' doesn't cut it.

That's why many managers tend to conduct unstructured interviews and rely on their gut instinct to make the final decision. But this is the least effective way to hire: it leaves us susceptible to our own biases, likely to choose those who are like us -- rather than those who are best for the job.

Instead, try brainstorming with existing members to develop a consistent candidate profile that you can easily refer back to. They will have insights that are specific to your business, and a good sense of what has and hasn't worked.

Develop a list of your core needs for new hires, such as:

  • Personality traits (empathy, patience, attentiveness)
  • ‘Must-haves' that are relevant to your business (knowledge of a certain program, experience with the product)
  • ‘Nice-to-haves' (a certain degree, a good sense of humor

If you're building a team from scratch, there will be plenty of trial and error. But if you can use every experience to refine your profile, you'll quickly develop a clear profile with an aligning set of steps. No more hiring on a whim.

You'll become closer to your team as you explore and implement your business's values together.

5. Good customer service empowers employees.

A happy customer experience relies on a happy customer team. And a key factor in this is empowerment.

Once you decide to prioritize customer experience, it can be tempting to keep a hawks' eye on people, or push a call script down their throats. That's a fast route to an unhappy team.

Customer support agents are in their jobs for a reason. They enjoy figuring out solutions to problems. It's what they're passionate about. It's why we hired them.

If you want your customer service team to thrive, let them get on with their job. Trust them to do it well. Give them the autonomy to work independently, think creatively, and problem-solve without someone breathing down their neck.

When someone brings the brand's customer mission to life, celebrate it. Share positive feedback. Consult staff on their views, and give them the freedom to spearhead change by letting them conduct research, analyze data and suggest new methods.

When staff feel empowered, they will rise to the occasion.

6. Technology can help support customer support.

Automation is useful when it helps free up resources to let reps focus on what they do best.

A chatbot can't match a human being, but it's better than no response or long wait times -- especially considering 75% of online customers expect a response within five minutes or less.

Implementing a bot can reduce friction by answering commonly-asked questions and, when necessary, re-routing requests to a rep.

Other technology that supports includes a well-stocked knowledge base that helps customers find answers quickly. Videos, how-tos, and blog posts can be the most effective way of explaining something (e.g. how to use a tool), with a significant return on time invested.

Brilliant customer service relies on empathy, intuition, and the right words uttered at the right second. There's no playbook for that.

Problems are part of life, and the products we provide. We can't avoid them. But it's how we address them that will distinguish us. And that's where human input remains unbeatable: It's what will make customers hang in, work through an issue with us, and return -- even if it's just for a bowl of pasta.

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Originally published Jul 10, 2018 8:00:00 AM, updated July 10 2018

Topics:

Customer Service