Enhancing the customer experience through customer service is among the most important disciplines for any organization for one simple reason: without customers, organizations would fail overnight. Customer service, sometimes called customer care or customer support, relates to the activities organizations take to ensure their customers’ needs are being met.

While every customer interaction is different, organizations that want to improve customer retention and grow their customer base must create an effective customer service strategy. Doing so requires combining customization with organization-wide rules for how to respond to customer issues, creating the best mix of personalization and scalability.

Why customer service is growing in importance

Customer service is more important than ever. Poor service is the top reason consumers stop purchasing from a company, according to Salesforce’s State of the Connected Customer Report. Organizations agree: the majority of service professionals say customer expectations have increased since before the pandemic.

Today, customers are more likely to switch to different products or cancel a membership than any other time in recent memory. As the pandemic created stock-outs, order cancellations and difficult in-person shopping conditions, it disrupted the normal customer experience and, as a result, customer loyalty slipped.

McKinsey found that 75% of consumers tried new shopping behaviors during the pandemic, and 39% chose new brands over their existing favorites. The trend was even more pronounced among Gen Z and millennials, evidence that addressing customer needs will only grow in importance.

While customers are still enticed by many factors, such as product pricing, availability and convenience, they also want organizations to understand their pain points and provide a simple way for them to directly communicate and receive answers about their goods and services. About 70% of customers report making purchase decisions based on the quality of their customer service experience, according to Zendesk.

As such, leading organizations are obsessive about providing an excellent customer experience. They must cater to their customers’ needs, be ready to address any issues that arise instantaneously and do everything possible to meet customers’ expectations.

The difference between great customer service, good customer service and poor customer service can mean the difference between keeping customers and losing them to a competitor.

Six tips to ensure a successful customer service strategy

1. Make customer-centricity a core component of your strategy

Customers today are more conscious of the values of and delivered by the organizations from which they buy goods and services. They also know it has never been easier to switch solutions or products if they’re not getting what they want from those organizations. In short, organizations should do everything possible to attract and retain loyal customers. While estimates vary by industry, it is well documented that it costs significantly more to recruit a new customer than to retain existing ones.

An organization’s customer service vision can set the tone for the employees to understand how important their role is in the delivery of excellent customer service.

As such, organizations must be more mindful of every potential touch point on the customer journey as an opportunity to reinforce value and ensure customers are happy with the experience. Organizations should surprise and delight existing, high-value customers by asking how they can provide more value. Some examples of how they can do this include providing limited edition or exclusive offerings or otherwise surprising and delighting those customers when possible. Making customers happy upfront will lessen the impact should something go wrong in the future.

2. Embrace technology

While human representatives remain a critical component of any customer service strategy, technological advancements like artificial intelligence (AI) can help organizations serve more customers more effectively. AI can provide automated chat support, live script recommendations for representatives on phone calls with customers, predictive issue resolution, and other enhancements that help customer service reps do their jobs quicker and more effectively.

3. Ensure customer service is an omnichannel offering 

It is more complicated to manage customer support today than at any time in the past. Long gone are the days when customers would try to reach organizations individually through the two dominant channels of the time—a customer service phone line or by writing a letter. Organizations often deploy a customer support strategy where all customer service issues go to one help desk. There, those issues can be routed to available reps that can address the issue based on their expertise or availability.

Now, customers have a variety of channels to receive and send communications, such as text-based social media, online videos, chat rooms, help forums and chatbots.

As such, front-line customer service teams must be adept at addressing real-time customer issues wherever they are raised. These teams must understand that other customers can easily see whether an organization is responding to its customers’ questions and know exactly what those organizations are saying.

The modern customer service approach means many organizations must invest in talent development initiatives to prepare customer service reps for the future.

For example, customer service now takes place in an omnichannel environment where they may need to triage conversations occurring on multiple channels. Organizations can improve the time-to-response by deploying chatbots to understand a customer’s general requests.

While this automation strategy saves costs, an organization must be quick to switch to a human operator in the customer support team if the chatbot cannot successfully solve that customer’s issue. Maintaining a high level of customer service standards is incredibly important.

Complicating these requests is that they’re being seen by thousands if not millions of people, further creating additional customer service issues through word-of-mouth conversations. For example, a customer complaining about a product immediately failing to work just days after purchase will discourage some potential customers who read that message from buying the same product. Of course, this can cut both ways. Customers who discuss a positive experience they had with a brand could help that organization recruit new customers.

4. Create a comprehensive self-service knowledge base

While many customers may prefer speaking directly with a representative, others are more than happy to research a solution to their issue and solve it themselves. Organizations therefore should invest in educational resources like frequently asked questions (FAQs) and larger informational databases to provide a wealth of information to those who prefer finding the answer on their own. This approach increases the utility of solutions for a percentage of customers and alleviates some bottom-line costs because it does not require customer support reps to hold costly one-to-one conversations. It also frees up the other support agents to deal directly with more customers who prefer having a representative walk them through solutions.

5. Track customer information

Customer relationship management (CRM) systems are a great way to know more about existing and new customers. CRMs are incredibly important for customer service operations to know if and when a customer had an issue, whether it was resolved and any necessary follow-up steps that may arise. It can also determine if certain types of customers are buying more of or less of the products than in the past, allowing the organization to effectively deploy the right resources to maximize value. However, organizations must protect this customer data at all costs, as there are legal and reputational obligations for safeguarding customer information.

6. Identify and track SMART Goals

No customer service strategy is complete without metrics, KPIs and continuous measurement. Organizations must have the right key performance indicators (KPIs) for customer satisfaction and must track them regularly. 

Organizations must ensure they have well-defined and achievable customer service goals. A great way to do so is to use the SMART (specific, measurable and achievable in a reasonable time frame) framework that ensures goals have concrete targets and the organization can easily assess whether they succeeded or not.

For instance, it is nearly impossible to ensure 100% perfect customer happiness. And it is also unlikely that every customer who raises an issue with a customer service agent will go away from the encounter completely satisfied. They must first benchmark how the organization is doing in these key areas, set specific targets for improvement and track progress.

While every organization will have different benchmarks and therefore, unique goals, here are some metrics they can measure to determine those SMART goals.

• Improve first response time: Organizations must track how quickly their customer service team members can identify and respond to a customer service issue.
• Resolution time: Unfortunately, only a few customer service issues can be resolved immediately, and some take days,weeks or even longer to resolve. A recent study found almost 60% of executives felt their first contact with customers was poor or less than adequate. As such, organizations should track how long it takes to ensure the customer’s issue has been fixed and that the customer is now satisfied.
• Customer satisfaction score (CSAT): To understand the success of any customer service strategy, organizations can create and track customer satisfaction surveys that can help organizations better understand what their customers are thinking and feeling. Doing so ensures an organization knows whether they are excelling at providing customers value or are falling short. Organizations often identify these scores through surveys.
• Net promoter score (NPS): This score asks customers how likely they are to recommend a product or service to their network. It is a powerful data point to demonstrate whether the organization is providing so much value that individual customers would go out of their way to tell their friends, family or colleagues how much they enjoy the organization’s solutions.
• Customer retention rate: Understanding whether customers continue to buy an organization’s solutions is critical to gauge the overall health of the organization. A high retention rate is a positive indicator of customer satisfaction and loyalty, demonstrating the organization is meeting or exceeding its customers’ expectations.

Take the next step

Organizations must continue to invest in customer service to ensure they retain their existing customers and gain new ones either through referrals or positive word-of-mouth. Providing better customer service than the competition is one way to grow a business and maintain a strong reputation. By following the above guidelines, organizations will thrive in an increasingly competitive marketplace.

It’s no surprise customer service has become the CEO’s number one priority for generative AI investment, according to the IBV CEO Guide to Generative AI for Customer Service. The goal of helping organizations meet the dual challenges of rising customer demands and operational costs is perfectly suited for AI.

IBM has been helping enterprises apply trusted AI in this space for more than a decade, and generative AI has further potential to significantly transform customer and field service with the ability to understand complex inquiries and generate more human-like, conversational responses. IBM Consulting offers end-to-end consulting capabilities in experience design and service, data and AI transformation. Using IBM watsonx™, IBM’s enterprise-ready AI and data platform, and watsonx™ Assistant, IBM’s market-leading conversational AI solution, we partner with you through the AI value creation process to enhance conversational AI, improve the agent experience and optimize call center operations and data.