Does Your Company Provide "Customer Service"?Or A "Customer Disservice"?

Digital transformation and fierce market competition in today’s  fast paced business landscape have combined  to make customer service one of the most key elements of any successful business. Exceptional service will distinguish a brand, foster loyalty, and drive repeat business and bottom line performance, while poor service can damage or destroy a hard-won reputation in days and hinder growth. Yet, despite its importance, many companies continue to under fund and undervalue customer service. So why is such an integral  part of a business today often neglected and outlines the profound impact of rethinking its role as a crucial investment, not just a mere cost center which clearly many CFO’s tolerate with incredulity

Prevailing attitudes for many companies, is that customer services are viewed as a necessary expense rather than a revenue-generating opportunity and a nice thing to have but not that important in scheme of things. This perception often leads to minimal budget allocations, insufficient training, and high employee turnover in service departments. Instead of recognising customer service as an avenue for brand loyalty, engagement, and retention, companies may consider it a department to keep lean and low-cost. The immediate costs saved by understaffing or using outdated technologies, however, can translate to long-term revenue losses due to dissatisfied customers.

Customer service should  always be seen as a customer relationship hub. Well-trained service teams creating a flow of up selling opportunities, and customer retention goals, brand advocacy, translating directly into revenue. A positive customer service experience can turn one-time buyers into loyal customers and vocal advocates of the brand and an enhances bottom line.

When a customer service team is underfunded, the consequences ripple outward, negatively affecting both the customers and the business. Underfunded departments may lack modern tools, such as customer relationship management (CRM) systems, and may also struggle to provide comprehensive training to staff. Without the proper support, customer service agents are ill-equipped to handle complex inquiries, manage high call volumes, or resolve issues effectively. This often leads to low job satisfaction, high turnover rates, and, ultimately, a poor customer experience.

 Dissatisfied customers often voice their concerns on social media and review sites, damaging a brand’s reputation in an era where online reviews strongly influence purchase decisions. Moreover, companies frequently spend five to ten times more to acquire new customers than they would have spent on customer retention—making it clear that under funding customer service can be an expensive mistake.

While companies may allocate substantial budgets to marketing and sales to boost visibility and conversion rates, customer service improvements are often deprioritised the underlying belief is that customer service yields limited immediate returns, making it less appealing when compared to high-return-on-investment (ROI) initiatives in marketing or product development.

The “Out of Sight, Out of Mind” Phenomenon: Since customer service typically happens behind the scenes, it is often out of sight for executives, making its positive contributions to brand perception easy to overlook. Unlike product features or a high-visibility advertising campaign, customer service benefits are often subtle and long-term, but their absence is felt immediately when a negative experience arises.

A robust customer service team can turn a one-time purchase into a lifelong relationship. Research has shown that 89% of consumers are more likely to make another purchase after a positive customer service experience. This effect is amplified in competitive markets where product offerings are similar across brands, as customers will often choose a company with better service even if prices are higher.

The Loyalty Loop:

Good customer service fosters trust, making customers more likely to forgive occasional mishaps and continue doing business with the company. For companies looking to create a loyal customer base, investing in high-quality service is a wise strategy that pays dividends in the form of higher lifetime customer value.

For businesses that want to embrace customer service as a key pillar of their success, the following steps are essential: Companies should assess customer service budgets based on potential gains, not just costs. This might include hiring additional staff, investing in automation, or purchasing advanced CRM tools to streamline operations.

Empower and Train Employees:

 Employees need the knowledge, tools, and autonomy to make decisions that benefit the customer. Regular training programs and skill development can empower         employees to provide solutions quickly and confidently.

Leverage Technology:

AI, chatbots, and CRM platforms can reduce customer wait times, improve  service quality, and provide agents with valuable customer insights. These technologies allow companies to handle high volumes of inquiries efficiently while delivering a personalised experience.

However new technology can deliver cost savings but its introduction  can be a source of frustration for customers as well  when algorithms are not aligned and  not customer concentric and badly implemented  they can cause customer frustration and resentment a target for disgruntled users on social media gaining instant traction which needs immediate attention.

 Establish Clear Metrics:

Companies should set metrics that gauge customer satisfaction, response time, resolution rate, and overall customer loyalty. Monitoring these KPIs allows management to assess the impact of customer service on overall business performance.

 Foster a Customer-Centric Culture:

 Companies should educate a customer-centric mindset throughout the organisation. When customer satisfaction becomes a shared responsibility, every department works towards making the customer experience positive, from marketing to product design.

When companies shift their perspective and view customer service as an investment rather than an expense, the financial returns are clear. According to research, companies that excel in customer service outperform their competitors in terms of both revenue growth and customer satisfaction. For example, a study by Deloitte shows that companies prioritising customer experience see revenue gains 4-8% above the market average.

Reduced Churn, Increased Revenue: Companies with strong customer service experience less churn, benefiting from a higher Customer Lifetime Value (CLV). They are also able to leverage brand loyalty, reduce acquisition costs, and create sustainable, long-term growth

Therefore, Customer services has to be recognised as a core business function, not a peripheral expense  individual working in this function should be highly skilled and trained as they are the preservers of the company’s image with their consumers Companies  overlooking its value and under funding this department miss out on significant revenue opportunities and risk eroding customer trust. As market dynamics shift,  prioritising customer service investments is an imperative to keep pace with rising customer expectations. Investing in customer service, empowering employees, and embracing technology are critical steps for businesses that aspire to build enduring customer relationships and enjoy sustained growth in an increasingly competitive landscape.