How to Use Customer Service as a Competitive Advantage for Small Businesses?

Customer service is the provision of service being provided by the seller to customers before, during and after a purchase of any product. A customer is a person who buys products (goods or services) from a shop or a business organization. Customer service is a series of activities designed to enhance the level of customer satisfaction — that is, the feeling that a product or service has met the customer expectation. It is also the process of assisting another person or persons who buys goods and services from a shop. In order to make the organization effective and productive, all the employees need to develop a positive service attitude towards customers. The goal of quality customer service in any organization is to send a positive message with a good attitude to the customers to make them more loyal and happy thereby. Such a message must focus on addressing the needs of customers and helping them in solving their problems. Having a positive customer service attitude requires an organization in the following lines:

  • Be approachable forever
  • Remain positive
  • Be patient with people
  • Maintain a good sense of humor
  • Make the customer feel welcome
  • Remember the importance of the customer
  • Be sincere in helping to solve the customer’s problem
  • Always put the customer first

Develop a customer service program that is focused on delivering good customer care and build it into your strategic plan.

Customer Service as a Competitive Advantage for SME’s

The importance of customer service is identified as very intensive in service industry when compared to other industries. Normally its importance varies by product, industry and customer. Even the quality and the nature of providing customer service from company to company in service industry. Some service-oriented companies allow the exchange of defective or broken merchandise often only with a receipt and within a specified time frame and some other companies may have relaxed policies towards the exchange. In case of engineering services companies, customer service plays an important role in an organization’s ability to generate income and revenue. From that perspective, customer service should be included as part of an overall approach to systematic improvement. A customer service experience can change the entire perception a customer has about the organization and such perception creates a competitive advantage for a SME over its large counterparts. Similarly the customer service in hospitality and tourism industry is very important to build customer and brand loyalty which will lead to growth of the company. The customers will generally opt to choose other hotels because they are afraid of having a bad trip. Therefore in such a case, providing good customer service more than the expectations of the customers leads to substantial reputation, growth in sales and the good rating in the competitive market. Normally every customer expects that whenever he goes to a restaurant or a hotel, his dinner/lunch should be served with a smile. But most of the small businesses in the hotel industry fail to understand this basic expectation of the customer. A best restaurant identifies the need of customer service in such a way that the customer service should start from the kitchen. Every hotel or a restaurant should be very cautious in the usage of the high quality raw-materials.

The customer service in any service-oriented company provides good number of sales, return visits by the customers and the very effective word of mouth advertising. In case of an e-commerce company, there is a need of putting some extra attention into customer service. The more happy customers the company has, the easier it will be for it to grow. So the prior focus should be on the implementation of the right strategy and hiring the right customer service team. Therefore a SME belonging to any category of service industry should concentrate on increasing efforts to improve its customer service and to measure it from time to time so that proper and immediate measures can be taken if there are any deviations in its customer service.

A small enterprise has to calculate a customer service Return on Investment (ROI) very often to understand the cost of the investment of the company towards customer service and the resultant competitive advantage. Accordingly, the company has to answer two important questions as below:

1. How much is the cost of NOT providing perfect quality and service?

2. How much is the return on various investments in service?

Once you answer these questions as a small business owner, qualitative customer service is ensured to have cutting edge from your competitors. Even a small business can quantify the ROI of problem prevention, enhanced service accessibility and improved customer satisfaction with service. Across any industry, good customer service is needed to succeed with the small business. It will reap in the following benefits which will result in competitive advantage.

    1. Loyalty: The best way to build customer loyalty in the small business is to provide good customer service. Customers who are treated with respect and feel important will return. For example, if you are running a hotel chain they will most likely seek out your hotel in other cities they visit. Perhaps they will even come back regularly to utilize your services.
    2. Growth: Customers who receive good customer service at small businesses like hotels, restaurants and tourist attractions will tell other people about their experiences. It is then likely that others will come, expecting good customer service. If they enjoy their visit they will probably tell their friends and family, and ultimately your business can begin to boom.
    3. Sales: The happier customers are the more likely they are to spend more money at the small business establishment. If they are given extra little perks, like a 15 minute massage for free, they are likely to come back the next day also for another massage or may pay for other services. If the hotel staff is friendly they may visit the hotel bar or restaurant because they know they will receive good customer service there also as well.

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