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When your business is on a low budget, there are probably several functions that are high-priority when allocating funds. Of course, your product team could use some financial assistance and marketing — especially advertising — could always use a little padding.

However, it might seem like a waste to invest money in your customer service team. After all, how can it really improve? Contrary to popular belief, your customer service team should be just as important  — if not more important than — as your other teams. After all, it’s the direct connection between your customers and your business.

1. Revenue increases with good customer service.

Revenue dictates every business decision. Companies measure success or failure based on money in minus money out. Profitability is king, regardless of whether it happens on day one or day 1001.

The number one reason why customer service is important in a business is that it correlates to revenue: 84% of organizations working to improve customer service report an increase in revenue.

why customer service is important reason 1 revenue

2. Happy customers build a better reputation.

A positive reputation leads to higher growth. Reputation goes a long way in business. It attracts customers, investors, partnerships, and employees. When seeking to improve reputation, start with excellent customer service.

After a positive customer experience, 69% would recommend the company to others.

3. Retention correlates to customer satisfaction.

Customer retention carves the clearest path to business success. Keeping current customers happy results in more stable revenue and more accurate predictions. When you master not just attracting customers, but retaining them, it sets a solid foundation for your entire organization.

And, why is customer service important to retention? 75% of people would return to a company with excellent service.

why customer service is important reason 3 retention

The majority of consumers sight good customer service as a reason for sticking with a company. Beyond product satisfaction or value, customer satisfaction reigns supreme in today’s landscape.

Your unique product or service may reel them in, but customer service keeps them.

4. Churn decreases with more customer care.

Churn measures the amount of customers who leave a business after purchasing. It provides a fairly cut-and-dry measurement of satisfaction. Customers churn when they’re unhappy.

When it comes to churn, the importance of customer service is clear: 89% of consumers begin doing business with a competitor following a poor customer experience.

why customer service is important reason 4 churn

Products have issues. Services have flaws.

But if you can provide a seamless customer service experience, people will be forgiving.

Rather than push them right into the enemy’s arms, focus on excellent customer service to prevent customers from churning.

5. CLTV improves with better customer service.

CLTV (customer lifetime value) reveals the amount of money a customer potentially brings to a company over the course of their engagement. CLTV correlates directly with revenue.

How does it relate to customer service, though?

(For one, it’s got “customer” in the name. And anything involving the customer, involves the customer service team.)

These data points reveal a more specific breakdown: Highly engaged customers buy 90% more frequently, spend 60% more per transaction, and have 3 times the annual value compared to other customers.

why customer service is important reason 5 CLTV

A highly engaged customer refers to one who reads your emails, follows you on social media, and interacts with customer support (whether through individual correspondence or more general blog posts and knowledge base articles).

A good customer service team is involved in all of these mediums. Better customer service means higher engagement, which leads to more dollars spent.