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  • Dennis Bingham

How to Provide Exceptional Small Business Customer Service

Updated: Jul 3

Target with arrows in the center words over the top improve communications with customers 12 best practices

Providing exceptional small business customer service is key to your company's success. But in today's competitive landscape, how can small businesses stand out through their customer experiences?

This article will explore why customer service excellence is vital for small businesses' success today.

We will also look at best practices that allow small companies to achieve better-than-expected results.

Why is Customer Service Excellence Vital to Small Business

According to Forbes, companies with the highest customer service ratings generate 5 to 7 times more revenue than their competitors with poor ratings.

Whether your competitors are mega-chains or small businesses, exceptional customer service can set you apart and drive growth. Here are five reasons exceptional service is vital:

1.  Builds Customer Loyalty: Consistently exceeding expectations, even compared to other small businesses, fosters loyal customers who spend more over time. For 86%, good customer service makes one-time clients into long-term clients. Khoros

2. Generates Word-of-mouth and Referrals: When customers have personalized and memorable interactions at your small business, they can't wait to tell family and friends and leave online reviews. By driving new referrals, this promotion gives you a competitive advantage over generic small businesses.

3. Strengthens Your Reputation: In the age of online reviews, consistently providing 5-star service allows small businesses to showcase impressive reputation metrics compared to nearby competitors. This credibility and community recognition sets you apart.

4. Differentiates You from Competitors: While other small businesses may lack personalization, your boutique-style service makes each customer feel special. That emotional connection becomes a competitive differentiator versus just another generic small business.

5. Increases Sales and Revenue: By retaining happy customers and attracting new ones with great word-of-mouth, exceptional service boosts sales. Customer loyalty drives revenue growth by having your best customers spend more over time.

What Best Practices Can Improve Small Business Customer Service

Providing top-notch experiences that exceed customer expectations requires commitment and creativity for small businesses. Here are twelve best practices to wow customers:

1. Determine Your Ideal Customer: Understand detailed demographics like age, gender, location, interests, values, and needs of your best customer personas. Then, tailor your service and experiences specifically for them.

2. Hire for a Customer-Focused Mindset: Look for intrinsically friendly, patient, and caring staff who smiley making customers' days easily and enjo. A genuine desire to help is easier to train than a positive attitude.

3. Train Employees Thoroughly: Role-play common scenarios: cover policies, best practices, standard operating procedures, communication etiquette, conflict resolution, and customer service vision/principles.

4. Set Clear Customer Service Expectations: Post principles visibly in your store and regularly share them at team meetings. For example: "Treat all customers with respect and empathy. Go above and beyond to make their day."

5. Provide Enabling Tools and Technology: Give employees the systems and tools to access information and quickly provide knowledgeable, speedy service—for example, a centralized knowledge base with FAQs, product details, manuals, and customer history.

6. Offer Personalized Interactions: Train staff to identify repeat customers by name and remember individual details like usual orders or preferences. Make each customer feel recognized.

7.  Be Available Across Multiple Channels: Meet customers on their chosen channel, whether in-store, online chat, social media, email, phone, etc. Structure workflows accordingly.

8. Communicate Clearly and Transparently: Use clear language instead of technical jargon. Be upfront about timelines, costs, risks, reasons behind policies, and any bad news. Proactively set proper expectations.

9. Listen Closely to Feedback: Make it easy for customers to give feedback through surveys, online reviews, etc. Monitor carefully and follow up on negative experiences quickly. Repeat praises.

10.  Respond Promptly to Issues: Speed matters when handling problems. Empower staff to quickly fix issues, offer refunds or gifts to compensate if appropriate, and apologize sincerely. 83% of customers feel more loyalty to a business that responds and resolves their issues. Khoros

11. Surprise and Delight: Look for opportunities to surprise customers. For example, include a gift or upgrade as a random token of appreciation. Delight them when they least expect it.

12. Follow-Up After Service: Check in to ensure satisfaction. Did their order arrive on time? How was their dinner? Are they happy with their new product? This shows you care.

Monitor Service Quality and Satisfaction

Continuously gather data to improve service quality:

  • Send customer satisfaction surveys and monitor scores over time. Offer incentives to complete. Aim for 80%+ satisfaction ratings.

  • Track first contact resolution rate - the percentage of inquiries entirely resolved on the first interaction. This measures how often your business fully addresses a customer's need the first time without follow-ups. According to SQM, the industry standard for good first-call resolution is 70% to 79%. The world-class rate is 80% or higher. Aim for at least 70% and improve over time.

  • Monitor first response time, which is how quickly you respond to inquiries initially. According to Zendesk, the expected first response time varies by channel. For social media, the good, better, and best times are 2 hours or less, 1 hour or less, and 15 minutes or less. Strive to respond within one hour.

  • Measure customer retention rate, which is the percentage of customers retained annually. Average customer retention rates vary by industry. Use industry data to compare how your business is doing. Paddle

  • Track repeat purchase rate, which reveals the percentage of customers that purchase from you again. Each industry or brand has a standard repeat purchase rate.

  • Monitor referral rate, which is the percentage of new customers sent by existing ones. Per Referral Rock, the all-industry average is 2.35%. "If your referral rate is close to or higher than this rate, you can feel confident knowing that your referral program is on track."

  • Review online ratings and respond promptly to feedback. Positive reviews increase consumer trust. Aim for 80%+ positive online reviews.

Get employee input at team meetings to identify process improvements.

Compare metrics over time and to industry benchmarks to find areas needing improvement. Don't remain complacent.

Real Small Business Customer Service Successes Stories

Let's look at three examples of small business customer service success:

Pizza Palace: The owner started addressing customers by name and adding personal doodles to boxes, and loyalty skyrocketed 45%.

Mary's Salon: Mary starts sending thank you texts after appointments with occasional surprise discounts. Appointments doubled.

Accounting Experts: The partners started providing video explanations of accounting topics through the client portal. They are also on call to immediately answer tax season questions, and they have an 80%+ retention rate.

These examples show that small gestures and focusing on individuals go a long way. Customers notice and reward businesses that make them feel special.

Helpful Resources

Here are three links for additional information on small business customer service.

  • HelpScout: 10 Ways to Deliver Consistently Great Customer Service

  • Wix Answers: 10 Customer Service Tips to Help Your Small Business Stand Out

  • ProProfs: 20 Best Customer Service Tips for Small Business

Key Takeaways: Exceptional Customer Service

  • Customer service drives referrals, loyalty, reputation, differentiation, and revenue.

  • Personalized experiences make people feel special.

  • Friendly, well-trained staff enable great experiences.

  • Clear communication, responsiveness, and tools are key.

  • Continuously gather feedback and improve over time.

  • Compare service metrics to industry benchmarks.

  • Delighting customers through quality service fosters an emotional connection that leads to repeat business and growth.

The effort to exceed customer expectations is well worth it for small businesses looking to succeed today.

Additional Resources

Thank you for reading this article on exceptional customer service. We recommend these additional articles on starting a business.


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