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What is customer service?

Customer service is the engagement and support of customers before and after the purchase of your business’s products or services.

To understand customer service, it's good to first understand the customer’s journey. A customer journey describes the path a person takes from the initial adoption of your brand as a new customer to the ongoing engagement with your business afterward.

Customer service involves the guidance, engagement, and support of your customers throughout their customer journey. Customer service is more than just communication around the initial sale of a product or service, good customer service is a continuous process.

Why is customer service important to your business?

Customer service is important to your business because it establishes the relationship between your business and your customers, and ultimately determines the success of your business. Customer service is an opportunity for your business to uphold its values, mission, and claims around product or service quality.

Offering good customer service encourages customers to stay loyal to your business. In fact, businesses often form teams of customer success managers, to help keep customers coming back––this process is called customer retention. Since customer retention is typically less costly than acquiring new customers, it usually has a positive impact on your business costs. As your business properly nurtures customers, they feel more valued and are more likely to report good customer experiences and recommend your business to potential customers.

What are the different types of customer service?

Customer service can be categorized into styles of communication, and each communication style serves a distinct purpose. Your business can use these forms of customer service to acquire, engage, and maintain customer relationships.

Here are four types of customer service and communication:

  1. Reactive customer service

    With reactive customer service, your business provides service based on customer requests or prompts—in essence, your business offers products or services when a customer reaches out with a need.

  2. Proactive customer service

    Proactive customer service means that your business anticipates your customers' needs and engages them without being prompted by customers to do so. Your business can use proactive customer service to increase sales, avoid customer churn, and maintain good standing with customers. Offering discounts to your customers on future purchases, asking for feedback, or initiating check-ins with customer accounts, can all be considered proactive customer service.

  3. Synchronous communication

    With synchronous communication, your business engages customers in real time—like a phone conversation. Synchronous communication can be used in either proactive or reactive customer service.

  4. Asynchronous communication

    Communication that starts and stops is called asynchronous communication. Asynchronous communication between your business and customers occurs in phases, based on convenience. Good examples of this are support messages, emails, and chats. In asynchronous communication, you and your customers can pick up where you left off, with the full context of your communication intact. Asynchronous communication can also be used for proactive or reactive customer service.

Customer service is the support of customers engaging with your brand, so naturally, there’s more than one right way to do so. And for most successful businesses, multiple styles of customer support are needed. Therefore, neither proactive, reactive, synchronous, nor asynchronous customer service are necessarily better than one another.  Determine how to use the various styles of communication and service by understanding your customer’s needs, your industry, and the capabilities of your business.

What is good customer service?

Good customer service is ongoing and prioritizes the customer, with the goal of solving their needs. Customer service impacts the perception of your business, beyond marketing and advertising alone. And great customer service involves skills and activities that can be organized into these eight core principles:

  1. Empathetic customer service

    Great customer service can’t exist without empathy. Your business can use empathetic customer service to engage customers with warmth, understanding, and a sense of familiarity regarding their feelings. Empathetic customer service demonstrates to customers that they are valued and not merely monetary transactions for your business. Increase empathy in your customer service by finding employees who possess empathetic qualities, like sensitivity and compassion.

    Employee training that uses customer scenarios and standardized empathetic communication, are also effective ways to foster empathy in customer service––phrases like, “I understand,” “I’m here to help,” and “I hear you” are great empathetic phrases.

  2. Active listening

    Active listening involves paying close attention to your customers throughout their communication to best address their needs. Listening attentively for details such as dates, times, pain points, anecdotes, and customer preferences for example, ensures that your business can accurately assess, solve, or resolve the needs of your customers.

    Offering multiple channels of communication to your customers is a smart way to improve your ability to actively listen to their needs. Using an omnichannel strategy, your business can develop communication guidelines for active listening, tailored to each channel.

  3. Service and product knowledge

    To provide the best service to your customers, your customer service managers must be knowledgeable about your business products and services. Educate your employees on your products and services and provide them with regular product insights and training. Being knowledgeable about product capabilities and service offerings communicates to customers that they are well cared for, and that your business can address and solve their needs.

  4. Technical expertise

    Technical expertise involves the knowledge of more complex service and product features, relevant use cases, and business scenarios. Customers regularly have needs, questions, and challenges that can’t be addressed with basic product knowledge, that’s why technical expertise is so important––think of product developers, product managers, industry experts, and specialists.

    To increase expertise within your business, hire or consult relevant technical experts. In addition, provide your technical experts with insights and workshops that help them learn, and stay current with industry innovations and advancements.

  5. Good interpersonal skills

    Interpersonal skills describe the ability to interact, engage and communicate well with customers, and they are a necessity for great customer service. Interpersonal skills bring a human element to your business interactions with people, and help determine if they’ll become your customers, and then remain your customers. Good interpersonal skills help differentiate your business from similar businesses in your industry, because they are difficult to duplicate.

    The best ways to improve interpersonal communication are through training and feedback, understanding the goal of the customer interaction, maintaining a positive and controlled tone of voice, and the use of conversational guides. But when using conversational guides, employees should be sure to modify them a bit to fit their own speech patterns, tone of voice, and personality.

  6. Clear communication

    Communicate clearly to help your customers understand the parameters of your business, products, and services. Helping customers understand exactly how you can be of service benefits them and your business. Clear communication can help you save time spent on troubleshooting and has a positive impact on your customers’ experiences. Enhance your communication by offering more channels of communication for your customers to interact with your business. Whether through live chat, online video calls, text messages, social media, email, or other channels, providing multiple avenues for communication helps you provide better service to your customers.

  7. Multitasking

    Multitasking skills are needed to serve multiple clients and perform activities while addressing customer needs. Your customer service representatives should be comfortable with managing different tasks, and clients in sequence and often, simultaneously. However, multitasking should never hinder your employees from performing business tasks correctly. To better improve multitasking efforts, and avoid losses in productivity, your business and employees should be aware of workload capacities, and set thoughtful, attainable goals.

  8. Follow up

    Following up with your customers can be a proactive way to nurture customer relationships. Follow up is important because it allows your business to keep an accurate understanding of your customers’ interests, plans, and challenges.

    A great way to improve follow up is to use personalized outreach. Personalized follow up entails using customized emails, promotions, and other communications tailored to your customer’s profile. Personalized outreach shows your customers that they are unique and valuable to your business.

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What are some methods of customer service?

Today, customer service is evolving, and changing the way your business interacts with people. Here are examples of traditional and emerging customer service methods:

Customer nurture

Customer nurture entails regular engagement of your customers after they purchase your product or service. Reaching out to check for customer satisfaction, offering valuable services, and communicating any upcoming product changes, helps to foster a sense of community among your customers. With an effective customer nurture strategy, your customers will more likely recommend your business to other people and choose your services rather than flock to your competitors.

Personalized service

Personalized service has revolutionized how customers interact with businesses. Today, customers receive recommendations, guides, and marketing content based on their individual customer profiles and preferences, like their location, buying history, and interests.

Personalized service gives your business a competitive edge, by providing an experience to your customers that’s hard to re-create. Personalizing your customer experiences to fit their specific needs and tastes helps your business retain customers.

Timely response

In your business, challenges are sure to arise. Using soft skills like good interpersonal communication to address customer needs and solve challenges in a timely fashion, builds confidence in the capabilities of your business among your customers. Resolving your customers’ issues quickly and accurately helps keep them loyal to your brand and is an opportunity to differentiate your business from competitors.

Multichannel service

Multichannel service is a continuously expanding example of customer service. Today, your customers expect to communicate with your business via social media, email, text, phone, and in person. As the channels for communication and service increase, your business should consider offering services via multiple channels. Increasing channels of communications and service gives your business more opportunities to expand your brand and customer base.

How does technology enhance customer experience?

Today, your business can improve customer experiences with new and emerging technology. Technology can help your business accommodate customers and increase sales and revenue. Enhance your customer experience with the following technologies:

AI

AI is used to enhance customer relationships by improving communication between your business and customers, and by offering useful customer insights. Using AI technology, your business can benefit from language and sentiment analysis tools, chatbots, and voice analysis.

Things like written and spoken tone, informativeness, friendliness, or seriousness can be detected with AI. Your business can provide enhanced support to customers by providing AI-assisted guides, messaging, and collecting valuable customer information.

Automation

Technologies using automation can drastically improve your customer service availability by providing your customers with automated self-services. Using automation to manage routine and redundant activities, your employees can focus on higher priority customer cases, and this can help reduce employee turnover––your employees won’t be bored and underutilized performing mundane tasks. Automation technology, such as help desk software, can offer quick replies to customers and guide them through payment portals. Automation can be used to process and schedule payments, provide account information, and schedule appointments.

CRM

Customer relationship management (CRM) technology can help your business manage and organize customer accounts, goals, and sales opportunities. CRM technology allows your business to track your customers’ interactions with your business, define and predict opportunities for marketing, outreach, and upselling opportunities, as well as identify accounts that may be at risk for churn.

CRM software gives your business an environment to create sales scripts and track the success of scripts and other messages across accounts and customer segments. CRM technology can work with other technologies and systems, like email, video chat, and bookkeeping platforms. Using AI and automation technology, a CRM can send triggered notifications to sales and customer success representatives, based on specific customer account behavior.

Personalization

Personalization technology tailors individual customer experiences based on their preferences, and enriches your business’s understanding of your customers. Your business can observe buying patterns, like the purchase of complimentary products, purchase schedules, and product preferences.

Personalization also allows you to identify upselling opportunities more easily, and avoid product cannibalization—when two or more of your business’s products that serve the same need compete. Using personalization, you can align your customer experiences to what they enjoy about your business the most.

Data analytics

Using data analytics, your business can anticipate customer needs, prevent customer service issues, and measure the success of your business sales and marketing efforts. Data analytics gives your business insights and data points on virtually any interaction your customers have with your business. Data analytics can report page views, clicks, sales, or help predict seasonal spikes in demand.

With analytics your business can develop stories and make inferences around the data and information on analytics reports and dashboards. Data analytics can inform your business strategies and tactics such as when to discount items, promote services or discontinue production of underperforming products.

How software can enhance your customer service

Customer service software enhances your business’s ability to meet your customers’ needs, through increasing productivity, communication capabilities, and knowledge of your customers. When choosing customer service software, keep in mind your specific business goals and customer needs. Understand which channels your clients use most, and pay attention to the distinct capabilities of different customer service technologies. Lastly, choose customer service software that works well with systems you’re currently using.

There are many software options, including Dynamics 365 Customer Service, that help your business optimize service operations, personalize customer experiences, and increase productivity. Discover new ways to enhance your business with customer service software.

Learn more about Dynamics 365