The Importance of Customer Service in Retail
Despite all the change in which we operate, customer service is one area of retailing that never changes and where you can still drive for success. Regardless of whether it relates to online platform customer support or behind the counter in physical stores, the importance of customer service in retail is undeniable.
Good old-fashioned retail is all about service. Actually, excellent customer service becomes a top priority because if customers are going to talk about you—and I guarantee they will!—it’s easier for them to share negative experiences, especially instances of poor customer service, than good ones.
Supporting your customer service teams is critical not only for sales but also for long-term customer loyalty and brand reputation. Recognising the efforts of such teams and incentivizing them can lead to vast improvements in their performance and morale. This is even more crucial because a little misstep in customer service can tarnish your brand image and scare away potential customers.
In this blog, we are going to take a look at why customer service is so important in retail and cite examples through statistics, as well as give you more reasons on how your business can stand out with the Customer Service Team of the Year.
What is retail customer service?
The interaction that happens between a store and its customers (online or physically) is called retail customer service. There are essentially two types of customer service in retail:
- in-person customer service
- online customer service
In-person customer service includes the customer service employee and the customer interacting in a brick-and-mortar physical retail location. The goal of in-person customer service is to ensure that every customer has a positive shopping experience by welcoming them, assisting them in finding the product that meets their needs, answering any questions they may have, and more.
As an alternative, “online customer service” is the practice of assisting clients through digital mediums. Live chat support, email correspondence, social media interactions, and handling online returns or complaints are all part of this.
Both scenarios require that workers have strong customer service skills and benefit from rewards and recognition schemes to maintain a good customer experience and be motivated.
If you build a great product and launch it, you need to back that up with the best possible support, whether in-store, online, or over the phone. As such, it has the advantage of both repeat business from current customers and avoiding a wave of bad reviews and negative word-of-mouth. In the retail industry, top-notch customer service is a key differentiator among competing businesses.
The Importance of Good Customer Service in the Retail Industry
Below are some benefits of good customer service in retail and its positive impact on retail businesses:
- Happy Customers Bring Other Customers: A great customer experience will create word-of-mouth advertising, which results in natural growth that can deliver an expanding and consistent network of customers. Research shows that when customers are happy, they talk about good things that happen, and this adds more business to your company. The phenomenon in which delighted consumers attract even more customers, leading to the expansion of your business, is referred to as the flywheel effect.
- Customer Loyalty and Retention: Investing in your most loyal shoppers may provide an opportunity for significant long-term financial gain, particularly when it comes to marketing. Reports published by Forbes also confirm that returning purchasers are approximately worth 10 times the value of their initial procurement. As a result, managers should pay special attention to customer retention campaigns because loyal customers are more likely to try new products/ services. Customer retention is typically far more cost-effective than customer acquisition, so loyalty should figure prominently in any successful business plan. A loyal customer is more likely to provide repeat business and advocate for your brand.
- Brand Reputation: When it comes to delivering exceptional customer service, some of the love a brand gets is drafted back into the industry—usually, in terms of raving internet reviews and social media shoutouts you cannot buy. Anyone can post a bad review or comment on the internet, and businesses are easily affected by that. Poor reviews subsequently scare customers away, however, good ones do the exact opposite: enhance a company’s credibility and ultimately lead to more business. Last but not least, solid customer service is the key to a brand maintaining and building its reputation.
- Customer Advocacy: Satisfied customers become advocates and will recommend more people to use or join your brand through word-of-mouth, online reviews, or social media. Customer advocacy can be used as a marketing tool in its true sense and help increase your brand visibility, positioning you as someone credible Essentially, when customers act as advocates for a brand, they are also offering up their credibility to the brand. This makes their recommendations more trustworthy for potential customers. This can ultimately result in customer growth and retention.
- Customer Lifetime Value (CLV): Increased customer lifetime value increases the company’s revenue overall. The meaning of Customer Lifetime Value ( CLV ) is the total revenue that a company expects to earn from the customer throughout all business with him. Businesses can increase their CLV by offering top-notch customer service, which will ultimately lead to repeat purchases and loyal customers. This can lead to a significant increase in overall revenue.
- Increased Revenue: In the end, through good customer service, companies can generate greater sales and revenue. Happy customers are more likely to become return visitors, and they may also refer your brand to other potential shoppers. This in turn can help increase sales and earn more revenue, which will lead to overall business growth.
Examples of Good Customer Service
Effective customer service can take many forms:
- Personalised Experience: Set up a personalised customer experience Tailoring the customer story goes a long way in terms of the level to which you can take your customer service. Actions as simple as calling a customer by his name, remembering what they like or dislike, and giving them some options based on their preferences can help you achieve the same. Personalisation improves the overall shopping experience and makes customers feel appreciated and valued by offering tailored recommendations for a product or service
- Product Knowledge: Staff should be knowledgeable about products and services offered, clearly able to answer inquiries, and provide meaningful advice. Experienced employees are likely to offer useful recommendations to customers and, hence, lead them into buying processes. This will help in improving the customer’s shopping experience and make your customers more satisfied when it comes to your brand. Retail employee engagement plays a crucial role in maintaining this high level of product knowledge.
- Empathy and Manners: Being nice doesn’t harm, quite the opposite empathy is about understanding and caring for what the client needs or fears, good manners, in turn, are entering all conversations with politeness and respect. Each can significantly impact a customer’s perspective of your brand and their satisfaction with it. Recognising how the customer feels during these interactions is essential for building trust.
- Efficient Service: A crucial element of good customer service is speed. A business can improve the customer-shopping experience, which is actually customer satisfaction with their brand if wait times are shorter and customers go through the shopping experience seamlessly
Top Retailers with Exceptional Customer Service
Several retailers have set the benchmark for exceptional customer service:
- John Lewis & Partners: John Lewis & Partners is the synonym for excellent customer service, which it is a big part of the brand’s identity. They offer such thorough training to their ‘partners’ (employees) that each one of them is knowledgeable enough to provide customised and personalised help. This extensive training focuses on developing customer service skills that ensure high levels of customer satisfaction and strong customer relationships.
- Marks & Spencer: Marks and Spencer (M&S) is another very high class retailer that is known for its exceptional customer service. They work on integrating their online and offline stores so that customers can move seamlessly across different purchase channels. M&S has always been known for the thorough staff training and development it offers to ensure employees have all they need to serve customers well. These provide tailored customer service, exceptional knowledge about what they offer, and a highly personalised shopping experience.
- Apple: Apple is loved for its new ways of doing things and relentless customer service. Their retail stores are intended to be unique places for customers who want more than just a transaction. Apple Store Specialists and Geniuses are all trained so that they can provide excellent advice or knowledgeable support, ensuring a superior customer service experience. Along with excellent knowledge base, Apple trains its customer service representatives to be courteous and efficient as well.
- Zara: Zara has redesigned the fashion retail scene with its fast fashion and high-quality customer service. It is renowned for its fast and friendly staff, who always attend to customers’ needs. The firm is also recognised for the way it conducts returns, their efficiency makes it easy for customers to use their services. The number of content customers who have remained devoted to the business can support this.
Final Thoughts
In summary, excellent customer service has an outsised place in the success of retail businesses, be they online or on-site. Providing excellent customer service boosts business in the long term by reinforcing consumer satisfaction, loyalty, and advocacy. Retailers that focus on strengthening their customer service through investment in people, training programmes, technology, implementation of retail teamwork, retail employee recognition schemes, and a supportive retail company culture will undoubtedly perform better across all business operations.
Improve your customer service by recognising your team’s hard work and commitment. Celebrate top players in customer service: apply for the Customer Service Team Award. Get in touch today.
