Customer service as a competitive advantage

Customer service as a competitive advantage

Table of Contents

A company’s competitive advantages are typically their price points or product offerings, but another aspect of the business that has the ability to get a company a significant competitive boost is customer service.

Customer service is generally considered reactive – a customer reaches out because they need help or have questions. Great customer service has the potential to convince your existing customers to stay and even refer their family and friends, expanding your customer base.

Customer service done right has the power to increase brand loyalty, customer advocacy, and increased revenue. 86% of customers say that they would pay more for a better customer experience.

In today’s competitive and crowded market, it’s not enough to have a good product, you need to have great customer service as well to stand out.

These days, there are so many choices to choose from that customers often suffer from decision fatigue. To differentiate yourself from competitors, you have gain customers’ loyalties and turn them into advocates of your brand.

There are typically three types of customer service loyalty; a combination of all three will produce strong loyalties to your brand:

1. Behavioral loyalty

The customer is loyal primarily out of convenience (i.e. proximity or price).

2. Rational loyalty

The customer is loyal as long as the brand provides the most value (i.e. loyalty programs, discounts).

3. Emotional loyalty 

The customer is loyal because of a preference or attachment to the brand (i.e. the brand resonates with the customer’s own personal values or aspirations).

behavioral rational emotional loyalty

While all three types are important, an emotional bond is crucial for customers to form strong brand attachments. Customer experience is largely emotional, with 70% of purchasing experiences are based on how the customer feels like they’re being treated.

According to Robert Plutchik’s wheel of emotions, there are eight main positive/negative emotions that drive responses: sadness and joy, disgust and trust, anger and fear, as well as surprise and anticipation. Loyalty is more easily gained if you can invoke a positive emotion from your customer. According to CustomerThink, 74% of customers with positive emotions will become advocates, while 63% will remain customers.

Customer loyalty and brand advocacy are extremely important to a company and shows a good customer service.

Just as a great customer experience can encourage loyalty (a 5% increase in customer retention has been shown to increase revenues by up to 95%), a bad experience can exponentially damage your brand – especially in this digital age of social media. Customers who have a negative experience are two times more likely to share their experience than those who had positive ones

So great customer service can give your brand a competitive advantage, but how do you go about providing great customer service? Below are a few tips:

  • Anticipate customers needs
  • Provide a seamless experience (omnichannel support)
  • Be available 24/7 and respond quickly
  • Offer self-service support
  • Set realistic expectations for your customers
  • Hire awesome agents
  • Actively listen to your customers and use the feedback to improve processes

Don’t underestimate the value of excellent customer service – it all comes down to creating a memorable experience for your customers. Great customer service as a competitive advantage will increase loyalty, bring in new customers, increase revenue, and help you stand out from the pack.

Ready to provide better customer service? Get in touch today!

Get support tips and trends, delivered.

Subscribe to Our SupportBlog and receive exclusive content to build, execute and maintain proactive customer support.

Free Coaching

Weekly e-Blasts

Chat & phone

Subscribe to our Blog

Get the latest posts in your email