An effective customer service strategy provides a business edge for the organisation. In recent years, a number of customer service satisfaction measurements have been available in the market.

One example is the Customer Satisfaction Index of Singapore (CSISG). Despite the best of intentions and incentives, the various industries in Singapore have made little headway in enhancing customer service. There was a 1.2 per cent drop in the index last year as compared to 2009.

Organisations have neglected to invest sufficiently in effort, time and commitment to the customer service function. The possible cause for this could be a lack of understanding of the potential value associated with customer service satisfaction. Research has shown that strong customer service promises returns to the investment made for any organisation in any industry.

Here are some benefits of enhanced customer service:

1. It gives a competitive edge

Too often, the organisation makes the mistake of competing in pricing and product development. Of course, these aspects are important, but realistically, there are limitations to the rate of product development.

Price wars will hurt the bottom line in the long run. Laptops for under $1,000 seemed like a myth five years ago. Today, almost every manufacturer has laptops available in that price range.

But if your organisation wins the customer service battle, it is likely that it will be a leader in the industry and command a premium associated with it.

2. It lowers operating costs

The primary benefit of enhanced customer service is customer satisfaction.

“Getting it right the first time round” is not as easy as it sounds.The call centre of a global IT company I worked with used to receive about 500 calls a day. About 40 per cent of those calls were enquiries on status updates for the items brought in for repair. Apparently, it was never built into their standard operating process to update the customer on the estimated time it took to repair the products.

A simple correction subsequently reduced the number of staff and their workload and enabled the organisation to re-deploy staff more efficiently.

3. It builds customer loyalty

This requires an organisation to deliver consistently high levels of customer service. It is popular nowadays to measure the service levels of organisations in Singapore. Customer loyalty is attained when the customer returns to give the company repeat business.

Some customers no longer view McDonalds as a mere fast-food restaurant. They choose to return to the restaurant because they know what to expect: it consistently delivers food and service quality.

The advantage of building customer loyalty materialises in the form of a steady revenue stream. An American consumer study has shown that 68 per cent of customers leave a product or service brand due to a bad experience.

4. It generates advocacy

Organisations are spending considerable time and resources to monitor customer feedback. This is boosted by the speed with which social media and technology have contributed to the advocacy of products and services.

It used to be that the typical customer would relate a negative customer service experience to between eight and 25 people and speak about a positive experience to between one and two others.

Facebook and Twitter, for example, have changed that exponentially. Both negative and positive comments go viral rapidly and can have a corresponding effect on your business.

If a consistently high level of customer service is delivered, it also translates into reduced costs in attracting new customers.

Instant peer-sharing has become the norm — friends, colleagues and family members seek recommendations prior to a purchase.

Great customer service will help maintain an existing customer base and even motivate happy customers to spread the word for your company.

5. It encourages talent retention

Any organisation’s team members, regardless of their remuneration package, will grow weary if they are required to manage customer complaints daily.

Providing customer service staff with proper training in managing customers and handling difficult situations and trouble-shooting issues promote job satisfaction which translates into better employee retention.

Successful organisations share the same philosophy of making customers their top priority. The way forward is to constantly ensure that your company has an effective customer service plan and implementation system.

A team of competent and motivated customer service staff are worth their weight in gold because they retain customers and, in turn, boost sales. This enables the company to develop greater market share and goodwill. Success generates returns and cascades down to everyone in the organisation.