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How Great Customer Service Can Drive Small Business Growth

How Great Customer Service Can Drive Small Business Growth

Aug 04, 2023
8 min read
Hiver HQ
Karishma Sehgal
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8000+ teams use Hiver to delight their customers!

Starting a new business is no easy feat. And if there’s anything the past year has taught us, it’s that staying afloat in such a tumultuous market is even tougher. 

The disruptions the pandemic caused in 2020 compelled businesses to accelerate their digital transformation strategies, and adapt to new normal ways of working, overnight. For large organizations, these strategic changes were far easier to implement. However, small businesses were the ones to bear the brunt of the upheaval the most. Many are still reeling from it. 

It’s clear that companies, both big and small, need a lot more than just a great product or service to survive today. They also need adaptability, resilience, and a solid base of loyal customers. 

According to a recent report by Forrester, resilient firms grew at 2.4 times their industry average. The report also found that some of the most notable traits these firms had were their strong emotional bond with their existing customers, and their ability to serve them, even when others couldn’t. 

Over a year into the pandemic, market conditions have started to stabilize, and the customer sentiment has begun showing optimistic signs. Small businesses must now implement strategies that can help them survive and grow. And, great customer service can be the most effective, dependable, and rewarding of them all.

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Why customer service is such a crucial aspect of a small business’ growth strategy

When you’re running a small business, the experience every customer (or prospect) has with your brand has a staggering impact on your revenue. And the price you pay for providing poor customer service can be far worse than you can imagine. 

Hiver’s recent customer support survey found that:

  • 70% of consumers will advise their friends and colleagues against buying your product or service after a negative customer service experience.
  •  60% of consumers will switch to an alternate brand after just 2-3 bad customer support experiences.

Alternatively, providing great customer service will ensure that your customers stay loyal to you, and spend more with your brand throughout their journey

A recent study by Gartner found that companies that deliver great customer service by providing clients with low-effort resolutions, and high value with their products, are bound to see better customer loyalty and retention. 

Another study found that a 5% increase in customer retention can boost profits by 25%!

So then, what can you do to improve your customer service quality, and, consequently, your revenue? Let’s take a look at some insights from small-business leaders on how their customer-focused strategies drove better ROI.

The pillars of customer service excellence for small businesses

Here are four pillars of customer service excellence endorsed by small-business leaders:

Hyper-personalize your customer communication

Being a small business, your greatest advantage over your larger competitors is your ability to develop a personal connection with customers. One of the best ways you can do that is by tailoring your communication to suit their interests and needs.

It’s important to understand that not every customer is the same. In today’s day and age, customers expect your communication with them to be relatable and relevant.

Timo van der Laak, a Material Specialist at Netherlands-based tech startup, 3devo, believes in leveraging the power of personalized communication to give their customers what they want.

Given the diversity of clients we have, a generic style of communication can never resonate with everyone. That’s why we ask our customers a lot of questions. We find out their knowledge levels and interests, and that helps us better understand what they want. It allows us to deliver them better value, and help them achieve their goals.

Timo van der Laak, Materials Specialist, 3devo

By segmenting your customers on the basis of their demographics, age, industry, interests, and actions, you can craft communication that’s meaningful and memorable.

Personalization is also a great way to enhance customer happiness and retention, explains Mark Webster, co-founder of the marketing education company, Authority Hacker.

One of the biggest things we introduced since our customer service overhaul was to send a personalized onboarding video to every new member. It gives everyone a great first impression. 

Mark Webster, co-founder, Authority Hacker

By introducing this element of hyper-personalization and delight, along with a range of other strategic and execution changes, Authority Hacker’s refund rate dropped from 18% to around 8%. Additionally, they’ve also seen significant improvement in their customer satisfaction and brand advocacy scores.

In the graph below, you can see that personalization has multiple phases of maturity. As companies implement more sophisticated personalization strategies, they see a steady increase in their revenue. 

However, most companies fail to do so.

maturity of personalization
The Maturity of Personalization

Research has found that 62% of marketing professionals see hyper-personalization as a crucial strategy. However, only 9% have successfully implemented it.

As a small business, you have greater control to hyper-personalize customer experiences – make the most of it.

Go the extra mile, and leverage the power of referrals

We are in a customer-obsessed era where merely delivering reactive customer service isn’t going to cut it. Now, it’s about delivering unforgettable experiences that customers would want to talk about. 

For small businesses with limited marketing budgets, going the extra mile is one of the best ways to retain existing customers, while attracting new ones through referral programs. In fact, research suggests that word-of-mouth marketing results in five times more sales as compared to paid ads.

Rex Freiberger, CEO of a technology publication, Gadget Review, attributes a significant growth in their traffic to customer referrals.

Word of mouth is extremely important for small businesses.You can’t compete with bigger companies based on advertising numbers. But what you can do is become known for your customer experience. If you wow people (as we try to do by prioritizing integrity in our content, and saving our customers their time and money),they’ll absolutely tell their friends and family about you.

Rex Freiberger, Gadget Review
customer referral stats for small business customer service
The power of customer referrals

Going out of your way to help customers in times of difficulty is another way to delight them and earn their loyalty. 

Luiza Strach, Head of Support at Surfer, an SEO tool, believes that great customer support is as integral to the success of their business as their product itself. 

They’ve implemented the following policies by putting themselves in their customers’ shoes:

  • Compensating clients via credits and coupons for inconveniences they face due to technical issues;
  • Boosting their credits when they urgently need them, sometimes even for free;
  • Reimbursing clients if they forget to cancel their monthly subscriptions, and;
  • Honoring their requests to extend their trial period.

As a result, Surfer has been able to prevent customer churn.

Every week, we receive emails from people claiming to have come back to Surfer or having changed their minds about canceling subscriptions because of our customer service.

Luiza Strach, Head of Support, Surfer SEO

Optimize for efficiency (without compromising on empathy)

When it comes to defining good customer service, there’s often the empathy vs. efficiency conundrum many face. Which of the two is more important?

Efficiency allows you to respond to more customers, faster. Empathy is about adding a personal touch to your customer service interactions. It’s about making an effort to understand where customers are coming from and what their pain points are.

The fact of the matter is that quality customer service is about balancing both empathy and efficiency, and one without the other just isn’t enough anymore. According to Hiver’s consumer survey, 80% of respondents expect customer support professionals to be more empathetic, or more responsive, or both!

Consumers' changing expectations of customer service
Consumers’ changing expectations of customer service

So how can you achieve this balance? By clearly defining your customer service goals, streamlining your workflow, and investing in a customer service tool that humanizes customer conversations. 

New York Custom Labels, a manufacturer of custom labels and patches, used to face numerous issues while managing their customer requests. They were unorganized and inefficient, and needless to say, their business suffered because of it. They missed a lot of customer emails and business opportunities.

By implementing Hiver, a customer service solution built for Gmail, not only were they able to iron out their issues, they were also able to convert leads into customers – all while keeping customer conversations highly personalized and human.

Our response time to requests for quotes affects the conversion rate directly. With Hiver, we send out quotes faster than ever. It definitely plays a role in converting more prospects into customers.

Myles Schepetin, Marketing Director, New York Customs Labels

Using a familiar interface like Gmail helped make their team’s workflow extremely simple, organized and efficient. What’s more, their customers now receive tailored responses from an individual instead of impersonal and robotic responses from an unfamiliar email address. 

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Regularly monitor the results of your customer service efforts

A great customer service strategy is incomplete and ineffective unless you can measure its results. Most popular customer service solutions will provide you with a metrics dashboard to routinely track critical performance metrics.

Tracking performance metrics helped the team at Authority Hacker in a huge way! It allowed them to pinpoint aspects of their customer service that needed attention, and reduce their first response time significantly.

Before we started working on our support offering, our average first response time was around 15-18 hours. We quickly bought this down to just a few hours with better training, templates and self-serve support.

Mark Webster, Authority Hacker

Apart from tracking performance KPIs, it’s equally, if not more important, to track customer experience metrics. These are the metrics that will have a direct impact on your revenue.

An important customer experience metric is the Customer Effort Score (CES). It indicates how much effort it takes for a customer to have their query resolved with you.

Research suggests that high-effort customer interactions can contribute to disloyalty and churn. It’s therefore essential that you make every aspect of customers’ support experience with you as smooth as possible.

Some drivers of high customer effort include:

  • Long response and wait times
  • Having to follow-up on the same issue repeatedly
  • Having to repeat information
  • Having queries being transferred multiple times
  • Difficulty in contacting support teams

The above problems especially arise when teams work in silos

Hiver makes it incredibly simple for teams to collaborate over Gmail’s familiar interface without having to use CCs or forwards. It ensures everyone within your company has access to customer context and can work collectively to give them the most seamless, swift, and memorable experience.

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customer service metrics

Wrapping up: In times of uncertainty, use customer service as an opportunity for growth

Being a small business owner, you’d agree that your list of to-dos is a never-ending one, and the resources at hand, never enough. While strategizing for revenue enhancement and growth, your focus on digital marketing services and product development shouldn’t sideline your focus on customer service. 

It’s great customer service that’ll help you form a foundation for a lasting relationship with your customers.

Invest time and effort into getting to know your customers. Set up focus groups, build community forums, conduct regular surveys, and interview customers to understand what you’re doing right and where you’re falling short. 

Asking customers for their inputs will not just help you improve your product and service quality but will also instill in them a strong sense of belongingness and community. It’ll make them feel more valued.

The more efforts you put into consistently delivering memorable customer experiences, the more your customers will reward you with their loyalty – both in good times and bad.

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hiver customer service benchmark report 2021
Karishma is a Content Marketing Specialist at Hiver. With a background in advertising and PR, she's fascinated by stories of how brands are built. In her free time, you'll find her holed up in a quiet corner, making art.

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