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BFS Capital Blog

Why Customer Service is Crucial for Small Business

April 13, 2016

That cliché about building 1,000 bridges really applies to small business.

Research has shown that it takes 12 good customer service experiences to make up for one bad one. So even if you run a flawless operation for years, if the wrong person has a bad customer service experience, it can undo a lot of that goodwill that your small business had established.

Customer service is the number one thing people will talk about when it comes to your business. Whether you’re in hospitalityretail, personal care or any industry really, the interactions people have with you and your staff will be what they remember, long after the product is gone or the service has been delivered. And if you don’t believe it’s the first thing you must master when starting a small business, here are some numbers that should drive the point home.

The Good is Great, the Bad is Worse Than You Thought

According to a survey from, 81% of people said they are more likely to do business with you again if they receive good customer service. And since it costs you seven times more to get a new customer than to keep an old one, making that great first impression can be a big savings. This is why companies that prioritize customer service on average make 60% more profits.

However, if you provide bad service the consequences run a lot deeper than you think.  Only about one in twenty people actually complains about bad customer service. So if you do the math, five complaints in a week means 100 instances where people were dissatisfied.

That alone should be cause for alarm, but the average person who has a bad experience will tell 15 people about it, and 13% of them will tell 20 people. That’s nearly 1,750 people who’ve now heard about the terrible experience they had with your business. And 48% of people in a survey from The Wharton School of Business said they’d avoid a business solely based on what they’d heard from others.

And that’s not even counting social media.


Don’t Ignore Social Media

So let’s talk about social media for a second. Though Twitter isn’t the social media staple it once was, it still serves as an effective platform for customer service. In fact, some social media experts predict that will be its main function in the future. One million people view Tweets about customer service every week, and about 80% of those are negative.

It might be tempting to ignore the “trolls on the Internet,” and sure, social media is full of people who like to complain for no reason. But ignoring them is not an option. According to Groovv, 88% of people said they wouldn’t buy from a company who didn’t respond to complaints on social media. However, on the upside, customers who feel engaged on social media will spend 40% more than those who don’t. And people who had a complaint resolved on average told five people about that experience. The point is that, along with a friendly face in your shop, you also need to provide good customer service online.

So What Can You Do to Improve Customer Service?

Look, no business aims to have poor customer service. And saying you’ll provide it is all well and good, but in order to actually achieve it you need some specific, actionable practices you can incorporate into your business. Here are a few easy ones:

  1. Answer the phone and respond to messages quickly. In an era of ignored voicemails, this is something surprisingly few businesses do. If you’re the odd business who actually takes the time to call people back, then you’ll win them over.
  2. Give when it doesn’t matter. Giving away a free soda to a customer’s child or fixing something small without charge will pay you back ten times whatever it cost you. There might be 50 dry cleaners somebody could go to, but that one that sewed on a button last minute and didn’t charge you will be the one who gets your business.
  3. Be pleasant. You don’t need to be overly friendly or try and be best buddies with your customers, but simply smiling, addressing customers by name, and saying please and thank you goes a lot further than you’d think.
  4. Listen to customers. Follow your social media closely, and if a customer in your store has constructive criticism, take a minute to think if it’ll actually work. People perceive your value by how valued they feel.
  5. Let them vent. Sometimes a customer just needs to rant to someone, and you may get the brunt of it. If they have an issue let them talk until they choose to stop and don’t interrupt. Then address the problem as best you can. They may even end up apologizing for being so difficult, but even if they don’t, everyone loves a good listener.

Nobody will ever debate that customer service is important to small businesses. Hopefully these stats have driven the point home for you, and you can start to incorporate some of these customer service tips into your business. Keep an eye on social media and see how your business’ customer service is perceived. And if changes need to be made, make sure you do it sooner than later.