Customer Service in Business (AQA GCSE Business): Revision Note

Methods of customer service

• Customer service includes a businesses actions and behaviours experienced by customers before, during and after their purchase

• Good customer service involves meeting clients' needs and keeping them happy

• It can be provided in a variety of ways

How businesses provide good customer service

The benefits of good customer service

• Providing good customer service can be beneficial for a business for several reasons

• Repeat sales

  • It persuades people to buy time and again and increase their average spend from a business with whom they have enjoyed a good experience, boosting revenue

• Reputation

  • It enhances a businesses reputation and increases the chance of word-of-mouth promotion

    • Customers tell others about how well a business has taken care of them, resulting in additional sales through free promotion

• Ability to compete

  • Small businesses that may be unable to compete with larger rivals on price may be able to maintain sales by offering good customer service

    • Customers are often willing to pay a premium price for good customer service, increasing profitability

• Competitive advantage

  • Providing excellent customer service can set a business apart from its rivals, creating a valuable competitive advantage that can help smaller businesses increase their market share

• Employee morale is likely to be high in businesses with a good reputation for customer service, leading to greater efficiency and productivity

  • Attitudes such as respect for others, kindness, and going the extra mile are aspects in which they can have pride

The dangers of poor customer service

• Failing to provide good customer service can cause significant problems for a business, including:

  • Unhappy customers are likely to take their business elsewhere, especially in competitive markets where there are many alternatives, reducing revenue

  • They can easily share negative experiences online through reviews, social media, etc, tarnishing the business's reputation

  • Poor service erodes customer loyalty over time, making it more difficult to retain existing customers without expensive price promotions, increasing costs

  • Customer complaints about poor service can overwhelm employees, affecting their motivation and productivity

  • Providing replacements, dealing with customer returns and offering compensation also increase costs