What is customer service?

Customer service refers to the assistance an organization offers to its customers before or after they buy or use products or services. Customer service includes actions such as offering product suggestions, troubleshooting issues and complaints, or responding to general questions.

Each customer service interaction is an opportunity to grow your business. Great customer service is a competitive differentiator that drives brand loyalty and recognition.


The history of customer service

To better understand the importance and the changing nature of customer service, it helps to understand the move from single channel to multichannel customer service as a key aspect of business success.

Before the telephone came into widespread use, customer service was largely provided in person or through the mail. The invention of the telephone gave organizations a new opportunity to stand out from the competition by providing better, faster customer service over the phone.

In the 1960s, the first call centers were developed, which evolved into customer service departments. With a dedicated customer service department, organizations could keep up with the latest customer service technologies and strategies, such as providing consistent training for all employees who interacted with customers.

Through the 1990s and early 2000s, the internet created many more customer service opportunities, or channels. Customers could not only call with questions, they could also go to a company’s website and send an email or, eventually, interact with the latest technologies such as chatbots.

Over the past decade, social media sites such as Facebook and Twitter have emerged as yet another channel through which customers can interact with businesses. More recently, emerging technologies such as AI and the Internet of Things (IoT) are rapidly expanding customer service opportunities.

Customer service vs. customer experience—What’s the difference?

Customer service is a subset of customer experience (CX), which is a broader term that refers to the sum of all touchpoints that a customer has with a company, including sales, marketing, training, customer service, and more.

Organizations often measure their customers’ experiences to assess the emotional, physical, and other connections customers have with a brand. Customer service, or customer care, plays an important role in the overall customer experience, helping or hurting an organization in its attempt to develop a positive connection with customers.

The business value of customer service

How Razer delivers a superior customer service and improves customers' experiences.

It is difficult to overstate importance of customer service for both B2B and B2C companies. The benefits of positive customer service experiences include:

  • Creating brand advocates: Happy customers tend to be loyal, repeat customers, and keeping customers by providing exceptional customer service is usually much less expensive than trying to attract new customers.
  • Increasing revenue: Better customer service can lead customers to purchase more products and services, which leads to higher revenue.
  • Driving brand differentiation: Some companies stand out from competitors—even if they offer equivalent products—by providing amazingly relevant and personalized customer service.

There are also costs in not providing a quality customer service experience. One bad experience—such as a slow online experience, being unable to get a question answered clearly and succinctly, or even receiving bad advice—can decimate trust, causing your loyal customer to leave you for the competition.

If that customer posts on social media about their disappointing customer service interaction, your brand can be further damaged, leading to even greater losses.

Keys to customer service success

To "wow" your customers, you need to go above and beyond customer expectations and provide an outstanding customer service experience. Customers, at minimum, expect you to be able to do five things:

Connect all customer interactions

Seamlessly connect all service touchpoints: digital channels, contact centers, and field interactions throughout the customer journey.

Offer engagement choices

Offer customers a wide range of choices to engage with you in the way they want—anywhere and anytime.

Deliver outstanding experiences

Enable customer-focused call center agents to go beyond expectations.

Give personalized responses

Give the one, correct answer through best-of-breed knowledge management or automated, personalized advice.

Automate processes and interactions.

Predict, improve, and augment the customer experience using automation and intelligence.

Organizations need to offer the latest technologies to automate and personalize service and provide a unified and seamless experience across every customer touchpoint to provide a continuously high level of customer service.

Top benefits of using the cloud for customer service

Organizations that still rely on legacy customer service solutions are finding it increasingly difficult and expensive to keep pace with rising customer demands for more and faster access across more platforms and channels. That’s why many organizations have already moved to cloud-based CRM platforms and other cloud-based customer service solutions that provide.

  • Integration across all departments and customer devices for simple management.
  • Scalability, for cloud platforms that can grow as fast as the business.
  • The latest features and technologies, without the need for continual capital investments.
  • Low costs, so they only pay for what they use.
  • Deeper insights into customer needs, preferences, and behaviors, so they can continually improve the services they provide.
  • Mobility, the cloud allows mobile access to customer service via smartphones and devices, which is a great way to ensure ease of access.

One especially critical advantage of integrated, cloud-based platforms is the ability to inject customer feedback opportunities throughout the customer service experience. For example, a business could insert an automated request for feedback—such as a thumb’s up or down—before, during, or after a purchase. That feedback can then be analyzed to determine customer satisfaction, leading to new opportunities to quickly identify problems and refine every aspect of the customer service experience.

The future of customer service

The future of customer service is coming fast and bringing with it new opportunities for organizations to differentiate themselves from the competition and increase both revenue and customer loyalty.

According to a recent global survey of 465 customer experience executives by Oracle and ESG, 66% of the surveyed companies use at least one of the following four emerging technologies to accommodate changing customer tastes, create an innovative and distinctive brand, and enable digital transformation.

Artificial intelligence (AI)

AI refers to systems that mimic human intelligence by improving themselves based on the information they collect. For example, an ecommerce company might use an AI-enabled chatbot to learn from past customer service interactions how to answer future customer questions more accurately and efficiently. Of the four emerging technologies, AI is expected to have the largest impact on the future of customer service, enabling organizations to provide more personalized offers and more predictive responses to quickly resolve customer concerns.

Virtual reality (VR) and augmented reality (AR)

VR is a computer-generated experience, typically delivered over a headset, that creates an immersive environment. AR is similar—an interactive experience where computer-generated information is overlaid on a real-world environment. Both are being used to allow customers to preview and customize products, take part in product demonstrations and training sessions, and explore new product experiences and entertainment. VR and AR are expected to help organizations resolve customer issues and differentiate themselves from the competition by offering better customer engagement.

Intelligent voice assistants

Intelligent voice assistants, including automated digital assistants offered through websites, perform tasks or services based on verbal commands. They make it easy and convenient for customers to ask questions, and they can use advanced intelligence to guide customers to relevant products and offers, as well as to alert them to changes to their order status or account information. Intelligent voice assistants can help businesses resolve customer issues faster while keeping operational costs low and providing a differentiated customer service experience.

The internet of things (IoT) for customer service

IoT technologies connect online devices to one another. IoT sensors can be embedded in just about anything—smartphones, wearable devices, appliances, cars, manufacturing equipment, and much more. The connections give organizations real-time data and intelligence about customer behaviors and preferences. For instance, IoT sensors embedded in products can provide telemetry data that allows organizations to continually monitor the product’s status and performance. If the product begins to underperform, the organization can initiate a customer service engagement before the customer knows there’s a problem. This real-time product performance monitoring, as well as product quality assurance and the ability of customers to manage their products using a mobile app, are just a few of the customer service advantages of IoT.

All of these emerging technologies can be used to automate customer service, freeing employees to provide more personalized service and tackle the most challenging and time-consuming customer concerns. The Oracle and ESG survey found that of companies that use two or more of the four emerging technologies listed above.

  • 95% meet or increase market share.
  • 90% meet or exceed customer retention goals.
  • 73% meet or exceed customer satisfaction goals.