The Ultimate Guide to Customer Service Strategy
Updated: Feb 25
The customer service guide you need to master your strategy and help your business grow.
What is customer service?
Why is a customer service strategy important for your business?
Successful types of customer service strategy
Which channels you need for your customer service strategy
How to measure your customer service strategy
How to build a customer service strategy team
Customer service strategy skills to look for
Reviewing your customer service strategy
Customer service gets a bad rap.
We tend to think of customer service as the people we talk to when things go wrong, which is often a frustrating experience. It reminds us of robotic phone menus, hours spent waiting on hold to speak with an agent, or losing our place in the queue and not having our needs met.
But by reengineering your company-customer relationship, you can position your business with a competitive advantage that will help ensure long-term growth.
And it all starts with your customer service strategy. Let’s dive in.
What is customer service?
Customer service can be defined as helping customers before, during, and after a purchase. However, when we expand our definition to include both B2C as well as B2B customer journeys, the overlap between customer service, customer support and customer success can become tricky. Let’s unpack them now.
Customer Support vs Customer Success vs Customer Service
Let’s suppose you’re buying a new shirt online. You’re not sure about the fit, and so you submit a question about sizing. A customer service representative replies and answers your question, helping you to complete the transaction happily. Great customer experience.
But wait, plot twist — when the shirt arrives, it doesn’t fit like it was supposed to at all. It’s quickly becoming a story about a terrible customer experience. You contact customer service once again, the agent apologizes for the inconvenience and arranges a free exchange immediately.
As a matter of fact, they were so kind and helpful in supporting you, that it turned your frown upside down, and now you’re smiling again. Not only that, but they see you’ve purchased their winter fleeces in the past, which are currently featured in their end-of-season sale. They alert you to the discount, and thanks to this personalized touch you seize the opportunity to stock up for next year.
What just happened here?
In this story, agents from the same department were fulfilling multiple functions along your buyer journey. When you called customer service to ask about sizing, this agent was acting in a sales capacity, helping you towards a place where you could buy with confidence. When you called to resolve an issue, this same customer service department was fulfilling a customer support role. All of this falls under the umbrella of customer service.
Now if we imagine the above customer service interaction taking place within the context of a B2B customer journey, there would be a few key differences.
Decision-making with B2B products involves more stakeholders, whereas B2C is by definition a customer journey of one.
B2B businesses tend to have fewer, more valuable customers, which changes the nature of the company-customer relationship.
B2B products often require a bit of hand-holding in order to be implemented successfully across teams.
So if we imagine that the winter fleece was a B2B product, this degree of customer-focused relationship management that allowed you to continue and expand your purchase to maximum benefit would be called customer success.
B2B products tend to be more complex to use, so this means having a dedicated onboarding team to help the new client (and all its employees) to get up and running. Then, this customer success team will typically assign an account manager to ensure the long-term health of the account, regularly checking in to help the client use the product to its full value.
As a form of customer service, customer success is therefore about building relationships with clients and focusing on customer goal achievement, rather than issue resolution (which would be customer support). To put it a bit differently, customer support solves a problem that the customer raises – it is reactive – whereas customer success is proactive and based around promoting the client’s successful use of your product, in all of its various applications.
Customer success is also a revenue-generating function, as it helps nurture the customer to expand their account over time. Although the customer success team here acts in a sales capacity, they are not selling to a prospect but rather to an already paying customer, again making it a form of customer service.
Why is a customer service strategy important for your business?
For many businesses, customer service strategy is an afterthought. A product is developed and brought to market, and once it is sold the money is in the bank. But customers need help and without a clear strategy to manage customers' concerns and questions, your customers will quickly grow frustrated.
Smart businesses know that the point of sale is only the beginning of the relationship with the customer who, when nurtured properly, will not only keep using your product or service — they will become a precious advocate for your brand. Let’s look at how that happens.
When we have a positive customer service experience that exceeds our expectations, we may share this positive experience with our friends and family (on average we share these experiences with 11 people, according to American Express).
But try and remember the last time you had a really terrible customer experience, one that left you feeling frustrated and your issue unresolved. According to this same study, people share negative customer experiences with an average of 15 people. Why the difference?
70% of the customer's journey is based on how the customer feels they are being treated. (McKinsey)
It turns out that from a social perspective, we like to share positive experiences (for example of restaurants and movies), things that we think reflect well on our knowledge. But a great customer service experience is just a bonus – something that happened to us, not something we did. On the other hand, a bad customer service experience is one of the great frustrations in life that everyone can relate to, and it’s not uncommon to want to vent when you have a bad one. The kind of negative word-of-mouth is, however, toxic (and costly) for your business.
These days, great customer service is not only a competitive advantage – customers have actually come to expect it, so the competition is high. 81% of Americans believe that businesses are either meeting or exceeding their customer service expectations. (American Express)
The ROI on Customer Service
This may sound somewhat abstract, but great customer service means a serious impact on your bottom line. Consider the fact that a customer is 4x more likely to buy from a competitor if the problem is service-related – rather than price or product-related (Bain & Company). This shows that while your customer might be more forgiving of factors that are beyond your control, they’re happy to take their business elsewhere over poor customer service, which is very much in your control at all times.
And while taking the time to map out your customer service strategy might feel like a colossal waste of time at first, it’s actually a prudent investment of your resources.
Investing in bringing in new customers is between 5x–25x times more expensive than retaining existing customers. (Invesp)
This is why a customer service strategy is so important — you’re putting in place a roadmap for how you as a company are going to support your consumers before, during, and after they become customers.
Successful types of customer service strategy
Think of a customer service strategy as the flag that your company waves as your employees go into the field and virtually represent your brand to the world every day. As we’ve seen, your customer service has an enormous impact on competitiveness and even the viability of your company, so it’s important to nail this pillar from the start – and it all starts at the top, with your brand values and leadership.
Who are your ideal customers? Are they individuals or businesses? How do they like to be spoken to? You research on this front will help shape the objectives of your customer service strategy. Identity the costs of inaction so you can prioritize your efforts accordingly.
The philosophy of your customer relationship from a management level has powerful effects on your managers and customer services reps, who will in fact be the face of your company as customers interact with you. What priorities do you want to reflect?
Some of the following customer service strategies might appear to contradict each other, but it’s all about finding the right fit for your business. In practice, your customer service strategy is most likely going to be a cocktail of the ingredients below.
For example, if you’re an SMB with <10 agents and you’re looking to gain traction in H2, your customer service strategy might look something like this:
1 part customer-centric
1 part data-driven
2 parts customer delight
On the other hand, if yours is an enterprise business looking to reduce costs as you grow, without losing that human touch, your customer service strategy might be more like:
1 part data-driven
1 part effort reduction
2 parts self-service
As many of today’s leading companies know, putting out a great product simply isn’t enough to be a great company anymore. With new platforms like social media totally transforming customer-brand relationships, companies are competing in a whole new arena for
Here are some hallmarks of a company that is truly customer-centric:
They believe the customer comes first, and they are the key to a successful business decision. They strive to see everything through the perspective of the customer
They pay attention to customers needs and build their products around that (rather than developing a product and then figuring out who to sell it to and how)
They see customers in terms of relationships that will give the customer the most out of the product
As the name would suggest, most customer service strategies devote their focus towards improving things for the customer — but where do the customer support agents fit into the picture? For some progressive companies, employees are the key to their customer service strategy.
As a case study, let’s look at The North Face. Tasked with the challenge of maintaining consistency across branded outlets and department stores, their move is to focus first on the employee experience, not the customer experience. According to their employee-centric philosophy, if your employees are feeling supported in what they do, then this culture will allow them to help customers feel supported in their difficult moments. If you can build that energy into the company, it stands to reason that your customers will feel it — and they’ll want to stick around.
The best way to deliver the experience you desire for your customers is to provide that experience for your associates. If you want a better customer experience, work on your employee experience.
– David M. Schmidt, Senior Manager, Customer Experience The North Face
Customer support is often seen as a cost center, but self-service creates a low-effort customer service that can seriously cut costs for support departments. One way to do this is with a robust knowledge base so that customers won’t need to contact you for additional support.
Self-service in the form of a knowledge base enables customer support departments to provide answers at any hour of the day, a service that no other support channel can really match. With a quick search, customers are able to address their issues with materials such as informative articles, FAQs, and how-to videos.
The savings to any support department can be clearly measured in terms of agent headcount. The less often customers request additional help, the fewer agents are needed to help them. The cost of high-touch support (any customer inquiry that requires human interaction) is enormous compared to self-service. A study by Gartner reveals that it costs 80x as much to help a customer through live support channels as it does through self-service.
For a more human approach to customer service, you may want to look at businesses that focus on their customer experience. While the desired outcome is the same – more happy, loyal customers – this approach is less about statistics and more holistic. It’s about identifying the touch points in your customers' journey, monitoring feedback, and then analyzing patterns to keep iterating on those experiences.
Gartner defines customer experience as the customer's perceptions and related feelings caused by interactions with a supplier's employees, systems, channels or products. Note that customer experience is defined by two primary factors – your products and your people.
The first step is of course to create a product or service that answers customer needs, not an already-developed product in search of a market. With that in place, focusing on your people (agents or reps) is where this fits into your customer service strategy.
Crafting a customer experience that is not only frictionless and intuitive, but also fun and engaging is a key differentiator for successful businesses. 84% of companies that focus on improving customer experience are reporting an increase in annual revenue. On the other hand, 74% of people will likely switch brands if they find the purchasing process too difficult.
Customer experience can be improved across everything from creating a customer community to investing in software that allows your agents to address customer issues with a 360 degree view of the customer’s profile. These should be seen as long term investments. A Forrester-commissioned study for Adobe showed that experience-driven businesses see almost double YoY growth in customer retention, repeat purchase rates and customer lifetime value than other businesses.
What if you could achieve such high levels of customer satisfaction, that people would want to tell their friends and family about it? This kind of word-of-mouth sharing is a kind of marketing gold that no marketing budget can touch. This is what we mean when we talk about customer delight — going so far above and beyond customer expectations that you establish an emotional bond between brand and buyer.
Keep the human touch — Over the years, our ears have learned to detect and tune out marketing language. That’s why commercials from the past sound so cheesy. A great way to cut through that marketing fatigue and get your customers' attention is personalized language. Consider that 80% of customers are more likely to purchase a product or service from a brand that provides personalized experiences. And the good news is that personalizing your communications doesn’t mean you have to customize each email — By using the right technology, you can collect customer data and use it to create personalized customer interactions and provide unique messaging to every client.
Build a community — For businesses at scale, there is a limit to the effectiveness of ‘personalized communications’ because there are only so many of your employees for all your customers. This where communities come into play – by allowing the customers themselves to help you create delightful experiences for other customers. Branded communities, such as private slack channels or clubs, are 13% likelier to increase customer experience than social media channels.
Increase agent authority — A dissatisfied customer calls customer support in the middle of a bad experience. They’re highly frustrated and worst of all, nothing your agent says is helping. And there it comes: ‘Can I speak with your manager?’
Customers usually do this for one of two reasons: Either they don’t like the answer they’ve been given, or they’re asking for a refund or service that the agent is not authorized to make. Promoting your agents by giving them the power to make these decisions independently allows support teams to remain agile, delighting your customers with creative solutions without making them wait for manager approval.
The customer service industry is built around ways to make your interactions so positive that the customer is simply ‘delighted’ by the interaction, however in recent years there’s been some compelling evidence that what most customers actually want is not to say ‘That was delightful!" by customer service, but rather, “You made that easy”
Reframed in this way, the conversation becomes less about building loyalty through customer delight, but minimizing customer disloyalty through reducing customer effort.
The reasoning here is that delighting customers is rare, costly, and doesn’t make customers all that much more loyal. The reason it doesn’t work is that customer service interactions are 4x more likely to drive disloyalty than loyalty. Also, customer delight is not something that can be measured in any reliable way, so it’s not a strategy that can be optimized.
Instead, companies on an ‘effort-reduction journey’ with their customers make this promise: When things go wrong, we’ll fix it. When you need help, we’re here to support you. Because as critical as providing best in class customer service is, the reality is that customers aren’t really interested in talking to you. They just want to get back to their lives.
Which channels you need for you customer
Just as every company will use their own tailored combination of customer service strategies, there are a variety of channels on which you can provide customer service. Each customer has his or her own preference of which channel is most comfortable for them. Wanting to make the customer experience as smooth as possible, you may be tempted to adopt a strategy that provides all channels. However, this well-intentioned approach can backfire, as too many options can create a high-effort decision and overwhelm customers who just want to know the easiest way to resolve their issue. The art lies in knowing your customer – and your product – and offering only those channels that will serve both.
Customers want to solve problems their way — but 84% care more about making their problem go away than about which channel they use.
Types of customer service support channels
A good customer service strategy should aim to help you meet your customers where they are. Here are the common channels where customers might be reaching out for support.
For small startups with little to no support staff all the way to enterprise companies who are scaling faster than hire agents, a knowledge base may be the single most efficient customer service channel. By building a content hub into your product or service, you can provide 24/7 solutions to the bulk of your common questions. It’s also by far the most economical customer service channel. A study by Gartner reveals that it costs 80x as much to help a customer through live support channels as it does through self-service.
“These days customers are looking for very simple and intuitive products. So they don’t need to call you at all. They should be able to figure out how to use your product, just by looking at the product and using the built-in self-service tools that enable them and teach them how to use it.”
- Nir Galpaz, Vice President Technical Service and Support BlueJeans by Verizon
Perhaps the image most commonly associated with customer support, the call center is a physical place (either inside your support team or outsourced to a BPO) where customers call for help when things go wrong. It’s worth noting that while call centers overall are declining in popularity, there are some demographics who still find phone to be the most comfortable way to receive support, especially when it involves sharing sensitive information.
For any customer service department that needs to support more than one or two users at a time, a ticketing system is a must. A good ticketing system allows you to provide a consistent experience for customers and agents by consolidating all channels – email, texting, messaging, social media and phone. Note that not all ticketing systems come with a built-in call center that will allow you to track calls under the same view. If you may want to offer support over the phone, make sure you choose a customer service platform that provides this feature.
A real-time support channel that allows agents to focus on more than one customer at a time, live chat delivers immediate, personalized support from a convenient chat box. As the fastest channel for online support, live chat offers a boost to customer satisfaction.
An AI-powered chatbot can be embedded anywhere within your site or app to support customers when and where they need you the most. Choose which channels to add to each widget: email, live chat, callback and a fully searchable help center.
These days customers often like to reach out directly anywhere they can get a quick answer. Think about who your customers are, which platform they’re like to be on when their intent is high (Twitter, Facebook, Instagram, LinkedIn) and then make sure you’re there to provide them with support.
How to measure your customer service strategy
Your customer service strategy and tech stack should reflect the kinds of goals you hope to achieve as a company, and then have clearly defined metrics or key performance indicators (KPIs) to measure whether or not this path is really working for your company. If it isn’t you need to be able to pinpoint where you’re falling short of your goals, and why — so that you can start meeting them.
Some examples of company goals might include:
Boost sales by X%
Invest in customer management
Improve customer recovery
Positive customer experience
Enhanced customer advocacy
What are your realistic goals for this year? Have an honest look at your current customer service offer to see what is most urgent and what can be part of a longer-term plan.
Here’s the critical point where customer service strategy goes from being an abstract idea to a concrete plan. With the corresponding KPIs chosen to reflect your goals, you will have a clear and unfiltered view of how your customer service is performing — and how that is impacting revenue. Here are some of the most important customer service metrics to monitor:
Customer Satisfaction (CSAT) – the classic metric for measuring customer service, customers are asked how satisfied they are with their recent purchase or support interaction? CSAT is typically measured on a scale of 1-5.
Churn rate – Another, more direct way to measure how happy your customers are is to track whether they’re staying with you, or leaving you for your competitor. It’s a binary metric, and there is no need for a customer survey here.
Employee Satisfaction Score (ESAT) – What about employee churn, aka attrition? Being a support agent is a notoriously demanding position and the turnover rate is one of the highest of any industry — but it doesn't have to be that way. Companies adopting an agent-centric customer service strategy will want to keep a close eye on how well they’re treating their team. This can be monitored through a survey, or with regular 1-on-1 check-ins to see how you can support your support agents.
Net Promoter Score (NPS) – A more comprehensive metric than CSAT, NPS asks customers how likely they are to recommend your product or service to a friend. The difference is subtle but significant, as this question allows the customer to look past their mood and reflect on their overall brand perception and loyalty.
Customer Effort Score (CES) – Is your company on an effort-reduction journey? Then this KPI is for you. Using a CES survey after a support interaction, ask customers how easy or difficult their customer experience was: easy, neutral, or difficult.
First Contact Resolution (FCR) – For measuring customer effort in action, rather than measuring First Response Time (FRT), a more comprehensive KPI is how often your support organization is able to solve a problem without making the customer switch channels (for example from self-service to live support, or from email to live chat, which always adds to customer frustration).
Voice of Customer
The above metrics are great ways to measure the health of your support organization at scale, but they can sometimes fail to capture the insights that an individual customer story can.
Is your product easy to use?
What are the pain points?
Are you truly creating value?
What kind of feature requests do customers have?
While many product managers view their support departments merely as queues of tickets to be resolved, they could be reaping gold when it comes to customer feedback. After all, agents are a company’s ‘front lines’ when it comes to interfacing with its customers, which means that no one knows better what the customer experience is like.
Surveys are great and generating direct feedback – things like NPS scores, lifecycle Customer Satisfaction (CSAT) scores – but when it comes to closing the loop between customer service and product development, indirect feedback can shed a more nuanced light on what’s working and what isn’t. Feedback generated by the ways clients are engaging with your product should be included in every company’s product strategy meetings. This will help you to learn not only how your customer service strategy is working, but how your product is working.
How to build a customer service strategy team
Now that you’ve carefully chosen the right customer service strategy for your company, it’s time to build out your team. Let’s have a look at some of the typical roles and responsibilities most customer service teams hand – bear in mind that your team may vary slightly depending on your industry, budget, goals and strategy.
Customer Service Representative
Representatives, or ‘agents’ in a customer support role, are in some ways the most important people in your support organization, because they are the ones your customers will actually be interacting with. Never forget that even with the best customer service strategy and support solution, customer service is at its heart a human job. Be sure to hire people with human-facing skills and high emotional intelligence.
Customer Service Engineer
Customer Service Engineers are responsible for the comprehensive and technical information about the particular services and products offered by your company. In their main role, they provide remote and on-site support about technical issues with products supplied by their company. They troubleshoot problems that require a high level of technical expertise.
Customer Service Supervisor
Overseeing small teams of agents, many customer support supervisors began as agents themselves. With their experience of the product, the role and its challenges, they manage and guide newer reps from onboarding to conflict resolution. These are the people you speak to when you ask an agent if you can please speak with their manager.
Customer Service Manager
Often having previous experience in the customer service industry, your managers will oversee the entire customer service teams within a given location or product. Using their background experience and understanding of larger company goals, managers help implement high-level strategic objects downstream to the granular level of your support teams — implementing new policy training, handling serious conflicts, and tracking the performance of their teams.
VP Customer Service
Larger customer service departments will also have a VP answering directly to the CEO. They are accountable for setting and holding quality support standards across multiple teams, spotting trends and removing obstacles that impede delivering customer satisfaction. They have to be an expert in the products their teams are supporting, in order to produce insights that lead their customer service managers in implementing data-driven improvement initiatives.
There are some companies that fill roles, and there are companies that hire based on people. If you look at the criteria that Apple uses when hiring its employees, you’ll notice that they recruit based on people – not on filling roles. Apple has found that the best way to build a special workplace is to hire for attitude and train for skill.
Here are some of the obvious and not-so-obvious skills that customer service agents need to succeed.
PROBLEM-SOLVING Customer service, and especially customer support, are largely about assisting with and resolving customers’ issues. To point out the obvious, you can’t provide a solution if you don’t know the problem and with technical products identifying the source of the problem is often easier said than done. Customer service representatives (CSRs) need to be comfortable with investigating and troubleshooting issues thoroughly before suggesting the right solution. Even if they are not technically oriented people, on some level good reps need to be problem solvers by nature. For both new and recurring problems, they must be able to look at any issue and suggest a path to resolution, even if that means flagging up the ticket for a product expert to tackle.
TECHNICAL KNOWLEDGE CSRs should always have product experts for more challenging issues, a certain amount of technical literacy and product knowledge are to be expected. They must not only be able to understand and navigate various technical platforms, but deliver accurate feedback and help customers feel comfortable and secure. For tech companies, reps need to be able to learn your product or service quickly and thoroughly, including features and capabilities.
ATTENTION TO DETAIL Going hand in hand with technical aptitude and problem-solving skills is attention to detail. The ability for reps and notice small details and irregularities is crucial to their ability to think on their feet and solve problems on the fly. They need to be able to analyze situations they haven’t seen before and improvise a solution that will reassure the customer that they are in good hands. Strong attention to detail often makes the difference between a rep who is just highly motivated and one who has a gift for resolving issues and helping your business to build customer loyalty.
EMPATHY In order to stay motivated while helping customers all day long, CSRs need to be able to empathize with your customers’ situations so they can appreciate the difficulty from their point of view. Customer service and support are not just about solving problems but also making customers feel supported during a very difficult moment when things are going wrong and your product or service is not working like they expected when they paid for it. Sometimes just displaying empathy for your customers’ pain points can help turn the interaction in a more collaborative direction.
LISTENING When customers are frustrated, sometimes the first thing they need is to have someone listen to what they’ve just been through, before they even get their problem address. From the side of the rep, good listening skills allow him or her to understand customer intentions and better address their needs. A good listener can pick out the important details from a story, express the appropriate understanding, and then ask the right follow up questions.
COMMUNICATION The other side of the coin with good listening is of course good communication. A good CSR always remembers that no matter how well he or she knows your product or service, the customer should be expected to speak the same technical language. A good test is to ask candidates how they would explain a certain jargon-filled product feature to their mother. This ensures that they are able to communicate in a manner that is both simple to understand and helpful.
PATIENCE Let’s be honest – customer service requires patience, and a lot of it. Reps will be required to solve the same problems repeatedly, support frustrated sometimes unhappy customers who can often be irate, while providing a never-ending string of solutions. They will have to do all of this with a friendly attitude without losing patience. A bit of mental toughness and patience are vital in these cases.
PERSUASION Finally, service reps often field calls from prospective customers who have not yet purchased your product but are considering it. For this reason it’s a good idea to hire reps with a bit of sales savvy, who are comfortable with converting these leads into revenue-generating clients. Salesmanship
The bottom line
If you’ve read this far, you will know that a solid customer service strategy is not just a nice-to-have, but a key component of any sustainable business plan.
You understand that when more and more businesses are contending in an increasingly competitive space, there is less room to stand out based on product alone. As it gets easier for digital products to mimic one another’s features, customer service becomes THE key differentiator where you can shine in a crowded field and earn customer loyalty.
So you are not surprised that Gartner predicted 89% of businesses are now expected to compete primarily on customer experience. In the words of President and CEO of Mercedes Benz USA:
“Customer experience is the new marketing.”
- Steve Cannon President and CEO, Mercedez Benz USA
And you are ready to take the next steps and level up your own customer service by putting in place a roadmap for how to support your consumers before, during, and after they become customers.