What is that one weapon small business owner has over the big business?

Small businesses are, well, Small. That means they do not suffer from the issues of big businesses such as decision delays due to hierarchy and ‘approval policies’, and implementation delays.

Small businesses can be nimble, act quickly, and change quickly if needed be.

Course correction is quicker with a small boat as compared to a huge cruiser.

Sure, small businesses do not have bigger marketing budgets, but they have a very strong positional advantage, if used well.

What is it?

Great Customer Service.great customer service

Since the number of customers are small, and additional business can come with word of mouth from happy customers, it is almost mandatory for small businesses to provide a great customer service.

And the beauty of this is that most of the customers, except may be excluding certain domains involving one-time buy products or services, will love companies that provide great customer service in addition to great products.

What better reason to nurture and get repeat business from existing customer than knowing the fact that it is 6 to 7 times more expensive to get a new customer as compared existing customer retention costs?

First, let us look at the REAL COST of bad customer service

According to Help Scout,

1. A Whopping 86% of customers quit doing business with a company due to bad customer experience.

Think about lost direct repeat sales and opportunity costs due to missed referrals from them if they’d loved the company.

2. Not every dissatisfied customer reaches out to customer support. Only 4% do it before giving up.

That means if a customer is silent it means two things –

  1. He is super happy with the company
  2. He is on his way out to a competitor

This makes NOT reaching out and interacting with existing customer a Cardinal Sin.

Now what makes this even more interesting (or alarming, based on where you are) is the fact that 51% of prospective customers reach customer service just ONCE before giving up on a purchase!

The other way to look at these in effect, is that these never-measurable costs add up to your marketing budget to get new customers.

Let us look at word of mouth effect on business, or lack of it.

On an average, customers tell 9 people if they are happy with their experience with a company, and tell 16 people if they have had a bad experience! Negative word spreads fast, far and wide, right? Add to this the super fast medium such as social networks – this means one good (or bad) tweet or facebook comment is enough to reach many many more people than above numbers.

3. What do customers really want

While 40% want better, cordial Interaction with customer support staff, 73% customers feel that Competency of the staff decides whether they want to continue doing business or give up.

4. Rewards of good customer service?

We must know this, in order to gauge the true importance of a great customer service.


80% of US customers are ready to spend more in order to get better customer service. So, having customer support is no more part of survival package, it can generate additional revenue!

Happy and loyal customers are 10 time more worth to your business than their initial purchase. So, for instance, if they bought a $20 garden equipment from you, expect them to spend another $200 or more from you if you treated them well. And this, for a fraction of the cost of acquiring a new customer – just about 15% of the cost, actually.

5. While many companies believe they are providing great customer service, the reality is..

80% of the companies believe they have a great customer service, where as in reality only 8% are found to be providing a superior customer service.

Where do I stand currently?

How do you find if your self-assessment of ‘customer friendliness’ is a reflection of reality? Only one person can tell you that.

Your customer.

Ask them!

  1. Run a survey such as SurveyMonkey, send link to customers through email (you sure are maintaining a list, right?)
  2. Integrate a quick survey tool (try Google customer survey for a free, inexpensive one) right on your site
  3. When customer calls, request them to take a minute in the end of the call to answer couple of questions, let them rate on a scale and tell one good and one bad thing about your business
  4. Run a snail mail campaign. Print a small survey with self-affixed postage for customers to fill in and send back

small business customer service

Customer Service Cost figures

Per Salesforce.com‘s survey conducted in 2013, $84 billion per year is the cost of bad customer service in the US along, and worldwide costs are $338.5 billion per year.

Great customer service may cost you money, but not having it can cost much more!

Enough of the bad, let’s look at some good

What is a good customer service? How can we improve to have a superior customer service?

Good Service depends on four parameters –


Is the customer addressed with his/her first name?
Are they given a patient ear to understand the real issue?
Are they made to feel good about calling up the customer service?


How long does it take for (prospective) customers to crawl through IVR maze to reach out to a real person?
How quickly is their issue addressed?


How competent is the customer support executive to resolve the issue?
Is one customer support executive passing on the tough question to another one, to a third one, only to frustrate the customer?


Can customer reach support via 24×7 online chat, email, and phone, or they just can log a support ticket and wait for someone to get back? Worst, are they thrown a bunch of FAQ/Knowledge base to sift through and find out their solution, or just post on the forum?

Kill the Competition From Big Businesses With Great Customer Service

Part of the solution..

There is no fixed way to deal with this issue. If customer delight is your goal, there can be unlimited ways one can find to achieve this goal, including sending birthday cards, to exclusive offers.

  1. It is critical to identify the exact feeling we want an ideal customer to have about our business – do we want them to feel safe, feel proud, feel important or generally feel good when thinking about our brand? Knowing this will help fine-tune every interaction with them
  2. An efficient customer service management system, integrated well with customer database is a must
  3. It is important to understand as much possible about every customer, so each one can be made to feel a ‘special customer’
  4. Innovative practices such as loyalty bonus/discount, membership benefits and exclusive deals go a long way
  5. Have a set of people to constantly scan social networking landscape for any bad (or good -> convert to testimonials) word about the customer service they have experienced

Here’s an infoghaphic from Score.net that shows customer loyalty stats in 2014 –


Finally, it is worthwhile to remember that an irate customer is a great source to find out flaws in our business, and the best chance we have to get a loyal and ambassador of our business.

Can you afford not to have a great customer service?

To your success,



Image credits –
Customer service: phildowsing
Comic strip: cainc
P.L.E.A.S.E: financialaidpodcast
Infographic: score.org

Shiv Shenoy
Shiv Shenoy

After spending 15 yrs in the corporate cubicle, Shiv Shenoy quit it to work with people by leveraging his skills and knowledge. He is passionate about teaching proven passive income generating methods, which draw their effectiveness from Behavioral Economics and Digital Marketing strategies. Shiv is a best-selling author and has self-published over 21 books in Digital Marketing and Project Management domains. When not hunting and perfecting a new passive income method, Shiv is often found playing Flute, or painting.