Why Customer Service Excellence is the Key to Success

Imagine losing 89% of your customers after a single bad experience. Guess what? You don’t have to merely imagine it. That's the reality. (Customer Experience Impact Report, Oracle) When businesses neglect customer service excellence, the impacts are dire​​. This statistic may sound dramatic at first glance, but think about it for a moment and it makes total sense. Consider your own experience. When you receive bad customer service once, how often do you never go back to that business again?

In a world where one negative review can go viral in minutes, merely good service isn't enough to survive. It's time for you to raise the bar and deliver unforgettable experiences. Customers are spoiled for choice, and they’re becoming more and more exacting.

Throughout my career, I have always been passionate about creating service excellence and training others in how to achieve it. Customer service stands out as one of the pillars of any business’s success—and also one of the most exciting! Customer care is both an art and a science. You get to explore your creativity and imagine new possibilities, invent new ways to thrill and delight your customers. On the more scientific side, I love teaching the research-backed methods and tools that make enhancing customer service more effective—creating customer personae, identifying the touch points of the customer journey, developing experience maps and building a unique value proposition, to name a few.

Why is improving customer service one of the most vital things you can do to further your business’s success and strengthen its resilience? Let’s dive into the answers together.

The Importance of Customer Care Skills

In today's competitive experience economy, simply providing good service is no longer enough. To truly stand out and succeed in the hotel and service industries—and beyond—businesses must focus on delivering exceptional experiences that exceed customer expectations.

Exceptional customer service skills don’t come naturally to every person, but their importance to your business is undeniable. Service excellence is the key to:

1. Building customer loyalty
2. Increasing satisfaction
3. Creating a competitive advantage

When customers receive outstanding service, they are more likely to return, recommend your business to others and spend more money. On the other hand, poor service can lead to lost customers, negative reviews and a tarnished reputation.

Rising Customer Expectations

In recent years, customer expectations have risen dramatically. With the proliferation of technology and social media, customers now have access to more information and options than ever before. They demand personalised, memorable experiences that cater to their individual needs and preferences.

“Personalisation” has been a buzzword in customer service for well over a decade, and its importance is only growing. What we used to think of when personalisation came to mind pales in comparison to what customers expect today. Businesses that fail to adapt to these changing expectations risk falling behind their competitors.

The Cost of Poor Customer Service

The cost of poor service can be significant. Losing customers due to subpar service not only results in lost revenue but also requires additional resources to attract new customers. The cost of acquiring a new customer is 5 to 25 times more expensive than retaining an existing customer (Harvard Business Review). This number varies depending on industry and the specifics of your own business, but no matter who you are, the cost is eye-shattering.

The most insidious aspect of losing customers is that we most often don’t realise it’s happened. The Oracle study on customer experience, which I mentioned at the beginning of this article, found that out of all the customers you lose, only 4% of them actually make a complaint to you. The rest simply disappear—quietly to you, but perhaps not as quietly when speaking to others. Negative reviews and word-of-mouth can spread quickly, damaging a business's reputation and making it harder to attract new customers.

Benefits of Great Customer Care and Service Excellence

The results of great service are clear: loyal and engaged customers who become brand advocates, and motivated employees who believe in the company's mission. Companies like Ritz-Carlton, Starbucks, Zappos and Apple have set the benchmark for service excellence, consistently delivering exceptional experiences that keep customers coming back. As renowned expert on service culture Ron Kaufman defines it, "Service is taking action to create value for someone else." By focusing on creating value for customers at every touchpoint, these companies have built strong, enduring relationships with their customers.

Businesses reap numerous benefits by focusing on customer service excellence. Loyal customers tend to have a higher lifetime value, meaning they spend more money over time and are more likely to recommend your business to others. Exceptional service can also lead to increased employee morale and reduced turnover, as employees take pride in their work and feel valued by the organisation.

Beyond this, improved customer service empowers you with more flexibility in your pricing strategies, including the possibility of charging more because of the value your enhanced customer experience provides. As PricewaterHouse Coopers says of the consumer experience, “The price premium for getting it right is real—and it’s big.” The research studies on the price premium are unequivocal. The Zendesk CX Trends Report 2023, for example, states that 75% of customers are willing to pay extra for good customer experience. Customer service impacts everything from consumer loyalty to revenue management to upselling opportunities.

Customer-centric Approach

Embracing a service excellence mindset requires a customer-centric approach. Leaders must foster a culture that prioritises the customer experience and empowers employees to deliver exceptional service. This involves providing ongoing training, support, and recognition to employees, as well as continuously seeking feedback from customers to identify areas for improvement. Investing in service excellence and training a more customer-centric approach not only helps retain existing customers but also attracts new ones through positive recommendations. Empowering your team with enhanced skills for success also improves overall team satisfaction, employee retention and individual growth trajectories within your organisation.

The Role of Management in Driving Customer Service Excellence

Management plays a crucial role in setting the vision for service excellence and building the systems and culture to support it. It's not just about having friendly team members who provide good service; it's about defining what service excellence means for your organisation and aligning every aspect of the business to deliver on that promise. Leaders must establish clear standards, provide the necessary resources and training, and create a culture that values and rewards exceptional service. Only by taking a holistic approach can businesses achieve true service excellence.

How to Enhance Your Customer Experience

As someone who has dedicated their career to creating and training others on service excellence, I understand the importance of not just providing good service but creating memorable experiences.

In upcoming blog posts, I will delve deeper into the strategies and insights businesses can use to elevate their service and create a lasting impact on their customers. I look forward to exploring the possibilities with you.

Customer Service Trainings at AIHM

Chris Meylan, Chief Operating Officer of AIHM, teaches weekend workshops and short courses on Customer Service Excellence at the management institute’s Bangkok campus.

See the current course schedules and an overview of all management skills training courses here.

Interested in a customised training course for your organisation?

Read more about AIHM’s tailored training programmes.