How Customer Service Is Different for Small and Medium Businesses Vs. Enterprises
Happy customers are key to business success, whether you are a small company or a large enterprise. Though the end goal is the same, how SMBs achieve customer satisfaction differs from their enterprise counterparts. Small and medium business can’t afford to provide the same comprehensive customer services enterprises do, so SMBS must maximize their customer service investments. What enterprises achieve through economies of scale, small and medium businesses achieve through personalized service and a focus on every interaction.
Why Do Customers Frequent Small Businesses?
Large enterprises can provide greater product/service selection, a one-stop-shopping experience, and discounted prices. These all seem like very attractive benefits, so why would a customer choose any other small company? The answer provides insights into the SMB customer service experience and how small companies compete successfully with large enterprises.
– Convenience: A big-box store, multinational services company or large online retailer may provide greater selection, but these businesses are optimized for business volume. This often means they aren’t providing customers with the most convenient experiences. Crowds, complex policies/processes and having to sort through a huge selection of merchandise they don’t need, to find the one item they do need, are all potentially frustrating for customers.
– Unique Products and Services: Enterprises provide products and services designed to appeal to a large audience. Many customers (particularly millennials) are willing to pay more for products and services that are unique and different. This could be a one-of-a-kind product, a specialty item that better serves their needs or personalized service.
– Emotional Connection with Company/Brand: Whether it is a neighborhood restaurant or a lifestyle clothing brand, customers may develop an emotional connect with the products and services they purchase. This leads to repeat purchases, referrals and other behavior that fosters long-term relationships with those companies.
– Knowledgeable Staff: Many customers shop at small businesses because they can receive help with their purchasing decisions from knowledgeable staff, who can advise customers about what selections will best serve their unique needs.
– Personal Relationships: It is much easier for customers to develop relationships with people than with companies. If a customer has a positive experience at a small business, then he or she will not only remember the company but also remember the person involved – and will want to do business with that person again.
Customer service is at the heart small and medium businesses – enabling them to differentiate themselves from large enterprises and command higher prices for their products and services. Successful SMBs know exactly what kind of business they are, and they embrace this uniqueness, not trying to be anything else.
Providing a Differentiated Customer Experience
Enterprises are successful by providing products, services, and experiences which serve the needs of the masses. Large sales volume necessitates that customer service processes be optimized for high-volume as well.
Take the example of a customer visiting a big-box home improvement store, seeking a part for a weekend project. The store has many products and employees. It isn’t reasonable to expect each of the staff members to understand the use and value of all the products and the exact item(s) the customer needs. The customer relies on vendor sales material and product packaging for a self-assessment of the available items. If the customer needs help, then he or she is likely to encounter a staff member with a little more knowledge about the products than what is printed on the packaging. Once the customer looks for the items on his or her shopping list and does not find them, the common response from a store associate and the conclusion of the interaction is, “Sorry, we don’t carry that item/those items.”
Compare this example with the experience at a small community hardware store with a much more limited selection and a smaller staff. The store’s business volume doesn’t match the large store’s, so the small store must make every customer interaction count. Within a few minutes of entering the store, a store associate is likely to greet the customer, asking him or her about the item(s) he or she needs. If the customer frequents the store, then the store associate may already have some idea of the customer’s preferences, skill level, etc. The store associate is likely to be knowledgeable about most of the items in the store and will be able to make suggestions on what the customer needs. If the store doesn’t carry that particular item, then the interaction will probably conclude with the store associate offering to order the item(s), or referring the customer to another store.
A customer calling a service company with a billing question could have a similar experience. If the company is a large enterprise, then the customer call is likely to be directed to a call center. Here the employees will focus on resolving the issue as quickly as possible and retaining the revenue from past sales. At a SMB, however, the customer is likely to be directed to a salesperson who is concerned with the long-term customer relationship and will act accordingly.
In both examples, when it comes to resolutions, enterprise customer service focuses on volume, efficiency, and speed, whereas SMB customer service is focused on personalized service and developing long-term relationships. Neither of these is the wrong approach – they just highlight a key difference in the customer service experiences, while looking at companies of different sizes.
The Impact of Customer Service Failure
Customer service isn’t just a strategic differentiator for small and medium businesses. It is an essential function the company must perform correctly. The impact of even a single customer service failure can be devastating. In the age of social media and online reviews, the impact of a mistake will follow the company into the future and is sometimes hard to shake off.
The purpose of customer service functions is to help the company better serve customer needs and to provide a positive experience that customers will remember as being helpful and beneficial. Customer satisfaction (and customer delight) are the goals of every customer service interaction. What happens when a company doesn’t achieve these goals? A satisfied customer may share his or her experience with 1–2 others, but a dissatisfied customer will share his or her experience much more broadly. A few years ago, this resulted in 10–15 negative references and potential lost sales, impacting the company for a few weeks. In today’s culture of online reviews and customer experiences shared on social media, the scathing reviews posted by dissatisfied customers has the scope to reach even thousand potential customers, negatively impacting the company’s reputation for years.
For a large enterprise, a few negative reviews and a few dissatisfied customers are expected. After all, enterprises do business in volume and no one can expect everyone to be universally happy, consistently. If the general sentiment is positive, then a big company will consider that a win. For small and medium-size companies that compete based on personalized service, negative reviews have a much larger impact. Reviews serve as a primary tool for customers to assess the reputation of the company and its products/services. Customer service failures indicate lack of organization, poor quality checks, lack of attention to detail, and a lackadaisical attitude about customers. Monitoring customer feedback, online reviews, and taking measures to satisfy customers, are essential to long-term success as an SMB.
How Are Customer Service Operations Different in Smbs and Enterprises?
While all companies perform customer service functions, company size significantly determines how a company views customer service, the cost of failure and the opportunities for strategic benefits. Is customer service considered an “overhead” function or a “cost center,” or is it considered a strategic differentiator and a source of future profits?
Enterprise Customer Service
Customer service in large enterprises is largely focused on efficiency and cost optimization. It is seen as a necessary function, but also an overhead cost that should be reduced whenever possible. Considering their size, enterprises can leverage economies of scale to provide acceptable levels of customer service. They do this by focusing on:
– Scale and structure
– Efficiency through process
– Reducing costs
– Customer self-service capabilities
– Analyzing for trends
SMB Customer Service
For SMBs, customer service is a more central part of their business model – an opportunity to develop customer relationships and drive future business. In small companies, staff members often assume a much more hands-on approach to customer service, engaging with customers on a wide variety of topics and interacting with them throughout the sales and fulfillment lifecycle. Customer service in a small or medium business is focused on:
– Providing a personalized touch
– Simplicity and effective processes
– Efficiency through information
– Developing customer relationships
– Creating value
– Analyzing for individual opportunities
This isn’t to say that enterprises don’t care about quality, relationships and value, or SMBs don’t care about cost, consistency and process efficiency. All companies must balance the holistic set of factors that impact customer service success and lead to profitability. The difference is where companies of different sizes focus their efforts to maximize value. SMBs see greater value from an individualized approach while enterprises see greater value from leveraging economies of scale.
Tools Needed to Support Customer Service Operations
In addition to operational differences, SMBs have different technology needs than enterprises to support their customer service functions. Technology is important in all facets of modern business, and customer service is no exception. Whether a company has a few employees or a large multinational enterprise has hundreds or thousands, customer service software can help provide the information and process support needed to help any company’s employees be productive and effective when serving its customers.
Customer Service Tool Capabilities for Smbs
Small companies have limited staff and limited financial resources to spend on tools, so every piece of technology they employ must be focused and effective in creating value. The right customer service software can help even a small team provide outstanding customer service that exceeds the service large companies provide. For a SMB, customer service software should be simple and efficient. The key capabilities should include:
– Managing customer data: Maintaining complete and accurate customer records enables small businesses to understand the bigger picture of their customers’ needs so they can foster long-term customer relationships.
– Basic processes and workflows: Small companies don’t need complex workflows. They need simple processes for consistency, and to enable small teams to manage multiple activities simultaneously.
– Known issues list: Customer feedback is a valuable tool for SMBs. Capturing known issues with products, services, and business processes enables the company to set reasonable expectations with customers as they work through the continuous-improvement process to enhance service.
– Supplier catalogs: SMBs can’t respond to every customer need themselves, often they must solicit the help of suppliers (for assistance with special orders, for example) or provide customers with referrals. Vendor catalogs and referral contacts are important to sustain customer engagement even if the company can’t respond to their needs immediately.
– Simple user interfaces: Limited staffing and employees wearing many hats means they need simple tools. Customer-service-system-user interfaces that are intuitive, quick and easy to use means employees are more likely to use the tools during their daily jobs.
Customer-service-tool Capabilities for Enterprises
Larger enterprises and medium-sized companies that are growing will need customer-service-tool capabilities that are more robust, configurable and scalable to support larger volumes of customer service transactions. Some of the key capabilities these companies will need include:
– Configurable workflows: Large companies have more complex organizational structures and business processes that require system workflows to be configurable. A common example is segmenting customer service workloads by content and routing them to specialized teams (such as billing, technical support, sales support, returns, etc.) for resolution.
– Task automation: As customer service workloads increase, there will be some common and simple tasks that can be automated to reduce the need for agent involvement. Large-scale customer service operations may have large automation libraries or even entirely automated workflows.
– Trend analytics: Enterprises and growing businesses have much data available to them, from customer records to sales transactions to support interactions. Trends in this data can provide valuable insights to continuous-improvement opportunities and cost-optimization potential.
– Customer self-service capabilities: In addition to automating the tasks customer service agents provide, customers can directly perform many routine customer service tasks if they are given the right tools and information. From product selection to billing to returns, customer self-service can help larger companies achieve better cost performance of their customer service operations.
Keys to Smb Customer Service Success
Customer service can be a strategic differentiator for small and medium businesses, not only to compete against large enterprises but also to drive sustainable, long-term business growth and profitability. Customer service success isn’t a secret. Here are five keys to unlock your company’s customer service potential:
– Hire the right people with the right attitude
– Make customer satisfaction your company’s top priority
– Implement a set of tools for managing customer data and tracking customer interactions
– Pay attention to customer feedback and reviews
– Look for opportunities to personalize
Happy customers lead to business success. SMBs must treat every customer interaction as an opportunity to make a positive impression, and show customers that the company genuinely cares about their needs. The right tools and data can help – enabling even small staff to perform a large set of customer service activities effectively, thereby providing consistent and high-quality customer service experiences. Small companies may not be able to compete with the economies-of-scale advantage that enterprises have going for them, but they can gain a reputation and a special bond with their customers, through high-value personalized service.