In a highly competitive market for consumer attention, customer service can be a great way for companies to differentiate themselves from competitors.

Companies that are truly customer-centric, meaning that they listen to their customers, see 1.6x more growth, according to Gartner¹ (link resides outside of IBM.com). Viewed another way, studies have shown that poor customer service²  (link resides outside ibm.com) is the biggest reason customers leave.

Meeting customer needs is incredibly valuable to a company’s bottom line, as it improves customer loyalty and retention. Poor customer service, on the other hand, creates significant challenges. It requires three new customers to replace the value of one lost existing customer, according to McKinsey³ (link resides outside of IBM.com). Customer service can be integral to customer satisfaction, which can lead to customer retention. It can also encourage those loyal customers to engage word-of-mouth, leading to referrals.

Providing an excellent customer service experience requires a well-constructed strategy, investment in resources and training, and the right approach to problem-solving tactics. Any modern customer experience strategy should also include a customer service strategy that uses customer data to meet customer expectations.

• Create frameworks to turn ideas into business value
• Put human-centered design thinking at the heart of the organization
• Embrace service automation and AI
• Augment customer service representatives with AI
• Personalize the service provided
• Be proactive
• Embrace empathy
• Empower customer service professionals
• Maintain up-to-date information
• Monitor key metrics
• Prioritize biggest impact fixes
• Provide personalized experiences
• Reach and respond to customers wherever they are
• Set a customer service philosophy
• Streamline workflows

Organizations often need a framework to help guide the ideation and execution of customer service solutions. For example, IBM Service Jumpstart Garage helps accelerate service transformation by helping to understand where in the service value chain friction lies. Doing so allows employees to better frame the challenges and solve them to meet customer expectations.

The goal of design thinking is for teams to understand and satisfy users with the most desirable, feasible and viable solutions to problems. The approach goes beyond the product or service that is offered.

A key step in the service value chain is putting human-centered design thinking at the core of architect experiences that bring together service, sales and marketing workflows. This step helps teams find optimal user-centric solutions as they manage customer information and conversations across channels and departments.

Organizations that incorporate service automation and AI can create advanced customer service processes and workflows. Doing so improves customer engagement and start conversations and provide relevant information faster and reduce customer wait.

Companies need to move beyond call sheets and templates and use AI to empower their customer service reps to make more decisions during customer interactions. An IBM Institute for Business Value (IBV) study found that every respondent planned to use generative AI in customer service with over two-thirds of respondents having already begun to incorporate it.

Customer service teams can use virtual assistants and other generative AI tools to improve response time and provide better overall customer support. Minimizing customer hold times and customer care calls that don’t end in a solution is a great way to produce happy customers.

To provide excellent customer service, companies should provide personalized customer service whenever possible. That’s why customer service design is so critical; it helps organizations plot out the best way to treat each customer as an individual while scaling the entire operation.

For example, younger customers are more likely to prefer self-service tools⁵  (link resides outside ibm.com), while older customers are more likely to want to talk to someone. Therefore, companies should have a good understanding of their customers’ demographics and allocate the right resources for a personalized customer experience.

Customer service does not need to be a reactive discipline. Offering exceptional customer service can also involve reaching out to customers to help them maximize the utility of the products they purchased and potentially eliminate future issues. Companies have several tools that they can use to communicate to those new customers.

They can email them user guides and frequently asked questions FAQs after the customer has purchased or received the product. They can follow up to posts on social media about the customers’ purchase to provide support. The best way to achieve this success is through active listening on all channels where customers congregate.

Good customer service teams demonstrate to customers that they understand their pains and want to help. Companies should demonstrate the importance of empathy to all their employees, so customer service reps pass that along to the customers with whom they interact. Key facets of empathy include staying positive when talking to employees, going the extra mile to solve their problems, and to be calm in the face of customer frustration.

Organizations should invest in improving the customer service skills of their representatives because they interact directly with customers and responsible for resolving customer issues.

They should also train in-store personnel to handle customer service issues, so they can produce a positive experience during any in-person customer service interactions. If their problem cannot be solved then, customers should be routed to the right channels.

Customer service representatives should learn soft skills such as problem-solving techniques, conflict resolution, active listening, and calm under pressure. They can also learn and improve upon hard skills such as software proficiency, omnichannel communications and how the company’s products work on a technical level.

One way to eliminate bad customer service is to provide accurate information. In an omnichannel environment, companies should focus on updating content on every touchpoint, including their knowledge bases, FAQs and product information.

Customers who have a customer service issue do not want the hassle of searching through multiple pages of incorrect information to find a solution. Companies that keep information constantly updated can help more customers address their issues without needing to speak to a representative.

Customer satisfaction metrics such as customer satisfaction scores (CSAT) and net promoter score (NPS) can help companies track whether they are providing great customer service or not. Companies should benchmark these stats and adjust their approach if customer feedback demonstrates they’re not providing excellent customer service.

Executives believe that generative AI has a huge impact on customer service. A recent IBM Institute for Business Value study found that 85% of executives believe that generative AI interacts directly with customers in the next two years.

Chatbots, historically a valuable customer service tool, can produce even more value due to artificial intelligence. Customers can access more accurate answers to their questions with more “human-like” responses, leading to fewer requests to speak to a customer service agent. This approach allows support team members to focus on larger problems that chatbots should not handle such as make good offers and refund decisions.

While some issues are unique to specific customers, other customer problems might continually occur, leading to a larger part of the customer base that is unsatisfied. For example, if thousands of customers are reporting a pain point with one use case of a software program, the company should put remediation of that at the top of their enhancement queue.

Some examples of large fixes a company can prioritize include solving bug issues, communicating important details to customers, and revising a product or service to be simpler to use.

Every customer experience should feel unique to the recipient. That approach is especially true with customer service. Companies should embed personalization wherever they can when interacting with customers. Chatbots should address customers by name, and customer care representatives should have as much customer data on hand when trying to solve customer issues.

Ideally the company also sends out postresolution emails that provide more context and information relevant to that customer. A Gartner study³ (link resides outside ibm.com) found that 65% of consumers say that they are loyal to companies that offer a more personalized experience.

Omnichannel customer service involves assisting customers across a seamless and integrated network of devices and touchpoints. Companies that offer omnichannel support need to go the extra mile. That means they need to meet customers wherever they are along the customer journey, including communicating on social media, phone calls, text and email.

Companies need to offer effective customer service wherever their customers are by having the appropriate staff and technologies to communicate with them.

Companies should codify how they want the customer service process to go, from how they treat customers, to how they try to resolve issues, and to what follow-up customer care they provide. Sometimes, they can publish this philosophy on their website as both a commitment to living that philosophy and also use it as a marketing tool.

Efficient companies use customer service automation to deliver excellent service. Companies that can route an inbound request from the help desk to the right customer representative automatically demonstrate good workflow use cases.

Another good example of a workflow is to use customer relationship databases (CRM) that connect to emails and other channels so messages between company and customer are automatically tracked.

There are several questions the routinely come up about customer service.

• How much should companies invest in customer service?
• Should companies embed AI into their customer service operations?
• What are key skills do customer service employees need to be good at their jobs?
• Is there a difference between customer service and customer support?

The answer depends on several variables, such as how many customer requests that company receives and how difficult it is to solve customer problems. Ultimately, keeping customers happy is an important part of the customer experience, so it is worth investing in.

Companies should invest in AI for their customer service function. AI augments employee work so they are more informed when they talk to customers. AI can also improve self-service by powering chatbots and other technology that customers can use without having to talk to a representative.

They should possess good communications skills, a desire to help people, excellent problem-solving approaches and adaptability.

Customer support involves troubleshooting specific technical issues or product problems. On the other hand, customer service is more broadly involved with customer experience, such as helping people get the most out of their products or learning how to use specific features.

IBM® has been helping enterprises apply trusted AI to customer service for more than a decade. And now generative AI has further potential to significantly transform customer and field service with the ability to understand complex inquiries and generate more human-like, conversational responses. IBM Consulting® offers end-to-end consulting capabilities in experience design and service, data and AI transformation. We use watsonx™, IBM’s enterprise-ready AI and data platform, and watsonx Assistant™, IBM’s market-leading conversational AI solution. We partner with you through the AI value creation process to enhance conversational AI, improve the agent experience and optimize call center operations and data.