Customer Service

Why Customer Service is the New Marketing

April 23, 2019
12:00 am

Companies tend to treat customer service and marketing as separate business units. This is partly due to the influence of an outdated business framework: the sales funnel. Originally created by E. St. Elmo Lewis in 1898, the traditional sales funnel assumes that prospects follow a linear path to purchase, beginning with marketing.

Why customer service is the new marketing
The traditional sales funnel

But there’s a lot wrong with this business model. For starters, it:

  1. Puts the burden of generating new business on marketing and sales teams,
  2. Assumes that marketing is the only way prospects find out about you, ignoring other digital channels through which potential customers learn about you, and;
  3. Pays little heed to what happens to customers after they become your customers.

Progressive companies don’t see it this way. They know that attracting new business is the responsibility of the entire company, not just the marketing department. And one of the most important departments in doing this is customer service.  

“In the old world, you devoted 30% of your time to building a great service and 70% of your time to shouting about it. In the new world, that inverts.”

- Jeff Bezos

Here’s why customer service is the new marketing:

1. It’s getting expensive to acquire new customers 

The cost of acquiring customers (CAC), especially in competitive industries, has gone up considerably according to Mary Meeker’s Internet Trends 2019 report. Marketing teams have had to reckon with this cost. Meanwhile, the lifetime value (LTV) of these new customer relationships has been declining. Business revenues have dropped because of increased customer churn.

Put simply: acquiring new customers is expensive. And when businesses do acquire them — thanks to an increase in competition and options that simply didn’t exist before — they churn faster. 

On the flip side, focusing on current customers is more financially rewarding than going after new ones. According to a report by Bain & Company, increasing customer retention by even 5 percent can increase revenue by 25 to 95 percent

Tip: Increase retention by personalizing your customer support. Shoe retailer Zappos does this well, encouraging its customer service representatives to engage in long phone calls. Some can last as long as 11 hours if it means providing the highest possible level of personalized service.

2. Good customer service turns customers into fans 

Heartfelt customer service is your marketing trump card. No matter how many times you espouse the benefits of your product or service is, nothing compares to the first-hand experience of a real person talking about it in their own words.

It’s authentic, and authenticity sells. If you need any proof, just take a look at Yelp. 

When Yelp first started in 2004, their business introduced a novel concept: pooling the collective experiences of a group of customers to form a crowdsourced database of reviews. The power of this changed the way restaurants did business. It’s true not all online reviews are real, and negative reviews can be damaging. But when a customer has had a truly amazing experience and subsequently reviewed it, a study of Yelp found that for each star given, businesses saw revenues increase by as much as 5 to 9 percent. 

Tip: Focus on creating a customer-centric company culture that prioritizes the customer experience. One way of doing this is to involve your customers in your product roadmap. UK-based Walkers potato chips let customers vote and choose flavors they produced, putting customers at the center of an important business decision.

3. Technology has created marketing opportunities for customer service teams 

In the past, customer service meant picking up the phone to hear from your customers or serving them in person. Nowadays though, customer service happens both offline and online. Technological advancements, along with internet connectivity, have created an always-on customer service culture, increasing the number of interactions between customers and companies. Each and every one of these interactions represents a marketing opportunity. 

When a customer reaches out on social media regarding your business or service, that’s an opportunity. Go beyond simply providing an answer to their question and display your brand, personality, or ethics as a business. Similarly, when you create a chatbot greeting for your website or social channels, that’s an opportunity to convert visitors into leads.

Tip: Offering omnichannel customer service is a marketing boon. Beauty retailer Sephora blends in-store experiences (makeup tutorials on iPads) with consumers’ online shopping habits, creating a personalized customer experience.

4. Customer reviews are a more powerful form of marketing than self-promotion

When it comes to buying decisions, your reputation matters. Customer reviews are key in establishing your reputation as a business. A BrightLocal study found that 85% of consumers trust online reviews, just as much as personal recommendations.

By focusing on creating a great customer experience, you improve your chances of generating positive customer reviews - whether that’s online or through word-of-mouth. This form of marketing is controlled by your  customer service team and represents a much more trustworthy source to a prospect than what your company says about its own products and services.

Tip: Use technology to create more opportunities for customers to leave reviews. For example, some live chat services enable companies to ask for reviews on popular platforms, like Product Hunt.

5. Good customer service is influential  

Assume that the amount of time and money invested in creating a single excellent customer experience and a single marketing advertisement are equal. In both scenarios, the target audience is a customer or prospect.

Which is more memorable to them? Most likely the positive customer experience. According to PwC, 65% of U.S. customers find a positive experience with a brand to be more influential than great advertising.

Tip: Customer service is an opportunity for a company to deliver an emotional experience, so do everything you can to make your customer service team comes across as human. When one particular customer contacted pet food supplier Chewy to cancel his dog food order after his dog died, customer service responded with great empathy. This led to the customer posting the experience on LinkedIn, prompting hundreds of comments and thousands of likes. 

Customer service and marketing - a power duo

Great customer service leads to more satisfied customers than an ad ever could. Adopt a marketing mindset in your customer service and a customer service mindset in your marketing, and you’ll be well on your way to creating better customer experiences.


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