Illustration by Andrea Pereira

The Ultimate Guide to Small Business Customer Service

With access to fewer resources and generally leaner teams, small businesses need to be more creative and tactful in their approach to customer service.

That’s not to say they can’t provide a top-notch experience — they absolutely can. They just need to be a little more focused with their efforts.

In this guide, we cover some common topics surrounding small business customer service and provide some insights gained from our years of working in support — as well as insights from small business leaders who’ve created great customer service programs of their own.

Armed with those insights and learnings, you should be able to get started on — or refine — your own customer service program to start delivering consistently exceptional support.

The importance of customer service for small businesses

We all know that customer service is important, but if asked exactly why, we might struggle to come up with an articulate answer. But without a strong answer to the question, investing in customer service could be a tough sell, both internally and externally.

So why exactly is customer service important for small businesses? There are three main reasons:

  1. It helps attract and retain customers.
  2. It increases the lifetime value of customers.
  3. It delivers insights that improve your product, marketing, and/or service.

Happy customers don’t tend to take their business elsewhere. And though there are a number of things that could cause a customer to become unhappy, a poor customer service experience seems to be the worst offender.

Research shows that a customer is four times more likely to switch to a competitor if their issue is service related, as opposed to product or price related. Conversely, 86% of consumers say a good customer experience can turn them from a one-time buyer to a loyal customer.

Loyal customers help you grow your business in a number of ways:

  • They’re around four times more likely to buy from you than a new customer.
  • They tend to spend more money than new customers.
  • They’re a great source of referrals, which continue to be the highest converting cohort for most businesses.

Customer service is also important for small businesses because it opens a direct line of communication with customers. Those conversations can lead to product breakthroughs and insights — or even reveal a new customer segment you didn’t know existed.

For example, did you know Rogaine was originally created to help lower blood pressure? However, through customer feedback, they found out about a prominent side-effect: hair regrowth.

Though that level of insight isn’t the norm, learning how people use your products and services can help improve your efforts in many ways — down to how you position your product in the market and who you sell it to.

5 strategies and 13 tips for small business customer service

In order to better understand how customer service acts as a competitive advantage, we reached out to three different small business leaders to get their insights. They offered advice, told stories, and revealed challenges they’ve faced along the way.

Though you may be in a different line of business than those interviewed, we’re confident the insights they shared can benefit any team. Below we share some of the big ideas from those interviews and show some real-world examples of how they look in action.

Strategy #1: Do what the incumbent can’t (or won’t)

As a small business, sometimes it’s easy to look at what larger competitors in your space are doing and try to mimic them. Though that’s needed on some level, matching them one-to-one with far fewer resources is quite the difficult task. However, there’s another side to the coin.

As a small business, you actually have some advantages over larger companies. Instead of trying to simply keep up, you should double-down on the things larger companies can’t do to get ahead. Here are a couple of examples that the small business leaders we interviewed shared.

Tip #1: Don’t worry if it doesn’t scale

At Workshop — a tool built to improve company culture through open and efficient internal communication — Co-founder and Chief Customer Officer Derek Homann is focused on using customer service as a differentiator.

One example he shared was solving a customer issue quickly, even though it was outside of standard working hours.

“The other night, a customer messaged me on Slack about a bug while I was at dinner. She told me not to worry about it and that it could wait until the next day. Instead of waiting, I contacted our CTO, and we did a rollback right away and solved the issue in 10 minutes.”

He admits it’s not something they’ll be able to do forever, but he knows how much of an impression it can make: “The issue could’ve waited, but when we do it right away, it has an impact.”

And the extra effort they put in is already paying dividends, “That customer has been a great source of referrals for us, and one thing she always mentions is how impressed with the service she is.”

Tip #2: Let customers see behind the curtain

Sometimes businesses are hesitant to commit to exact timelines — especially larger ones. And there’s some pragmatism for that: Issues come up, and deadlines get pushed. However, that can be a pretty frustrating experience for a customer.

At Fruitful Design & Strategy — an Omaha-based marketing agency — they do the exact opposite. Instead of being opaque about where they’re at on a project, they’re incredibly transparent. Ben Lueders, Co-founder and Lead Designer, explained their approach:

“Our first project manager — my wife Megan — started this really great thing we still do called ‘The Monday Email.’ In it, we tell the client what we worked on last week, what we’re working on in the upcoming week, and let them know if there’s anything we need from them.”

By doing so, they’re able to continually set expectations and keep customers in the loop: “We might be working hard on their project, but if they don’t know, then it doesn’t matter. It was our way to be proactive, keep people calm, and lead them in conversation.”

Strategy #2: Invest in customer service early

There’s a lot of focus on getting customers — but not always so much on keeping them. It’s a similar case with customer service. Most business owners know it’s important, but it’s not always one of the earliest functions people invest in.

However, when you dive into the data, it starts to become very clear just how important customer service is to any business’s success. Below are three ways you can get started with customer service early and set yourself up for success for the long term.

Tip #3: Decide which channels you’re going to actively cover

If you’ve looked at a couple different “customer support best practice” lists, you’ve probably seen the suggestion to “meet your customers where they are.”

In theory, it’s great advice. But in practice, it’s not always pragmatic. “At my previous company, we almost made ourselves too available,” Homann says. “We wanted it to be really easy to contact us, but it wasn’t really possible to cover all the different channels equally.”

Thinking back on that experience, Homann decided the Workshop team would clearly define where they talked to customers to ensure a consistent experience: “By focusing on a few channels, we’re able to create the best experience possible.”

The channels you cover are generally a reflection of your business and the resources available to you. If you want a little more guidance on the subject, check out this article on creating a multichannel customer support strategy.

Tip #4: Create self-service content ASAP

While deciding on which channels they were going to actively support took some consideration, the Workshop team knew they wanted to invest in self-service from day one: “We decided to have support documentation ready for launch,” said Homann.

It’s for good reason. Self-service options are quickly becoming the preferred support method for many customers, and they also help out your team. Self-service tools regularly reduce support volumes, letting your team focus on more complex issues and out-of-the-queue projects.

Homann suggests that for any new feature, product, or service, creating help documentation needs to be part of the pre-launch checklist. And self-service content shouldn’t be static. After making the content, review it every 6-12 months to ensure the information is up to date and as relevant as possible.

Tip #5: Have some structure in place, even if it’s basic

Keeping track of customer conversations and resolving issues is tough to do if you’re not organized in some way. Customers may get multiple responses or, worse, no response at all. It becomes very easy for things to slip through the cracks if someone’s not actively managing it.

First, someone needs to be the main owner for customer service. That’s not to say others don’t need to chip in — they absolutely do — but there should be someone steering the ship.

Second, you should invest in a customer service tool to help make things less hectic. For example, with Help Scout, you can manage customer conversations in one central place using the shared inbox tool.

Using workflows, you can automate certain manual tasks to make your team more efficient and provide an even higher level of service to customers. You’re also able to create and manage a knowledge base using Docs.

Lastly, you need to set some sort of metrics (more on that below) to measure performance and set standards for service. You don’t need to share them publicly, but they should be clearly stated internally.

Strategy #3: Involve the whole company

Though someone does need to be the owner and driver, good customer service should be the responsibility of the entire company. How that looks will vary based on your makeup and what people have capacity for, but there should be some way to get everyone involved.

If you’re looking for some inspiration on how to involve everyone in your customer service efforts, check out the two tips below.

Tip #6: Encourage ride-alongs

If you’ve ever worked in sales, you may be familiar with the idea of a ride-along. Basically, it’s where someone shadows a rep while they’re on a sales call. Sometimes it’s another salesperson — usually for training purposes — but other times it’s someone outside of sales.

The customer service equivalent could work a few different ways. If you do calls, then you could simply have someone sit in on the call just as they do with sales. You could also do a screenshare where someone else is able to see a rep responding to email and chat conversations.

In either case, what it’s meant to do is get the non-support person thinking about support issues. For example, you could have someone from the product team do one to get a better understanding of what issues customers are facing using the product.

Or you might want someone from marketing to shadow a rep for a day to better understand how people are actually using the product. Those insights can provide valuable information to make messaging as relevant as possible.

Above all, what ride-alongs do is allow people from multiple teams to connect and gain a better understanding of what customer service actually entails.

Tip #7: Have all-hands days

If you’re looking for people outside support to play a more active role than a ride-along, then you might want to consider some sort of whole company support. It’s actually something we do here at Help Scout.

Over the years, whole company support has changed some to best align with business needs. Initially, everyone regularly spent some time in the queue. But that evolved over time, and the current iteration is having all-hands days.

Once a month, there are a couple of days with two-hour blocks where people in the company can sign up to work in the customer service queue. While they’re logged in, they can grab whatever customer conversations they like and respond to them.

If someone isn’t confident about a response, they can ping our support team in a dedicated Slack channel to review the response and give feedback as needed. Once it has support’s stamp of approval, they can send it along.

At Workshop, they take a similar approach, just a little less structured: “Technically, on paper, I’m the only one in support right now, but people from engineering, design, and product all pitch in. It’s definitely a shared responsibility,” said Homann.

Doing all-hands support days not only provides some much-appreciated help for your support team, it also helps non-support folks connect with your customers and get a better understanding of your product or services.

Tip #8: Report on customer service metrics at company meetings

In journalism school, they teach you that the power of the press isn’t telling people what to think; rather, it’s telling people what to think about. Though leaders may not be cognizant of it, on some level what they choose to talk about publicly also signals what’s important.

Since customer service teams tend to work behind the scenes, it’s not always the most visible business unit in the company. So if no one is talking about customer service on a larger company stage, it could seem less important than other business functions.

One way to remedy that is to shine a light on it, and company meetings are a great forum to do just that. By putting customer service stats like CSAT or NPS front and center with other high-level metrics like revenue or customer growth, it can signal just how important they are.

Another useful tool to put customer service in the spotlight is through a voice of the customer (VoC) report. A VoC report highlights the general sentiment among customers. Though a VoC isn’t completely metrics-focused, it is another way to show the company’s overall commitment to customer service.

Strategy #4: Audit your efforts

In a sense, metrics act a lot like a map for your team. They can tell where you are currently and provide some insight into how to get where you want to go. If you’re not measuring performance in any way, that’s an incredibly difficult task.

Being aware of where you’re succeeding and where you have room for improvement can serve you well in a multitude of ways. Below are three suggestions to help you get started.

Tip #9: Decide on baseline metrics and measure against them regularly

As they say, there’s more than one way to skin a cat. The same is true with metrics. There are lots to choose from, and which ones you focus on are somewhat dependent on your specific team.

Homann suggests posing this question to yourself: “What are the things that actually create a great customer experience?” After answering that question, you can start to decide what you want to track.

As Homann put it, “You need to quantify, on some level, what makes good service so as you grow, you’re able to track it and know whether you’re meeting your standards.”

For example, if you prioritize speed, then you might track first response time. You could also look at time to resolution, which is a measure of how long it takes for an issue to be completely resolved for a customer.

To have a better grasp on overall satisfaction, you might look to things like CSAT, CES, or NPS. All measure customer sentiment, though they do each have their own nuances.

After you decide on what metrics you’ll track, set a regular cadence to check in on performance. Weekly, monthly, and quarterly are pretty standard intervals.

That said, you do need to be careful to not “miss the forest for the trees,” meaning you should look for trends over a longer period and not worry too much about short-term changes.

Tip #10: Be very honest about what’s working and what isn’t

Customer service requires some amount of trial and error. Some stuff you do will work, and some stuff won’t. And that’s okay. But what you want to limit is how much energy you spend on things that don’t work.

Regularly reviewing projects, practices, and procedures is the first step in the process. But you also need to have a way to evaluate how effective something is. Putting together a basic scorecard can be useful to help you be more objective when measuring.

Include things like overall effort, impact, and cost. Each of those measurements is somewhat subjective, but they do provide a baseline to start a conversation. Also, by not being too strict, you give yourself some amount of flexibility.

It’s also important to recognize that how well something works exists on a continuum. As Homann pointed out, “There are some things we’re doing now that we might not be able to do 12 months from now.”

If you find something isn’t working for your team, don’t hesitate to move on from it ASAP. Research shows we have a tendency to sink even more resources into something that’s not working to try and improve it — it’s called the “sunk cost fallacy” — but that’s almost always a mistake.

Admitting something isn’t working can be uncomfortable. If you struggle with that, try framing each new project or initiative as an experiment. By putting the focus on learning and not on an outcome from the start, you can limit pressure to succeed and make adjusting, or totally moving on, feel like less of an issue.

Tip #11: Update when possible

As Help Scout CEO and Co-founder Nick Francis says, “Crafting an experience comes down to two things: the product and the service. You can make the best product in the world, but if you fall down on the service aspect, it’s not a good experience.”

As any business owner knows, customer expectations are a moving target. Take restaurants, for example. Just two years ago it seemed like only chains and larger restaurants offered online ordering. Now, even small mom-and-pop places offer it because that’s what’s required to compete.

Though we don’t always think about customer service as a competitive differentiator, it is. Francis pointed out, “Generally, there are still a lot of businesses that think of customer support as a cost center. That perspective is outdated. It’s really a growth engine.”

In fact, 67% of churn is avoidable if a customer’s issue is resolved in the first interaction. So just like any other aspect of your business, as you grow and have more available resources, you need to invest more into customer service and the overall customer experience.

There isn’t one right answer for every team on what the next step is to continue evolving their customer support. That said, a few common ways are improving self-service options, expanding coverage, or offering new channels through which customers can contact support.

The best thing you can do when deciding on a new initiative is to listen to your customers. Chances are there’s something they’ve been asking for. And if they’re not telling you verbally, looking at different metrics and data can help signal where you have the most opportunity to grow.

Strategy #5: Listen to your support team

If your marketing team talked to customers on a daily basis, heard how they were using your product, and learned about the challenges they face and successes they’ve had, you’d feel pretty confident in their ability to speak for that group, right?

Though the scenario described above is far from normal for a marketing team, it’s routine for customer service. So why wouldn’t you ask for their insights when making nearly any business decision?

As Francis put it, “Your customer support team is an incredible resource your business can leverage to build better products and do better marketing. To not unlock that resource is a missed opportunity.”

Below are two ways you can take advantage of customer service as a resource.

Tip #12: Give customer support a direct line to leadership

For many support teams, one the biggest challenges they face is simply being heard. Over the past few years, more and more companies have started adding roles like a Chief Customer Officer, which is a great idea — but it’s hardly the norm.

Though it may not be pragmatic to add a high-level position, everyone should be able to open the lines of communication to leadership in some way. For example, here at Help Scout, our VP of Customers, Abigail Phillips, reports directly to our CEO:

“Abigail has a seat at the table and reports directly to me. And it will stay that way as long as I’m around,” said Francis. You could also earmark time in leadership meetings for someone from the support team to share what’s been going on in customer support and success.

Being able to best serve your customers requires you to know what’s going on in their worlds. As Francis says, “You can’t build a product people really love unless you can finish your customers’ sentences.”

"You can’t build a product people really love unless you can finish your customers’ sentences." Nick Francis, Help Scout

Without the insights from the people who spend the most time with your customers, it’s an incredibly difficult task to accomplish.

Tip #13: Allow them to influence business decisions

Creating a path for your customer support team to share information with leadership is a great first step. But in reality, that’s what it is: a first step. The next is to actually use the information they bring to affect high-level choices.

“Your customer support team is an incredible resource the business can leverage to build better products and do better marketing,” Francis says. “To not unlock that resource is a huge missed opportunity.”

For example, if you’re planning a new marketing campaign, you could share the messaging with the customer support team prior to launching the campaign to get their feedback. Or if your product team is trying to decide on what new feature to build out next, consult your support team to get their input.

Really, it comes down to inclusion and taking the information they bring to the table seriously. Once you commit to doing that, you’ll unlock a whole new world of rich insights and information to help you create a better business.

3 approaches to scaling support for small businesses

Knowing why customer service matters for your small business and having strategies to deliver great service are both incredibly important. That said, in order to put those learnings into action, you need a great team.

But building a solid customer service team is easier said than done. There are a few different ways you can approach building out and scaling your customer service team.

Below we cover three common ways small businesses are scaling their support teams and offer some pros and cons for each approach.

1. In-house customer service

An in-house customer service team is one composed of permanent staff. They may be full-time or part-time employees, but they are directly employed by your business. For lots of small businesses, it’s the most common setup.

Permanent employees are able to get a deep understanding of your products, services, and business. As they continue to build knowledge, they become even more valuable assets to you and your team.

For companies that either have a very complex product or work very closely with a smaller number of clients, in-house staff is usually preferable. They’re able to learn more than outsourced staff generally do, and they provide consistency for customers.

However, permanent staff are generally more expensive because — in most countries — you have to extend benefits and perks beyond their salary. There’s also the cost to find and hire talent, which can be quite expensive.

2. Outsourced customer service

Depending on your product and market, it may not always make the most sense to have all your customer service staff be permanent employees, e.g., if you work in a particularly seasonal industry or you’re a small business needing to serve international clients.

In those cases, outsourcing some or all of your customer service work can make a lot of sense. Outsourced staff are generally less expensive than permanent staff since you don’t have to extend them additional benefits.

Working with an outsourcer also means you don’t have to spend time and money on hiring since they already have people in place.

That said, there are some potential cons. For example, if you get lots of very technical requests, outsourced staff may not be able to handle those conversations since they generally have less training.

There’s also the possibility that outsourced staff you hire handle conversations for multiple clients, meaning they could have their focus split. It’s not always the case, but it’s a good question to ask when interviewing a potential outsourcer you’re thinking of partnering with.

3. Hybrid customer service

Sometimes in-house and outsourced customer service are presented almost as a binary, as if you have to choose one over the other. However, that’s not the case. There are many teams that utilize both together to create an ideal situation.

In those circumstances, they usually have a core staff of permanent employees and work with an outsourcer to cover any areas outside the core staff’s purview. For example, you might use outsourced staff to answer more basic requests so core staff can focus more on complex issues.

Or perhaps you’re based in one country and looking to increase support coverage. With outsourced staff, you don’t have to worry about international hiring laws since you’re not employing staff directly.

Successful customer service for the long term

Providing a great customer experience is a difficult task, but it’s one you can absolutely accomplish. If you properly utilize all your available resources, make a plan, and execute on that plan, you’ll set your business and your customers up for success.

Do your best to stay diligent, and update your approach as needed. Remember, customer service isn’t a box you can check off as complete. It’s an ongoing process that will continue to grow and evolve with your business.

Jesse Short
Jesse Short

After spending a few years working as a support agent, Jesse made the switch to writing full-time. He works as a Content Writer at Help Scout, hoping to help improve the agent and customer experience.

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