The term "customer service" encompasses a variety of techniques used by businesses to ensure the satisfaction of a customer, from friendly and attentive staff to prompt response when confronted with product defects. Successful small business owners often cite customer service as the factor most important in establishing and maintaining a prosperous company. A strong emphasis on customer service throughout a business will help to produce the sort of environment conducive to loyal customers. This is true for companies that sell to other businesses and to companies that sell to individual consumers.

The U.S. Small Business Administration provides, on its Web site, a variety of reports useful to small businesses. In one simply entitled Customer Service, the administration summarizes the importance of customer service to the small business this way: "The growing significance of meeting—or exceeding—customer demands for quality service has special implications for small business. For it is in this arena that small companies can, in the least expensive way, set themselves apart from the competition. In fact, a recent three-year study by the National Federation of Independent Business (NFIB) in Washington, D.C., showed that small businesses which put heavy emphasis on customer service were more likely to survive and succeed than competitors who emphasized such advantages as lower prices or type of product."


In order to assure that there is a positive customer service attitude within every department or area of a company it is important to establish customer service goals for the company as a whole. Customers have contact with companies at many levels and at each they should meet courteous, friendly, and knowledgeable people willing to work with them. Customer service can be seen to be like a three-legged stool. The three legs of the stool are employees, sound practices, and training.


Many business observers contend that the most critical facet of ensuring good customer service lies in simply hiring personable and responsible employees. The use of pre-employment screening tests can enhance the hiring procedure by helping employers measure the skills and characteristics needed for success in customer service jobs before hiring a new employee. There are a variety of valid tests available, and consistently hiring people who score highest on these tests will ensure that new hires will represent the business in a positive light. In addition, business owners are urged to make sure that they adequately inform potential employees of any customer-relations obligations that they might have. This is typically accomplished through training programs.


Employee training is an important component of customer service. Customer service principles should be put in writing, and it should be made clear that all employees are expected to be familiar with them and be prepared to live up to them. Small business owners also need to recognize that customer service training should be extended to all employees who interact with clients, not just those in high-profile sales positions. Service technicians, for example, often regularly interact with customers, but all too often they receive little or no customer service training. "More companies are asking their technicians to fill gaps in sales efforts and to repair communication breakdowns," noted Roberta Maynard in Nation's Business. "Some companies are cultivating their technicians' abilities to clarify customer needs and identify and capitalize on sales opportunities'¦. Some managers are giving technicians greater authority to do what it takes to keep customers happy, such as occasionally not charging for a service call or a part."

Sound Practices

Finally, businesses need to make sure that they work hard to ensure customer satisfaction on a daily basis. Customer service should be ingrained in the company, commented one entrepreneur in an interview with Michael Barrier in a Nation's Business article: "It has to be part of the organization's mission and vision, right from Day One. Then the rest tends to be simple—it carries over to your products, your advertising, your staffing, and everything else."


Business experts cite several tangible steps that small business owners can take to ensure that they provide top-notch service to their customers. These include:

  • Build quality support systems—Companies armed with tangible, easily understood guidelines for establishing and maintaining quality customer service will go far toward satisfying clients.
  • Communicate with customers—Communication with customers can often be accomplished more easily by smaller businesses than larger companies that are often slowed by layers of bureaucracy. Methods of communication can include telephone calls, postcards, newsletters, and surveys as well as face-to-face conversation. By keeping in touch with customers one is able to more quickly address problems that arise and anticipate some before they are even serious. And while such steps are perhaps most helpful when dealing with regular customers, consultants counsel business owners who specialize in making big-ticket sales to try and maintain communications with their customers as well. Such customers may not make a purchase every month, noted Frederick F. Reichheld, author of The Loyalty Effect, but those purchases that they do make carry a lot of weight. Reichheld notes that big-ticket purchases typically have a fair amount of service and financing associated with them, both of which provide small businesses with opportunities to nourish their relationship with the customer. In addition, consultants observe that communication with ex-customers can be helpful as well. "A defecting customer may offer a reason that points to a potentially serious problem [within your company]," wrote Barrier.
  • Communicate with front-line employees—Employees who are kept apprised of changes in company products and services are far more likely to be able to satisfy customers than those who are armed with outdated or incomplete information.
  • Retain employees—Many customers establish a certain comfort level over time with individual employees—a salesman, a project coordinator, etc.—and these relationships should be valued and nurtured by the small business owner. "Each customer has special needs," observed Barrier, "and the longer that employee and customer work together, the more easily those needs can be met. Companies that want long-term relationships with their customers need equally healthy relationships with their employees. In particular, they must encourage employee involvement."
  • Invest in technology that aids customer service—Small businesses should choose voice mail systems that make it easy for customers to contact the person or department that they wish to reach. Technology systems can also help small businesses gather information about their customers.
  • Cultivate an atmosphere of courtesy—Small gestures such as friendly smiles, use of the customer's first name, and minor favors can have a disproportionate impact on the way that a business is viewed. "Remember that small kindnesses can carry a lot of weight," said Barrier.
  • Address mistakes promptly and honorably—No business is infallible. Errors inevitably occur within any business framework, and sooner or later a customer is apt to be impacted. But business experts contend that in many instances, these incidents can actually help strengthen the bond between a company and its customers. "In the normal course of a business relationship, the depth of a vendor's commitment will not be put to the test," wrote Barrier, "but a serious mistake will reveal quickly just how trustworthy that vendor is."
  • Avoid equating price with customer service—Many small businesses find it difficult to compete with larger, high-volume competitors in the realm of price, but most analysts insist that this reality should not be construed as a failure in the realm of customer service. Moreover, most experts indicate that many small businesses can triumph over price differences, provided that they are relatively minor, by putting an extra emphasis on service. "For some customers, of course, price is all that matters," admitted Barrier. "Those are customers you probably can live without."
  • Create a user-friendly physical environment—Writing in Entrepreneur, Jay Conrad Levinson counseled small business owners to "design your company's physical layout for efficiency, clarity of signage, lighting, accessibility for the disabled and simplicity. Everything should be easy to find."

By crafting a customer service policy that combines the practices listed above, a company is likely to leave a positive impression with customers. Over time, the cumulative effect of this positive impression will build loyalty.


Although smart entrepreneurs and business managers recognize that customer service is an important element in ensuring company success, it is a reality of life that a small percentage of customers are simply incapable of being satisfied with the service they receive. Small business owners are generally averse to letting any customers go, but consultants contend that some clients can simply become more trouble than they are worth for any number of reasons. The solution to determining whether a business owner should sever ties with a problematic customer, observed Nation's Business, "may lie in defining the word 'customer' properly: Someone who costs you money isn't a customer but rather a liability."

Entrepreneur's Jacquelyn Lynn listed several scenarios in which consultants recommend that small businesses consider ending their relationship with a troublesome client. Client attitudes and actions that should prompt an honest assessment include:

  • Lack of respect or appreciation for the small business owner's work.
  • Excessive demands, either on company or individual staff members.
  • Unreasonable expectations in terms of monetary arrangements for work or goods provided.
  • Proclivity for imposing difficult or unrealistic deadlines.
  • Tendency to pay bills late (or not at all).
  • Treats company as a commodity that can be discarded as soon as it ceases to be useful to the client.

Lynn noted that, in some instances, honest communication with the client can salvage a deteriorating relationship, but this does not always work. "If your attempts to make the relationship a mutually productive one don't work," said Lynn, "it may be time to move on and focus on more profitable clients or prospective clients. Calculate what you will lose in gross revenue, and decide if your business can stand the financial hit." If the business is able to withstand the loss of revenue, move forward to terminate the relationship in a professional manner. If not, then the company's leadership needs to develop a strategy to expand existing business relationships or garner new clients so that the company can sever relations with the offending customer down the line.


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Brown, Stanley E., ed. Customer Relationship Management: A Strategic Imperative in the World of E-Business. Wiley, 2000.

"Customers You Want to Lose." Nation's Business. August 1997.

Friedman, J. Roger. "Quality Service Is the Key to Earning Repeat Customers." Nation's Restaurant News. 1 September 1997.

Lee, Dick. The Customer Relationship Management Survival Guide. High Yield Marketing Press, 2000.

Levinson, Jay Conrad. "Taking Care: 17 Ways to Show Your Customers You Care." Entrepreneur. October 1997.

Lynn, Jacquelyn. "Good Riddance." Entrepreneur. October 1997.

Maynard, Roberta. "Are Your Technicians Customer-Friendly?" Nation's Business. August 1997.

Paajanen, George. "Customer Service: Training, Sound Practices, and the Right Employee." Discount Store News. 15 September 1997.

Reichheld, Frederick F. The Loyalty Effect. Harvard Business School Press, September 2001.

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Zemke, Ron, and John A. Woods. Best Practices in Customer Service. AMACOM, 1999.