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April 17, 2012

Customer service critical for small firms, finds poll

More than half of small firms have improved their customer service in the past 12 months in an attempt to win new business, research by Sage has highlighted.

In a survey of more than 10,000 business owners across Europe, North America, Africa, and Asia for Sage’s Business Index, 53% said that customer service had become more important to them in the past year, while nearly two-thirds (60%) of those that had increased their turnover in the last six months said meeting the needs of customers was more crucial than ever in the current economic climate.

The poll also found that more than half of small firms (53%) felt that good customer service was becoming more necessary as a means of standing out from competitors. Four in ten small-business owners stated they were increasing their customer service budget to improve their offer this year.

Among those who said they had no intention of spending more on improving customer service, 70% said they had already met or exceeded customer expectations, while 14% admitted that fine tuning service levels “was not a priority”. 

According to the Forum of Private Business (FPB) smaller firms were often well placed to pick up business from bigger rivals because of superior customer service.

“While big firms might often be able to offer slightly cheaper prices because of economies of scale, smaller businesses should remember that bottom-end price is not necessarily what clients want. Clients appreciate relationships and being able to offer a more tailored approach to customer requirements can put small firms ahead,” said FPB spokesperson Robert Downes.

Downes added that firms offering “above and beyond” normal customer service levels were also likely to be better able to retain business and win word-of-mouth recommendations. 

Gary Young, head of customer operations at Sage UK, said that any small business that took a “laissez-faire” attitude towards its customers was limiting its chances of success.

“Consumers know it’s a buyer’s market and they, quite rightly, want more than just a product when they make a purchase,” Young added. “Over the coming months we’re going to see more and bigger businesses encroach this space as firms seek to win the hearts and minds of consumers as a new route to their wallets.”