What is customer service management? Hint: It could propel your small business forward

Want the fastest way to send customers to your competitors? Give them a bad customer service experience. 80% of customers move on to another company due to a poor customer service experience. If you don’t offer effective solutions to your customers, your team can struggle to earn their loyalty.

But delivering a good customer experience can get overwhelming, especially as any small-to-medium-sized business grows. More customers mean more customer interactions. Customer service teams will need help to keep up.

The solution is a customer service management program. Building one capable of keeping up with your business’s growth requires understanding what a CSM program entails, the steps to building a program, and tech tips to smooth out the process and boost your business growth — all without sending any customers to your competitors. Here’s how to do it.

How is CSM different from CRM?

CSM sounds suspiciously close to CRM, or customer relationship management. So what’s the difference? CRM focuses on managing the overall customer relationship across multiple touchpoints. In addition to customer service, marketing and sales participate in CRM.

CRM works the entire customer lifecycle — including those touchpoints before leads convert into customers.

That’s why CRM systems like HubSpot typically offer features to support the sales process as well, including:

• Lead management
• Opportunity tracking
• Sales forecasting
• Marketing automation
• Customer analytics

CRM’s goal is to provide a holistic view of both customer relationships and potential customer relationships. A good CRM tech stack can foster collaboration between sales, marketing, and customer support while also supporting your customer relations strategy.

Your team can use CRM to track customer touchpoints, schedule follow-ups if you don’t hear from them, and route customer complaints to the appropriate department.

CSM, on the other hand, is about customer service. How does the customer feel once they’ve decided to engage your services? How soon do you resolve their problems once they reach out? 

That’s why CSM also emphasizes speed and efficiency. Your CSM tech stack should include:

• Ticketing systems for tracking customer problems
• Case management for tracking specific queries
• Knowledge bases for team collaboration and commonly asked questions
• Customer communication management software (e.g., phone and chat) to ensure smooth, reliable interactions with customers

CRM is about the entire customer relationship. CSM narrows its focus to the efficiency and effectiveness of your customer service.

If CSM’s focus is narrow, why not focus on CRM? Because in customers’ eyes, good customer support is the mark of a good business. It’s the barometer by which your customers judge their purchasing decisions. It’s how you stand out. Customer experience for the top-ranked brand in every market tends to be 11% higher than the market average.

If you want to be in that top percentile too, invest in CSM by acquiring customer service management software. You’ll streamline your customer service operations, keeping you organized and responsive with each customer interaction.

We’ll cover in more detail later in this guide, but if you want to start with a CRM from the ground up? VoIP business phone systems can often offer their own lightweight CRMs. Or they can integrate with popular CRMs like HubSpot and Salesforce so as your business grows, everyone at your company has the same visibility into conversations with customers. 

These can be a great introduction to more dedicated customer service management, helping you make and receive customer calls while organizing customer information for your entire customer service organization.

The simple path to more effective customer service management

Businesses don’t stumble into great reputations with customers. They earn them through effective customer service management. But CSM can sound complicated the first time you need to establish it or improve on what your team already has in place. So where do you start if you’ve never built a CSM system?

On every new journey, you can benefit from a compass. Here’s the simplest path between your small business and robust CSM:

1. Know your customers

If you’re starting small, the temptation is to handle all customer queries equally. One problem at a time. The challenge with this approach is it can lead to a serious misallocation of team resources.

Instead, you have to know your customers and their specific pain points. Look at your common customer complaints and organize them into the following groups:

• “Defend” customers: These are the customers at the end of the rope — at serious risk of churning or defecting to your competition. Place high priority on resolving these problems as efficiently and quickly as possible.
• “Maintain” customers: High-value customers who spend a lot of money with your company. Their problems may be urgent or minor, but you still need to give them attention because of who they are — and what their loyalty means to your revenue.
• “Grow” customers: These are typically new customers. If you delight them, there’s potential to expand your relationship with those customers by upselling other services.

The way your team approaches each customer can help you tailor outreach and communication strategies accordingly.

How do you know who’s who? It’s time to start collecting customer data.

Record all communications, touchpoints, milestones, and personal tidbits you learn about each customer. Maintain call recordings so you can review call transcripts.

Personalized data captured through your team’s tech stack can help you build a personal connection with each customer. 93% of customers spend more money with some companies simply because those companies use the customers’ preferred method of communication.

So use your data to help you “read the room.” Adapt your communication style to the customer’s preferences. Some customers may prefer shooting the breeze before jumping into business. Others may prefer getting down to business. Train your team to document these customer preferences. That way, anyone on your team can adjust their style accordingly and you can begin to see why CSM pays dividends in customer loyalty. 

2. Invest in training

There’s a serious lack of training in today’s customer service environment. 68% of customers believe businesses need to improve the training their customer service agents receive.

Every customer interaction reflects your investment in customer service onboarding and ongoing training. The better equipped your staff feels, the less likely you run into bad reviews and other negative word of mouth. Training also instills confidence, equipping your team with the right tools to speed up customer solutions and handle all sorts of customer objections.

Call recordings are instrumental here. Supervisors can monitor recordings to identify where representatives need to improve. Do you notice that colleagues have issues understanding their customers’ objections? Maybe it’s time to work on that, training your agents to “gain agreement” before trying to solve customer problems.

Customer service training can come in various forms, including:

• Mentorship programs
• Learning modules
• Online courses
• Webinars
• Training modules
• Tech training
• Networking and conferences

The choice is yours. Ultimately, you have to decide what fits your team’s current needs. And iterate on what training looks like to continually deliver a better customer service experience. 

3. Set clear expectations

What’s your goal with each customer interaction? You must first define what good customer service looks like at your company.

Set clear objectives using the SMART framework (specific, measurable, achievable, relevant, time-bound). These guidelines help each team member understand what you expect from them. And setting measurable goals gives you a barometer for measuring individual performance.

What should you measure? Here are a few ideas:

• Speed to customer response
• How many customer issues were resolved on the first contact
• Customer satisfaction scores, as rated by post-interaction surveys
• How many customers return to do business with you 

Jarin Stevens, Director of Customer Success at SalesRabbit, says great customer service starts with knowing the data. “High levels of service are provided by customer service managers who know their own data and what is expected of them,” Stevens says. “It starts with the leadership team letting the team know how they are measured.”

But based on agent experience level, some team members need more coaching than others. Here’s how Stevens approaches it:

• Record customer service calls
• Meet once per month with each team member so you can go over calls and offer feedback
• “We talk about their performance and their bonus, and I provide feedback based on any feedback that I gathered from the leaders, the team leads, and any other peers,” Stevens says

When team members understand the metrics, they know what’s important to your leadership team. And they gain clarity on how to deliver consistent, high-quality service as you measure it.

4. Emphasize empathy

Good customer service starts with empathy. Your team can’t solve a problem if they can’t see things from your customer’s point of view.

First, let’s define empathy. “Being empathetic means being on the same level with another person and focusing intently on the feelings they’re expressing,” writes Karyl McBride, Ph.D., for Psychology Today. 

Empathy can feel different in every customer interaction. Want to have a real impact on customers? Make the empathetic approach a fundamental part of your team culture. So lead by example. Demonstrate empathy during one-on-ones with teammates.

It’s impossible to know what kind of day each customer is having. Maybe they’re calling you after 3 hours of frustrating troubleshooting. Maybe they have personal problems, and they’re intent on taking them out on your business. Approaching customer service issues with grace can be the difference between a lost customer and a loyal customer.

Read more about dealing with difficult customers for more training ideas.

5. Request feedback

Your customers are your audience. Ask them for feedback — utilize these insightsThey can be invaluable for identifying holes in your service.

A few tools you can use include:

• Customer satisfaction surveys, which are great for identifying patterns and blind spots
• Testimonials, which help highlight what truly delights your customers — and what frustrations led them to you in the first place
• Check-ins during phone calls, at which point you can talk over problems directly

If a customer has a good experience, ask them to leave a review. When potential customers see those good reviews, they often convert into customers themselves. 

Fortunately, this doesn’t have to be an intensive process. Check out our guide for automating positive customer reviews.

6. Focus on quick response times

In the age of social media and email, speed is the name of the game. 70% of customers expect you to provide solutions the same day.

Speed is also a key differentiator — and a measurable one. Response time and solution time both please customers and give you meaningful metrics for tracking your customer service success.

But speed isn’t always possible. Maybe you’re dealing with massive call volumes. What do you do then? You need a system for prioritizing those requests your team can track and easily follow.

This is why “knowing your customers” is so important. You can tag VIP customers in your contact properties so you know when to prioritize their requests and solve them ASAP.

Speed may not always be possible, but prioritization is. If you anticipate your customers’ most relevant needs and offer solutions, you can maintain strong relationships.

To increase average speeds, consider automating more backend customer support processes. For example, snippets can help you save time responding to commonly asked questions if your customers reach out over text. 

7. Implement a follow-up system

Want to show customers you’re looking to help them solve problems?

Follow up with them. You’ll accomplish two things:

1. It will give you another opportunity to solve a customer’s problem, potentially earning their loyalty
2. It will demonstrate your commitment to helping them, making the customer feel valued

When you meet with customers, identify what you can work on together. Having a “next step” or two can help you maintain a relationship with them.

Then follow up on these next steps with customers, ensuring they’re satisfied with the resolution. The more personal this interaction feels, the more they’ll appreciate your personal attention — even if your solution isn’t 100% perfect.

8. Reward loyalty

Loyal customers are an immediate benefit to your business. Don’t forget they should benefit, too.

Develop a customer loyalty program to thank your customers for their support. But it’s not just a thank-you. It’s also a gentle nudge to keep them engaged. A reward program can be as simple as “buy ten sandwiches, get one free” — after all, there’s a reason shops offer those.

Loyalty programs for small businesses may not be as scalable as they might be for large businesses. 

As our team was working to gain our first 1,000 customers, we sent cupcakes to customers who provided us with feedback as a thank you.

Loyalty programs and other similar initiatives can have an impact on your customer’s behavior. Customer loyalty is one side benefit, sure — and customers may even take it a step further and become an advocate for your brand.

9. Ready set iterate

Even if you incorporate each step above, your customer service program may eventually stagnate. So remain on the lookout for ways to improve your customer service. Learn from your qualitative and quantitative data. Track emerging customer service trends. 

The marketplace is always evolving — and customer expectations change with it. Your customer service management will need to change with the times, too.

You may be ready to start rolling out a program to deliver better customer service, but need to still get buy-in from others. Next, let’s look at how you can build a case for it.

Why is high-quality customer service so important?

Customer loyalty has a way of showing up on your bottom line.

94% of customers say a positive customer experience makes them more likely to buy from a business again. And if customers are happy, they’re more likely to become brand advocates. Maybe they leave you an online review, increasing your digital word-of-mouth.

With a good custom service management strategy, you encourage happy customers to leave good reviews. Other potential customers read those reviews. This builds a “virtuous circle”; the more customers you please, the more customers you get.

With good CSM practices in place, you also turn complaints into opportunities. No business likes to fail to please customers, sure. But when they reach out, it’s a chance to impress them with your customer service. 

Listen with empathy. Apologize when necessary. Solve their problems. Show customers you value them, and you may earn more brand loyalty than if there was never a problem at all.

Jarin Stevens of Sales Rabbit makes sure to set up his team so pleasing customers is all in a day’s work. 

At Sales Rabbit, they use their tech stack to cater to a delightful customer experience. For example, Sales Rabbit’s software even includes a weather app. This way, sales reps in the field working for a roofing company, often out knocking on doors, can approach customers and say: “Hey, we know you’ve just had a storm. How can we help?”

This is the problem-first approach: delighting customers at their low point. These customers just went through a storm. But when a company takes the time to meet customers at the point of the problem and offer a solution, it actually feels like a favor. That’s what drives high-quality experiences: being the solution to an existing problem.

What are the benefits of improving your customer service management? 

Is CSM worth the time and effort to implement? Why not put 100% of your budget toward new sales? In case you still need to pitch investing more into refining your team’s customer service processes, let’s dive further into the benefits of pleasing customers:

Happier customers

Every business will have customer complaints and negative feedback. How you respond to that feedback is what determines and can improve your customer satisfaction levels. 

But CSM does more than please customers. It also means gathering and analyzing data about your customers. You learn about their preferences, behaviors, and levels of satisfaction. And this data means you can potentially cater to future services to avoid negative customer feedback.

Better customer retention

If you know what customers love and what they hate, you become a customer retention machine. CSM is what helps you identify and address the reasons your customers leave so you can help prevent them from moving onto another business.

Consistent service

Why not just “try harder” with customer service? Because CSM helps you build the systems for consistent service. There’s an old saying in business: what gets measured gets managed. CSM gives you the tools to measure your performance in pleasing customers, which helps you build long-term habits for better customer loyalty.

Improved team morale

Customer service management has a powerful side-benefit: it equips your team. You can use CSM to train your team, create specific expectations, and help them work together to handle customer inquiries more effectively. 

Smoother operations

The net result of CSM is not just happier customers. It’s helping your team avoid stress and the feeling of overwhelm as the queries roll in. 

CSM can give you the communication features — like tagging specific customers or monitoring previous customer touchpoints — to make every interaction feel more personal.

More growth opportunities

Customers can often guide your path toward growth. Watch more than just their purchase habits. Watch what they say. What are they telling you that delights them? What solutions do you offer that make them wish they’d known about your business before? Those may be the growth opportunities that come to define your business.

How can technology sharpen your CSM?

Great customer service is paramount, no matter how big or small your business is. But as your business grows, you have to use advanced tools to meet customer needs.

At the start, your team might manage it all. Improvements can be as simple as training your team to be more empathetic. As the business grows, you need to invest in tools that help you manage incoming queries. 

Think of CSM as an investment in your business’s future — an expanded capacity to handle the growth you’re after.

Let’s look at the software that can help you handle CSM as your company grows.

Tech tools to help you along your CSM journey

Good news here. Technology — data tracking, AI, machine learning — is transforming customer service. Here are some tools that can make your path easier while making your business more responsive to customers:

• Notion: Create and store databases with customer information such as interests, upcoming life events, and their stage in the customer lifecycle. You can also create and store templates for the communications you use most frequently like go-to positioning when answering common questions during phone calls.
• Loom: Record training and feedback videos for your team to watch and rewatch asynchronously.
• Zapier: Automate customer service tasks by creating Zaps, connecting your tech stack into one simple assembly line.
• Calendar: Set reminders and schedule messages for different touchpoints to nurture customer relationships and stay connected with customers.
• OpenPhone: What doesn’t it do? With OpenPhone, you can manage contacts, coordinate messaging between teams, and improve your response rates to any incoming calls and text messages.

How OpenPhone can help you with customer service management

Looking for a more effective way to monitor and manage your customer conversations? Look no further than OpenPhone. Here are some of the features to help you build a powerful customer service experience:

• Calling/texting: Every user gets a dedicated number for unlimited calling/texting in the US and Canada. This helps your team communicate with customers according to their preferences. “An email response can be delayed for a day or two, but a text, people usually won’t let it,” Jarin told us. “Why? Because they can’t stand the little red dot that says there’s an unread message.”
• Phone menu: Manage overwhelming customer queries by setting an automated phone menu for call routing. You can forward to OpenPhone virtual numbers or send calls to numbers outside OpenPhone — or you can playback recordings for commonly asked questions.
• Share numbers/simultaneous ring: Want to decrease wait times? Send incoming customer queries to an entire team so the line is never “busy.”
• Call recordings: To help with training, grant full visibility to your team so you know who said what and whether how your team manages escalated calls can be handled differently. This will also give you customer insights to help improve future customer service.
• Call transcriptions and summaries: Your call recordings are more useful with call transcriptions and summaries. Call transcriptions are broken down by speakers and timestamps — they help you review calls for specific information quickly instead of spending time reviewing recordings manually. Call summaries give you a snapshot of each call in a bullet-point list. Your team can also review action items for every call so that they easily follow up after any conversation.
• Lightweight CRM: Always know who’s calling by easily importing your existing contacts or syncing OpenPhone contacts with your CRM. Instantly access contact details and custom properties and synchronize notes between team members so no one ever feels like they’re spending hours playing catch-up.
• Internal threads: Help your team solve problems in context with conversion threads that are only visible internally.
• Auto-replies: Customers may move on if you don’t even acknowledge not answering their call. Set up auto-replies so customers know when they can expect to hear back from you after they call or text you.
• Snippets: Quicken your response time with saved message templates. These are especially useful for crafting messages you write most often, saving your team time.
• Scheduled message: You need to maintain work-life balance. Schedule messages to send out later so you can work on a schedule to avoid burnout.

Implementing CSM? Refining your customer service management for improved customer loyalty? Sign up for OpenPhone’s seven-day free trial today to see how simple nurturing your customers can be.