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Updated Oct 24, 2023

Small Businesses Offer the Best Customer Service

Customers find that small businesses often provide the best customer service experience.

Jordan Bishop
Jordan Bishop, Business Operations Insider and Senior Writer
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This guide was reviewed by a Business News Daily editor to ensure it provides comprehensive and accurate information to aid your buying decision.

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When making a purchase decision, consumers value customer service as an increasingly important aspect of a company’s offerings. The American Express Global Customer Service Barometer in 2011, for instance, showed that great customer service makes up a large chunk of a customer’s loyalty to a business’s brand.

The survey was conducted in 10 countries, including the U.S., and it aimed to show consumers’ attitudes and preferences regarding customer service. Although the results are more than a decade old, the findings remain relevant. 

What the Amex survey said

The 2011 American Express survey emphasized the significance of excellent customer service as a way to gain and retain customers. It also found that, compared with bigger brands or companies, smaller businesses had a better understanding of how to employ customer service practices that add value to the business.

Eighty-one percent of the survey respondents said small businesses are better at customer service, and about 70 percent said they felt more encouraged to spend more at businesses with exceptional customer service — 13 percent more than at businesses with inferior levels of customer service.

Customer satisfaction promotes brand loyalty

Consumers are willing to pay more for outstanding service. But they will also forgo the purchase altogether if the transaction is not handled properly, the Amex survey found. More than 78 percent of the survey respondents said they had ended a transaction or not made an intended purchase because of a poor service experience.

PwC’s 2022 survey on customer loyalty offered similar findings, with 26 percent of the people profiled ending their purchasing relationship with a business in the past year because of a bad experience. This is true for internet shopping as well, with more than half of those surveyed wanting an online shopping experience that is just as easy and enjoyable as an in-person one.

As the world becomes more automated, more than one-third of respondents said they enjoy human interaction, and speaking to real people increased their brand loyalty. Additionally, 82 percent said they would be more open to sharing their personal data with brands that practice good customer service, especially if it made their shopping experience more personalized

Did You Know?Did you know
In the PwC survey, 30 percent of respondents said they enjoyed the benefits of loyalty programs, such as rewards, offers, discounts, coupons or rebates.

Word of mouth matters for businesses

Even if you already own an established brand, it does not make you immune to the losses from your customers’ bad experiences. Word of mouth is a great way to market a product, but it is just as effective at showing your business’s weaknesses.

A study by Salesforce revealed that 72 percent of respondents like to talk about their experiences with other people. This is bad news for brands that do not care about their customer service, as poor word of mouth leads to a loss of customers and reduced profits. However, paying attention to what customers say online can help. According to a Statista study, 47 percent of respondents said brands that replied to customer questions or complaints on social media were looked at more favorably despite the negative posts. 

Tips to improve your business’s customer service

You can’t overhaul your business’s customer service overnight, but the most effective way of handling the process is to work directly with your customer service team and reassess your infrastructure. Consider these tips for improving your company’s customer service.

Provide the right tools.

Automation is the key to improving your customer service team’s efficiency. Use customer service software that will help your team thrive even with myriad customer issues and queries. Some of the most commonly used customer service platforms are Zendesk, Hootsuite and LiveAgent.

Tip: Looking for a way to boost your customer service and build better relationships with your target audience? Explore how the best CRM software can help with this.

Train your team members to be masters in the field.

Once you have provided the right tools, you should also offer adequate training to your team members so they can effectively uphold their responsibilities and provide top-notch customer service.

Providing training in empathy, positive language and other soft skills related to emotional intelligence will go a long way in helping your team work with your customers. It’s an additional advantage to hire people who already know how to communicate effectively with different customer types, but you should still train your staff to communicate effectively without sounding too transactional.

Offer professional development opportunities.

On top of the company-provided training, you can encourage your team to take professional development courses that will continue to improve their skills. You can invest in customer service training programs, such as those found in Udemy and Alison. These courses can help jump-start or develop your team members’ careers in customer service.

Listen to your team’s feedback, and make necessary changes.

If your team members feel like their feedback is being considered and their voices are being heard, they’re likely to do the same with your customers.

Aside from these ways to improve your customer service, you can work on your company’s customer loyalty and enact interactive voice response (IVR) and VolP systems, such as Nextiva. (Learn more in our Nextiva review.) Lastly, a social media customer service channel will help you manage your queries effectively and ultimately connect with present and future customers and achieve top-notch customer service.

You can always improve customer service

Small businesses have a better grasp on customer service, but there’s always room for improvement. Whether this means expanding your team, investing in new technology or incorporating training, the extra effort will be well worth it in the long run.

Max Freedman contributed to the writing and reporting in this article.

Jordan Bishop
Jordan Bishop, Business Operations Insider and Senior Writer
Jordan Bishop is a finance expert who founded the small business Yore Oyster to help people make better financial decisions. Prior to starting his own company, he spent years auditing financial statements, developing financial models and advising on marketing strategies designed to improve scalability. Bishop holds a bachelor of business administration degree (BBA) and has supplemented his formal education in entrepreneurship and finance with real-world experience. His expertise has been cited in The New York Times, Yahoo Finance and other outlets, and he has also contributed his insights to Forbes, Entrepreneur, Bankrate,, Money and more. He published his first book, "Unperfect: Innovators, Trendsetters, and the Art of Problem Solving," in 2021.
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