Definition of Customer Service – A Comprehensive Guide
Introduction
Customer service is the backbone of successful businesses, influencing everything from customer satisfaction to brand loyalty.
But what exactly is the definition of customer service?
While it may seem straightforward, customer service encompasses a range of practices, definitions, and approaches that can vary greatly across industries, regions, and even individual organisations.
There is no shortage of customer service definitions that vary between industry associations, consultants, influencers, etc, which can add to the confusion.
This guide is designed as an agnostic resource to help both industry professionals and those outside the field understand what customer service really means, how it’s measured, and why it’s more important than ever in today’s customer-centric world.
Table of Contents:
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- The Difference Between Customer Service and Customer Experience
- Customer Service Across Channels
- A Brief History of Customer Service
- Why Customer Service Matters
- Popular Definitions of Customer Service
- Core Components of Exceptional Customer Service
- Popular Customer Service Metrics
- The Role of Technology in Customer Service Today
- Challenges (and Solutions) in delivering customer service
- The Future of Customer Service
- Conclusion
Customer Service vs. Customer Experience: Understanding the Difference
Before we get too far into the definition of customer service, let’s clear something up.
Customer Service and Customer Experience are NOT the same thing!
While the terms are often used interchangeably, customer service and customer experience (CX) are distinct but complementary concepts.
- Customer Service is specific to one-on-one interactions, often involving direct support such as solving issues, providing recommendations, and fulfilling customer requests.
- Customer Experience (CX), on the other hand, is the sum of all interactions a customer has with a brand, from the first touchpoint through the entire lifecycle. CX is more holistic, encompassing the emotional and sensory perceptions customers have about the brand as they engage across multiple channels—both online and offline.
In other words, customer service is a component of the broader customer experience.
While CX aims to create an engaging, seamless journey, customer service focuses on specific points within that journey where direct assistance and human connection matter most.
Customer Service Across Channels: Voice, Digital, and In-Person
Whilst we clear up some misconceptions, let’s add another one the mix.
Customer service isn’t limited to just call centres or digital support.
In-person service in retail and other face-to-face environments remains a cornerstone of the customer service landscape, offering a unique opportunity for personalised, human connection.
Whether customers are seeking assistance in a store, at a bank, or a hospitality venue, face-to-face interactions allow for immediate feedback and an immersive brand experience that’s hard to replicate in other channels.
In-person service enables frontline employees to engage directly with customers, reading body language and adjusting their approach to create a supportive, helpful atmosphere.
Retail service is especially critical, as customers often form their perceptions of a brand based on the quality of these face-to-face interactions.
The skills required in retail customer service—like empathy, active listening, and problem-solving—play an essential role in building loyalty and driving repeat business.
A Brief History of Customer Service
Customer service has evolved dramatically over the decades:
- Early 20th Century: Customer service was personal and often one-on-one, typically involving face-to-face interactions in local shops. Businesses relied heavily on building relationships within their communities.
- Mid-20th Century: With the rise of mass production and large-scale businesses, customer service became more systematised. The introduction of telephone support in the 1960s revolutionised how companies could interact with customers.
- Late 20th Century: The development of call centres, particularly in countries like the United States, Australia, and India, brought about a more structured approach to customer service. This era saw the introduction of metrics like First Contact Resolution (FCR) and Service Level Agreements (SLAs).
- The 2000s and Beyond: The digital revolution has completely reshaped customer service. With the rise of e-commerce, chatbots, and self-service platforms, businesses have had to adapt to multi-channel customer service strategies. Customer experience (CX) is now viewed as a competitive differentiator, with customer service as a core component.
Why Customer Service Matters: Core Benefits
There are numerous business benefits as a direct result of delivering great customer service, including:
- Customer Retention: A positive service experience can significantly increase customer loyalty and lifetime value.
- Brand Advocacy: Satisfied customers are more likely to recommend the business, amplifying brand reach.
- Revenue Growth: Businesses that prioritize customer service see measurable impacts on their bottom line.
- Competitive Advantage: Exceptional service is a unique differentiator in highly competitive markets.
Whilst we all have examples of when poor customer service has turned us off a brand or business, the stats also support the importance of getting it right.
View the latest customer experience and customer service statistics >
Popular Definitions of Customer Service
While there is no single, definitive definition of customer service, certain common themes and principles resonate globally.
We’ve sourced some of the most widely accepted definitions from across the internet below:
International Customer Service Association (ICSA)
The ICSA defines customer service as:
“A series of activities designed to enhance the level of customer satisfaction – that is, the feeling that a product or service has met the customer’s expectation.”
This definition emphasises that customer service is about more than resolving issues—it’s about ensuring the customer feels their expectations are consistently met.
Harvard Business Review
In their business context, customer service is described as:
“The assistance and advice provided by a company to those people who buy or use its products or services.”
This straightforward definition focuses on the relationship between service providers and customers in transactional contexts, highlighting the role of service in the overall customer journey.
Wikipedia
Wikipedia defines customer service as:
“Customer service is the assistance and advice provided by a company through phone, online chat, mail, and e-mail to those who buy or use its products or services.”
Deloitte
Deloitte defines customer service as:
“Customer service is about creating meaningful connections through problem-solving, product knowledge, and brand representation to foster loyalty and long-term customer relationships.”
American Customer Satisfaction Index (ACSI)
The ACSI defines customer service as:
“The degree to which customers are satisfied with the goods or services they receive, as measured by the ACSI survey and other metrics like complaints, recommendations, and repeat business.”
This definition connects customer service directly to measurable outcomes and emphasises the link between satisfaction and business performance.
Forrester
Forrester defines customer service as:
“An organised system of providing assistance and advice to people who buy or use products or services.”
Forrester’s take shows the structured and strategic nature of modern customer service, focusing on organisation-wide systems that support customers through their journeys.
Gartner
Gartner defines customer service as:
“The support offered to customers, both before and after they buy products or services, that helps them have an easy and enjoyable experience with you.”
This customer experience-centric definition highlights both the pre-sale and post-sale customer service experiences, tying them to ease and satisfaction in interactions.
Daniel Ord (global CX trainer)
Daniel Ord, a prominent global trainer in customer experience and contact centres, says:
“Customer service is the bridge between customer need and the organisation’s ability to meet that need. It’s about ensuring seamless and memorable interactions, regardless of the touchpoint.”
Ord’s definition captures the importance of meeting customer needs across all stages of their journey, through efficient and positive service interactions.
Shep Hyken (Customer Service Expert and Author)
Shep Hyken defines customer service as:
“Customer service is not a department. It’s a philosophy to be embraced by every employee, from the CEO to the most recently hired.”
Hyken’s definition reinforces the notion that customer service is everyone’s responsibility, underscoring the importance of internal alignment to deliver exceptional experiences.
Core Components of Exceptional Customer Service
Delivering outstanding customer service requires a balance of several critical elements, each of which contributes to a consistent and positive customer experience.
Whether for in-person retail interactions, digital support, or over-the-phone assistance, these foundational components guide organisations in creating valuable and memorable experiences that keep customers returning.
1. Empathy and Personalisation
- Empathy is the ability to understand and relate to the customer’s perspective and emotions. It’s foundational for establishing a personal connection, fostering trust, and helping customers feel valued and understood.
- Personalisation tailors the experience to the individual, using customer data and insights to offer recommendations, resolve issues quickly, and recognise loyal customers uniquely. Together, empathy and personalisation transform a routine interaction into a meaningful experience.
2. Clear Communication and Transparency
- Clear Communication involves using straightforward, concise language to ensure customers fully understand the information or guidance they receive. This applies to verbal interactions as well as written content, such as FAQs, chat support, and help guides.
- Transparency means being honest about policies, time frames, or limitations. When a company is upfront about wait times, costs, or product details, it helps manage customer expectations and builds a reputation for integrity.
3. Responsiveness and Timeliness
- Customers value prompt responses to their inquiries and quick resolutions to their issues. Responsiveness demonstrates respect for the customer’s time and shows that the company is dedicated to resolving concerns efficiently.
- Timeliness is especially critical in fast-paced channels, such as live chat, phone support, and social media. Leveraging technology like automation can streamline responses and support, particularly during peak times.
4. Knowledgeable and Competent Service Representatives
- Product Knowledge enables service representatives to provide accurate and helpful information on products or services. Knowledgeable staff members can answer questions, offer solutions, and recommend alternatives confidently, reducing the time customers spend resolving issues.
- Competence extends beyond product knowledge to include familiarity with company processes and policies, ensuring customers receive accurate and relevant support.
5. Problem Solving and Proactive Solutions
- Problem Solving is the ability to address and resolve customer issues effectively, regardless of complexity. It involves using a customer-first mindset to quickly identify the best solutions, even if they require going above the standard protocol.
- Proactive Solutions mean anticipating potential customer issues and addressing them before they escalate. This approach not only resolves problems but also strengthens customer loyalty by demonstrating that the company is invested in customers’ success and satisfaction.
6. Consistency Across Channels
- In today’s multi-channel environment, Consistency across customer service channels (such as in-store, online, or via phone) is essential. Customers should expect the same level of service and brand experience regardless of how or where they interact with the business.
- Organisations can achieve this by creating standardised service protocols and training staff to deliver seamless support across all touchpoints.
7. Continuous Improvement and Feedback Loops
- High-quality customer service is a journey, not a destination. Continuous Improvement ensures that a company regularly evaluates its service delivery methods and adjusts to changing customer needs, preferences, or feedback.
- Establishing Feedback Loops—such as surveys, reviews, or follow-up emails—gives customers an opportunity to share their experiences. Analysing this feedback helps identify trends, weaknesses, and opportunities for enhancement.
8. Empowerment and Ownership
- Empowering staff to make decisions and take ownership of customer issues fosters accountability and speeds up problem resolution. When employees are trusted to go the extra mile, customers benefit from quicker and more personalised solutions.
- Ownership in customer service builds a culture where employees feel responsible for delivering positive outcomes, encouraging them to exceed expectations and embody the company’s values.
9. Patience and Adaptability
- Customer interactions can vary widely, and service representatives must exercise Patience in handling complex or challenging situations. Patience ensures that customers feel heard and valued, even if their issues require more time or multiple attempts to resolve.
- Adaptability enables representatives to remain flexible in their approach, adjusting to individual customer needs, new products, or unexpected scenarios while maintaining service quality.
Final Thoughts on Building Quality Customer Service
Mastering these core components requires commitment, training, and a customer-centric culture that prioritises satisfaction and engagement.
As Australia’s leading association in customer service and experience, we empower businesses to integrate these elements into their service strategy, creating experiences that go beyond expectations and our members have access to wide range of resources, training and support to assist them in delivering exceptional customer service for their customers.
Popular Customer Service Metrics
Customer service performance is typically measured by a set of widely adopted metrics.
These metrics help companies assess their effectiveness and customer satisfaction levels.
Below are the most common metrics used to measure customer service.
1. Customer Satisfaction (CSAT)
CSAT directly asks customers how satisfied they are with a product, service, or interaction.
It provides immediate feedback and is a good measure of specific customer experiences.
2. First Contact Resolution (FCR)
FCR measures the percentage of customer issues resolved in the first interaction.
High FCR is linked to lower operational costs and improved customer satisfaction, as customers don’t need to repeatedly contact support.
3. Customer Effort Score (CES)
CES gauges how much effort a customer must exert to resolve an issue or complete a transaction.
Reducing customer effort is key to enhancing the overall experience.
4. Net Promoter Score (NPS)
It’s not a direct customer service metric, but the skill is very popular. NPS measures the likelihood of customers recommending your business to others using a simple scale of 0-10, and it’s often seen as a leading indicator of customer loyalty.
The Role of Technology in Customer Service Today
With the rise of AI, data analytics, and CRM (Customer Relationship Management) platforms, technology is now integral to customer service operations.
Chatbots, artificial intelligence, and automation are now crucial tools, enabling companies to provide customer support across various platforms simultaneously.
- Artificial Intelligence (AI): From chatbots to predictive analytics, AI is set to revolutionise the speed, accuracy, and personalisation of customer service.
- Customer Self-Service: Expect an increase in self-service options such as knowledge bases, FAQs, and community forums, enabling customers to solve issues independently.
- Hyper-Personalisation: With the help of data, customer service will continue evolving toward increasingly tailored and relevant interactions.
- Focus on CX Integration: As customer experience grows in importance, customer service will play an even more central role in delivering seamless, memorable interactions that align with broader CX goals.
At the same time, customers’ expectations are also increasing, demanding seamless experiences, whether interacting via phone, chat, or social media.
These advancements, when done correctly, can provide a range of benefits that enable:
- Faster Response Times: Chatbots and AI can handle basic inquiries instantly.
- Enhanced Data Insights: Analytics provide deeper customer insights, supporting more personalised service.
- Improved Collaboration: CRM tools centralise customer information, allowing teams to deliver consistent service across channels.
Challenges Businesses Face in Delivering High-Quality Customer Service
Despite the well-documented benefits of great customer service—like customer retention, loyalty, and positive brand reputation—many businesses struggle to consistently deliver it.
Understanding these challenges can provide insight into why companies sometimes fall short and why prioritising service excellence requires ongoing commitment.
1. Lack of Investment in Training and Development
- Issue: Effective customer service requires specific skills, such as empathy, communication, and problem-solving. However, many businesses under-invest in training, which leaves employees ill-equipped to handle complex customer needs.
- Solution: Regular, comprehensive training programs empower employees with the skills they need and help them stay updated on the latest customer service strategies and technologies.
Learn more about our training solutions to help your business >
2. High Staff Turnover and Burnout
- Issue: Customer service roles can be high-pressure, leading to burnout and turnover. This constant churn makes it challenging to maintain quality and consistency.
- Solution: To reduce turnover, businesses can offer better support, incentives, and work-life balance, ensuring employees feel valued and motivated to provide quality service.
3. Disconnect Between Customer Service and Company Goals
- Issue: In some companies, customer service teams are not fully aligned with the organisation’s goals or customer experience strategy. This disconnect can lead to inconsistent service that frustrates customers.
- Solution: A well-defined customer service vision, integrated with overall business goals, can help align customer service efforts with broader company objectives.
4. Inadequate Technology and Tools
- Issue: Outdated or insufficient technology can hinder service quality, especially as customers expect seamless, multi-channel interactions. Without the right tools, employees may struggle to access customer information, resulting in slow or inaccurate responses.
- Solution: Investing in technology—such as CRM software, AI support tools, and data analytics—enables companies to deliver faster, more accurate, and personalised service across channels.
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5. Poor Feedback Systems and Lack of Improvement
- Issue: Without effective feedback channels, companies miss out on crucial insights from their customers. This can prevent them from identifying recurring issues and making meaningful improvements.
- Solution: Setting up systems for gathering and analysing customer feedback allows companies to adjust their service strategies, address weaknesses, and show customers they’re valued.
6. Balancing Cost Control with Service Quality
- Issue: In efforts to reduce costs, some businesses make cuts that inadvertently impact customer service quality, such as understaffing or limiting service hours. This can lead to long wait times, frustrated customers, and ultimately, lost revenue.
- Solution: Successful companies strike a balance by finding cost-effective ways to maintain quality. Leveraging technology, refining processes, and optimising resources can help achieve this balance.
7. Adapting to Rising Customer Expectations
- Issue: Customer expectations for fast, personalised, and consistent service are higher than ever. Adapting to these rising demands can overwhelm companies, particularly if they lack the necessary agility or resources.
- Solution: Regularly monitoring customer expectations and adopting flexible, customer-centric approaches helps businesses stay relevant. Continuous improvement and adaptation are crucial to meeting modern demands.
Delivering exceptional customer service isn’t always easy, but overcoming these challenges is essential for businesses that want to succeed long-term.
By understanding and addressing these common obstacles, companies can improve service quality and achieve a reputation for excellence in customer care.
The Future of Customer Service
As we look to the future of customer service, technology will undoubtedly play a central role in transforming how businesses meet evolving customer needs.
AI-driven chatbots, self-service platforms, and advanced data analytics are becoming staples, enabling faster, more efficient interactions.
However, as these tools enhance convenience, the human touch—whether in face-to-face retail settings or remote interactions—remains crucial for building genuine connections.
In a world where digital engagement is prevalent, face-to-face interactions offer businesses a unique advantage: the ability to foster immediate trust, read customer emotions, and respond with empathy in real time.
This hybrid approach—blending efficiency with the personalised, empathetic support that only human engagement can provide—will be key to creating meaningful, memorable customer experiences.
By ensuring that in-person and remote agents are empowered to handle complex or emotionally charged situations, businesses can create a service model that not only meets but exceeds customer expectations.
This future of customer service combines the power of digital advancements with the irreplaceable value of human connections, both online and in-store.
Conclusion: Setting the Standard in Australian Customer Service
Our association is dedicated to raising the bar for customer service in Australia, providing the resources, training, and insights needed to empower businesses in creating purposeful, impactful customer interactions.
With a strong foundation in best practices, a commitment to innovation, and a clear understanding of the difference between customer service and customer experience, we’re here to support Australian businesses every step of the way.
By investing in customer service excellence, Australian businesses can strengthen relationships, drive loyalty, and establish a reputation as leaders in delivering outstanding service.
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