30 Customer Service Terms Every Small Business Owner Must Know


As you grow your small business, you’ll likely have customers reaching out about technical difficulties, questions about your products and services, and even complaints. A customer service team can handle these queries. Building these teams involves understanding the lingo your representatives may use.

Below are 30 customer service terms every small business owner must know, with definitions and practical, real-world examples.

1. Customer churn rate

Customer churn rate measures the rate at which businesses lose their customers over time. As a small business owner, you can observe how many customers stop interacting with your marketing content, buying your product or service, or subscribing to your email newsletters or SMS texts.

If you are unsure about how to calculate your customer churn rate in a specific time period, follow these steps:

Subtract the number of customers you currently have from the number of customers you had before: For example, say you want to measure the customer churn rate in a one-month period. At the start of the month, you had 100 customers, but at the end, you had 95. You would subtract 95 from 100 to reach a total of five customers lost in one month.

Divide the number of customers lost by the number of customers you had at the start period: Now, you need to get a percentage. Following our example, we would divide five customers lost by 100 customers you had at the start of the month, which would equate to 0.05, or five percent. This percentage is your customer churn rate for that one-month period.

Most business owners want to keep their customer churn rate as low as possible. Churn rates can pinpoint where you might need to improve your customer service strategies.

2. Customer lifetime value (CLTV)

Customer lifetime value (CLTV) measures the overall revenue potential a customer brings to your business if they remain a loyal customer. Businesses can use this metric to get insight on which cross-selling and up-selling strategies work well with their consumer base and increase their overall lifetime value.

Many businesses nurture CLTV through subscription services or content, which can alert consumers about upcoming sales or provide exclusive discounts. These tactics encourage consumers to stay loyal to a business and continue purchasing its products or services.

3. First reply time and response time

“First reply time” and “response time” are two separate terms that both refer to how long it takes for customer service agents to respond to queries they receive. If you use a customer service software, you can observe this metric by reviewing how much time your agents spend responding to support tickets, which document the interactions between the agent and consumer.

Companies generally should strive to keep their initial reply times as short as possible, preferably a few minutes. Shorter response times make customers feel valued and heard. Wait times longer than 24 hours can jeopardize potential sales for a company.

Ways to cut down on your response time

Some ways to reduce your customer service response time include:

Use chatbot service software to handle initial responses: You can use software that utilizes artificial intelligence via a chatbot to handle basic and common queries from customers. Chatbot service software can reduce your response time for website queries to seconds, then refer support tickets to customer service agents once the software identifies a customer’s specific issue.

Use automated responses to immediately register a customer’s query: If a customer emails your business, you can set up automated email responses that acknowledge the query and let them know an agent will respond to their message shortly. This can assure the customer that you received their support ticket.

Use receptionist services to handle first replies to customers: At Smith.ai, we offer receptionist services that include 24/7 phone answering, SMS text answering, and 24/7 website chat. Our virtual receptionists can handle immediate responses to queries your business receives, then transfer qualified leads to your customer service team if there is potential for a complete transaction.

4. First call resolution (FCR)

First call resolution (FCR) refers to how often businesses successfully handle consumer queries on first contact. This percentage can help you understand whether your customer service agents have the necessary training to handle support tickets and convert leads.

If you notice that one or several agents on your customer service team have a low first call resolution rate, you may need to reassess your agents’ strategies for speaking with customers. You can also retrain your agents, especially if new products or services have been added to your inventory.

5. Ticket routing

As a company grows, so does the number of support tickets it receives from customers. From frequently asked questions to queries that require niche knowledge, companies can improve their customer service responses through ticket routing. This involves separating support tickets and transferring them to appropriate agents based on:

● The type of question asked (e.g., queries about product returns or missing items)

● Whether a support ticket needs to be sent to a specific department (e.g., queries about invoices should be sent to the billing department)

● Whether the consumer has a referral number to speak with a specific agent

Companies can benefit from ticket routing, as this process streamlines the customer service process and reduces response times as tickets get spread out to appropriate parties. You can begin the ticket routing process with online forms on your website that allow customers to choose the category their query might fall under or an automated phone service that allows customers to dial appropriate numbers for query categories.

6. Customer retention

Customer retention refers to a business’s ability to keep customers coming back. You may hear this phrase when discussing the retention rate. Whereas churn rates measure how many customers a business lost in a specific timeframe, retention rates focus on how many customers it gained or retained in a specific timeframe.

Methods to improving customer retention can involve:

● Offering discounts or deals that benefit your consumer (e.g., offering free shipping on purchases over $100 or 15 percent off for new users who sign up for your email newsletter)

● Maintaining engaging social media profiles that keep your consumers wanting to follow your business for more information or sales opportunities

● Having consumers fill out customer feedback surveys and implementing those responses into your marketing and customer service campaigns

● Producing high-quality goods or providing high-quality services to maintain trust with your consumer base about your brand

7. Customer satisfaction (CSAT) score

Customer satisfaction (CSAT) scores gauge how customers feel after interacting with your business. For example, if a customer finishes a call with one of your call agents, they might receive an email asking them to rate this interaction out of five stars, with five being the most positive. Their star rating for the call experience becomes the customer satisfaction score.

CSAT scores are vital to improving the quality of the customer service you provide. Getting more positive CSAT scores ensures you are providing appropriate and useful information to your consumer base, which can help retain their loyalty to your brand.

If you start receiving numerous low CSAT scores, you should consider revamping your customer service strategies. Additional training can also help your agents answer key questions from customers.

Calculating CSAT scores

CMSWire illustrates how to calculate your CSAT score, converting it into a percentage. For example, you can measure how many people gave positive ratings (four or five stars) versus negative ratings (three stars and below).

Let’s say 300 people gave your business a five-star rating while 200 people gave your business a four-star rating. There were 600 ratings in total. To calculate your CSAT score, you would:

● Add 300 and 200 to reach a total of 500 positive reviews.

● Divide 500 positive reviews by 600 total reviews, which equates to about 0.83.

● Multiply 0.83 by 100 to determine your percentage, which is 83 percent.

In this example, you would have an 83 customer satisfaction rate, which is great but still has room for improvement.

8. Customer journey and journey mapping

Customer Journey & Journey Mapping

The customer journey spans their entire interaction with your business, even after they complete a transaction. These stages include:

Awareness: The customer learns about your brand through a marketing campaign, search result, or word of mouth. This stage generates leads who may be interested in purchasing your company’s products or services.

Consideration: The customer considers purchasing your product or service based on the information they learn about your brand or the way you market your products/services. For example, online chiropractic care pages encourage people with orthopedic injuries to get treatment at your office.

Purchase: The customer completes a transaction by purchasing a product or service from your business.

Retention: After a customer purchases a product/service from your business, you can then use retention strategies to encourage customers to return to your business. You can offer discounts, mention sales, and send reminders to renew services or buy replacement products. Without this stage, you could lose customers to your competitors.

Advocacy: The customer trusts your brand well enough that they begin referring your business to others, creating leads. You can encourage this process by offering discounts to customers who send referrals to friends, family members, and social media followers.

Journey mapping refers to building strategies for each stage in the customer journey. You can then train agents to respond to queries, up-sell, cross-sell, and follow up with customers.

9. Brand experience

Brand experience refers to the way people interpret your brand. While marketing campaigns lay the foundation of your brand’s image, how your customer service representatives respond to potential buyers can also affect brand experience.

Consider these factors when shaping your brand experience profile:

● What kind of tone should your customer service agents provide customers when answering calls or messages? More uplifting and family-friendly or serious and professional to maintain authority?

● How should agents handle complaints about your business?

● What readily available solutions can streamline the support ticket process?

● How should agents handle queries that lack readily available solutions?

● What phrases should your agents use to reflect your brand?

While you cannot completely control how potential consumers perceive your brand, answering these questions can help with complaints or other issues.

10. Cross-selling

Cross-selling involves promoting items similar to products a customer recently bought or is about to buy. Cross-selling is an effective sales strategy in terms of boosting sales and customer lifetime value. It encourages consumers to look at your total product/service inventory and build more trust with your brand.

For example, say you own a shoe company. A customer buys a pair of black leather ankle-length boots for the fall. You can take this opportunity to retain the customer’s purchasing interest and cross-sell knee-high boots that the customer can wear in the late fall or winter. Your customer may return for other seasonal shoe items, increasing their lifetime value.

11. Omnichannel, cross channel, and multi-channel

Omnichannel, cross channel, and multi-channel are all terms related to the communication and marketing platforms you use to advertise your brand and engage with consumers. Definitions for each term include:

Omnichannel: Omnichannel marketing involves reachable and well-established platforms across several channels. These channels exist by phone, online, through email, and in social media messages in terms of customer service. With marketing, channels can also extend to print and televised advertising.

Cross channel: Cross channeling involves interacting with customers through different communication channels. For example, a customer may ping your business via Facebook message to initiate the interaction. An agent may offer to call them directly to speak over the phone, which would allow the customer to “cross channel.”

Multi-channel: Multi-channel is a term that was first established when the internet became mainstream with marketing strategies. Businesses may have marketing and customer service options through different channels, but these channels exist separately, unlike omni- and cross channeling.

12. Product feature

Product features are details about a given product that can help a customer determine whether they want to buy it. Product features can involve detailing the product’s:

● Size and dimensions

● Weight and weight limits

● Functions

● Benefits or advantages

● Ingredients or materials

● Color

● Texture

Other features include whether the product comes with other items, in other forms, or for additional purposes. Customer agents should know product features or have a list of these features readily available to promote items and encourage sales.

13. Self-service portals

Self-service portals are support platforms that allow consumers to find solutions or information that they need on their own. These platforms can exist as frequently asked question (FAQ) pages, help service directories, and even support knowledge software.

Having self-service portals can filter out basic queries, allowing customer service agents to either respond quickly to those who message about common issues or focus more on complex queries as other consumers resolve their issues on their own.

14. Customer experience

Customer experience is a general term that describes how a customer interprets a brand after engaging with its business. The customer experience process can begin at any point of the customer journey, whether a consumer’s interaction with your brand begins when they first learn about your brand or when they have a query or complaint about a product or service they bought.

Analyzing customer experience can involve observing whether:

● Your marketing strategies are generating leads to interact with your company’s website, call your agents, or complete transactions.

● Your agents provide information or solutions that satisfy the customer when they call or message your business.

● Your agents successfully cross-sell or up-sell products and/or services to customers when they reach out to your business.

● Customers leave positive or negative reviews about your company’s customer service, whether in person, online, by phone, or any other form of communication.

Maintaining positive customer experiences is crucial to building a positive reputation for your brand, as negative experiences can discourage potential customers from engaging with your business.

15. B2B customer experience

“B2B” stands for “business to business,” so B2B customer experience is exclusive to customer journeys involving other businesses. If your business provides products or services that other companies can use for their business, then your main focus in maintaining a positive B2B customer experience might focus on:

● Building authority in the niche industry you’re marketing toward so that other businesses refer to you for their own gain

● Providing high-quality customer service that helps clients troubleshoot issues, begin using your products/services, and feel valued as a consumer

● Implementing design adjustments that make the B2B buying process simpler for your consumers (e.g., allowing clients to download software directly from your website for immediate use with their business)

16. Customer relationship management (CRM)

Customer relationship management (CRM) is an umbrella used to label the different marketing strategies, techniques, and resolutions businesses use when building and nurturing customer relationships.

You may use this term when discussing which strategies can improve your customer service responses or resolutions. For example, you may come up with strategies to improve customer relationship management, such as having catered responses when greeting consumers via phone or email, establishing a more personalized approach when responding to comments on social media, and increasing your agents’ knowledge base so that they can answer questions more effectively.

17. Subject matter experts (SMEs)

Subject matter expert (SME) is a title given to specific agents who have established that they are well-versed or knowledgeable in a specific area about your business’s products or services. You may assign certain individuals to handle complex queries from customers or specific queries about subject matters they handle in their department.

For example, if you operate a computer tech support company. You may have agents who handle general computer troubleshooting in both Mac and Windows systems.

However, you may have SMEs who know more about Linux systems, can answer coding-related matters, or may have specific knowledge of the consumer’s computer build (e.g., RAM-related issues). Having SMEs handle complex matters increases customer satisfaction.

18. Escalation management

Escalation management occurs when initial customer service agents cannot answer a specific query due to the subject matter complexity or overall difficulty.

Agents may escalate the support ticket to a higher-ranked agent, such as a subject matter expert, or to management so that the situation can deescalate.

Having an escalation management system in place ensures that customers get the resolutions they need. Failure to resolve customer queries can result in negative reviews, lost sales, and low customer retention.

19. Onboarding

Onboarding refers to the process of convincing a customer to use another product or service for their own benefit, such as a Software as a Service (SaaS) product.

This can be a form of cross-selling if the customer already purchased a product or service your company provides or it can be a B2B opportunity if you are marketing SaaS products that businesses can use to improve their sales or analytics.

20. Tiered support

Tiered support is an effective method of separating support tickets to different customer service agents so that response times remain low and ticket backlogs remain manageable.

Service agents may be assigned specific kinds of support tickets, such as queries about technical issues or billing issues, while other agents may get divided in handling general queries. Organized tiered support can help you handle interactions with consumers more smoothly and quickly.

21. Outsourcing

Outsourcing involves hiring third-party companies to handle specific business operations, such as customer service. As a company grows, its ticket volume may increase exponentially, especially if its consumer base spans across the nation or even internationally.

It is common practice for companies to hire other businesses to handle customer service duties, if not to just meet the needs of consumers from different time zones.

Smith.ai offers 24-hour virtual receptionist services seven days a week. We can respond to initial contact from consumers and filter through these leads to determine which are likely to convert into transactions. We can also filter out spam calls or messages, perform CRM integration, speak to customers in both English and Spanish, and do overflow answering if your customer service team does not respond first.

22. Key performance indicator (KPI)

Key performance indicator or index (KPI) measures a company’s growth, performance, and response to customers. This article has mentioned several types of KPIs, such as:

● Customer churn rates

● Customer experience rates

● Customer lifetime value

● First reply times/response times

● Customer retention rates

● Customer satisfaction (CSAT) scores

23. Service level agreement (SLA)

Service level agreement (SLA) refers to the agreement between two parties. In the case of sales and marketing teams, this could mean an agreement to perform according to KPI standards. Having an SLA can be practical if you are outsourcing certain aspects of your marketing, sales, or customer service response duties to third-party companies.

With an SLA, you can keep sales and marketing teams performing at good rates so that they can continue having business with your company.

24. Net promoter score (NPS)

Net promoter score (NPS) is a metric used to determine how likely a customer may refer your company to another person, be it a friend/family member or someone in their follower base if they have an audience to market toward, such as on Facebook or Instagram.

NPS scores involve a scale of one to ten, with ten being the most likely to recommend your business to someone else. You can gauge these scores with customer feedback surveys or referral tracking.

25. Customer-centric

The core of any good customer service strategy is to implement “customer-centric” solutions and techniques. Get into the mentality of your average or ideal consumer. They will be more inclined to trust a brand that caters to their needs.

For example, if you own a personal injury law firm that caters to automobile accident victims, your customer service strategies may involve:

● Expressing empathy and compassion to potential clients who have been injured

● Explaining how you can manage their case

● Discussing potential damages they can recover

These are customer-centric talking points that can convert a lead.

26. Customer loyalty

Customer loyalty refers to the ongoing relationship between the consumer and the company. Lead nurturing strategies can help you retain customers so that they continue to purchase products and services from your brand. Some examples of lead nurturing strategies include:

Sending follow-up emails after a customer purchased a product or service to encourage additional sales

● Cross-selling similar items to what a customer recently purchased or has in their shopping cart

● Providing quick response times whenever customers call or message for help services

● Providing comparison charts or blogs about how your products/services compare to what competitors have to offer

● Sending exclusive discounts and sales notices to people who subscribe to your email newsletter, follow your social media pages, or sign up for SMS texts

27. Live chat

Live chat is a form of communication consumers can have with agents online. You can use live chat software on your website and allow customers to send messages when they have questions about your products or services.

Live chat exchanges can involve HD video and audio or remain in written format, depending on the software you use. This convenience can help a customer find the product/service they want or need without picking up the phone or going into a store.

28. Chatbot

Chatbots use artificial intelligence (AI) software to respond to customer queries, particularly in live chats. They can answer basic questions to satisfy customers, such as common technical questions. They can also direct customers to SMEs who can handle more complex queries.

Chatbots can filter spam messages or handle common queries so that your customer service team responds to more important questions and issues from your consumer base.

29. Co-browsing

Co-browsing is a form of screen sharing. Customers can allow agents to gain access to their computer screen to resolve matters like:

● Technical issues

● Problems finding products or services

● Problems completing a transaction

Customers can censor information they do not want to share during co-browsing, such as financial or contact information.

This process can help agents move through specific technical issues faster. In some cases, agents can also spot issues with the website, such as glitches or coding errors.

30. Agent empowerment

Finally, agent empowerment is the overall concept of encouraging your customer service agents to perform well for your company. You can boost agents’ morale and confidence by:

● Providing comprehensive training on your company’s products and services

● Demonstrating how to handle complaints and common troubleshooting issues

● Providing canned responses so that they know how to greet customers and handle communications

● Establishing best practices for navigating customers down the journey map

● Providing examples of when agents should transfer customers to SMEs

Set guidelines so your agents can handle all sorts of calls. This will encourage confidence when they interact with customers. Confident agents encourage more positive interactions and greater sales.

Outsource virtual receptionist services to Smith.ai and improve your response times

At Smith.ai, we can handle first contact with potential customers for your business. Our virtual receptionists can provide detailed call summaries and chat transcripts from your website so that when we transfer potential leads to your customer service team, they know where they pick up the conversation. Having our company handle initial messages and phone calls allows you to get filtered leads that are more likely to convert to transactions.

Other services we provide include:

24/7 phone answering, including after-hours

24/7 website chat services

Lead screening and intake

Outbound call-backs to leads who filled out forms on your website

Payment collection

SMS text answering

CRM integration

For more information, schedule a free 30-minute sales consultation on our Calendly. You can also look at our pricing charts for receptionist services and chat services. All plans come with a 14-day, money-back guarantee. Other queries can be sent to hello@smith.ai, and one of our agents will respond to you right away.

Business Education
Small Business
Written by Sean Lund-Brown

Sean Lund-Brown is a current Marketing Assistant for Smith.ai. A graduate from Metropolitan State University of Denver, Sean graduated with a BA in Music and an individualized degree in Teaching Vocal Pedagogy.

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