By Ian Ford, special to Overdrive and partner at InsiderGuide.com, LC

Whether running an online business, a hardware store or a service-oriented organization, practicing and maintaining quality customer service is the key to success for any entrepreneur. That was tough this past fiscal year, when customers around the world faced a struggling economy. Many drastically cut their budgets, paid off their debt and scraped to build their savings. As a result, when they go to make a purchase in this new era of frugality, they are demanding higher levels of service.

From a business owner’s standpoint, loyal customers are important to a company’s bottom line. Studies show that repeat customers typically spend more money, generate larger transactions, refer more customers and buy a broader range of products than one-time shoppers. Maintaining a customer starts, and usually ends with, a company’s customer services representatives, which is why a company must put in time to ensure their employees are operating with high standards. Many of the leaders in customer service recognize the importance of giving their employees a certain amount of freedom in how they deal with a customer’s request, versus having to call in a manager for approval. Not only does this allow them to respond quicker to the customer’s needs, it builds overall morale in the company.

When times are rough, companies tend to make their biggest customer service mistakes. Taking the wrong approach to solve short-term problems can create long-lasting damage and lead to a reduction in the quality of the customers’ experience. Slashing costs, cutting employee numbers or pay/benefits, or reducing investment in the free “value-added” extras—like special services a company provides—may reduce overhead, but it also deeply impacts the customer. It’s important to weigh any cost-cutting measures with the total strategic differentiators of the company and ensure there’s alignment.

Customers, for the most part, are walking into a store poised for a battle. When a return is needed or an adjustment is necessary, customers often start with the following mindset: “I’m sure you are not going to make this right, but…” Already on edge, the situation can escalate into a negative customer service experience before it even begins. However, key strategies can assist customer service representatives in diffusing the situation. Most importantly, representatives need to have a conversation with the customer. If customers perceive resistance or a lack of two-way communication, they are likely to go on the defensive, or worse, find a new store.

If a customer has an issue with a business, the old adage of “the customer is always right” works for a reason. Listening without interrupting can go a long way for a customer service representative. One of the most common reasons customers get defensive is because they feel vulnerable or misunderstood. They often see themselves as small and powerless, and as a result, are unable to control the situation. This is where businesses should put the control in their customer services representatives’ hands to develop a meaningful solution for the customer. In the end, it can make a huge difference in both the customers’ day and the company’s bottom-line.