Everything you need to know about customer service policies

Everything you need to know about customer service policies
By Pedals | On Mar 15, 2022
8 min read

Did you know that 74% of consumers are likely to buy based solely on their customer experience?

A good customer experience attracts repeat customers, but this type of experience doesn’t come out of thin air. It requires deliberate documentation, strategy, and action. That’s where the customer service policy comes to play. When it’s well-developed, a customer service policy readily provides that three-in-one impact. 

Below, we’ll cover everything you need to know in order to create a strong customer service policy. But before we dive into the meat of the matter, let’s look at how customer service policy is defined.

In this article:

What is a customer service policy?

A customer service policy is a document that clearly outlines how you and your team should approach all matters related to customer service. At its core, a customer service policy allows you to create an organization where keeping both employees and customers happy is a top priority. 

Here’s an example of a customer service policy from Amazon Pay. Amazon developed this policy to ensure that their third-party merchants match the service standards and responsiveness that customers expect from Amazon. This policy governs how Amazon’s third-party merchants should handle:

  • Condition of their items
  • Purchase receipts
  • Delivery estimates
  • Charging after fulfillment
  • Limits for additional charges
  • Returns policy
  • Customer service information
  • Privacy of customers

Amazon is serious about creating a consistent, high-quality customer experience, and this customer service policy serves as proof. By sticking to this policy, third-party merchants are also able to handle a range of customer issues more efficiently and maintain better customer relationships.

But customer service policies aren’t limited to big companies like Amazon. Small businesses use them too because they provide significant benefits for both their team and their customers. We’ll dive deeper in the next section. 

3 reasons customer service policies are important

Customer service is typically considered a cost center in organizations. So, it’s not surprising that many companies don’t invest heavily in great customer experiences (and therefore, also don’t invest in customer service policies). But research by Salesforce shows that 67% of customers will willingly pay more in order to have a better experience.

With that number in mind, let’s take a look at three ways you can use a customer service policy to create a better customer experience..

1. It keeps everyone on the same page

A customer service policy ensures that all employees clearly understand how to approach all aspects of the customer experience. When properly crafted, your employees are likely to avoid situations similar to what happened at Frontier Airlines a few years ago.

In short, a Frontier Airlines flight carrying two unaccompanied children was rerouted, and the parents were never notified. The worried parents, waiting for their children and with no idea where they were, received little to no sympathy from any Frontier employees. Even Frontier’s official statement about the incident outlined that they were “just following protocol.” The children were safe, but the event resulted in a lot of bad press for the airline — and understandably so. 

A customer service policy is a proactive way to address customer issues before they even arise. The document makes it clear how common customer issues should be addressed. A clear customer service policy that outlined what Frontier's staff should do in situations like these could have prevented this negative experience for the parents. It would have kept all the staff on the same page on how information should be communicated (and who should hear it). 

2. It supports company goals

Your company probably has a clear set of customer service goals: improve customer satisfaction, cut issue resolution time in half, increase customer lifetime value, etc. Having a documented customer service policy helps you connect company goals with the actions that your employees should take. 

Here’s an example from Zappos. Their goal was to ensure support agents engage in meaningful customer conversations. So, they created the Happiness Experience Form, a 100-point scale that measures agents based on four criteria:

  • Personal Emotional Connection (PEC)
  • How well the agent built a good rapport with the customer
  • Whether the agent addressed the customer’s unstated needs
  • How well the agent provided a “wow” experience for the customer

It’s important to document things like this in a customer service policy. Employees will be clear on what the customer service goals are, and what’s required from them to achieve those goals. 

3. It helps your customer service team deliver better care

A study by Microsoft reveals that 90% of the respondents considered customer service to be a significant factor when choosing a brand. If the quality of your customer service is poor, you’re going to lose a lot of business — so it’s important to provide your customer service team with everything they need to deliver better care.

Combining a well-developed customer service policy with adequate training makes this possible. A 2017 Gallup study showed that only 21% of employees feel like they have the performance management (e.g., feedback, access to analytics, and clear expectations) they need to motivate them to do outstanding work.

Your customer service policy should make performance expectations clear, but you also need to provide each of your customer service representatives with the training they need to improve their performance. 

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Necessary items to include in a customer service policy

Your customer service policy is only as good as the information you include in it. Below are a couple of the most important elements of customer service policies. 

Customer service workflows

Your customer service policy is directly related to how your customer service team works. That’s why this policy should clearly explain the six crucial customer service workflows used by customer service teams:

  • Customer onboarding based on engagement signals (such as lead magnet downloads, link clicks in emails, number of platform logins, etc.)
  • Customer issue resolution
  • Technical issue resolution
  • Customer interactions on various digital channels such as email, phone, WhatsApp, etc.
  • Billing, orders, and returns
  • Inbound contact — what happens when a customer reaches out to your company?

It should also be clear when issues should be escalated within each workflow and to whom they should be escalated. 

Your CS team’s promises

Julia Ahlfeldt, a customer experience strategist and business advisor, describes a service promise as “a vision or mission statement focused exclusively on the experience and how it’s delivered.” It explains:

  • What a customer can expect from interactions with your business
  • How customer service representatives should deliver that experience

Consider the Marriott hotel chain, whose brand promise is “Quiet luxury. Crafted experiences. Intuitive service.” Team members who read this service promise understand that they’re to provide Marriott’s guests with:

  • A quiet and peaceful stay
  • Experiences specifically crafted to the guests’ needs
  • Uplifting and memorable experiences

Give careful consideration to what you want your service promise to represent, the language you want your customer service representatives to use, and how you want customers to be treated. A service promise will only work if there’s widespread acceptance by your customers and team!

How to create a customer service policy in 6 steps

The process for creating a customer service policy rests on three fundamental pillars: documentation, communication, and feedback. The six steps below explain how these three pillars help you create a customer service policy that brings lasting change.

1. Craft a mission statement

Here’s a snippet from a customer service policy created by a gymnastics center:

Their mission statement has two distinct parts. First, there’s a clear sentence that explains their overall customer service mission. The gymnasium’s staff knows that they should display excellence and professionalism wherever they interact with customers. They’re also directly responsible for taking care of the gymnasium’s limited resources.

Second, the mission is broken down into seven core values related to providing an excellent customer experience. These core values paint a clear picture of what excellent customer service looks like in the eyes of the gymnasium’s management. 

Begin your customer service policy with a clear mission statement. Speak with your managers, team members, customers, and community stakeholders to get a clear sense of what your customer service policy’s mission statement should include. 

The mission statement is an overall statement that explains what customers should expect from your service representatives. Likewise, you want to make your core values clear, as they are the heart of what guides the customer service experience. 

2. Set achievable goals

Your business will have goals for each stage of growth, and your customer service policy should be directly related to them. How can customer service help you achieve those goals? 

Broad customer service goals — such as reducing your average resolution time or improving your customer satisfaction score (CSAT) — provide a good starting point. But they need to be quantified and time-bound so that you can realistically measure progress and accomplish them. They also need to be specific, detailing the actions the customer service team needs to take to reach the finish line. 

When possible, look to past performance data to craft realistic team and individual objectives. Then make sure your customer service policy supports them. For example, if you want to increase CSAT, think about whether you currently have the resources to do so or need to build them. 

Do you have a reliable way to collect customer feedback? Are you asking the right survey questions to assess satisfaction? Can reps actually act on that feedback, or is this really a goal for the product team? 

Important Note: As your business grows and your goals change, the goals you initially created for your customer service team will also change. That’s a good thing. The best customer service policies are dynamic documents that are revisited and updated on a regular basis.

3. Document your team’s problem-solving guidelines

How your customer service team addresses customer issues will mean the difference between building strong customer relationships or ending up with unhappy and frustrated customers. Your customer service policy should clearly explain how your team solves problems. The aim? Preventing negative customer interactions. 

Here are some tips that can help your customer service team better handle customer problems:

  • Add a knowledge base feature to your live chat tool. Often, customers prefer to find answers themselves. A knowledge base that has answers to commonly asked questions can help reduce the pressure on your customer service team and set healthy customer expectations about your policies and practices. 
  • Listen to customers instead of becoming defensive. After listening, respond to the customer’s complaint (no matter how rude) by summarizing what you understand the issue to be, and reassuring them that it will be resolved. Break down the issue — not the person.
  • Offer the solution that best matches the customers’ needs. If you offer a blanket solution, you’re only putting on a Band-Aid. The solution you offer should directly address the root cause of the customer’s issue. 
  •  Conclude the conversation by ensuring the customers’ issues were resolved, asking if there were any other issues to be addressed, and recommending follow-up actions if necessary.

4. Develop a reimbursement policy

It’s important to have a cut-off point for how long customer issues can remain open and eligible for reimbursement. Below are a few highlights of the information you should include in your reimbursement policy:

  • The process for collecting and approving the reimbursement request
  • If the reimbursement depends on an inspection, include how long it will take for the inspection to be completed
  • Who is responsible for shipping costs if applicable
  • Mode of reimbursement (store credit, full refund, new item etc.)
  • Timeline for receiving the reimbursement

This example of a reimbursement policy from Lululemon shows how you can create a company policy that’s clear to both your customers and your team:

The policy then continues into an FAQ section. Customers can browse through the most common questions about Lulumelon’s return policy. This page makes it clear:

  • Who handles returns
  • Where customers should go for specific returns
  • How returns should be made

Having all this information in one place makes it easier to handle reimbursements 

5. Provide a code of conduct

Customer service representatives are often the first point of contact your customers have with your business, and that’s why it’s so important to document how they should behave in everyday scenarios. This includes everything from the language they should and shouldn’t use to what they should notify their managers about (for both negative and positive customer interactions).  

If you’re stuck and need some inspiration, consider using the customer service code of conduct from the CX Touchpoints Group as a template. There are 33 points for the company’s customer service representatives to consider — they even include a video at the end to summarize and reiterate the key points. This is one way you could approach creating a code of conduct within your customer service policy. 

6. Revisit and improve customer service policies

As previously mentioned, your customer service policy is a dynamic document that will change continuously as your business grows. As such, remember to regularly request feedback from both customers and customer service representatives to determine whether adjustments should be made. There are a number of ways to do this:

  • Feedback boxes
  • Cart abandonment surveys (a pop-up with a small text box that allows customers to explain why they didn’t check out)
  • Post-purchase feedback through immediate surveys at checkout and surveys sent directly to email subscribers
  • Emoji-feedback on live chat sessions
  • Social media listening

For your customer service representatives, you should speak with them directly on a regular basis. They will tell you the good, bad, and ugly of their interactions with customers. Oftentimes, they’ll even have suggestions for how their team can become more adept at handling customer issues. 

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Best practices for creating and maintaining a customer service policy

The steps for creating a customer service policy outlined above act as a solid foundation. But if you want your customer service representatives to actively apply what’s in the policy, here are the four key best practices to incorporate ASAP. 

Incorporate your company’s values

Earlier, we discussed how important it is to outline your customer service values as you craft the mission statement for the customer service policy. But these values aren’t limited to words on a page — they should be principles your team lives by each day.

Mailchimp is known for building a team that actively displays the company’s values at each point of the customer’s journey. One of the things they do to make this possible is to highlight a customer success goal for each quarter of the year. 

The goal for 2021 Q4 was to help customers achieve marketing success during the busy holiday season. As a team, Mailchimp was committed to being with customers every step of the way by:

  • Removing communication barriers that could slow down chats
  • Adequately allocating resources so that the team could readily be there to support customers
  • Forecasting the volume of queries they would receive from customers during that season

As you can see, incorporating company values requires more than writing them in a policy document. Resources need to be properly allocated, goals should be broken down into quarterly buckets to best meet the seasonal needs of customers, and data should be used to properly plan for adequate customer support. 

Address customers’ needs in the policy

Although a customer service policy is an internal document, it relies heavily on a deep understanding of customers. You won’t get that deep understanding from common knowledge about your customers (age, gender, interests, and so on). You have to dig deeper by:

  • Interviewing eight to 10 of your customers (most recent, most loyal, and even those who may have said some ugly things about your business).
  • Using social listening tools, such as Sprout Social or Hootsuite, to discover what people are saying about your brand.
  • Reading reviews of both your and your competitors’ products.
  • Listening to customer service calls to hear your customers frustrations and experiences.

These insights will help you create a customer service policy that can truly address your customers’ needs and lead to higher customer retention. 

Provide an accurate response and resolution time

Customers want to know that their concerns will be noticed and quickly resolved. So, what are some of the benchmarks for response and resolution time?

  • Most customers expect responses to queries sent by email within an hour. (Jeff Toister)
  • Some customers who raise concerns via social media expect a response within 24 hours. (Microsoft)
  • Some customers expect a response to any concern, regardless of the medium, to be provided within 10 minutes or less. (Hubspot)

It’s a bit difficult to pinpoint a specific benchmark time for an accurate response. The best approach would be to set your own benchmark based on data you already have about your customer service. This way, you can set realistic expectations and develop a standard that your team can actually maintain.

Explain how to handle customers when they’re unhappy

In an ideal world, we’d quickly resolve our customers’ issues and they’ll be happy — but we don’t live in an ideal world. There will be occasions where customers are still unhappy with the solution you provide, despite your team’s best efforts. Here are a few tips to keep in mind during those situations:

  • Provide your team with a script to de-escalate issues. This ensures consistency and reduces the risk of a customer service representative saying the wrong thing. The last thing you want is for the customer to get even more upset.
  • Ensure the problem is clearly understood so that alternative solutions can be provided.
  • Provide incentives such as discounts, upgrades, or other rewards.

Put your customer service policy into action

Customer service policies are built on three pillars: documentation, communication, and feedback. Without documentation, there won’t be a guide for your team to follow consistently. Standards should be clearly communicated to both your team and customers. Finally, there should be opportunities for both your team and customers to provide feedback. 

Remember, the policy will be a dynamic document that grows with you and adjusts as your customers’ needs change.

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Pedals is a beloved member of the TestBox team whose entire goal in life is to author amazingly helpful blog posts and to cameo on every piece of TestBox swag.

TestBox empowers you to have a self-serve, customer-led experience so you can buy new software and feel confident that you made the right choice. Currently focused on Customer Support, TestBox allows you to test out Zendesk, Freshdesk, HubSpot, Dixa, and other products side-by-side. It takes a matter of minutes to sign up and take these products for a test drive. Find out more at TestBox.com or follow on LinkedIn.