How to start a customer service business Online, in-person, or by phone: which type of customer service business should you start, and how? Learn more here Scarlett Cook May 18, 2021 7 min read Our experts Startups was founded over 20 years ago by a multi-time entrepreneur. Today, our expert team of writers, researchers, and editors work to provide our 4 million readers with useful tips and information, as well as running award-winning campaigns. Our site is governed by the Startups editorial manifesto. This article was authored by: Scarlett Cook Writer Have you had a memorable customer service experience? Whether good or bad, learn about the different types of customer service businesses and the steps to take to start your own.01 | How does a customer service business work?02 | What are the different types?03 | Research costs and equipment04 | How to get a telephone system05 | How to find CRM software06 | Identify a revenue model07 | Find customersCustomer service businesses tend to fall into two categories: a business that deals with customer enquiries or one that offers a consulting service.If you opt to go down the consulting path, you’ll be providing businesses with insight into their customer service operations and how they can improve them.Alternatively, if you focus on starting a customer enquiry business, you’ll be tasked with interacting with customers directly, whether that’s on a support or informational basis.In this guide, we’ll focus on the latter of the above two points: how to start a customer service business (dealing with enquiries). What are the essential skills that entrepreneurs looking to start a customer service business will need?Listening – you’ll spend the majority of your time dealing with customers directly, so being able to actively listen and understand their concerns is crucialProblem-solving – often, as you’ll be at the frontline, fielding complaints and problems from customers, you’ll need to be able to come to conclusions that are satisfactory for both an individual and your businessReassuring – people will need to trust you, so being able to relay information in a relaxed yet authoritative manner is necessary 1. How does a customer service business work?A customer service business works by handling inbound queries about products and services, as well as offering support and processing complaints.If you’re thinking of setting up a customer service business, then you’ll be operating as an outsourced provider. Often, many companies don’t have the capacity or the expertise to assist customers’ queries in-house so rely on specialist businesses (such as yours).With the increase in popularity of software based online, calls can be routed and integrated with a customer database, all through the internet. This reduces costs (for example, for office space or in-house staff) so requires a smaller budget, as well as offers the options for you to create a virtual team or run your business remotely.Understanding the customer service experience is key to operating this kind of business. This means knowing which stage each particular customer is at on their journey with your company.For example, are they looking to clarify a question before making a purchase? Or do they require technical assistance? Alternatively, they may have had a negative experience and want to make a complaint.Often, customer service businesses will follow a script when processing customer issues. However, it’s possible to use an unscripted approach.A script can be useful, especially in the early days while you’re still getting used to things, however as your business grows and develops you may find not using a script gives you more freedom to connect with your customers.The route you choose will depend largely on the type of customer service your business is providing, along with which approach best suits your business’ brand.2. What are the different types?When you think about customer service, you may think it’s all about complaints. While assisting customers who’ve had a negative experience is one option, there are a number of types of customer service. These include:Processing complaints – recording negative experiences and offering solutionsSupport – providing information about products or servicesTechnical assistance – troubleshooting; aiding customers with set up issuesYou can choose to differentiate your customer service business by the type of format you use too. For example:In-person – reviewing customer service enquiries in-person (this is more typical in retail or hospitality businesses)Email – responding to items in writing via emailOnline – offering assistance on social media, live chat or forumsPhone – providing real-time information, support or technical knowledge, as and when calls come inOutlining how your business will operate and what type of customer service you’ll offer will help you create your business plan. These concepts feed into key customer service business plan points, such as your set up costs and revenue projections.You can find a free business plan template here.3. Research costs and equipmentAt this stage, knowing how much money to set aside for equipment and other costs, is going to be a priority.Running your own customer service business is going to require a reliable telephone system (unless you opt for a completely online-only approach) and a way of managing all customer interactions with your business.What costs and equipment do you need to consider?ComputersCustomer relationship management (CRM) softwareDesks and chairsHeadsetsOffice spacePhone system4. How to get a telephone systemEven if your clients are primarily online-only businesses, customers can still want to speak to someone ‘in real life’ from time to time. Some issues are just too complex to process via email and chat, or complaints may require human empathy and understanding.Business phone systems offer your company the specific functions and features necessary to handle high call volumes, as well as track and monitor your inbound calls. Whether you choose VoIP or cloud-based, a telephone system will be a central piece of equipment for customer service businesses.Get the best telephone system for your business by completing the form and comparing quotes here.Key factors to consider:Which type of connection will your business require? Traditional ‘landlines’ are still possible, but electronic private branch exchange (PBX) are used increasingly due to its focus on cost-saving and qualityHow will you interact with customers? Most phone systems are sound-only, but video can be an option too so consider which is most suitable for your businessWill you need a hosting platform? If you opt for a VoIP system, you’ll need somewhere to store the dataYou can find out more about call centre equipment costs in our how to start a call centre guide.5. How to find CRM softwareCRM software offers your business the ability to collect and collate information about customers in one central point that’s easily accessible. Any team member with the log-in details can follow and analyse each customer’s previous interactions. It can be difficult to keep all data current, and that’s where CRM software offers a solution. As a customer service business, you’ll be holding personal information about people. You’ll need to comply with data protection laws to ensure you’re storing and using it in the correct way.The General Data Protection Regulation (GDPR) came into effect on 25 May 2018. For example, a customer that keeps coming back with the same issue would suggest that there’s a pattern occurring. Whether that started with a product fault, or miscommunication in a previous exchange, you can use your CRM to review past communication and interaction history. It can help you to find the cause, and ultimately, resolve the customer’s issue. You can then prioritise which cases need to be worked on and when.What to look for when choosing CRM software:Easy-to-use – as the ability to understand and respond quickly is often a major part of whether customers are happy with the reaction to their enquiry, you should look for a system that’s accessible and intuitive.Scalable – while you may have few customer queries to deal with initially, as your business grows you’re likely to be processing more and more requests and messages. Be sure to choose a system that offers options to streamline and expand its offering depending on your business’ needs.Cost – while it may be tempting to think that the most expensive software will be the best, that’s not necessarily a guarantee that it’ll be the most suitable option for your business. Conversely, opting for the cheapest package may mean you get a system that doesn’t offer all the functions you need. Ensure you match your criteria with your budget and find the best software for your business operations and your bottom line.Find the right CRM for your business by filling in the form and comparing quotes here.6. Identify a revenue modelAfter selecting which type of customer service business you want to run, along with assessing which equipment and software meets your business’ needs, the next stage is thinking about how your business will actually make money.Generally, customer service businesses operate on a few key revenue models. These include:Convenient – with this option, the focus will be on fast-paced, quick turnaround times to resolve each customer query. Personalisation will be minimal, with more emphasis placed on speed.Customised – the opposite of the above; this model offers personalised customer service that requires an understanding of the individual. The focus will be high-quality interactions.Commission – in this model, your business will generate income based upon how many products or services you help to sell that are connected to each call or other applicable form of contact. If it’s phone-based sales you’re specifically interested in, our guide to how to start a telemarketing business has more information. 7. Find customersA customer service business without customers is, well, not really a business. So how do you find them and what kind of strategies can you use to let potential partners know about the services your business offers?The most common forms of marketing and advertising to promote your business are:Create a websiteAn online presence is non-negotiable. Not only does it give your business the professional quality that people expect, it allows people to find you, in addition to your efforts to secure work for your company.In the beginning, a basic website that you can create yourself is sufficient, and there are a number of options to choose from for the best website builders for small businesses.As your business develops, consider hiring a web designer to take your site, and customer service offering, to the next level – for example, with custom designs or an app.Use social mediaSocial networks offer your business the chance to reach out to new contacts, as well as maintain relationships with current customers.Plus, once you’ve determined your target audience, you can focus your social media efforts on the platforms they’re most likely to use.In addition, due to its very nature, social media requires quick responses and personalised messages – allowing you to showcase some of the attributes that successful customer service businesses need to have at the same time.Word-of-mouthHearing a glowing review of a company or service from a trusted contact can be hugely beneficial when it comes to deciding which customer service business to go with for a company’s outsourcing requirements.Once you’ve established a customer base – however small – be sure that the customer service experience you’re providing is as best as can be, so that if and when the time comes for a recommendation, your business will be top of the list.Get on the phoneParticularly pertinent if you’ll be using phone as the main form of customer service that your business provides, you should play to your strengths and contact potential businesses to work with in this way too.Again, it’s a chance to show, not tell, what your business can do. If you say your business strives to make every customer interaction unique with a personalised service, then do exactly that when you call up companies that could benefit from your business’ services.What are the next steps?So now you’ve learned the key steps to starting a customer service business, including which type to focus on, as well as the essential equipment and software you need, you’re ready to move on to the next step. Which is? Get going and begin your business – good luck! Share this post facebook twitter linkedin Scarlett Cook Writer Scarlett writes for the energy and HR sections of the site, as well as managing the Just Started profiles. Scarlett is passionate about championing equality and sustainability in business.