It is common knowledge that quality customer service can benefit a business, but its effect on the bottom line is sometimes murkier. The Harvard Business Review reported the results of a study that makes the value of customer service clearer, highlighting significant benefits for both transactional and subscription-based business models.

The study found that in transaction-based businesses—where the focus is on return frequency and how much is spent per visit—a good past experience boosts customer spending 140 percent more than a poor past experience. For a subscription-based business—which value retention and cross- and up-selling opportunities—the study found that 43 percent of subscribers who are having the poorest experience will be a subscriber one year later, compared to 74 percent of subscribers who are having the best experiences. The study also estimated subscription length based on customer experience, finding that those with the poorest experience will remain a subscriber for a little over a year, while those who are having the best experience can be projected to remain subscribers for seven years.

The report notes that the push-back against investing in great customer experience is the high cost. However, anecdotally, it reports that unhappy customers are actually more expensive, as they are more likely to return products or require support services.