The question is this, “Can a company be too friendly?“

Mark MacLeod puts on his CFO-hat when asking the question, because he’s trying to figure out if there’s an optimal mix between great service and keeping costs down (by not having to hire tons of people to provide the support.)

Mike McDerment throws his hat in the ring as the well-known CEO of Freshbooks, stating simply, “Service is an opportunity, not a cost centre.“

I’ve written about customer service a few times myself. I’ve said in the past that I’m “obsessed with it.”

The Twitter discussion that ensued was also interesting. It’s too bad it’s not easy to capture a simple discussion (unless hashtags are used, I guess…) But Hugh McGuire said, “key metric is referrals & new business gen. aka consolidated cost of new customer acquisition + service @freshbooks vs other cos..”

Jeff Tala disagreed with Hugh, saying, “New biz, referral biz, as a result of customer service (like w/@freshbooks) is gravy. Keeping existing biz is job one.”

And I completely agree.

Client retention is the #1 metric and measurement of ROI when it comes to great customer service. That’s especially true for SaaS businesses that rely on monthly or yearly subscription revenue. But in almost any business, repeat customers are critical; and one way to improve the rate of repeat business is through great customer service.

You can easily measure the lifetime value of a customer. After a few years in business you can start to see what your churn looks like, and figure out how to improve it. I can almost guarantee that improving your level of customer support will reduce churn. It will also increase testimonials, referrals, up-sells and other wonderful things — but client retention remains the #1 value of great customer service.

At the end of the day it’s cheaper to retain an existing customer than acquire a new one. Retention is key. Customer service ROI is obvious.