Which of the following is a benefit of effective customer service?

Effective customer service contributes significantly to improved customer retention. When customers feel valued and satisfied with their interactions, they are more likely to remain loyal to the brand and continue purchasing products or services. Retaining existing customers is often more cost-effective than acquiring new ones, as the existing customers are already familiar with the offerings and typically require less marketing effort.

In addition to retaining customers, effective customer service fosters positive relationships, which can lead to word-of-mouth referrals and an enhanced reputation. This creates a cycle where satisfied customers not only return but also recommend the business to others, further expanding its customer base without significant additional costs.

While the other options relate to various aspects of business operations, they do not present the advantages associated with effective customer service. Increased advertising costs and limited customer feedback do not contribute to retention, and higher employee turnover can detrimentally impact customer interactions and service quality. Thus, the emphasis on improved customer retention clearly highlights the essential role that effective customer service plays in sustaining business growth and stability.