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History of Customer Service: How Did It All Begin?

2023-06-01

 

Trade has a long history. It was as early as 3000 BC when the first long-distance trade occurred. With the rise of trade, the concept of a customer and the practice of serving one emerged. However, the history of customer service wasn’t officially going to mark its beginning until much later.

 

Interestingly, the first-ever customer support teams were created in the 1760s after the Industrial Revolution. This initiated customer service as we know it today. It’s quite interesting to go back in history to see how this industry has evolved over time.

 

So here’s a recap of the customer service history and where it leaves us today.

 

Who Invented Customer Service?

 

To begin, let’s define customer service. Here’s how Investopedia describes it:

“Customer service is the direct one-on-one interaction between a consumer making a purchase and a representative of the company that is selling it.”

 

There are no records of who coined the term “customer service,” which shows us that it might have developed naturally with the expansion of trade. The term is often linked to the invention of the telephone by Alexander Graham Bell in 1876, but the history of customer service began long before that.

 

 

Stage 1: Face-To-Face Service

 

In the first stage of customer service history, all interactions between merchants and consumers were in person due to the absence of technology. Letters were another way for customers to voice their concerns, but they took longer to arrive and get addressed.

 

1760-1820: The First Industrial Revolution started an economic transformation across Europe and America. New factories were created, and manufacturing accelerated at a fast pace. The first-ever customer service teams were created to meet the demands of consumers. The main and fastest means of customer service was face-to-face communication.


1776: Adam Smith published the Wealth of Nations that described the industrialized capitalist system and laid the fundamentals of competition in the marketplace.

 

 

1868: Watkins Liniment, a door-to-door salesman, was first to offer a money-back guarantee. He offered clients a full refund on his home-cooked remedies if they weren’t satisfied with the product.

 

 

Stage 2: The Invention of the Telephone

 

This era in the history of customer service stands out with a massive jump in the volume and efficiency of customer support. The invention and gradual adoption of the telephone changed everything.

 

1876: Alexander Graham Bell, who invented the telephone in the Industrial Revolution, single-handedly changed the entire course of communication and customer service. In just a few years, telephone calls became the primary means of communicating with the customer.


1894: With the creation of the telephone switchboard, telephone communication became more accessible to businesses and customers. Buyers no longer had to visit stores or mail letters – the telephone switchboard made it easier to connect callers and recipients.

 

1960s: As calls became more common, the very first call centers were created. Companies started hiring agents to answer phone calls and resolve customer queries.

 

1967: AT&T launched the 1-800 Number that allowed calls between numbers without an intermediary operator. Not only was this faster and more straightforward but also cost-effective.

 

1970s: The Interactive Voice Response (IVR) technology came into the scene, allowing callers to give simple one-word answers (such as “yes” or “no”) to direct the call to the right representative.


1989: Call center outsourcing became popular, as companies sought a cheaper alternative to maintaining in-house call agent teams.

 

 

Stage 3: Here Comes the Internet

 

The internet revolutionized every aspect of business and life in general, and customer care was not an exception. This next stage of customer service history was kindled with the invention of the world wide web and ended with the emergence of social media networks.


1990s: Even though the internet was created in the 80s, it only became popular in the following decade. Brands started developing their online presence to stay connected with their customers and reach new ones.

 

1992: President George H. W. Bush established Customer Service Week – a five-day holiday that celebrates the importance of customer service.

 

Mid-1990s: The rise of the internet and the emergence of online marketplaces like Amazon revolutionized commerce. E-commerce (electronic commerce) picked up its pace. New channels were introduced to reach clients: email and one-on-one live chat. Customers were now able to enjoy fast, effective interactions with less effort than at any other point in history.


2000s: The advancement of technology led to the creation of customer support software, and so the CRM history began. Companies now had specialized tools to track, collect, and systemize customer data. There is a lot of debate around who invented CRM, but ACT! is largely considered to be the first one in the market.

 

 

Stage 4: Social Media Support Surges

 

Although the first social media platform, Six Degrees, was created in 1997, social media surged in popularity in the early 2000s. As more and more user profiles populated social networks, businesses started using the latter to stay connected to customers. This brings us to modern-day social media support.

 

2003: LinkedIn became officially available to the public a year after being founded in Reid Hoffman's living room.

 

2004: MySpace was the first social media network to achieve a million monthly active users.


2006: Twitter was launched, and one of the co-founders, Jack Dorsey, published the very first tweet. Fast forward to today, and the tweet sells for $2.9m as a non-fungible token (NFT).

Mid-2000s: Platforms such as Facebook and Twitter took off, and businesses began actively engaging with customers on social media. It gave clients a way to publicly address their issues with brands, urging companies to pay close attention to their online reputation.


2011: Facebook released the Messenger app for iOS and Android, thus popularizing messenger apps. As messengers were swift and direct, they became practical tools for businesses to establish one-on-one communication with customers.

 

 

What’s Next: Welcome AI Customer Service

 

Looking back at the history of customer service, we see how communication channels evolved and multiplied. If back in the 19th century, clients had two or three options to contact a business, now they have at least a dozen. Various social media platforms, email, mobile apps, live chat, phone calls – the choice is broad.

 

When there are so many touchpoints with a customer, it becomes a challenge to keep up with all of them. Support agents get overloaded, and clients stay waiting, which is a big customer service mistake that can harm businesses.

 

These issues, coupled with the rapid advancement of artificial intelligence, started a new era in the customer service industry. AI customer service is still a relatively new phenomenon, but it’s hard to miss how AI is already shaping the future.

 

You’ll often see chatbots on business websites that answer questions and provide users with simple guidance. By automating some aspects of customer service, businesses save resources and free up their human agents for other tasks.


The next step of this technology is incorporating AI to create virtual assistants that can handle much more complex tasks. Besides answering customer queries, AI assistants also gather and analyze the data to give businesses deeper insights into their audience.

 

Machine learning and natural language processing keep advancing, so expect machines to get more precise in deciphering the human language. This means that they’ll be able to understand clients’ intent and provide better, more personalized support.

 

As a final thought, support channels keep changing, but the importance of customer service stays unshaken. Now is the time to embrace the changes in the customer service industry and ensure your business is well-equipped to meet customers’ demands.