Replacing lost customers is very expensive. A good customer service team can do a lot to prevent customers moving elsewhere, but a bad team can give customers cause to find another supplier. Also, there are fantastic opportunities for your customer service people to leverage more sales through cross-sell and up-sell, all at a very low cost to you.
Most service organisations don't satisfy customers on first contact more than 80% of the time at best. That means you are spending 20% or more of your service budget on inefficiency. It doesn't have to be that way. Given the right training, tools, systems and processes you can reduce these "repeat contacts", lower costs and increase customer satisfaction.
So, good customer service can help you to increase sales, reduce costs and so increase your profitability Most customers leave because they think you don't really care about them after the sale. Having great customer services gives you dozens, hundreds or thousands of opportunities every day to show how much you care, and to increase your profits and reputation. Good customer service is good business
Customer Service As A Profit Generator
You can turn your customer service operation into a profit generator, not simply a cost centre, but how? The solution isn't simple, as your customer service operation doesn't work in isolation from the rest of your organisation.
You need to examine the factors "upstream" that cause customers to need your support and therefore add costs to your business.
You need to maximise the efficiency and effectiveness of the customer services operation and so reduce the cost of service delivery.
You need to analyse and improve the customer experience you deliver and so improve customer retention.
You need to achieve high levels of staff satisfaction so that they deliver optimal service quality and you minimise staff attrition costs.
You need to find ways of leveraging extra sales, at low cost, from every contact between customers and your customer service staff.
The Benefits Of This Are
Fewer unnecessary customer queries
More efficient and effective customer services
Improved customer satisfaction and retention
Better trained and motivated customer service staff
Improved staff retention
Significant up-sell and cross sell opportunities
All of these factors lead to improvements in your profitability through reduced cost of service, reduced cost of sale and increased sales-through-service.
How to Go About Making Your Service Operation Into A Profit Generator
There are nine key elements to examine:
Strategic- Service Strategy, Organisation Structure & Culture, Service Channels
Operational- Systems, Processes, Performance Management Systems
HR Related- Recruitment, Training and Coaching, Staff Satisfaction & Retention
When we get these right the results are:
Improved customer satisfaction and therefore higher customer retention
Lower cost of service and higher staff retention
More sales at lower cost
Higher profitability
Your Checklist
Use this 40-point checklist as a guide towards how to leverage profit through your customer service operation:
Service Strategy
We have a service strategy that works in harmony with our overall organisational strategy
We have a service vision and mission that is clearly articulated and owned by the customer service operation and understood by the whole organisation
We have programmes and projects in place that will achieve the service mission and vision
Organisation Structure and Culture
We have a customer service organisational structure that fully supports the mission, vision and strategy
We have a no-blame culture of continuous service improvement, learning from mistakes and acting upon the learning and customer feedback
Service Channels
We provide a variety of channels for our customers to request and receive service
We have fully aligned our customer service structure to the servicing of these channels
These channels and the way they are designed fully reflect our customer demographics
We make extensive use of user-friendly self-service option
Systems
Our front office and back office customer service systems are reliable, hold fully accurate information and are easy for customer service staff to use.
The quality of our systems significantly enhances the customer experience
The systems used by our front line staff are designed to maximise first contact resolution
Our front line staff can resolve the vast majority of customer queries without having to get support from other groups or departments
Processes
We have designed the processes used by our staff to achieve an excellent customer experience and internal efficiency
Our processes act in support of first contact resolution and ease of doing business with us, and we empower our front line staff to make decisions in support of customer satisfaction
We regularly improve our processes based on customer and staff feedback
We regularly measure customer satisfaction with our products, services and customer support and use this information to trigger timely improvements across the business
We have a clear and simple to use complaints handling process and use complaints as opportunities to improve customer experience in a timely manner
Performance Management System
We measure our customer service performance with a set of relevant key performance indicators (KPI)
Our KPI are designed to highlight areas where our performance could negatively affect customer experience
Achieving our KPI will not drive internal efficiencies at the expense of customer experience
In times of heavy workload, we never encourage our front line staff to cut corners when dealing with customers
We have an active and effective system to dynamically match the number of available front line staff to customer demand
We regularly review our KPI performance to drive training and coaching initiatives for our staff
Our individual staff performance measures actively drive behaviours that enhance customer experience
The performance measurement system for our individual customer service staff uses a balanced performance scorecard methodology to drive customer satisfaction and internal efficiency
The performance measurement system for our individual customer service staff drives their reward and recognition system
Performance measures of staff in other departments are set in a way to support customer experience and to avoid inter-departmental conflicts of interest.
Recruitment Processes
We recruit and select our customer service staff using a blend of competency-based assessment and traditional interviewing techniques.
In our recruitment processes, we value behaviours and skills above knowledge, as we can more easily remedy knowledge shortfalls
The competencies used in our balanced performance scorecard system align fully with those sought during recruitment
Training and Coaching
Our customer service team leaders and managers focus primarily on coaching and supporting their staff as opposed to command and control activities
We have rigorous processes to ensure that front line staff are fully trained before interacting with our customers
We always ensure that our staff receive on-going training to keep abreast of product, service and process changes, and where possible cross-train them to give them more skills and to give the operation more robustness
We maintain an up to date and relevant resource library and encourage our staff to use it
We view the loss of well-trained and motivated staff members as less of a concern than retaining poorly trained and de-motivated ones
Staff Satisfaction and Retention
We regularly measure staff satisfaction and use this information to improve our working methods
We work hard every day to ensure that our people are motivated and enjoy their work
We encourage our people to socialise with each other as this fosters teamwork and mutual understanding
We recognise that our physical working environment is an important factor in maintaining levels of motivation, satisfaction and retention, and we strive to create the best environment that we can
So, if you can put a tick alongside vast majority of these statements, then you are on track to deliver Profit-Through-Service.
If not, get in touch for a no-commitment discussion on how we can help you.
Norman Huckerby, the founder of Profit-Through-Service, is a customer service consultant, interim manager and trainer.
He has been working in the customer service sector for over 25 years, and since 1997 has delivered customer service consultancy and interim management to a wide range of clients in the UK and Europe.
You can contact Norman via http://profit-through-service.com
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