SOCAP International

The Strategic Profitablilty of Great Customer Service

Here are some best practices to help you answer the question: Cost versus ROI?

Customers are the foundation of profitability. Now they are empowered through the ever-changing landscape of technology and social media, including all major outlets such as Facebook, Twitter, YouTube, online messaging and many others. Portable technology has made social media even more accessible to customers, and they are quick to post their feelings on everything from what they think of a news item to the kind of service they got at Starbucks this morning.

In the past, conversations, particularly around outsourcing customer service, were geared toward costs and cost savings. Now, with voice of the customer a signature metric of success, it’s time for that conversation to move beyond the tactical realizations of cost savings and into the strategic value of great customer service.

Costs versus ROI

When we think about costs versus return on investment, we need to realize that cost is important, but not as important as ROI. If we spend $1,000 to improve our customer service, and get back $8,000 worth of new customer money or retain customers we might have lost, that is an excellent return on our investment, and we have made a big profit.

We have to start thinking about what really drives brands to succeed and keep succeeding. We could analyze a lot of factors, but it all comes back to one thing: excellent customer service. In this day of instant gratification, the customer expects no less. Research is showing they are less loyal to the brand itself, and more loyal when they receive excellent customer service.

Agents who feel empowered will produce at a higher level and treat your customer better.

In the Forrester Consulting study “North American 2011 Consumer Preference Report - Contact Centers,” only 85 of 1,000 consumers surveyed reported excellent customer service. (Fig.1) The complaints seemed to center mostly around long wait times, too many automated phone menus and having to repeat information to call agents. This underlines the fact that we need to implement some changes. Here are some best practices that we can focus on.

Houlne_Tim - Forrester Pie

Best Practices

1. Train and recruit the best agents. In the buying process, customers want immediate gratification. This means training great agents who are not only quick on the draw, which minimizes wait time, but who are also courteous, professional and have the customer’s needs at heart. Keep in mind that training should be frequent but fun, in a way that stimulates excitement and enthusiasm among workers.

Don’t overlook the trend of work-at-home entrepreneurs— those who work as independent contractors from home during their own hours and around their family schedules. If agents are happy and feel good about what they do, they will perform at a higher level, offer better customer service, and will tend to care more about the customer. The key is to keep good agents by offering plenty of incentives, extra money for improved performance, and other positives that will draw and keep the best agents happy and helping your company thrive—independent of where they work. So a focus on training and recruiting the best, happiest agents and independent contractors who believe in what they do is the first step in improving customer service.

2. Empower those new agents. Agents who feel empowered, independent, respected and important will produce at a higher level and treat your customer better. This leads to improved retention rates of existing customers and new customers. Empowered workers generally have the following traits: They are self-starters who believe in themselves and are able to achieve, regardless of the obstacles. They are educated and have the knowledge needed to break through new boundaries and are consistently improving their skills. They understand technology and how it works. And they are connected to a variety of social-media channels, so it’s not a difficult for them to use these channels as customer service platforms. Virtual contact center representatives who set their own hours, and manage their own time are most likely to be empowered, as they feel they are in more control of their own lives and work schedules.

According to recent research, 44 percent of consumers said their expectations are higher than a year ago.

3. Keep in mind that technology is important, but only a tool. The money is where the people are, so we need to move beyond a customer service model that includes just contact center phone service, and toward a more versatile model that includes all the platforms, tools and technology that customers are using to access our brands.

While we have to be where the customers are and where their access point is, it would be a mistake for contact centers just to focus on the technology. We need to focus on making the customer happy, because just one negative post on a major social-media outlet can be seen by millions in a matter of seconds.

Contact centers must find where their customers are and offer them service on the same platform. The customers are already there, and they are talking about your company. If you offer friendly, courteous customer service on that same channel, it’s hard for them to be negative on that same social-media outlet.

4. Remember the old adage: The customer is always right. It’s been said that a happy customer goes and tells their friends about their experience, but a mad or upset customer goes and tells it loudly and to anyone who will listen. That means the customer who is unhappy will be more vocal and expressive about their experience than the happy customer. They will also be more likely to post it on social-media channels with a broader reach, giving us reason enough to invest our money and time into focusing on improved customer service.

According to recent research, 44 percent of consumers said their expectations are higher than a year ago. This, along with the new empowerment of customers via social media means we cannot afford to ignore the importance of making the customer happy, regardless of what channel they came through.

The Question Answered

A recent review pointed to research that even a 5 percent increase in customer loyalty translated into a 25 percent to 85 percent increase in profits. With numbers like these, we can see the importance of not only having the right technology tools that will complement the tools the customer is using, but also increasing the excellent customer service customers are getting.

So, in answer to the question of cost versus ROI, we can see that ROI is much more important in the long run. This return will be high if we are loyal to our customers. They will keep coming back for more, increase our sales and help our brand. With time, we may even see a return to brand loyalty among customers because we have gone out of our way to please them. Remember, it all starts with the agent who first speaks with your customer on the phone. Then, if that agent wants to solve the customer’s problems, the battle is half over.

Houlne_Tim---HEADSHOTTim Houlne, chief executive officer of Working Solutions, has more than 20 years’ experience in call center services, technical support, and warranty management industries. He holds an MBA from the University of Texas at Dallas and a BSBA in management, as well as an ASBA in banking and finance from Missouri Western State University. Houlne also has International Residency from Ecole School of Management and Grenoble Graduate School of Business.