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Do you remember the movie, “E.T.”? This little alien was clearly more advanced than those of us on Earth, yet he became ill in our atmosphere. Many scientists rushed in, running tests and conducting analyses, but they just couldn’t save E.T. A similar scenario is happening to our customers in the atmosphere of customer service cost reductions. As we see the dwindling health of our customer base, we come rushing in to run many tests and analyses but find it difficult to keep the patient going.
Seth Godin discussed bad customer service recently when he mused that the reason we see bad service is that most of us have experience with how easy it is to give good customer service. I also think that too many cost reductions in the realm of customer service have wreaked havoc with great service.
Cost reductions such as cutting headcount, outsourcing, pay-for-performance, and call-reduction strategies in the customer service center are a short-term approach to improving operations. Such an internally-focused approach can lead to higher costs and poor operational performance as customers are alienated. It can also lead to employee churn, which incurs additional costs. A customer-focused approach is almost impossible to maintain in that environment.
Customer focus and cost reduction co-exist and thrive when the final objective is not solely about cost. If the desired end-goal is about customers, a reduction in cost usually follows. Organizations with a customer focus see cost improvements resulting from more complete customer information, improved decision making, improved customer service effectiveness, as well as from customer service reps empowered to satisfy the customer. These organizations have one thing in common: they are proactive about their customers. Managing the customer experience, while improving service processes and capabilities, can bring balance between customer focus and cost reduction.
Customer Service New Year’s Resolutions
As you head into the New Year (in just a few days!), you might want to answer these questions for yourself and for your organization.
Do we have a customer strategy for the customer service organization?
While most organizations have a product or marketing strategy, many do not have a customer strategy. A customer strategy addresses who our customers are, how we can differentiate them from one another both in value and needs, and how we will treat them. This strategy should be built around the interactions and relationship that the customer has with your organization. The right customer strategy in your service organization lays the groundwork for the rest of the journey.
Are we proactively managing the customer experience?
The customer experience takes place through all touch points with a customer, including agents, web sites, newsletters, and automated systems. We can think about each interaction as an opportunity to either increase or decrease a customer’s value to us. Example: I recently moved to a new house and needed to contact multiple utility companies. In the first instance, I called the customer service line and waited on hold for nearly 30 minutes in order to tell an agent I would not be able to make the installation appointment that was previously scheduled. At the end of that half-hour period, I was not having a very good experience! The next day, the second instance but with a different utility, I called to cancel the service at our old residence. Wait times again were high, but in this case I was given the choice of receiving a call-back from an agent. An agent called me 25 minutes later, exactly as they had predicted, and a recording of my own voice validated the call. My elapsed time to deal with that call was 3 minutes as opposed to 30 minutes the day before. In both cases, the contact center was scheduling agents to take calls as they come in; however, in the second case my experience was optimized to make the interaction as convenient for me as possible. Which one built a stronger customer relationship and increased customer value?
Has your organization formally linked rewards with customer-centric behavior?
A hard look at customer-based metrics is necessary in order to retain a balance between customer focus and cost reduction, especially in areas such as the contact center. Activity in the contact center should be reviewed based on measures of both efficiency such as call handle time, and measures of effectiveness such as first contact resolution, the number of repeat contacts, and the share of customer data. These measures have the greatest impact when they are linked to performance improvement opportunities including coaching plans and training as well as root cause analysis activities. The wrong measures can cause behaviors which reduce cost but also reduce customer value. For example, if an agent is measured solely on average talk time but not on how well the customer’s concern is resolved, that agent won’t care that the customer has to contact the organization again. In addition, these customer-based measures need to roll up the management chain so the success of all members of the contact center organization is tied closely to customer success.
Living Together in Harmony
If you have honestly worked through the above questions, you now have the makings of a plan for customer focus which can reduce costs. What does “customer-focused customer service” really mean? Does it mean, “Customers are important; pay attention to them!”? No. It means we need to be proactive about maximizing the value of each customer interaction, both from the organization’s perspective as well as from customer. It is then that we can best reap the benefits of being customer focused while reducing costs.
(excerpted from article by Becky Carroll published in the SSPA News, August 2006)
Customers Rock! 