Customer Service In A Downturn – Invest, Divest?

I think that most if not all of us engaged in aspects of customer service recognise its importance in shaping and differentiating the customer experience.  Recognising the value of this in times of economic prosperity is natural but understanding the potential value in times of an economic downturn is perhaps much harder.  In short, its value undoubtedly far higher.

In a previous blog The Implications of Reacting vs. Responding In A Customer Service Environment I touched on the differentiated costs of retention vs. acquisition – dependant on industry the cost of acquisition seems to outweigh the cost of retention anywhere between a factor of 4 – 14 which in an economy such as the current one should clearly help us identify where our real focus needs to be.

Research from SPSS (the analytics company) back in September 2008 suggested that retention was the number 1 issue keeping executives awake at night with 34% indicating it was at the top of their priority list.

Just 8% ranked acquisition at the top of their priority list. In 2007 acquisition was ranked number 1 by a whopping 40% of respondents. 2009’s data for comparison showed
a further swing towards retention and 2010 once published is unlikely to have changed dramatically.

So whilst in reality we should not dispense with acquisition completely, it should be treated as a secondary area of focus. So what role does Customer Service play in this regard?

Fundamentally it is about driving the loyalty of your customers in the right direction such that they do not feel the need or have the urge to look at the competition in the first place, acting as your greatest advocates by recommending your products and services to others. Thus each interaction with Customer Service is an opportunity build that brand loyalty and the Customer Service Representative (CSRs) need to have an acute appreciation of their role.
In addition, organisations that simply view their Customer Service operations as a cost centre and not as an enabler of sustainable long term growth are significantly missing the point. My real concern here is that it is too easy for a business to scale back on Customer Service in a downturn when the fact is, it should be seen as an opportunity for those that understand the real value of the customer experience.

I have previously talked about the fact that CSRs need to put themselves in the shoes of their customers and this equally applies to the organisation generically. In a downturn customers was to know that they can rely on a service provider to deliver; they want to be able to place their trust in an organisation. The company needs to be empathetic to that notion, in effect making it a foundation block to their customer experience strategy, tailoring the interactions and underlying processes accordingly.

Areas on which to focus:

  • Be clear on what’s important to your customers in this industry specifically. Don’t assume previous learning and experience is industry transferable.
  • Establish Best Practice processes delivering service excellence. These will undoubtedly be “joined up” and cohesive
  • Performance Management e.g. deliver on your promises
  • “Create” engaging and evangelising Customer Service Reps
  • Have a clear understanding of your customer segmentation. Do you really want to retain all your existing customers?
  • Look at expansion of customer loyalty through non core offerings i.e. it’s not just about the product
  • Be prepared and able to modify your approach.

In summary, any company that thinks that now is the time to be scaling back on Customer Service is potentially reducing its ability to deliver to the one entity that is best placed to ensure its long term survival – its customers. Reducing the rate of success in this regard is truly undermining the customer experience at the exactly the time it is most likely to have the largest impact on customer loyalty.  Consider instead the opportunistic benefits of investing in a downturn proofed customer experience.

Nigel Beane is the owner of Colebrook Consulting,  Enabling  Your Competitive Advantage.
www.colebrook-consulting.com

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