INTRODUCTION TO CUSTOMER CARE NOTES
WHAT IS CUSTOMER CARE?
Customer care involves putting systems in place to maximize your
customers’ satisfaction with your business. It should be a prime
consideration for every business – your sales and profitability depends
on keeping your customers happy. Customer care is more directly
important in some roles than others. For receptionists, sales staff and
other employees in customer-facing roles, customer care should be a core
element of their job description and training, and a core criterion when
you’re recruiting.
But don’t neglect the importance of customer care in other areas of your
business. For instance, your warehousing and dispatch
departments may have minimal contact with your customers – but their
performance when fulfilling orders has a major impact on customers’
satisfaction with your business.
A huge range of factors can contribute to customer satisfaction, but
your customers – both consumers and other businesses – are likely to
take into account:
- how well your product or service matches customer needs
- the value for money you offer
- your efficiency and reliability in fulfilling orders
- the professionalism, friendliness and expertise of your employees
- how well you keep your customers informed
- the after-sales service you provide
Customer service, especially in the shape of a call-centre – is to
customers one of the most visible and significant aspects of
organizational performance.
To many organizations however customer service is one of the most
challenging and neglected areas of management, including those with
modern call-centres.
For customers the quality of customer service determines whether to buy,
and particularly whether to remain a customer.
Think for a moment how you yourself behave as a customer. You can
perhaps think of an occasion when poor customer service or an unhappy
exchange with a call-centre has driven you to leave a supplier, even if
the quality and value of the product or service itself is broadly
satisfactory.
The significance of customer service eludes many senior executives, let
alone the methods of establishing and managing customer service
standards and quality. Our own experiences as customers demonstrate all
the time that many large organizations fail particularly to empower
customer-facing and call-centre staff, and also fail to design policies
and systems to empower customer-facing staff and enable effective
customer service. Often these are defensive strategies because staff are
not trusted, and because competition is feared, or because simply the
policymakers and systems-designers are too far removed from customers
and their customer service
expectations.
Pricing strategy also plays a part on customer service – especially
strategies which effectively discriminate against existing customers in
favour of new customers, which in certain situations borders on the
unethical, never mind being stupid in a customer service context. This
is strange since by any reasonable measure or criteria – in any market
or industry – it costs far more to gain new customers than to retain
existing customers. Neglecting, constraining or failing to optimise
customer services capabilities is waste of great opportunities. Instead
many organizations and their leaders are habitually fixated on sales,
marketing, advertising and promotion – desperately striving to attract
new customers – while paying scant regard to the many customers that are
leaving, just for the want of some simple effective customer service and
care. We see this particularly in highly competitive and profitable sectors
such as communications and financial services, where new customers are
commonly extended better terms and attention than existing customers. No
wonder customer turnover (‘churn’) in these industries can reach levels
exceeding 25%. Leaders and spokespeople will blame the competitive
market, and the fickleness of customers, but ultimately when a customer
leaves a supplier it’s because they are unhappy about the service they
are receiving – otherwise why leave?
WHAT IS CUSTOMER CARE
Benefits of Effective Customer Service
The central aim of effective customer service and call-centres is
retaining customers, but when an organization gets this right the
acquisition of new customers – and so many other things – automatically
becomes much easier too.
Retaining customers – enabled by excellent customer service – produces
many positive benefits for the organization aside from the obvious
revenue and profit results:
- Retaining customers through effective customer service enables
easier growth, indirectly and directly, for example by sustaining
healthier volumes and margins, and by business expansion from
word-of-mouth referrals. - High levels of customer retention via effective customer service
also improves staff morale and motivation. No-one enjoys working for
an organization that feels like a sinking ship, or where stressful
arguments or pressures prevail. When customers are happy, all the
staff are happier too – and more productive. - Improved staff morale and motivation resulting from reducing
customer attrition also positively benefits staff retention and
turnover, recruitment quality and costs, stress, grievance,
discipline and counselling pressures. - Reduced customer attrition and upset naturally reduces litigation
and legal problems, from customers or fair trading laws. - Retaining customers also enables the whole organization – especially
middle-managers – to focus more on proactive opportunities (growth,
innovation, development, etc) rather than reactive fire-fighting,
crisis management, failure analysis, and the negative high pressures
to win replacement business. - Having a culture of delighting and retaining customers fuels
positive publicity and reputation in the media, and increasingly on
the web in blogs and forums, etc. The converse applies of course,
when nowadays just one disgruntled customer and a reasonable network
of web friends can easily cause a significant public relations headache.
For these and other reasons the cost difference and relative impacts on
organizations between gaining and retaining customers can be staggering.
A useful analogy is that only a fool tries to fill a bucket of water
when the bucket has lots of holes. Better to fix the holes and stop the
leaks before you try to fill the bucket. Especially consider the actual
cost of retaining customers when all that many customers require is not
to be upset.
While the trend is apparently for more people to complain (mobile phones
and the internet make it easier to do so, and people are less tolerant
than they used to be) this does not necessarily mean that customers are
more likely to migrate to competitors. In fact these days time pressures
and the ‘hassle factor’ combine to create huge inertia in people’s
decision-making, which means although they might complain more, they
have less inclination to actually change suppliers
because of the time and inconvenience of doing
so. There are arguably some exceptions in fast-changing sectors, but
largely inertia tends to make it more likely for customers to stay than go.
People behave like organizations, when the true costs of change in time
and hassle are recognized often to be greater than the savings that the
change will achieve. Consequently most people prefer not to change
suppliers – they have better things to do with their time – which means
that retaining customers should actually be easy – if only organizations
would attend to the basic customer service principles and keep customers
happy. In short, customers largely don’t usually leave unless they are
upset enough to do so.
Contrast the cost of achieving happy customers – virtually zero aside
from normal customer service and operating overheads required to run a
business – with the costs of marketing, advertising, selling, sales
training, sales management, credit-control and account set-up, that
necessarily arise in the acquisition of new customers. Consider also
that the main factor in keeping a customer – even if the situation
appears irretrievable – often comes down to a simple apology or update –
just by keeping someone informed and avoiding upset – and compare this
with the huge costs of acquiring a new customer. It is then easy to see
that the costs of gaining a customer can be five, ten, a hundred or a
thousand times greater than retaining a customer.
And yet from the customers’ view many organizations seem unaware or
dismissive of the need to prioritize great customer service above many
other perhaps more exciting or fashionable initiatives – typically
related to sales, marketing, advertising, technology, the web, etc.
These high-profile customer acquisition activities, plus systems,
policies, procedures, training, etc., all play a major role in running a
high-quality organization, but the glue which holds it all together for
the customer – and often the only thing that really matters to the
customer, is the quality of customer service that the customer feels and
experiences.
Within customer service there are many elements which must be organised
to make effective customer service happen properly – pricing strategy is
important of course – but the crucial constant factor is the human
element – how people are treated and communicated with – because simply,
customers are people, and people tend to behave like people and respond
to people – they
do not behave like computers, and they do not respond like machines.
Policies, systems, technology all enable customer service, but none of
these actually determines effective customer service. Only people – your
employees – can do this,
particularly when serious problems arise which by their nature must be
escalated to a ‘real person’.
People – your employees – also (if encouraged and enabled) perform
another critical customer service function – that of giving feedback and
suggestions to improve customer service systems, policies, processes,
technology, etc. Often policies and technology are dreamt up by managers
or consultants working away from the actual day-to-day customer-facing
activity. Feedback and recommendations from customer service staff – and
customers too – are vital in refining and improving the systems and
policies within which the function is operating. So again, people – your
employees – are the most crucial in shaping effective customer services
capabilities.
Ignorance and avoidance of these factors is a problem, but also a big
opportunity. Where customer service is neglected and ignored the
function is powerful lever waiting to be pulled.
Improving customer service – especially empowering and listening to
customer service staff – offers many organizations a bigger return on
investment than any other initiative. Customer service is generally the
critical factor in determining whether a customer buys and is
retained, which is ultimately what the organization exists to do – to
serve and retain customers.
Understand Your Customers
In business-to-business trading, providing a high level of customer care
often requires you to find out what your customers want. Once you have
identified your most valuable customers or best potential customers, you
can target your highest levels of customer care towards them. Another
approach, particularly in the consumer market, is the obligation to
treat all consumers to
the highest standard.
Collect Information About Your Customers
Information about your customers and what they want is available from
many sources, including:
- their order history
- records of their contacts with your business – phone calls, meetings
and so on - direct feedback – if you ask them, customers will usually tell you
what they want - changes in individual customers’ order patterns
- changes in the overall success of specific products or services
- feedback about your existing range – what it does and doesn’t do
- enquiries about possible new products
or services - feedback from your customers about things they buy from other businesses
- changes in the goods and services your competitors are selling
- feedback and referrals from other, non-competitive suppliers
