There are many different opinions on the value of customer service, such as that it is a cost to minimize, a competitive advantage to maximize, and all points between. Companies approach customer service in very different ways. What’s true and right for your organization?
- Like many leaders, you probably spend a great deal of time trying to figure out how well you're serving your customers. You may be using customer satisfaction surveys or net promoter scores or maybe looking at customer experience or customer loyalty. Or maybe even mapping out customer journeys to name a few. All of these are attempts to understand what customers are thinking and doing. And though they're beneficial, none really tell you about the value of customer service has on your organization. Understanding the value of customer service, being able to quantify that value, will position you to showcase it's return on investment, ROI to your organization. Now what is ROI? Defined simply, it's an assessment of what's spent compared to what's gained. Identifying the value created by good service and the cost of bad service will enable you to determine the ROI of your customer service investments. There are many organizations that view customer service as unnecessary expense and invest as little as possible in supporting customers. Some organizations are so focused on the measurement score that they game the system. That's a foul. You've got to encourage customers to tell you the truth, not some inflated version of it. Organizations that are focused on doing the right things are enjoying some hefty benefits. Market research firm, Dimensional Research, found that 87% of customers reported good service, changed their buying behavior. A customer who receives good service is more likely to buy more which increases customer lifetime value or CLV. They also bring referred customers to your organization and they promote your brand which studies show can generate more than twice the sales of paid advertising. In addition to increased revenue, there's value for your internal organization. A benefit that matters whether you are a for-profit, nonprofit, or government organization. For example, effective service leads to operational improvements. Customer feedback and insights assist in the innovation of products and services. And there's a benefit many organizations forget to account for. Good service improves employee engagement. The cost of bad service is staggering and really should be included in your analysis. Dimensional Research found that customers experiencing bad service were 97% likely to change their buying habits if given a choice. And the majority said they would tell someone else. Other costs include customer defections, recurrent service problems, damage to your brand, compliance, safety, and legal issues, and the negative impact of employee dissatisfaction. And all the costs associated with turnover. Identifying all the benefits of good service and the costs of bad service empowers you to truly understand the return on your customer service investments.
- Defining value and ROI in customer service
- Characteristics of an effective customer service approach
- Customer lifetime value and loyalty
- Brand promotion and referrals
- The value of operational improvements
- Product and service innovation
- Engaging your employees
- Compliance, safety, and legal costs
- Key measures and calculations
- Principles of effective budgeting
- Customer service leaders and company leaders