MASTERCLASS:Research shows that most customers are lost, not because of price, but because of poor service – and that's something all companies can to change, writes OLIVE KEOGH
CUSTOMER SERVICE is something companies talk a lot about. However, there is often a big gap between talk and action. Recession or no recession, consumers are still being frustrated by companies not bothering to call them back and delivering a less than satisfactory service experience.
In the current difficult trading environment, the gap in standards of customer service seems to have widened. On one side are those who believe customer service is more important than ever. On the other are those who do not see the point of wasting scarce resources on service when cash-strapped consumers only care about price.
“Even in a recession people want to be treated properly. If they have a bad experience they won’t go back. If they are younger customers they will probably be on Twitter telling everyone else about it,” says Robert McKernan of McKernan Training. “The research into why customers are lost is very interesting. Only 9 per cent of defections are actually due to price. By far the biggest reason (over 60 per cent) is the attitude of staff. Consumers do not like being treated with indifference or rudeness.”
In very broad terms, customer service operates at two levels. The first is a straightforward interaction via the telephone, email or across a counter where a customer asks for information or presents a problem that needs quick resolution. The second is more strategic and involves the development of a long-term customer relationship to maximise retention and earning potential. Level two is usually referred to as customer relationship management (CRM). Not every business needs CRM but all need to listen to and value their customers.
With prices cut to the bone, McKernan says service is now a key differentiator in the marketplace. “There are still gems of companies where the service is exceptional,” he says. “But we’ve all had the experience of encountering staff who are clearly so bored by having so little to do that they can’t even summon up the energy to be interested in a sale. Many companies are under intense pressure on price especially in the FMCG sector. Before the recession around 12 per cent of their product was typically on promotion. Now it’s up to 80 per cent. They have to find other ways to get an edge.”
Dealing with the public can be difficult at the best of times especially if one subscribes to the view of Ryanair boss, Michael O’Leary, that “the customer is nearly always wrong”. Mary Harrison, managing director of Optimum which provides customer service and CRM training to the corporate sector, says the recession has made customer service even more of a challenge.
“In particular we have seen a rise in the demand for training for those in customer-facing roles,” she says. “There is a lot of conflict out there and people are very stressed. As a result they tend to become more fraught when faced with a problem and customer service staff need to know how to handle increased levels of frustration.”
With people constantly watching their budgets Harrison advises big and small enterprises alike to “mind” their customers. “It’s always worth remembering that it costs a lot more to win a new customer than to retain an old one,” she says.
What seems clear is that customer service is becoming less an option and more a “must-have” with the introduction of tools such as service level agreements that spell out to suppliers how high they have to jump to keep a company’s business. In the motor trade, for example, companies such as Mercedes-Benz have very clear customer service objectives that must be met. Mercedes operates a system of Customer Service Indicators and its dealers are scored on how they perform against the criteria.
Businesses that do not meet customers’ expectations will struggle at the best of times but even more so in a recession. “If you want to retain customers it’s crucial to get inside their heads whether this is in retail, manufacturing, service, distribution or sales. It is not rocket science, you just ask them,” McKernan says. “If someone is really interested in getting to the bottom of what will keep their customers coming back, they should pick up the phone. Take your last six customers, call them and ask what you could have done better. Initially they will probably say everything was fine. But push a bit and things they don’t like will start coming to the surface.”
McKernan rejects the idea that all companies need to make a big investment in CRM systems. “CRM came from the IT sector where projects were often very big and involved a number of people over a long time. Managing relationships in this context was complex,” he says. “But this model has been applied to sectors where it doesn’t work because it’s too involved. You have people with advanced systems using a fraction of the functionality. CRM is right for some businesses but you don’t need complicated CRM to manage simple transactions.”
Customer service checklist
DO
Make sure all frontline staff know whats going on and, where appropriate, are familiar with promotions or changes in company policy
Answer queries promptly and courteously
Have a process in place to handle the escalation of a problem
Make the service interaction as simple as possible (a good example is Marks Spencer's no-quibble returns process)
Look at processes and systems that could be changed to improve customer service
Listen to customer service staff
For web-based businesses ensure your site has troubleshooting tips and friendly support staff
DO NOT
Promise what you cant deliver
Delay in responding to queries especially on email as people have come to expect fast answers from electronic media
Tell a customer it will take a day to sort out a problem when you know it will take longer
Treat customers as transactions – the personal touch still matters
CASE STUDY BLUEFACE
Getting up-close and personal with customers is crucial for all employees at this Irish-owned telco and making sure the lines of communication are always open is vital
'BEING CUSTOMER- centric is a mindset and Blueface designs its products not just around technology, but also around the customer experience. This mindset and ethos drives all aspects of our business and ensures the customer is central to the decisions we make," says Catrina Sheridan, chief operating officer of Irish internet-based telecommunications company, Blueface.
Sheridan says managing the customer experience should involve everyone in an organisation and that it should be an ongoing and evolving process. For example if a Blueface staff member notices a problem or picks up on something of interest from talking to a customer, this will be passed on to everyone else in the organisation. Knowledge is routinely shared and adjustments made to products and services as a result.
"All employees spend time at the cold face with the customer," Sheridan says. "It's important that there is a good span of control so employees are empowered to help the customer on a range of issues. This enables better diagnosis of the problem leading to better first-time call resolution which is critical to the bottom-line."
Unlike some companies that seem to want to keep their customers at arm's length, Blueface likes to get up-close and personal. Customers can contact the company via instant messaging, on its forum via email or on social networks. "We think it's important to have these choices for the customer and also to have up-to-date information available to hand to resolve the customer's query. Keeping the customer informed and managing expectations is very important also," Sheridan says.
Blueface is an Irish owned company employing 20 people. Its customers are both SMEs and residential consumers. Recognising that telecomms' customers can be fickle at the best of times and even more so in a recession, the company has endeavoured to woo customers with "targeted solutions" that meet specific needs.
"We were the first operator to introduce unlimited fixed-priced bundles, first with real time online billing, first with fixed/mobile integration, first with voicemail to email – many features which remain unique within the industry," Sheridan says.
Having enticed customers with its product offering, Sheridan says the aim is to keep them. To this end Blueface believes in empowering customers to make the choices that suit them through its proprietary customer portal.
While Blueface supports its customer interactions with sophisticated metrics and analysis Sheridan is not prepared to rely on cold data alone. "Sensing the customer experience is really important also," she says.
"Managers in organisation need to spend time on the phone themselves and spend time talking to employees around customer issues."
