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Building a service culture is a challenge for many enterprises—but failing to do so can mean customer churn, lost revenue, and a crumbling reputation.
Growth is the number one priority for CEOs in 2016, and facilitating a great customer experience is a major part of it.
"The big rise of of explicit mentions of the word 'customer' was very noticeable in the results of this year's survey," said Mark Raskino, vice president and Gartner Fellow. "CEOs seem to be concerned about improving customer service, relationship and satisfaction levels."
But developing a service culture is anything but easy in an era of automated telephone attendants, long wait lines on phone calls while companies try to push customers to the internet, service agents who can't speak English fluently, merchandise return processes that fall apart, and the inability to get knowledgeable product specialists to explain a function of a product when the product documentation is poor or missing.
The inverse is listening to your customers, facilitating their needs, and making them feel important. How do you do this?
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Nordstrom's does it by price-matching any retailer in the country on a given item if the item ever has a price drop—and it pays for return shipping and offers free shipping on every order. It also hires knowledgeable customer service agents.
Chase Bank and American Express use US-based call center agents who are highly knowledgeable about their products and who answer the phone as soon as it is humanly possible.
Amazon's web-based customer service offers seamless merchandise returns and extremely fast response times at its call centers with thoughtful follow-ups.
In an effort to improve customer service and the customer experience, I remember how as a vice president in a financial institution, I worked with my C-level counterparts to see how we could improve our customer-facing skills on the front line teller stations in our branches. One idea was to depart from hiring "financial types" to do the tellering work and to train new hires coming from the retail industry in financial services. We felt that by hiring people from retail, we would get people skilled in treating customers well, which would help our company—and it did.
But we also discovered that there was more to developing a service culture than just getting the right people to work with the customers. You must also have a system infrastructure that can support service.
For merchandisers, this has meant deploying new systems in warehouses and distribution centers to handle the returns process—and to effectively integrate that process with the sales and manufacturing processes. It has been a challenge for many.
In industries that have a poor reputation for customer service, such as healthcare and telecommunications, the issue also comes down to an organization's systems infrastructure and how tightly integrated it is.
Telecom has struggled for years to find systems that give customer service agents a 360-degree view of a customer, from the services that the customer is using to end-to-end visibility of the sales, delivery, and billing processes. Many of these companies, frustrated with endless attempts to integrate systems, accept as a fact of life that there will always be significant customer churn. As a result, little effort has gone into customer satisfaction and retention strategies.
Healthcare has likewise been hampered by systems that don't talk to each other, despite many years of the electronic medical record (EMR), which was supposed to be a 360-degree log of everything that has occurred with a given patient, no matter who within the system was treating him or her.
To tackle these persistent obstacles, CEOs who care about service need a way to quantify the potential losses in revenue and goodwill from poor service to their boards to garner support for what continues to be viewed as back-office cost center.
How do you do this?
CTMA, a customer services research and consultancy firm, acknowledged that it is hard for companies to quantify the value of customer satisfaction and loyalty. But it maintains that "dissatisfaction amongst customers and employees has a significant and measurable impact on financial outcomes for the organisations. For businesses it has a direct impact on growth and places revenue and profit at risk. For public sector organisations, poor service can significantly increase costs and sometimes lead to other negative social and community outcomes."
CTMA surveys have demonstrated that when customer satisfaction drops, customer loyalty also drops by 43%. Survey results also revealed that customers who have a bad experience with a company tell between five and 10 other people about their experience, spreading the word.
All these factors lead to reduced revenues and heightened customer churn. They stymie corporate growth. And they are exactly what CEOs should be presenting to their boards in their company growth strategies so they can gain support for important investments in customer service systems and initiatives that will open new markets while securing ongoing growth in existing markets.