Executive Lounge

Posted on April 25, 2013
The New Dynamics of Customer Service
The New Dynamics of Customer Service Jo Causon, CEO of the UK Institute of Customer Service

The past 10 years have seen a fundamental shake-up in the provision of customer service, and this pace of change is gaining in momentum every day. The balance of power has shifted. Companies are no longer in a position to dictate terms and service levels to their clients; it is their clients who are taking charge of how they wish business transactions to play out. But not all organizations are listening, despite the empirical evidence that demonstrates that those that do, will profit from it.

In the three years since Jo Causon was appointed CEO of the UK's Institute of Customer Service (ICS), she has managed to resist stating 'Do you know who I am?' when confronted with bad service. "My husband is surprised I haven't," she admits.

"Good service is not about servitude. It is about meeting the demands, or understanding the needs, of the customer and being able to deliver on that. Ultimately, we are all customers of each other."

Jo says the dynamics of customer service have had an about turn over the past few years.

"The key challenges businesses face remain the same, but the balance of power has shifted. Much more information is available to us [customers] and we are much more savvy. We have less money in our pockets and we are more prepared to pipe up if we are not having the experience we expect. We use social media to refer and complain and this feedback is an intrinsic link to brand and reputation.

"Did you know that consumers today are more likely to trust a stranger's opinion on the internet than they are advertising?"

Good customer service is not about always providing the best possible service, it's simply about communicating what service levels a customer can expect and then delivering on them - and of course, ensuring that that service proposition matches the value proposition.

"For me a good customer experience where everything is aligned and joined up, so organisations need to align their processes with their culture and strategy," says Jo.

"Is the customer always right? No, but the customer has the right to be listened to and understood and explained to. The CEO and leadership team need to communicate the purpose of the organization to both their staff and their customers. That means there are very clear expectations and boundaries."

Integral to this is that role that internal customers play.

"I know a CEO who doesn't have job descriptions for those he employs. He simply tells them their role is to help others in the company do their jobs properly. If there is not a good relationship between the finance and sales department, how can they help each other to achieve their shared goal in meeting the expectations of the end customer?"

Ultimately responsible for customer service is the board, but Jo agrees that there are wildly different approaches to customer service across different sectors and companies. Some boards do not even address customer service at a strategic level. 

"Every member of the board needs to be focussed externally - outside in-  and every single one of them needs to be focussed on the customer experience and that is not about what is going on in the contact centre.

"CEOs who keep themselves in touch with their customers are good leaders.  They genuinely listen to their customers and rigorously scrutinise customer satisfaction survey which should be god in the boardroom. The financials tell you where an organization has come from, but customer surveys tell you where an organization is going."

Based on annual research that the ICS does annually, involving some 26,000 respondents, customers' priorities fall into five key areas:

 -  Being dealt with in a professional manner by people who are knowledgeable, helpful and friendly

-   Problem solving or the ability to deal with a complaint

-   How easy the company is to do business with

-   The quality of the product

-   The timeliness of responses 

And the cost of poor customer service is tangible. The ICS has found it takes on average 56 days to replace a lost customer and the average cost to a business of each lost customer is £6500. In the UK alone, some £2.5 billion will be lost to the economy due to poor customer service over the next three years.

What 2020 will look like? There are key trends emerging across all sectors and geographies which organizational leaders need to be aware of:

Feminisation

Women's increasing influence not only on spend but at a corporate level is something companies need to take into account - is your company? It is no use having an 80% female customer base if there are no women on your board and few in your senior management team.

Life impacts on customer choices

"We are all becoming increasingly time poor," says Jo, "Future research needs to account for much greater insight into our customers' lives and to allow us to think about our customers lives more.  Insight is moving from demographic profiles to a much more complex and nuanced understanding of lifestyles and preferences, also reflecting the multiple combinations of channels customers choose to interact with organisations."

Recruiting for added-value customer service

"Core skills and competencies will be people who have very high emotional intelligence, empathy, listening skills and the ability to establish a personal connection, as well commercial acumen and solid technology skills.

"The most commonly cited  issues  people complain about are  staff attitude and staff competence, and that is really concerning. People don't go to work to do a bad job. Organizations that constantly embrace training, leadership development and communication, including emotional intelligence, are the ones that will seize the opportunities giving good customer service will bring - opportunities which are clear threats for those that don't."

Call centres

"Does it matter if a call centre is in Birmingham or Bombay? No - it all comes back to the leadership, the training and the development. In the UK we have hard economic conditions, the weather is bleak, l and people are feeling quite low. A bad customer service experience affects the whole of your day and impacts on your own personal productivity. A good experience can create a big virtuous circle.   

"There needs to be a move away from scripted call centres even in highly regulated sectors such as Financial Services, which have to follow certain protocols. Allow people to make the right judgement calls  or the right decisions within boundaries means better customer service."

Socioeconomic polarization

There is increasing polarization of consumers - with extremes of the very prosperous and the economically insecure. But these two groups and every group in between still expects valued-added in terms of price and experience. Some companies are tapping in to this socioeconomic segmentation and refining or redefining their propositions and target markets as a result. There is one very successful example of this in the UK. Iceland is a supermarket which originally only sold frozen goods. It attracted some criticism for running TV advertising campaigns targeting budget conscious mothers offering various deep fried or battered frozen goods and desserts for extremely low prices. But Jo points out that Iceland has one of the highest customer satisfaction scores in the UK: "It knows its customers, it listens to its customers and it consistently delivers on customer expectations."

Co-creation 

"We are starting to see through the use of social media and technology - not just the sharing of feedback about the experience but suggesting improvements. I can go to the hairdresser and see a picture of me with a different hair colour or style before it is done; I can stay in a hotel and the room will be configured according to my requests. More of this will happen as companies recognise that the best ideas for products and services will be those where customers have been engaged in co-creation."

Customer service and the bottom line

"I see a time soon when customer satisfaction will be reported in company accounts.  This would be a clear signal  that organizations are  taking it seriously, have evaluated products and services customers want and  actually listened and created products and services using quantifiable customer feedback mechanisms."

UK plc

"Fundamentally, customer service is critical to UK plc because74%  of our GDP is service related. I have seen a big step change in how organizations are starting to view customer service. It's no longer seen as a bolt on, pink and fluffy or a nice to have - it is a key driver of bottom line performance." 

For more information on the UK Institute of Customer Service, visitwww.instituteofcustomerservice.com

 

 

Posted By: IIC Partners