If customer
service is so
important...
In this Customer Strategy exclusive
Sarah Cook and Steve Macaulay
advocate organisations take a
pragmatic but thorough review of
service strategy, balancing a clear
focus on what really matters to the
customer with necessary sales targets,
cost and benefits management
28
...how come
it’s done so
badly?
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THIS FEATURE AT A GLANCE
Sales first - service second
Sales take priority over service - look at any
advertisement for new recruits to customer
service positions for high street financial
service organisations, for example, and the
emphasis is skewed towards sales
Customer power
The power of the customer should not be
under-estimated. The rise in use of the
internet and in particular social networking
sites had led to a more informed sophisticated
and selective consumer
ustomers appear to be tuned in to customer service,
and poor service ‘naming and shaming’ should have
brought about a powerful effect on organisations
that wish to protect their reputations and service
standards. The UK Institute of Customer Service
(ICS) has raised the stakes through its recent
introduction of their Customer Satisfaction Index:
Consumers in UK and Ireland are encouraged to
rate their satisfaction with the service they receive from banks, retailers,
hotels, utilities and a range of other organisations.
The Index enables consumers to see what sectors give the best
service and who the top organisations are in each sector, while
organisations can benchmark their performance against the best in the
country. Based on US experience, Robert Crawford, ICS’ director, says
the Index keeps organizations on their toes, and customers in touch.
But does this pressure to improve service work in practice?
Most organisations say customer satisfaction is an important issue
- that’s the accepted wisdom, which few would dare to challenge
in public. Customer charters, targets and service standards are
commonplace and customer expectations have increased.
But the jury is still out on the degree of improvement in levels of
customer service-companies are very mindful that service provision
is an expensive business and, in addition, for many companies the
drive is to achieve sales targets. Employees may be given titles such as
‘customer service agents’ but they are often measured on how many
sales opportunities they convert or referrals that they generate.
Sales take priority over service - look at any advertisement for new
recruits to customer service positions for high street financial service
organisations, for example, and the emphasis is skewed towards sales.
It appears that, in practice, many businesses have lost sight of the fact
that excellent service drives sales.
Service as a source of competitive advantage
There is light at the end of the tunnel: best practice organisations do
recognise that the provision of better customer service is a source of
competitive advantage. To achieve this, consistent service delivery is
carefully managed, based on a few relevant target areas. It means that
apparently easy budget cuts do not prune back service. It also means
that organisations recognise that the value of customers grows the
longer they remain with you. Many credit card customers, for example,
need to stay with the organisation for over five years before they
become profitable. Customers are more likely to remain loyal if the
quality of service they receive is high.
Of course, improving levels of customer service is not an easy fix:
it is now all too clear for managers introducing service improvements
that customer service is far more than smiles and being courteous.
Customer service depends on weaving together a complex web
Way forward
Set priorities for service which are based on
a razor-sharp focus on customer priorities
and expectations, and set up systems to
ensure they are put into practice to a high and
consistent standard
of such factors as the effect of the organisation’s history, its culture
and structure, the leadership style which has developed and how
it translates into recruitment practices, development and coaching
styles, measurement systems and targets. The systems, procedures
and processes that have evolved can strangle or encourage service,
for example through the rewards it develops and its management of
information flows.
Two decades ago, British Airways set a service benchmark when
it vastly improved its image and service through an high profile
campaign Putting People First, going to endless trouble to satisfy
the customer and, importantly, seeing service as internal as well as
external with everyone working together to serve the customer. But
then gradually recognition of the cost of this provision started to build
up and the budget airlines took huge chunks of customer and market
share from ‘full service’ airlines.
World of dual standards
High-profile organisations have chosen to put sales revenue and cost
savings above service, with apparent impunity. Budget airline Ryanair’s
apparent disdain for customer service is balanced by the popularity of
its ‘no frills’ approach, its chief executive Michael O’ Leary lashing out
at money-draining service at airports which it criticises as ‘Taj Mahals’
of opulent wastefulness.
Car supermarkets offer bargain basement prices, and hardly a
salesperson to answer questions in sight- yet customers still come
back for more. We live in a world of dual standards. Most banks
behave in a high-handed manner to their customers, bolstered
by the lack of competition. Many NHS hospitals find it almost
impossible to operate procedures which treat their customers, the
patient, with dignity. Customer complaints on the service from utility
companies have soared. It remains widely accepted and tolerated that
many organisations do not give consistently good service and large
organisations in particular are often frustrating for the customer to
deal with. Yet they remain profitable and prosperous. However, the
power of the customer should not be under-estimated. The rise in use
of the internet and in particular social networking sites had led to a
more informed sophisticated and selective consumer.
They are more likely to pay attention to their peer group’s views
about products and services than to pay attention to a company’s
promotional material or advertising. For example, when booking a
hotel or resort many customers now consult the website TripAdvisor
to reference fellow customers’ comments and scores before making a
choice of hotel. Customer service is a key differentiator and arbiter of
competitive advantage.
Managing in a customer-focused way is a challenge too far for many:
it may mean knocking down a well-established edifice of strategy,
processes and structures, with many organisations assuming they
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know what the customer wants, and never testing this out. Lowly
customer service employees may feel disempowered and disgruntled
and, despite the rest of the organisation being in apparently good shape,
can let the company’s image down.
Tom Peters grew to prominence proclaiming the message that
organisations need to be turned upside down to serve the customer, the
familiar organisation pyramid should be reversed, with attention and
status given to front-line customer contact employees. But turning an
organisation upside down is more than many managers will undertake,
particularly as service delivery channels have become more complicatedthe internet has added an extra layer of complexity, outsourcing contact
centres and logistics has made control more difficult.
Set priorities and follow through
We advocate a rigorous and realistic approach to service provision.
Instead of a blanket “We do everything possible to satisfy our
customers”, companies should target key areas and implement them
in an exemplary manner. According to ICS research, the factors
that matter most to customers can be grouped into five attributes:
professionalism; problem solving; timeliness; quality/efficiency; ease of
doing business.
Each organisation needs to determine what really matters to its
customers and how the organisation can best uniquely meet their
priorities. For a number of years, Cranfield has run a workshop
Service Performance: Strategies for Success. This allows participants’
organisations to be able to develop a coherent approach to analysing
specific aspects of their company’s performance to achieve operational
improvement. They benefit from rubbing shoulders with other
managers who face similar service issues and are prepared to challenge
an organisation’s sacred cows.
CUSTOMER
SERVICE: WHAT
IS REQUIRED
●
●
●
●
Clarify your service offering,
explicitly and in detail.
Review how much real top
management commitment
there is to service quality.
Be clear about the
image that your service
communicates to customers
and prospective customers,
and how it satisfies
customer expectations.
Look again at operations
from the customer
viewpoint. Review
standards, systems and
procedures for ’drift’. Study
how customer expectations
and perceptions are
managed during and after
the service.
Create ‘Listening Posts’.
We advocate using
regular ‘listening posts’
to continually listen to
customers’ views and
opinions and to find out
what is really important
to them. These can take
the form of qualitative
measures such as customer
focus groups and one
to one interviews and
quantitative measures
such as questionnaires,
comment cards and on-line
surveys. These allow an
organisation to listen to
its customers and establish
their priorities
Sales take priority over
service - look at any
advertisement for new
recruits to customer
service positions for
high street financial
service organisations,
for example
This will only happen if information overload is countered by
absolute focus and determination to follow through on the, say, top
three things that really matter to the customer- trying to do them all
often leads to hopeless overload.
A new book, ‘Punching In: The Unauthorised Adventures of a FrontLine Employee’ By Alex Frankel, Collins 2007, reveals how important
it is to find out what really happens on the customer front-line. By
working as a service employee in different well-known companies Gap, Apple store, UPS, Enterprise Rent-A-Car and Starbucks – the
author discovered frontline employees who were:
• Weighed down with detailed manuals they hadn’t time to read
• Offered distracting sales incentives and promotion carrots for
generating new business
• Checked upon every minute of the day
• Swept along by peer pressure to live corporate values and solve
customer problems flexibly.
Technology has potentially boosted strong service delivery, but only
if it is carefully managed. Websites can offer information and answer
specific customer queries. Specialist software tracks service levels and
identifies deficiencies for management action. Powerful databases
monitor individual customers’ preferences and buying habits. They
should be used to help improve the service provided. However many
organisations use them as a sales tool to target customers with products
and services: financial services organisations for example use this
data to spot sales opportunities. The offer of an account ‘review’ often
leads to the organisation trying to sell something to the customer.
Technology should be used to improve service, thereby increasing
customer loyalty-however, much data is used as a sales tool or lies
unanalysed and under-used.
For more advice on Superior Complaint Handling go to our website:
www.customer-strategy.co.uk
ABOUT THE AUTHORS
Steve Macaulay is a Learning Development Executive at Cranfield School of
Management and Sarah Cook is Managing Director of strategic customer
care and leadership specialists, the Stairway Consultancy. Steve can be
contacted on ++44(0)1234 7511222, email s.macaulay@cranfield.ac.uk,
Sarah on ++44(0) 1628 526535 email sarah@thestairway.co.uk
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