Despite the economic crisis, the rise of the “Social Customer” and the popularity of Customer engagement strategies through Social Media, I sometimes get the feeling that managers in Customer Services put in a lot more effort to ensure the company does not get bad press, or negative “buzz” in stead of providing a better then expected Customer service experience. We know companies do not always take Customer service seriously. I think though many managers of Customer Services should start taking their discipline a lot more serious than they are doing today..
Apart from the fact that it is useful to improve waiting & ticket-processing times, Customer’s self-service capabilities, complaints handling, first contact resolution, quality monitoring scores and what have you.. I believe there is a necessity for a more fundamental change in both the mental model and governance systems guiding current design and execution of Customer Services operations. Not only because great Customer service can be a differentiator, but mostly because Customer service needs a (mental) makeover for it to really become one.
The best service is no service
To date, the best proxy for good and effective Customer Services (operations), has been set by Bill Price, with his book (and proven methodology) “The Best Service is no Service”. You can see a good summary in this slideshare presentation.
Key to the methodology is that it very closely looks at what contacts are of value to the Customer and to the company, continuously eliminating contacts that are of no value to both, by means of improved processes etc. Furthermore reducing time and Customer effort as well as implementing self-service capabilities for high value contacts to Customers OR company. Last, but not least, investing in those contacts regarded valuable to both Customers AND company.
The methodology basically prescribes you to:
- Listen to “What (y)Our Customers Are Saying” (WOCAS)
- Improve your products and processes so that you do not get repeat contacts and many complaints
- Implement self-service with the utmost rigor possible
- Use the remainder of contacts to do smart up- & cross-selling
- Segment your service (e.g. better service for high value Customers)
And if you do this well, you’ll see that your Customer services unit does not have to grow, or can even shrink in headcount (significantly!), whilst company revenue can double and transaction volume can multiply with a factor five (Amazon case).
Whilst I believe there is a lot of greatness to be found in this methodology and/or approaches like Lean/SixSigma, which have similar claims and approaches, I believe we need a more fundamental change in perspective to get out of the “call center is the end of the line or the organization’s drain”-paradigm. And, of course, to finally start having a real and sustainable impact on business results, not just sitting on the cost-side of the equation.
I would like to explain so by elaborating on the “Five perspectives on Customer Services” we need today.
- The Value-perspective
- The Customer-perspective
- The Experience-perspective
- The Relationship perspective
- The Network-perspective
These perspectives are hardly new, you may say or think. And I would agree. Combining these perspectives and projecting them onto Customer services operations shows though we are far away from integrating the logic, the views and ideas that can be found in these perspectives. All the more reasons to take a closer look.
1. The Value perspective
The most important shift in logic and customer services governance we need to make is the shift in our value logic. The entire governance system is based on a value-logic that embraces value to the company and aims at maximizing Customer value extraction.
The current value logic has been perfected into such detail that almost every KPI the industry uses breathes value-to-the-company on each contact. Some examples:
- A call cannot take longer than 5 minutes
- A call must be solved within the first contact in 80 % of all cases
- A service representative cannot have more than zero fatal errors or 2 non-fatal errors in her quality monitoring sheet.
- Customer satisfaction on the call must be at least a 6 (on a scale of 0 – 10)
The “transaction” or “interaction” (=the call) is central to all we are doing. Contact Centers are managed by the day, the week at most. even the quality management systems put in place look at the transaction. 3 mistakes on a call, and you’re out. Maybe, just maybe this improves Customer Satisfaction on the call, but if this also relates to improved value to the company as a whole, or the Customer in specific, is only assumed, if at all. Besides that: satisfactory results are good enough, most certainly if it’s possible to reduce costs further without reducing Customer Satisfaction.
This all may be a little better in the Best Service is No Service approach, but even there it is the contact and the transaction that is center to the approach and the upper right corner of the value to the Customer vs Value to the Firm matrix shows “sales campaigns” as one of the activities to fit in there. I would argue there is no value to the Customer in being sold to..
Goods versus Service Dominant Logic
To put it bluntly: the Customer Services management system is designed with a production-based logic from the pre-war decades of the previous century. The founding fathers of Service Dominant Logic (Vargo & Lusch) name this old logic a “goods dominant logic”.
It is time, contact center and customer services operations management switch to a Service Dominant mindset. A mindset that understands that the Customer can bring more to the table than money alone, like knowledge, feedback from her experiences, on all touch-points, not just the regular survey or after the “feedback”-button. A mindset that does not see service as something offered after the sale, but as the basis for value creation between company and Customer. And a mindset that values the role of the employee, not just the value he/she is able to extract from the Customer in exchange.
And whilst the “Best Service is No Service” approach is more than half way of this direction, most Customer Services (operations) needs to redefine what it means with “Value Center”, for the current understanding and application has “goods-dominant-logic” written all over it. More guidelines as to what this means can be found in the four remaining perspectives.
2. The Customer Perspective
I did not only not put this one first to avoid the obvious trap, but more so because I wanted you to understand first, from the previous paragraph, that from my point of view most Customer Services operations are not about Customers. They are about transactions. Throughout my career I have not seen one Manager Customer Services reporting Customers, not transactions. Not one of them could say, on a weekly bases even, how many Customers dialed in, and how many have been helped to their satisfaction.
They can tell you how many calls they handled, and what the average satisfaction score was, but they cannot tell you how many Customers are considered at risk for retention, because they had a complaint. But this was not logged as a complaint, because the Customer did not use the complaint procedure (usually sending in a written letter.. )
Hardly any Customer Services manager will be able to tell you how many unique Customers call into the call center or visit a service site in any period, nor what the calls of the heavy users are about, compared to the light users.
To cut it short: any Customer Services department that has not already should get started tomorrow on building a Customer centered view of their operations, not a transaction based view. I guarantee you the “a-ha.. now I see what’s the issue” look on your face.
3. The Experience Perspective
Furthermore it is of vast importance to stop seeing service as something just offered after sales when something went wrong. From the Customer’s perspective everything you do is service (or not, most of the time ;). The way service is perceived is through the experiences Customer have over all your touch-points. From the fine-print to the mail-delivery company used, to the advertisements in a magazine (with a coupon for new Customers with a nice discount..), to the invoice, the payment arrangement, the collections calls etc etc..
And, more and more experiences from others are part of the Customer’s perspective of the service you provide, through ratings and reviews shared by others, whether shared through (online) social networks or not.
Understanding the Customer’s journey throughout her lifetime should go beyond listing Customer Services as the after sales touch-point. The role of Customer Services should also go beyond providing feedback and (actionable) insights to the organizations as to (incrementally) improve the Customer Experience. Customer Services should expand their horizon by understanding the Customer’s journey and how their key-capabilities to help Customers when things are not running smoothly, could be put to use to improve the Customer’s experience when getting her job done.
4. The Relationship Perspective
The fourth perspective is the Relationship perspective. Not new either. CRM traditionally consists of Marketing, Sales and Service. In the name of CRM though, many companies have done their very best to exploit their relationships with Customers at the lowest possible costs. And when the relationships comes to a divorce, companies even ask for alimony. CRM is not there to improve the Customer’s nor the employee experience, CRM is there to improve the company’s control.
In stead of conversion-rates, revenue per hour or per contact, I believe the next generation Customer Services will need to make a serious effort to manage their Customer interactions with respect for the (individual) Customer’s lifetime value, network value AND referral value. These long-term relationship-indicators should shed a different light on what is important to manage on a contact, and which contacts are of value to the company and/or the Customer.
5. The Network Perspective
Last, but not least: in the name of CRM the 1 on 1 relationship between Customer and company is center. In the meantime, in Customerland, the Customer, increasingly armed with numerous social tools, cannot only solve issues better herself, she can do so faster than you can, and most of the time even better. Where your legal department is still fighting over wording issues, to avoid future compliance or other legal actions, your Customer is already doing what has been advised by her peers or “experts”.
Where many companies are stars in describing what situations are NOT covered by Customer services, companies that see themselves as service providers to their Customers, arrange for their Customers to have access to networks of Customers and/or experts, outside the company firewall, to increase the likelihood that the best resolution is offered in the fastest possible way, with the least possible Customer effort. Please take a look at this post by Laurence Buchanan about GifGaf to see the benefits of this Network perspective.
Best practices in Customer Services are hard to come by, mostly because bad Customer service stories have better reach and because there is more to gain for the story-teller. The best methodology so far comes from the heart and mind of Bill Price: The Best Service is No Service. I do think though Customer services in general, and the Best Service is No Service, are in need of a thorough iteration, based upon the latest insights and developments.
The five perspectives discussed above are not new in a stand alone way of discussing. I wanted to bring them together as guiding principles, with practical implications, for the future directions of Customer Services management and governance. Directions that go beyond operational excellence, process efficiency and other tactics. Because it is time we take Customer services seriously..
Please share with me your thoughts!
This post is an iteration of this post in a Dutch digital magazine. I wrote that article in collaboration with Fred Zimny, who I’m grateful for his own fresh perspective and contributions on the Dutch article, which now resulted in this improved version, imho, of it. Thx Fred!