Sales & Marketing

Creating a customer service strategy to add real business value

7 min read

24 October 2016

Failing to deliver to clients can cost businesses dearly. But creating a customer service strategy that adds real value to a company can help ensure operations and loyalty thrive.

Still unsure where the customer service strategy can help avoid awkward and expensive situations? The Financial Conduct Authority (FCA) recently fined payday loan company CFO Lending an eye-watering £34m for treating customers unfairly.

The FCA result comes just months after regulator Ofgem fined Scottish Power £18m for the exact same reason.

And, it’s not just regulators punishing companies for failing to deliver good customer service. Customers are becoming increasingly intolerant of receiving a poor service themselves – research we undertook found that almost a third will move their custom elsewhere if this is the case.

Furthermore, consumers are growing in confidence when it comes to taking matters into their own hands – in fact, almost half (48 per cent) have withheld or defaulted a payment deliberately as a result of service issues, incurring what is known as “protest debt”.

So what do businesses need to do?

I spoke at an industry conference recently where I was asked of the importance of customer service and whether it can be linked to financial results. My answer was, of course, yes – there is a direct link between customer contentment and profitability.

And, it should be something threaded throughout the organisation, with board level engagement and buy-in. But what else should businesses be considering in order to create leading customer service strategies?

Truly listening

Customers like, and deserve, to be heard. It’s pretty obvious, but surprisingly there are many businesses that “hear” but do not “listen”.  This only serves to antagonise customers and create the impression a business does not care. In fact, it’s believed that in monetary terms, poor customer service is costing UK businesses a sobering £234bn a year.

One way to combat this as part of your customer service strategy is through the use of customer satisfaction surveys. Highlighting poor scores and negative comments in real time, these surveys can really help – provided the results are used to inform actions that benefit customers.

Having a robust process in place, that follows up quickly on customer feedback, enables issues to be effectively resolved before they escalate and ensures customers feel truly valued.

Embracing customer choice

Customers are changing. They are better-informed, and becoming more critical and demanding. Businesses must therefore also evolve and listen to what customers, collectively and individually, want, and understand the channels they wish to be contacted through, providing choice and making interaction as easy as possible.

For instance, research has found that while 53 per cent of people prefer face-to-face or telephone contact, 17 per cent would choose email in the first instance and a further 13 per cent prefer web self-serve.  Using the right channel in the right way is equally important – channel choice depends on contact type and complexity.

Digital self-serve, for example, enables customers to carry out basic, transactional tasks conveniently in their own time. Advisors are then freed up to handle more complex and emotive contacts, and be more proactive, driving customer loyalty and advocacy.

On the next page, read how being proactive can help the customer service strategy, the long-term value that can be created and more.

Be proactive

Proactive customer service can really differentiate a business from its competitors when it comes to customer experience. Gaining a deep understanding of the customer journey and identifying new touch points where real value can be added makes a big difference to the customer service strategy.

For example, contacting new customers after their first order to ascertain satisfaction, using data to identify service features that customers are not using and may not be aware of, or contacting a customer post-complaint to double-check it was resolved to their satisfaction.

Success starts with people

Whilst a robust customer relationship management platform and knowledge base are in no doubt vital to create a great customer service strategy and deliver on it, these tools are reliant on accurate and rich data, up-to-date knowledge and proactive insight to drive improvement.

Empowering frontline advisors to manage knowledge bases ensures FAQs evolve quickly and remain relevant based on current customer feedback and sentiment.

Clearly, balancing the desire to inform and empower advisors whilst maintaining day-to-day service performance can be challenging. E-learning is a great asset here, enabling advisors to learn at their own pace, in bite-sized chunks, at a time and location of their choice.

Long-term value

To provide a great customer experience, businesses must move away from considering only short-term customer service strategy measures, and focus more on the lifetime value of each customer.

For example, financial pressures to recover outstanding payments from customers in debt can lead to a rise in customer dissatisfaction. Our research found that 50 per cent of customers who’d experienced debt collection felt harassed and 56 per cent of people on the receiving end of poor debt collection practices would switch provider.

Often, debt is simply a short-term blip for a customer. Connecting with and engaging customers and focusing on long-term customer value rather than short-term collection rate benefits, can rectify debt in a positive manner without damaging reputation and valued customer relationships.

The bottom line

Evidence increasingly shows businesses that provide a great customer experience outperform their competitors in terms of profit and growth.

Being proactive, really listening to customers, deploying engaged and empowered advisors, and taking a longer term view will create real value for customers.

Trust is a big issue, and arguably an organisation’s most valuable asset. Get customer service right, and loyalty, recommendation and trust will surely follow.

Chris Cullen is the head of sales and marketing at specialist outsourcer Echo Managed Services

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