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Customer Service as a Strategic Differentiator

During a recent webcast with more than 100 marketing and customer service managers, I asked participants about the degree to which their respective customer experiences need to be personalized. To my surprise, more than 50% of respondents reported that more than half of their customers routinely request experiences that are individually tailored to their needs. This finding (though by no means statistically valid) reinforces the assertion that customers are not content with generic products and services, and are increasingly demanding and expecting personalized experiences.

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For years, customer service organizations were relegated to the backwaters of corporations across the globe. Customer service was seen as a necessary and expensive evil; a line item that had to be carefully scrutinized and controlled. While companies routinely increased the budgets of sales, marketing and R&D departments, the customer service organization had its budget cut and was left to wither while other organizational functions flourished. Companies neglected to invest sufficiently in the customer service function because they never fully understood the economics of customer relationships and the potential value associated with investing in customer service.

Companies can no longer afford to treat customer service as a drain on corporate resources. As the function most responsible for improving the company’s image, reducing attrition, building loyalty, increasing purchase consideration and driving cross and up sales; it’s time to rethink and redefine the role of customer service as a strategic asset. At a time when consumers perceive most products and services as being undifferentiated, customer service can be a competitive differentiator. However, those companies that continue to bury their heads in the sand and refuse to adequately fund the customer service function will soon find themselves on the fast track to commoditization and price wars.

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Long-term success rests on the ability to transform the customer service function into a strategic asset and competitive differentiator. To accomplish this, many companies will simply need to start from scratch, take out a piece of paper and identify the steps needed to begin the transformation process. This is a golden opportunity to think about the economic benefits of delivering innovative and delightful customer service, and create a vision that will propel the customer service organization to the forefront of strategic business operations. As you embark on planning the role and responsibilities of your customer service organization, let me suggest the following ideas to help get you started.

Use Leading Indicators – In every organization one of the key challenges is to identify and solve problems before customers defect. However, companies tend to over rely on lagging indicators such as customer satisfaction or transactional surveys that provide historical data – inhibiting their ability to rectify problems and prevent attrition. The contact center can serve as the pulse of the organization by utilizing leading indicators in the form of customer interactions that highlight customers, problems, issues and needs. These issues can range from inaccurate invoices, product defects or a new service. By utilizing the contact center as knowledge hub, and distributing a daily report on the nature of customer interactions to the entire organization, departments can take immediate and decisive action to solve problems and prevent defections.

Act Emotionally – When customers send an email or use web-self service, their expectations are radically different then when they call the contact center. During a live one-on-one interaction, organizations have a unique opportunity to build emotional connections with their customers and drive loyalty. The contact center can be a cold and efficient machine or it can serve as an emotionally engaging loyalty generator.

Take the Time to Care – Customers want to give their business to organizations that genuinely care and that are truly interested in solving their problems and making their lives easier. Talk to your customers without looking at your watch. Take the necessary amount of time to ask the right questions and solve the stated problems. Show customers that you care and look forward to the opportunity to talk with them, listen to their problems and deliver great experiences.

Test and Adapt – Unlike wine, experiences do not get better with age. What excites customers today will bore them tomorrow. Experiment with new ideas and use the contact center as a customer experience laboratory. Customers will appreciate your efforts to innovate and will reward you with repeat business and positive word of mouth.

Invite Others to Come – Customer service is not a department, it is the pulse of the organization. Invite employees from all organizational functions to sit in the contact center, listen to customers and even take a few calls. Integrate customer service with all other organizational functions by demonstrating through first-hand visits the importance of this organization.

Customize the Experience – Different customers have different needs, problems and concerns. Find ways to customize the experience to create an emotional connection with customers. Personalize greetings, acknowledge the length of time the customer has been with your organization, and offer products or services that reflect their individual needs. Embrace the diversity of your customers and provide them with experiences that they will remember and share with their friends and family.

Drive Customer Knowledge – Each interaction with customers is an opportunity to learn about their needs. Rather than focusing on cost-centric metrics like average speed of answer, use each customer engagement as an opportunity for self assessment to determine what your organization is doing right and which areas need improvement. Your contact center can drive customer insight about a range of critical issues such as product functionality, service plans and competitor offerings. All you need to do is ask and listen.

The sad truth is that many companies continue to under value the contribution and potential of their contact centers by outsourcing the function that is most directly responsible for their most important asset – customers. To remedy the situation, it is incumbent on you to educate the organization, highlight the contributions and demonstrate the power and potential of the customer service function. Start with the economic benefits of great customer service and explain how this function can reduce attrition. Illustrate how customer service can serve as a strategic and competitive differentiator.

Now, more than ever is the time to make the case for the customer service organization. Customers are more demanding, fickle, and willing to defect at a moment’s notice. The vast majority of products and services are no longer seen as distinctly identifiable and valuable. However, despite all the difficulties, I believe that all is not lost. All that’s needed is that you recognize the strategic benefits of delivering great customer experiences, and begin taking incremental steps to change the present situation. This will take time but it will happen.

Good luck!

By Lior Arussy, CEO of Strativity Group

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