The Customer Service Dilemma

Bob Schultek
Author of
The Gauntlet

If customer service impacts the value you create for your customers, then you’re confronted with the service investment dilemma.

On one hand, if your judgement is that customer service is a necessity that creates little additional value, then you might structure your customer service operation as a cost center. Making cost control the highest priority often ensures that your customers speak with some of your lowest paid employees, who are not empowered to provide solutions or make decisions. And typically, there aren’t enough of them; no recording will long mollify a customer who needs answers.

A focus on minimizing costs rarely considers the customer’s perspective, and its impact on your business. How much of a customer’s time and money are wasted while awaiting your reaction to their inquiry? How much is their frustration amplified by this delay? How many opportunities for repeat business vanish when a deficient service response reveals a lack of respect or appreciation for the customer’s business? How much of a customer’s satisfaction is devalued by the attitude of service reps more focused on cost than on the needs of the customer?

On the other hand, you may conclude that a strong customer service competency is a revenue generator, a profit center worthy of investment. Here are 3 reasons why leaders make this decision:

1. Customers who contact you are fully engaged. In these moments, unlike others in which you’ve interacted with them, customers are paying close attention to how you react in resolving their issue. A service person who listens intently and suggests potential solutions, creates a personal experience that communicates respect and appreciation for the customer’s business.

2. Exceptional service is a proven, quantifiable differentiator. While it’s unlikely that you could produce a product that is five times better, it’s entirely possible to significantly overdeliver on the service provided to customers, service that’s five times better than what your competitors offer. People enjoy sharing stories, and great service causes them to share their story about how well they were treated by your people.

3. Finally, your most valuable customers are the loyal ones. It’s been proven many times that providing exceptional service builds loyalty that generates additional revenue. While attracting new customers is a necessity, it’s still true that the most productive, profitable means of boosting sales is to increase activity with current customers. Exceptional service produces repeat customers.

To most of your customers, your service folks are your company – and they have unlimited access to those, and all of your customers.

Is your customer service operation a cost center or a profit center?

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