Customer Services Isn't Always That Important

When reading “the web” one could be lead to think that a company’s poor Customer Services is the worst that could happen. Any mistake in this area would easily set off negative word-of-mouth. Armed with Social Media the “crowds” will seriously harm the brand(ed) reputation, seriously damaging a company’s growth opportunity. Some even consider Customer Services the new Marketing. The importance of Customer Services though, which in lots of cases is considered to be the same as the importance of a company’s (multi channel) customer services contact center, can easily be overrated.

I’ve worked for several companies that invested significantly in operational excellence of the Customer Services Contact Center. Convinced that this would provide them with competitive advantage and high Customer retention in the end. At the same time competition did the same, resulting in a zero-sum game with regard to market shares.

For one of these companies, increasing retention of (B2C) Customers became even more important than before, because it was for sale. They had been loosing Customers to a new Competitor for a little over a year (like most other competitors, yet this specific company was hurt most). In combination with not meeting market share growth plans for several years and a shareholder short of cash, this was to be expected.

The company’s strategy continued its focus on improvement of the Customer Experience through improvement of Customer Services and processes, at the same time trying to increase operational efficiencies to reduce costs. Whilst their Customer Services satisfaction rates improved as did their overall CSAT (the numbers were decent, not great, much like competition), churn rates continued at (too) high levels, market share eroded as did the company’s potential sales price.

An analysis of the company’s Customer data revealed that their strategy of Customer Services Operational Excellence did not work out, because it was only 20 % of the customers that contacted Customer Services. At the same time churn rates were caused for less than 15 % by Customers who contacted Customer Services. From this perspective Customer Services did a good job.

It is not difficult to understand that a strategy that focuses on only 20 % of Customers (and their direct need for Customer Services) is not the best strategy. This example also shows that doing a good or great Customer Services job is not necessarily the sweet spot. Valuable resources can easily be wasted for years.

Understanding your Customers, their needs and wants, the jobs they are trying to do, the experiences they have with your Company (not the ones you think or assume they have), the relative importance of each part of the total Customer Experience, how well you perform against desired outcomes of the jobs and Experiences etc etc.. All of these are important to understand where your Customer’s sweet spot is. Customer Services might be it. It might also not be.