Why Don’t Managers Understand Customer Service?

You don’t want him running your customer service department. Customer service ought to be a revenue source and not a cost. If your customer service department is cost item, something is seriously wrong at your business. Customer service is all about two things. It is a means of helping potential buyers make choices by providing technical information and advice when the sales department is not available. And, most importantly, customer service is there to solve your customer’s after purchase problems with as little time and involvement of the customer as possible. Very few managers and CEOs understand the latter and, therefore, waste a lot of money and lose a lot of customers. The lack of understanding of customer service is stunning to me. Many businesses that tout great service run their customers through terrible ordeals to resolve simple problems. There are two big barriers to changing how a company approaches customer service. The first is cost. If management sees customer service as a cost, they will never see it as vital to the company’s growth. Service is perceived, in their shallow minds, as an expense to control. The other barrier ties right in with the first. It’s measurement. Measurement is rarely applied to customer service as a means of improving it. Measurements are taken as a means to reduce cost. Poor management will measure things like average time per call or calls per hour that a representative handles. Even worse, some companies measure a reps performance by comparing costs to point of resolution. There are a few companies that measure customer satisfaction after a problem is resolved but have you noticed how few companies make those results public? If your business has a high “satisfaction” rate, you should shout it from the mountain top even though it’s a meaningless measurement. Let’s look at these barriers to great service in greater detail and see why measuring “satisfaction” is meaningless. Businesses are always looking for ways to reduce cost. That’s good only if you want to trim waste. Is your customer service department a waste? I hope not. If it is, then things need to be changed rather than cut. The purpose of any business is to make profits. You must see customer service as a profit center. You must approach how customers are treated with the goal of making those customers so pleased with your company that they will tell others about their pleasant experience. That preserves a customer and gains you more customers. The guiding principle of decision making in customer service must be with building the customer base in mind. Always. Okay, I can hear you from here. “You want me to give away the store every time a customer has a problem.” Wrong. If you go back and read my definition of customer service, you’ll see the key to minimizing your expense. You must solve the problem in as little of the customer’s time and involvement as possible. That means you must answer your phone. That means not putting the customer on hold. You must focus on accellerating the process for the customer. If you cannot handle the calls, why should the customer be forced to wait, on hold, for as much as an hour “because calls are taken in the order they are received”? That says “get in line and stay there and we’ll take of you when we can.” The harder it is for your customer to actually reach the person who will help, the more expensive the resolution. You graph nuts that have to measure everything should take a look at that. Compare the customer’s time spent with the cost of making him happy. There is a direct relationship. Speaking of graph nuts. The other barrier to providing great service is this obsession with measurements that businesses seem to have developed recently. It’s stupid and it’s expensive and you usually don’t measure the right things. Average time per call? What if your engineering department has screwed up and your product has a really weird technical quirk? Does that mean customer service should get off the phone as quickly as possible? You should be measuring the reason for the call which will put the responsibility back on the engineering department where it belongs. Fix the problem in engineering and you’ve fixed the customer service problem before it happens. Get it? Please be careful about what you measure. If you must measure something, measure the customer’s time, not yours. Ford F-150 pickup truck sales are slipping badly. Chrysler can’t give their pickups away. Both companies blame high gas prices for declining truck sales. Sales of the Toyota Tundra, a big pickup, are up 48%. Of those three manufacturers, which one would you associate with the word “reliability”? That’s the benefit of fixing the customer service further up the line in your business. Service starts with the CEO and everyone in the company has a role. You can’t build crap and expect your customer service department to cover for you. Measuring the problems your customer service face will point you toward a gold mine of business improvements. Finally, there is this thing about measuring satisfaction. Satisfaction is very easy to manipulate. Too easy. If a customer has a problem with a $100 item and you send a replacement with a $100 bill, he’d be very satisfied. But you don’t want Santa Claus running your customer service program. Measuring satisfaction is meaningless unless you have skillfully handled the customer’s problem. That goes back to the speed of access to solution. The faster you handle the problem, the cheaper the solution. And if instead of a $100 bill, you offer the customer an item from your catalog at a nice discount to be shipped with his replacement item, he just might be very pleased with your service. And you might make enough to cover the shipping. That is why simply measuring satisfaction has no value. You can, if obsessed with measurements, measure satisfaction against different solutions. Still, I think you’re wasting time on the obvious. The measurement that matters most is profit. I see so many companies measuring so many things while losing money to obvious problems. You can only hide behind graphs for so long before you’re finished. Work on cutting the time it takes for your customer to reach satisfaction and you’ll reap the benefits.