Figure 1 plots the challenge faced by the organization in trying to balance the provision of a satisfactory level of customer service while at the same time doing so in a financially viable manner. The figure shows that in some cases a high level of service can be too expensive for the organization. Alternatively, if the level of service is too low the customer will go elsewhere.
The secret of success is to find a quality of service that is satisfactory for the customer and achieves a profit, or reaches service level targets for public sector organizations. This is the ‘zone of agreement’. Point ‘A’ indicates the lowest level of acceptable service for the customer. Point ‘B’ indicates the highest level of service the organization can deliver without it becoming unprofitable.
This zone of agreement is rarely fixed and is dynamically changing over time and with the type of customers. All customers are different and their expectations vary considerably, so that what may be satisfactory for one may be unsatisfactory for another. Furthermore, individual customers have changing expectations and whether or not they are having a good/bad day will affect their telephone responses. To compound these variables, there are also other competing organizations that seek to offer better products and customer service.
Why customers stop doing business
Customers stop doing business with an organization for a variety of reasons but, as can be seen below, the main one is indifference by an employee:
Dissatisfied customers
The main objective is to keep the customer satisfied, happy or better still excited. Without this, customers are likely to become discontented and seek other providers. The challenge for the organization is that many dissatisfied customers just disappear and are never heard from again. There are some general rules of thumb that provide some insights into the challenges that organizations face:
- The average business never hears from 95 per cent of unhappy customers.
- For each complainer there are 19 who do not tell the organization.
- 90 per cent of unhappy customers will not give their custom to the business again.
- People who complain are more likely to return to the business than those who do not complain.
- If the problem is resolved the majority of complainers will continue to buy from the company.
- The average dissatisfied customer will tell 10 other people.
- The average customer who has his or her complaint resolved will tell only five.
- A customer who receives exceptional service will, on average, tell three or four other people.
It is evident from the above points that many organizations may not even be aware that they have dissatisfied customers who just disappear, never to return. Thus, it is very easy to develop a bad reputation when dissatisfied customers tell 10 other people about their poor experience. Moreover, even when there is exceptionally good service it takes a much longer time to develop a good reputation than a poor one, so it is essential to keep a close focus on service levels. For this reason, all organizations should conduct audits to ascertain how well they are satisfying their customers.
Service recovery training
Service recovery training is designed to rescue situations where the customer has not received satisfactory service. When customers are satisfied with the service they receive, 65 per cent remain loyal and return compared with only 30 per cent returning when they are dissatisfied.
Surprisingly, when customers feel that a complaint has been handled well 85 per cent of them will return. For this reason, advisers should be trained to take responsibility for the problem even though it is not their fault. They should not blame other departments and instead give a sincere unconditional apology, which will normally calm even angry customers (Crome, 1998). Generally, the rule of thumb is that it is five times more expensive to gain a new customer than retain an existing one. As a result, and particularly in recent years, much greater attention is being given to keeping existing customers satisfied.
It is clear from these figures that it is far easier to get a bad reputation than develop a good one. Most customers complain because they are seeking to have their problem resolved and if they are given attention and the problem is resolved they o en become loyal customers.
Excellent service
It is not the organization that decides whether the service is excellent or not, it is the customer. Thus the customer should always be given opportunities to provide feedback on the level of service.
Where customer service is only satisfactory it becomes almost invisible to customers. They are not even aware of its existence, except when it is missing. To be fully perceived and recognized, customer service needs to be excellent.
Back office becomes front office
One significant aspect of turning back office functions into customer facing ones is that staff who never had direct interaction with the customer in the past are now in very regular contact. Furthermore, they are o en expected to sell, up-sell and cross-sell. In a three-day programme called ‘Making it easy (for the customer) to say yes’ for a direct insurance company, the objectives were:
To improve the conversion rate from call to sale; to improve the average transaction value of each sale; have the confidence and the skills to control calls and indeed increase business through professional telephone techniques; develop an action plan; . . .to delight the customer; be the best (company); today everyone (in the company) sells.
In many organizations there are now few places to hide for people who do not like interacting with the public. Thus, it is essential that customer service training is provided for all employees and at regular intervals. After all, everyone has customers, whether they are outside the organization or inside.
Standardizing service
Standardization of service is o en aligned to prescriptive requirements and is very common in contact centres. The procedures and tactics to be used are o en condensed into a number of ‘commandments’ as this checklist for a utility company confirms:
- Quick response time.
- Standard greeting.
- Be polite and professional.
- Use listening noises.
- Take control.
- Ask questions – don’t demand information.
- Take notes.
- Obtain reason for call.
- Use customer’s name.
- Take appropriate action to defuse anger.
- Make the customer feel important.
- Treat the customer as an individual.
- Know our products and services – promote them.
- Summarize the call.
- Offer your name and extension.
- Thank the customer for calling and finish the call with goodbye.
- Always use the standard greeting: Good morning/a ernoon, . . .speaking. Can I take your reference number? Never say . . .Hello!
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