Customer Service: The Business Imperative

Institute of Customer ServiceJo Causon – chief executiveCustomer Service: the business imperative?iCrossing client summit 2012Friday 18th of May 2012

introducing the Institute ofCustomer Servicewe are:• independent, not-for-profit membership body• over 370 organisational members• 70% from private, 30% from public and third sectors• more than 3,500 individual membershipswe aim:• to lead customer performance and professionalism• to be the first port of call for all issues around customer servicewe provide:• advice, research, professional networks, products and services, awards, national occupational standards, continual professional development and conferences

some of our members added in thelast year

the renaissance of customer service• customer service a critical element of business performance• increasingly recognised in the boardroom• a key driver of profit and efficiency• changing relationship between organisations and their customers – customers now hold the power• future of customer service – changing attitudes of we, the consumer – challenges and opportunities brought by technology – changing business models – changing employee engagement

we have all become more demanding • customers/clients/people more willing to complain - 2001 - 50% people were willing to complain about poor service - 2006 - that figure had risen to 60% - 2010 – now 75% consumers prepared to complain • more disposed to tell others about bad experiences - 81% - 2001 - 89 % - 2006 - 90% - 2010 • more able to do so • growth of social media - as consumers we can draw down information more easily - seek tailored solutions both offline and online - expect us to respond through multiple channelssource: ICS National complaints culture survey 2006

customer service and the bottomline

what we found• weight of evidence proving link between service and profit or efficiency• 74% of the sample group agreed that ‘gathering and acting on customer feedback’ is very likely to lead to ROI• 81% believed that ‘gaining an understanding of the customer viewpoint’ will also very likely lead to positive ROI• calculating ROI is complex and is contextualised• having the right staff increasingly crucial both now and in the future• a step change in customer service quality may require undertaking a significant change programme• need to move from easy to measure to harder to measure activities: value of relationship with the service provider, what kind of culture of service quality has been established the whole customer experience.• need to raise our game• customer service is beginning to play an increasingly strategic role principle source: return on customer service, the bottom line report: Institute of Customer service, February 2011

why retention is critical• customer churn is seen by over a third of businesses as the biggest challenge to their bottom line in the coming year• threatening some £2.2billion of revenue• The cost of replacing a lost customer is estimated at more than £6500• 58 days on average to make that replacement• 65% of business leaders agree that customer service will be a critical market differentiator• 71% single out service as a key loyalty driver, ranking it above product and service quality, brand reputation and effective sales and marketing.• Customers agree: – 83% identify the quality of service they receive as an important driver of loyalty.Source: Institute of Customer Service The impact of Customer Churn November 2011

UK customer satisfaction levels principal source: ICS UKCSI survey January 2012

UKCSI: the top performers Amazon (92) Marks & Spencer (food) (87) Ambulance Service (87) First Direct (86) John Lewis (86) Fire Service (86) Virgin Holidays (85) SAGA Holidays (85) Boots (85) Marks & Spencer (85) principal source: ICS UKCSI survey January 2012

some channels deliver a betterexperience than others 50.0 60.0 70.0 80.0 90.0 100.0 in person (e.g. visited a 80.0 store/branch) 79.0 on their website Customer Satisfaction Index (CSI) over the phone (e.g. called 74.0 a contact centre) 68.0 in writing (letter or email) principal source: ICS UKCSI survey January 2012

Customer priorities: what all customerswant B2B or B2C?• professionalism: treated like a valued customer• quality and efficiency• ease of doing business with• problem solving• timeliness

building customer confidence• understanding the customer and developing solutions around them• commitment to staff – direct correlation between staff and customer satisfaction• building service cultures• focus on maximising value of long-term relationship• engaging and championing – co-creation• considering business structures – easy to do business with• focusing on multi-channel integration• creating customer strategy, service delivery and the right culture

looking ahead: customer servicetrends • choice • make it simple but valued • easy to do business with • effective use of technology • co-creation • experience • anticipation

the challenge is to do more with less• increased demands come against the backdrop of a recession• greater stress among the public• falling morale among staff• important we encourage and build customer focus – led from the top – programmes built with a core focus on service – each customer is an individual and needs to be treated as such – innovate to reduce cost but improve experience – key is to help staff make the right judgement each time

lessons learned• customer management is fast becoming a strategic boardroom issue• only sustainable competitive advantage• customer feedback is immediate and highly visible• multi-channel not one route• consumers and customers have the power to shape image as never before• strong service leadership is crucial• greater empowerment and support for staff• alignment of people, processes and strategy

Thank you Jo CausonInstitute of Customer Service

Customer Service: The Business Imperative

by iCrossing on May 25, 2012

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