Good customer service should be at the heart of every business, but in competitive industries such as financial services, utilities and retail it is critical that companies get it right.
A 2010 analyst report, “The Cost of Poor Customer Service: The Economic Impact of the Customer Experience”, from call centre software provider, Genyses, claims UK business loses £15.3 billion as a result of poor customer services, with each customer lost or abandoned costing £248. The report estimates that financial services firms lose £2.18 billion; utilities £1.98 billion and telecoms £1.91 billion every year due to poor customer service. However, it’s not all about lost profits; poor customer service can damage brand reputation, cause customer defection and in regulated industries, increase the risks of financial penalties.
ScottishPower was last month ordered to pay £8.5 million to customers following an investigation by Ofgem, the UK’s energy regulator, who found that misleading information was given to customers during face-to-face and telephone sales. Earlier this year British banks were told to set aside £16 billion to compensate customers who were mis-sold loan insurance.
These examples highlight the risks and consequences of having employees who provide customers with inaccurate information. With markets increasingly competitive, services commoditised, pricing tight and league tables constantly promoting attractive deals to tempt consumers to switch – holding onto customers has never been as challenging.
In the first four weeks of the new ‘bank 7-day switching service’ being launched, 89,000 customers switched their bank account, an increase of 11 per cent on the same period last year. With web comparison sites making it far easier for people to compare and switch companies or to compare products and services before they buy, good customer service is becoming the main key differentiator
In today’s multi-channel environment customers demand excellence whether they are dealing with companies on the phone, face-to-face or through social media channels. Analyst Ovum calls these people ‘high velocity’ customers – 74% of them use three different channels to get their questioned answered – they are hard to please and easy to upset. High velocity customers want personalised, accurate, timely information delivered professionally always. If they don’t get it, they will switch without a backwards glance. Banks were traditionally less affected by customer infidelity; however, the introduction of the 7-day switch means the days of unwavering loyalty are over.
How can companies get it right?
The quality of customer service is often the only real and tangible differentiator for the customer but it must be maintained throughout every channel. Call centre staff are the vanguards of customer relations – powerful in their ability to win and lose customers. However, they have a tough job – working in a regulated, highly competitive market, where products, internal processes and regulations are complex, sophisticated and subject to continual change and where the impact of getting it wrong can carry a legal and financial penalty and brand reputational impact.
For the past 20 years we have been years working with large blue chip companies operating in regulated industries like banking and utilities delivering employee assessments that highlight people risks – risks stemming from human error or incompetence. In our experience, typically 30% of employees in any company misunderstand at least one key aspect of their role, in spite of the fact they have received training.
What seems to be overlooked in many of these companies is that organisational effectiveness lies not in how well processes are engineered but whether employees actually understand what they have been trained to do and if they have the confidence to do it in the right way, every time.
A common pitfall is that companies take a ‘sheep dip,’ approach to training – delivering training that is ‘one size fits all’, untargeted and ineffective. Many companies also fail to benchmark their staff or measure what people really understand versus what they think they understand and how their knowledge is actually applied at work.
Managers want to be confident that their employees are competent and providing customers with accurate information consistently. In truth most are in the dark about how knowledgeable their employees are, how they behave at work and how they treat customers. They lack accurate information about any skills or knowledge gaps their employees may have so individuals are subsequently not given appropriate or targeted interventions that would improve their performance.
To meet the challenges of delivering consistently excellent customer service in an multi-channel environment, companies need to assess their employees to ensure they are delivering the right training, development, information and management processes that allow them to excel in their roles and keep customers happy and loyal. Key to this is understanding not just how competent people are but how they use their knowledge and how they behave at work. With today’s high velocity customers getting ever more demanding, the companies that can get their customer service right will be the ultimate winners.
Mary Clarke, CEO, Cognisco, www.cognisco.com
