Customer service is to customers one of the most visible and significant aspects of organizational performance. In many organizations however customer service is one of the most challenging and neglected areas of management, including those with modern call-centres.
The significance of customer service eludes many senior executives, let alone the methods of establishing and managing customer service standards and quality. Instead many organizations and their leaders are habitually fixated on sales, marketing, advertising and promotion - desperately striving to attract new customers - while paying scant regard to the many customers that are leaving, just for the want of some simple effective customer service and care. We see this particularly in highly competitive and profitable sectors such as communications and financial services, where new customers are commonly extended better terms and attention than existing customers. No wonder customer turnover ('churn') in these industries can reach levels exceeding 25%.
The central aim of effective customer service and call-centres is retaining customers, but when an organization gets this right the acquisition of new customers - and so many other things - automatically becomes much easier too. Retaining customers - enabled by excellent customer service - produces many positive benefits for the organization aside from the obvious revenue and profit results:
Effective customer service enables easier growth, indirectly and directly, for example by sustaining healthier volumes and margins, and by business expansion from word-of-mouth referrals.
High levels of customer retention via effective customer service also improves staff morale and motivation. No-one enjoys working for an organization that feels like a sinking ship, or where stressful arguments or pressures prevail. When customers are happy, all the staff are happier too - and more productive.
Improved staff morale and motivation resulting from reducing customer attrition also positively benefits staff retention and turnover, recruitment quality and costs, stress, grievance, discipline and counselling pressures.
Reduced customer attrition and upset naturally reduces litigation and legal problems, from customers.
Retaining customers also enables the whole organization - especially middle-managers - to focus more on proactive opportunities (growth, innovation, development) rather than reactive fire-fighting, crisis management, failure analysis, and the negative high pressures to win replacement business.
Having a culture of delighting and retaining customers fuels positive publicity and reputation in the media, and increasingly on the web.