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What is the value of Customer Service?

What is the Value of Customer Service?
Can we quantify it?
Can we get senior management to understand it?
We all know what good customer service is when we experience it, but few organizations can translate this into profit or margin at the end of the day.
Why is the value of good customer service so elusive?

The studies are clear 92% of consumers base their opinions of an organization based upon their call/contact center experience (Purdue), 54% of consumers have a higher opinion of an organization before they contact center than after (transversal). So what is the value of customer service? Does it affect lifetime value? if so how? Does change loyalty, repurchase, RFM analysis? If so how? Can we stop speaking of customer service as we do the weather…everyone talks about it, but nobody does anything about it? Come on weigh in, lets get your point of view.

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2 thoughts on “What is the value of Customer Service?

  1. Colin Taylor says:

    Steve,
    Great comments and you have hit the nail on the head. Business often makes superficial and inaccurate estimates of the amount of support a product or service will require…It is amazing how dumb people can be ( I know as I am often guilty of ‘stupid user errors’. Products/services are priced with little more than a cursory attention to downstrwam support and even less thought about the quality of the support that is now underfunded will have upon lifetime customer value, repurchase, loyalty and retention.

    Pay as play support is at least honest . The provider is telling us up front that they have no margin for support at these prices.

  2. Steve Hamrin says:

    Don’t you think the problem has to do with economics – or capitalism? The alternative, it seems to me, is that we’re just too stupid to deliver decent service and I don’t think I’m willing to accept that.

    If you just look at one aspect of Customer Service, say customer technical support, the economics continually put pressure on the after-sales support. Whether it is for that router that you bought for $20 at Best Buy or the “free” DSL service offered as part of a triple-play, the margins just get thinner and thinner. It seems to me that company’s would love to provide fantastic one-on-one support if they could, but they don’t have the cash. The result is that agent training is shortened, salaries are held down so attrition is increased, IVR and long wait times help the financials as well. Then, as you move up the chain, managers are measured on things like AHT and budget, well…you get what you incent for.

    IMHO, the answer, in at least this area, is paid support. Ironically that seems to suggest a consumer has to pay for customer service but so be it.

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