Building a World-Class Customer Service Model
The digital age has brought two major changes to the area of customer service, which I believe have greatly contributed to its downfall. These two major changes are outsourcing customer service departments to foreign lands and attempting to provide customer service without the use of verbal communication (i.e. companies who only offer customer service via email or chat). I frequently hear companies talking about their commitment to customer service and their customers being king, However, it is hard to find evidence of these statements. In our research and personal experience, we find that 25-30% of companies ACTUALLY provide great customer service (Bloomberg, Redtail, RedBlack, etc.). The purpose of this article is to create a simple and repeatable framework for organizations to create a great customer service experience.
I am not going to reference research material and show fancy bar graphs, etc. about the financial benefits for companies that have happy customers. There is a plethora of information available on the topic and it is not debated. We know that companies with happy customers have great retention rates and keeping customers is much less expensive than obtaining new ones (marketing, onboarding, etc.). After researching this problem in depth and spending hundreds of hours building our customer service model, I came to the realization that this problem was not extremely complex, and a great customer service model consisted of a set of fundamental values or concepts. Most of the companies that we evaluated that provide poor customer service (Envestnet, DocuSign, Adobe, Microsoft, etc.) are simply putting growth and shareholder value WAY ahead of customer service, a short-term win, and a long-term loss. The customer retention rates of these companies are poor, which places a lot of stress on the sales and marketing departments to rapidly replace customers. What we discovered was that companies, like Bloomberg, that have awesome customer service models implant customer service deep into their organizational culture. Developing and maintaining a great customer experience requires commitment and sacrifice. It requires a company to grow a bit slower than they would prefer. It requires a company to tell a prospective new customer that they will not be able to onboard them for 2-3 months due to the need to hire and train new team members to service their account. It requires a set of company values that are not negotiable. This type of mindset must pervade the entire organization for a great customer service model to emerge.
As we thoroughly researched both good and bad customer service experiences and as we developed our own customer service model the following fundamental principles emerged. We believe these fundamental principles of customer service can be used as a guide for companies of all sizes.
1. Great customer service must be part of the organizations culture, starting at the top. This is a very simple and obvious prerequisite to the principles below. Leadership must be “in it” for the long term and their beliefs and behavior will emanate throughout the organization.
2. The customer service role should be the starting point for young talent that wants to progress within the company. Morningstar and Bloomberg do a great job with this concept and we stole a page from their playbook when we developed our own model. Young talent starts in a customer service role before moving on to their desired path within the organization. When highly skilled, young talent fill the customer service roles for a company the quality of people is very high. These individuals are motivated to succeed in the customer service role as they cannot advance within the company without first proving themselves in this position. This creates the proper framework regarding the importance of customer service for the entire organization.
3. A meaningful amount of each customer service associate’s compensation must be tied to customer retention and revenue generation. Each customer service associate is placed on a team that services a group of customers. The customer service associates work in tandem with sales professionals to form a cohesive team that works together with one common goal. That goal is to service as many happy customers as possible. As the team increases revenue the salespeople and customer service associates make more money. If they lose customers and revenue decreases the salespeople and customer service associates both lose revenue. This is a very simple model that keeps the interests aligned for the organization, salespeople, customer service associates and most importantly, the customer. Companies with poor customer service most often have a structure in which nobody is accountable for anything. This creates a horrible experience for customers as they are left to feel as if they have no representation within the company that they are paying for services and sometimes locked into contractual agreements.
4. Customer service associates must be given the autonomy to solve problems using whatever form of communication necessary. This is a very common mistake made by companies in today’s digital world. Many companies are trying to “do away” with phone support, thinking that they are being efficient, etc. TypeForm and BlueLeaf are both examples of companies that are making this common mistake. In general, we like both companies mentioned above, and we enjoy their software products, but customer service is lacking and frustrating due to agents not being able to simply pick up the phone and call the customer when needed. We have spent hours in email or chat dialogue with both of these companies knowing that if the customer service agent would have simply picked up the phone and communicated verbally all parties could have saved an hour or more of time. RedBlack, Bloomberg, and Morningstar all do a great job in this area as they entrust their customer service agents to determine the most efficient form of communication to solve the problem at hand.