About Service Delivery
There exists a consensus view that customer satisfaction is critical to business success - right? Indeed, speeches and presentations on the subject of customer service are notable for their predictability:
- The only valid definition of business purpose is a satisfied customer (Peter Drucker)
- Customer brand loyalty is directly proportional to their level of satisfaction
- Satisfaction levels are driven by their product-, contact-, and service experience
- Customer retention costs a fraction (15-20%) of every new customer acquisition
- About 50% of dissatisfied customers do not complain, most of them turn elsewhere
- Complaining customers satisfied with the response are most likely to buy again
- Complaining customers not satisfied with the response are least likely to buy again
- Poor service can destroy in years the reputation and image built up over decades
In view of this evidence, you would expect service to be given the management attention and budget it needs to keep customers happy. In theory, this should indeed be the case. Every manager has by now learnt to express a deep commitment to customer service. In practice, customers, independent surveys and service employees will challenge such comfortable views in many companies. There are few areas of business where corporate aspirations and hard reality are subject to such large gaps as in customer service.
In this section of the website, we will address how service delivery can be made successful. The objective must be to create a service organization that is lean in costs but meets customer needs in terms of the speed and quality of its operation. Based on insights gained from the reform of service organizations in several companies, we propose a reform program with four components:
Benchmark The Status Quo
Before a meaningful reform of the service area can be undertaken, it is important to investigate how the current organization fares in terms of its operational performance: time, quality and cost. As indicated, a huge gap is often detected between customer expectations and current performance. In addition, poor performance may be aggravated by low productivity. Find out what tools exist to effectively bring these problems out in the open. If done properly, this effort will expose the gap to be closed and mobilize energy to make the necessary changes.
Define The Strategy
Once the performance expectations are clear, the strategy to achieve them needs to be defined. As service expectations can not always be met in full, the targeted degree of compliance must be agreed. Then, there is the issue of scope: how much of the ownership cycle is to be covered? Should a service event become a sales opportunity at some point? Moreover, a balance must be struck between what is done in-house and what is left to business partners. Find out how some of these key decisions can be arrived at and how other companies made their choice.
Design The Infrastructure
The strategic parameters in turn drive the resources and the infrastructure required. However, by understanding some of the key logistical aspects of service delivery, a flexible, lean and effective infrastructure can be created. We will discuss what these parameters are and what traps should be avoided when defining the service infrastructure.
Motivating the front line to create and maintain a service culture is essential for any stable and successful service organization. It involves optimizing processes so that staff can focus on the customer, it involves incentives that reinforce the customer perspective in the organization, and it involves the selection, training, and the continuous dialog with people staffing the front line. Last but not least, it requires top-management recognition of their challenges, efforts and successes. We will expand on these topics in the last section.
Service organizations can not transform themselves overnight, but early successes can be seen within six months, major improvements within one year, and quantum leaps within three years. When the reform is successful, it will generate a continuous improvement effort from within and many happy customers supporting your business success.