Direct-to-Customer Commerce

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Strategic insights into the direct commerce industry, including ecommerce, direct marketing and related fields

The Illogical Nature of Good Customer Service

Have you noticed how some companies are trying to drive down the cost of customer service by making it very difficult for their customers to reach a customer service representative (CSR) in a contact center?

The premise of this strategy is that if it’s hard to reach a human CSR, customers will be compelled to go the web for customer service — which is generally accepted as being a lower cost solution to customer service. Of course, it’s also a less satisfactory solution to many customers.

Customers must learn they can have confidence in the web-based customer service tools you provide on your web site. And this takes a little time and experience (experience for your customers).

I recommend you pursue two customer service strategies, at the same time.

First, make it easy for your customers to reach a CSR by phone. I applaud Citibank who has recently advertised that anytime you call, you can reach a live operator by touching “0.” We’ve all been caught in “IVR hell.”

Second, continue to enhance your IVR and web-based customer service practices.

As the quality of your IVR and web-based services improves and as your customers gain confidence in them, the volume of calls to your contact center will decline and your customer service expenses will decline along with them.

In the end, it’s one of those classic win-win situations. Other approaches may be a win for you in the short run, but a loss for your customers in the short run — and a loss for you in the long run.

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Filed under: Direct Commerce, Uncategorized

The True Cost of CRM?

Without the question mark, this is the title of an article by Peter Rosenwald in the June 1 issue of Chief Marketer. Mr. Rosenwald does an excellent job of reviewing the economic analysis that is appropriate for assessing how much capital should be invested in a CRM solution, especially in light of the likely return, based upon increases in Life-Time-Value, compared to the cost of acquiring new customers.

The article is an excerpt from Mr. Rosenwald’s book Accountable Marketing: The Economics of Data-Driven Marketing.

I have no particular disagreement or dispute with Mr. Rosenwald, but I worry a little that to focus on CRM as the solution to increasing LTV is getting the cart before the horse.

Admittedly, Mr. Rosenwald’s focus is the marketing aspect of the equation, and the viewpoint I’m advocating is a more holistic view.

When a customer transacts business with you for the first time, that customer is conducting a little test of their own: Will I find this product/service acceptable? Am I getting fair value for what I’m paying? Will they treat me right if there’s a problem with my order? Will they even get my order correct, without me having to contact customer service?

When new customers get the right answers to these questions, the likelihood they will become repeat customers goes up. And their LTV will increase, their tenure as a current customer will continue, as long as they keep getting the right answers.

Not to say marketing doesn’t have a role, but keeping customers is more about quality, service and execution than it is about CRM. Because quality, service and execution is what leads to great customer relationships.

Filed under: Direct Commerce, Uncategorized

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