Direct-to-Customer Commerce

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

Is Customer Service Just an Expense Line Item?

Too many businesses treat their customers as if the answer to this question is “yes.” They reluctantly provide customer service, but only because they’re convinced they must. As a result, while they do try to provide good quality service, they simultaneously try to drive the overall cost of customer service as low as they can.

Others go out of their way to provide superior customer service. Some — and unfortunately, too many — end up spending money on operational efforts that make no appreciatable difference to customers. For example, some merchants insist that web or catalog orders be shipped the same day they come in. To the managers in the warehouse, this creates a very expensive labor burden, because they typically have to over staff in order to meet the service level. Then, to rub salt in the wound, the order is shipped via the lowest cost method, which means the customer will never notice how quickly their order was picked, packed and shipped.

But the real oversight is not following the logic of good customer service to it’s proper conclusion.

Most companies which provide good customer service do so in the hope that such good service will result in greater customer Life Time Value. That is, the customer will buy more over the long term.

Fair enough. That’s a good plan.

But why not go for it right now!

That is, ask for another order right after you provide the good customer service. Take care of the customer’s problem and then try to make another sale.

Too many customer service contact centers are failing to recruit and train their staff with sales in mind. So, while the customer service is great — the lost sales opportunities just continue to mount.

Customer service should not be just an expense line — it should be a revenue generator — all the time.

I was prompted to write this comment because of some dealings with one billion dollar company who recovers 30 percent of their customer service expense thru increased sales on those very same calls. However, another company — this one a client of mine — generates four times their customer service cost in additional sales at the end of customer service calls.

Which report would you rather give your boss?

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Filed under: Direct Commerce, Uncategorized

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