The central aim of effective customer service and call-centres is retaining customers, but when an organization gets this right the acquisition of new customers – and so many other things – automatically becomes much easier too.
Retaining customers – enabled by excellent customer service – produces many positive benefits for the organization aside from the obvious revenue and profit results:
Retaining customers through effective customer service enables easier growth, indirectly and directly, for example by sustaining healthier volumes and margins, and by business expansion from word-of-mouth referrals.
High levels of customer retention via effective customer service also improves staff morale and motivation. No-one enjoys working for an organization that feels like a sinking ship, or where stressful arguments or pressures prevail. When customers are happy, all the staff are happier too – and more productive.
Improved staff morale and motivation resulting from reducing customer attrition also positively benefits staff retention and turnover, recruitment quality and costs, stress, grievance, discipline and counselling pressures.
Reduced customer attrition and upset naturally reduces litigation and legal problems, from customers or fair trading laws.
Retaining customers also enables the whole organization – especially middle-managers – to focus more on proactive opportunities (growth, innovation, development, etc) rather than reactive fire-fighting, crisis management, failure analysis, and the negative high pressures to win replacement business.
Having a culture of delighting and retaining customers fuels positive publicity and reputation in the media, and increasingly on the web in blogs and forums, etc. The converse applies of course, when nowadays just one disgruntled customer and a reasonable network of web friends can easily cause a significant public relations headache.
The cost difference and relative impacts on organisations between gaining and retaining customers can be staggering, especially when the actual cost of retaining customers if all that most customers require is not to be upset!
While the trend is apparently for more people to complain (mobile phones and the internet make it easier to do so, and people are less tolerant than they used to be) this does not necessarily mean that customers are more likely to migrate to competitors.
British Standard Code of Practice for Customer Service
The British Standard Code of Practice for Customer Service was published by the British Standards Institute (BSI) and became effective on 16 April 2007.
As a Code of Practice, this standard is one of guidance and recommendation – it is not a mandatory specification and should not be offered, implemented or quoted as such.
The Introduction of the code of practice references the Harvard Business Review in summarising the main benefits of improving customer satisfaction via effective customer service as being (the ‘3Rs’):
It also refers to the research by the (British) Institute of Customer Service (ICS) in identifying the most important elements of service delivery according to customers:
quality and efficiency
ease of doing business
These are interpreted into an alternative set of ‘3Rs’ for effective non-commercial, public sector customer services and service delivery:
BSI suggests that the Customer Service Code of Practice will assist organisations to:
Establish effective customer service mechanisms
Differentiate their offering via innovative customer services
Build customer loyalty through positive customer service experience
Increase customer retention
Attract new customers via word of mouth
Reduce marketing costs
Increase service efficiency
Reduce complaints and complaints handling resources and costs
Improve compliance with consumer trading laws
Improve services and accountability (especially for public sector organizations)
Develop and sustain organization-wide focus on customers and quality
Improve ease of dealing with organization for customers Pro-activity and anticipation are identified as crucial underpinning factors in working with the code of practice.
The 2007 BSI Code of Practice for Customer Service is an excellent template and essential reference material for anyone involved with introducing or managing customer service.