Customer service: What should you measure to generate ROI?

CEO
Institute of Customer Service
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Jo Causon, CEO of the Institute of Customer Service, takes us through key ICS research findings and the implications it has for both private and public sector organisations.

This is probably one of the most important pieces of research the Institute has undertaken in recent years. It arose from a realisation that those of us involved in promoting customer service excellence and professionalism, need to talk more in the language of business. We need to understand how business operates and how customer service delivery – the whole experience – has to add up in order to demonstrate that it is an important strategic driver for business. We wanted to move thinking away from customer service being purely about services and the delivery mechanisms to a recognition of its worth as a serious business imperative at the very heart of any successful business.
If you look at the UKCSI results, (the UK’s most comprehensive survey of customer satisfaction), it’s very clear that the same companies are always up at the top of the ratings – significantly ahead of the game. What is it that makes them so successful? The way they implement, manage and measure their customer service and how they work to align their people, processes and strategy.
We set out to discover what organisations should be measuring in order to generate ROI in customer service. We set up an online survey, with over 150 responses, largely from senior management and produced 23 case studies from across the public, private and third sectors.
No single solution
There is no one single solution shining through our report – which doesn’t surprise me. But what we have found is that a number of organisations are shifting their perspective on customer service. They are starting again on their customer journey and recognising that all the traditional hard measures such as customer satisfaction, loyalty and retention are still important, but these are not the only drivers which will ultimately lead to ROI.
It is of course contextual and will vary depending on the business sector, culture of the organisation, competitive landscape and other factors. But what is clear is that the softer, more emotional activities such as treating customers as individuals, are more likely to lead to ROI than hard/measurable activities. 53% of our respondents agreed that focusing on these softer measures is ‘very likely’ to lead to ROI compared to 37% for hard and measurable activities.
Customers want to be treated as a person not a number. We want to give our candid opinion on products and services – and the growth of social media makes this very easy. The softer elements of customer experience and customer engagement – the complete experience – these are the areas organisations need to focus on and measure. This needs to be done right across the business, from the back to the front. It’s not just about the contact centre or length of time spent on the telephone. It’s about an experience that creates an advocate of the customer. A total culture of service quality will be necessary to develop and enhance customer relationships for a sublime customer experience end to end.
These softer, less tangible aspects of customer service are harder to measure, especially those that influence customer behaviour and perceptions, but they will lead to competitive advantage because they provide a focused and customer-centric approach – bringing all parts of the business together to give customers what they want. And in today’s challenging economic climate, the organisations that can differentiate through exceptional customer service are the ones who will not only survive, they will grow.
Adding strategic value 
Strong, enduring customer relationships are the key to long-term success and profitability. 81% of respondents believed that gaining an understanding from the customer viewpoint is very likely to lead to an ROI in customer service. Acting on customer feedback was second with 74% and selecting the right staff followed with 68%.
Eurostar conducted an in-depth survey around ‘how did your experience make you feel?’ The organisation was consistently rated strong in terms of operational performance but lacked ‘emotional attachment, personality and flair.’ A cultural change programme was introduced to develop a service personality which balanced the important operational, financial and engineering skills with emotional intelligence, engagement and connectivity.
Any step change in an organisation’s culture and values requires a re-aligned approach which integrates people, processes and strategy. Bourne Leisure, one of the UK’s largest privately owned leisure companies, sees its customer services as paramount to its long-term sustainability. A common theme in the training of all their teams is learning to view the service they offer from the customer’s point of view. As they said: "If you’re not looking after a customer directly, you’re looking after someone that does."
The Elective Orthopaedic Centre currently conducts the largest number of joint replacement operations in the NHS and traditionally has measured its key performance indicators around clinical performance. But clinical outcomes are not their only focus. "The holy grail is how we do more for less and at the same time, improve the quality of what we do," they told us. So all their services aim to make it easy for their patients, from the moment of referral to follow-up post-operative care, all geared towards a successful outcome for the patient.
If you want to achieve an optimum return on your investment in customer service, I recommend the following steps to add strategic value to your organisation and achieve competitive returns.
  • Look at your strategy – its effectiveness, how is it perceived internally and externally – and compare it to your competitors. Can it be strengthened?
  • Is customer service fully embedded in your culture? Is there a consistent approach right across the organisation, its attitudes and behaviours? What is the level and range of staff empowerment? Delivering great service must be embedded in organisational culture, led by an inspiring CEO and carried through by empowered staff.
  • Do you look at your products and services from the customer viewpoint? Do you know what needs to change in order to deliver the definitive customer experience? How can you develop a strong relationship with your customers? Understanding the viewpoint and requirements of the customer is vital to delivering a service which will engage and delight.
  • Re-evaluate your investment approach – what are your drivers, who are your ‘valuable’ customers?
  • Do you have the right measurement variables – are they cross-functional for a total picture? Are you looking to measure and track the softer, less tangible aspects? With potential new forms of measurement emerging, organisations can begin to measure both the ‘soft’ – intangible or emotional – and financial returns of their customer relationships.
  • Be innovative. Overhauling existing customer service systems to embrace new, streamlined engagement and monitoring solutions can offer tangible benefit to both customer and organisation. Think social media, online forums and CRM.
  • Don’t forget your basics. Review your ‘hygiene factors’ such as service recovery, staff training. Product, price, ethics, and efficiency cannot be overlooked; they are the foundation of any great service, ripe to be built upon with value-added customer initiatives.
It is no longer good enough to simply satisfy your customers or to have a product that works. No longer can you merely deliver a service within the timescale you have set. All these are important and we have to do them. But what will really make the difference is when the customer asks: when I went through that experience, did the provider really engage with me, did they understand my needs, did they think logically about what was best for me? Is this approach embedded in the ethos, the brand of your organisation? 
There should always be a constant striving for improvement, never settling for the routine or mundane simply because it’s always worked for you. Successful organisations are those that are prepared to innovate and if necessary, take a risk.

Jo Causon is CEO of the Institute of Customer Service.

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