Customer service training faces the axe

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It is a commonly held truth that training budgets are often the first thing to face the chop when times get hard. This can be a costly mistake, however. An increasing number of firms are now putting stock in training their way out of the recession - investing in staff to ultimately save your organisation money.

So it is with some disappointment that I've read the latest release from The Institute of Customer Service, which reveals that one in three organisations have axed customer service training to survive the recession.

Having conducted a survey of customer service professionals between July and October, the Institute found 30% of organisations surveyed have cut investment in customer service training and 21% have laid off customer-facing staff in 2009. That is despite the Institute’s research that companies with a reputation for service excellence and committed frontline staff have a 24% higher net profit margin than same-sector rivals who do not enjoy similar standing, and can achieve 71% more profit per employee.

Interestingly, the same poll also found only six percent of organisations have cut investment in technology.

Jo Causon, the Institute’s chief executive, said: “Investing in your people is a key differentiator in business today. An organisation that emphasises customer service, through training and development, goes a long way to retaining staff – which motivates them to satisfy customers.”

“Technology can only take you so far in customer service delivery," she adds. "It is your people who are on the front line and they need to be highly trained and motivated to consistently meet and even exceed a customer’s expectations, with technology working in parallel, so that people, processes and strategy are truly aligned around the whole customer experience.”

Well said Jo!

With customer service levels already taking a beating, and our postal services shortly to be crippled by national strikes, it looks like Christmas spirit could be in short supply for customers this festive season.

On a positive note, the poll found that one in five organisations have actually increased investment in customer service - and I'm sure this investment will pay off handsomely for this minority of businesses that are taking a more holistic view of the customer experience.

About Neil Davey

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Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 15 years, including Internet Works, CXO magazine and Business Management. He joined Sift Media in 2007.

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By JamalJ
24th Oct 2009 09:34

The economic recession, since it originated with the finance industry, has a lot of people concerned about predatory lending. What kind of lending is predatory?  Is it whom the loan is lent, or is predatory lending the ease of access to small amounts?  A lot of people think that the worst offenders are payday lenders, but there isn't a lot of evidence.  On top of already published studies, a recent study of the payday lending industry by NYU graduate student Aaron Gold, they're about as profitable as banks or credit card companies, and carry the same risks – if payday loans lenders are indeed predatory lending, so are all lenders, although payday lenders can't afford to buy Congressmen.

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26th Oct 2009 14:56

and the pursuit of new customers, it seems as though the established customer is treated as something of a worthless relic. If cost of customer retention is so great that it renders an organisation unprofitable, then that is fair to conclude that the fault is more likely to lie with the business model rather than the customer?

After all, if it's true that it costs typically 8 times as much to acquire a new customer as it does to retain an existing one, either that statistic is based on a faulty premise or the ego (customer acquisition at any cost) rather than the bottom line (profitable existing customers) controls the business. Customer service training invests in both the customer and the staff - the ultimate win-win.

In the final analysis, it would appear that for some businesses, high customer churn is the avenue to a more profitable operation than developing happy profitable customers who are pre-disposed to recommend others, regardless of whether they were prompted to.     

 

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26th Oct 2009 16:21

The fact is that training budgets have been slashed across the board and customer service training is just another casualty of this.

There has been much talk of organisations focusing on customer retention in these recessionary times - even from those industries like the telecom sector where customer churn is par for the course. I just wonder whether some of these organisations have taken an axe to their training budgets without exploring in fine detail exactly what collateral damage will occur as result of some of the cuts.

It just seems inconceivable to me that firms would knowingly undermine their customer service in the present environment.

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