Sales through service: The start of social business

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'Sales through service' is a simple concept, and one that is becoming increasingly popular as organisations look to drive their contact centres into profit centres. But sales through service requires a lot of hard work to get it right. Jennifer Kirkby explains what it is, why it's important - and how it can be implemented successfully.

By Jennifer Kirkby, consulting editor

‘Sales through service’ is a seductive little term that’s been around for a while and which is about to get a big ‘heave-ho’ up the hype cycle. Its rise in the customer relationship lexicon comes from contact centres eager to become profit centres. But like all simple ideas, there is a lot of hard work involved in getting it right.

The customer’s perspective

We’ve all had it happen to us - the call at ‘tea time’ from our bank with that unmissable offer on home insurance you’ve had before; the ‘Dear valued customer’ letter from the retailer who hasn’t bothered once to contact you to see if you’re happy with the bed you purchased three years ago; the half price chocolate bar offered with your newspaper when you’re calorie counting. Did you feel valued by any of this? Probably not. In fact I’ll warrant you felt irritated and used.

And yet, according to a 2004 Forum Corporation study on cross-selling, 88% of customers welcome product and service suggestions that help them. And not just any customer, they surveyed customers with spending power. The same is true in the B2B world; clients prize sales professionals who empathetically understand their business and make suggestions about how to improve it.

Three of the seven ‘services’ customers most value from suppliers are those that make their life simpler, help them solve their issues, and help them reach their goals. This is the human behaviour behind cross and up selling initiatives.

What is sales through service?

We’ve been so busy kicking off our controllable ‘outbound’ sales process (with leads ranging from the cleverly modelled to the scattergun) that we’ve overlooked the customer’s buying process. We have forgotten that the best times for making offers of any kind is when we are in service mode and the customer is happy we are listening to them and meeting their needs.

When the bank staff have just sorted out your mortgage problem, you are far more open to that home insurance offer; if the retailer calls to see how the bed is wearing he is more likely to hear about your current needs; and if the newsagent trained his staff to engage into personable conversations he might sell more goods and have fewer grumpy commuters.

Sales through service revolves around ‘conversation’, even if that is machine to human. That conversation can be kicked off by the company, but the approach is more often made by the customer when looking for a service.

Examples of sales through service are:

• Key account managers, whose role is to understand client’s needs and find solutions from his company. The best do this through personal conversation, like the IBM client manager for an airline who spends most of his time talking in the airline’s staff canteen.
• The Dyson field service team who, whilst carrying out servicing in the customer’s home, find out through conversation what issues and needs the customer has. They are well versed in all the products and connected to operations to put right any issues. Customers have been highly delighted with this ‘time saving’ service.
• John Lewis thought that leaving customers to browse was what they wanted, but customers thought staff were being aloof and unfriendly. After a five year sales through service programme, staff now acknowledge the customer, open up conversations and close sales by matching product to need as closely as possible – even if it means selling a lower priced product than the customer had intended to buy.
• Amazon, which was founded on a sales through service philosophy.
• O2, which supplies service contact centre staff with information on the customer’s risk of attrition, and the three best offers (sales or service) to make to that customer based on propensity modelling and the content of the call. Around 6% of its 50 million annual calls now generate revenue, and customer satisfaction is reported to have risen.

All the examples emphasise that sales through service is not just about revenue generating sales, it is about exchanging value. That may be free upgrades, helpful advice or customer care, in exchange for customer engagement, recommendations, valuable data – and yes, at some point sales.

Initiating sales through service

Now the sales through service concept can sound easy - get your sales people to provide services, or incentivise your service staff with sales targets and away you go. Wrong:

1. Your service staff get their kicks from helping people, and view sales disdainfully as product push. Burden them with sales targets and you’ll meet heavy resistance of the “If I’d wanted to sell I’d have joined sales – and got the commission” kind. Staff (sales or service) need specific sales through service training and compensation.

2. The customer will hate having the same conversation every time they call. So staff require excellent customer insight systems with profile data, information on which to make offers, and records of what’s been offered together with the outcome.

3. With a ‘make and sell’ culture, you cannot move service from the end of the sales process to the beginning without the support of the whole organisation. Service has to become a cultural precursor to sales – and that means an understanding of longer relationship, rather than, short product push timescales.

4. How will you prove the effectiveness of your sales through service strategy, when comfort zone measures’ such as call handling time and sales calls per day are threatened? How will you evidence the benefits of higher sales, deeper relationships and greater customer profitability that offset the cost of staff competency building?

Specifically contact centres

Sales through service is a brand differentiator for any customer-facing environment where consumers are demanding. But it is particularly attractive to call centres for justifying the ‘inbound call function’, an area that has traditionally been seen as a cost, particularly when it has to come back onshore.

Sales through service initiatives are frequently started by either the service function or a forward-thinking CRM manager tasked with improving experiences – and often it’s a collaboration of both. The initiatives may be called sales through service, but more efficaciously they are named ‘intelligent dialogue’, next best action, real-time marketing, conversational marketing or added value service. Many companies are talking about it, but few doing it; 02 and Barclays are two of the most experienced in the UK, and there are more in the US.

A McKinsey study on the sales through service concept amongst call centres in North American banks showed that they managed to achieve three product sales for every 100 inbound calls answered. Elsewhere, a doctoral study of six major UK organisations, including the AA, O2 and Barclays by Christine Bailey, marketing director services at Cisco Systems, showed that the best in the UK achieved around nine product sales per 100 inbound calls.

According to The Forum Corporation’s cross-selling study, there is remarkably little difference across the world in the reasons why offers succeed better in service interactions. However, they did find regional differences in the percentage of customers most likely to buy during an interaction.

The successful must-haves

All studies on sales through service point to better business results on a number of measures if issues 1-4 above are surmounted. Of all these, reengineering the staff is the most vital, quickly followed by integrated technology, the right guiding metrics and the support of the rest of the organisation. More specifically:

• Reengineering the staff
  Agents need to become advisors and an employee engagement process needs to be thought out. Staff have to care about creating customer affinity for the organisation and understand what it means to them. They will require skills in spotting customer needs, solving problems, working with others, involving the customer and managing the sales through service process. They should be actively involved in deciding the offers made and advising the business on what customers want, as a crucial part of the engagement process.

• Integrated technology
  Even time-rich key account managers need good client information, but contact centre advisors require especially reliable information system support in the seconds they have to establish callers’ requirements. Real-time decision support systems are now coming on the market and must integrate into enterprise CRM technology for maximum effect – no flicking around screens, or else advisor take up will be low. The technology has to be welcomed by advisors, and staff must learn not to freak the customer out with the personal data it contains. It is a vital tool for recording and evaluating outcomes.

• Guiding metrics
  Christine Bailey’s study found that metrics needed to balance customer satisfaction, with cost metrics such as handling time, and value targets such as retention, customer data and sales. She found that good practice dictated changing metrics as a sales through service culture evolved. Initially, for example, O2 measured advisor use of the decision support system, then moved to offer making, and finally offer take up and retention. Thus O2 found that if advisors irritate customers with product push, a subsequent 0.25% drop in retention would wipe out all the additional cross-selling revenue!
• Organisational system
  If advisors are to succeed they must have a climate in which the whole organisation cares about customer service, and they see managers being responsive to customer needs. Service to them from other departments must be impeccable, so that they can offer that to customers. That also applies to partner companies. Excellent service must be part of the customer proposition and advisors should be able to deal directly with departments who cause calls about poor products and service failures. Sales through service is many times more valuable to the business when done on the back of calls asking for help with use and information, according to lean business specialist Stephen Parry.

Bottom line

With a sales through service strategy it is front line staff who ultimately make the decision if and when to make an offer, after the requested service has been fulfilled. Staff have to be trusted to do the right thing for the company, which is why their engagement is vital. In an online situation the customer must be given the opportunity to say no easily.

Sales through service, therefore, is just the start of becoming a 21st century social business. It is a far more open, conversational and collaborative way of making money which can capitalise on the myriad of opportunities offered by social media; but beware of starting an initiative without understanding what is involved to make it a success.

Further reading

• 'How customers view cross-selling' by The Forum Corporation
• 'Roadmaps for delivering winning service' by The Forum Corporation
• 'A demanding world: How much value do you create for customers' by Stephen Parry
• 'Engaging employees the John Lewis Way' by Jennifer Kirkby
• 'Cracking key account management' by Jennifer Kirkby
• 'Unleashing the Value of your SFA system' by Dow Jones
• 'Using call centres to boost revenue' by McKinsey, premium content from the McKinsey Quarterly
• Doctoral thesis by Christine Bailey - 'How companies use customer insight to drive customer acquisition, development and retention' - available in hard copy from the library at Cranfield Business School
  

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