Why the customer service dinosaurs should be extinct

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The Institute of Customer Service's Paul Cooper looks at the customer service crimes being committed and why it's important to ignore the dinosaurs and learn from the innovators if you want to keep customers loyal.

By Paul Cooper, Institute of Customer Service

Have you noticed that the majority of organisations who year in, year out give great customer service and are recognised for it aren't the ones in trouble in the recession?

Of course, there may be some exceptions to prove my rule wrong before the year is out but in the meantime, there is proof yet again that giving great service is not only the best way to make money long-term but also to keep your customers through the good and the bad times. And not only that – keep the best staff as well.

"It costs around 8-10 times more to gain new customers than keep the ones you have, so where do most organisations spend their marketing money?"
Paul Cooper
 

They will also be the ones who are the most reluctant to shed staff in the difficult times too: they care about their people and realise that it's the employees that have got their organisation where it is today.

Back to the future

Back in the 70s and 80s, most organisations would have a restructure now and again, introduce voluntary redundancies to (allegedly) improve efficiency and then find that all that happened was their best people left and the poor ones stayed, leaving them handicapped to come out the other side off the problem. This forced them to waste valuable time, energy and cost on re-recruiting and training people to get back to speed.

I thought these crazy ideas had been ditched, but no, we see them all playing out again in 2009 as the first batch of organisations go into panic mode and think short-term.

Then of course there is the whole issue of customers. It costs around 8-10 times more to gain new customers than keep the ones you have, so where do most organisations spend their marketing money? On trying to gain new customers of course! They often compound this basic error with offering better deals to prospects than they do long-term loyal customers, almost abandoning their loyal customer base when it comes to follow–up service and after-sales care.

How many times do we hear of organisations with 20 sales phone lines, always available, and three customer service lines ("your call is important to us!"), which are always engaged and often 0870 premium numbers? It makes you wonder why organisations spent millions on CRM systems to know their customers better just so they could abandon them.

Don't cry wolf

I predict that crime three in 2009 will be committed by the organisations that believe they can use marketing to get themselves out of a hole by telling the world they're great at customer service when they aren't. We’ve seen this before and it never works, unlike with products where, selectively, a great marketing department can get the public to believe in something that may not be quite as good as it sounds.

We've seen it before with a well known high street store, a major supermarket and an airline, all in the last five years. The public just doesn't buy it. "We’re great at service!", they cry. "Oh no you're not!", we respond. And yet, if they bothered to actually get great at it, there is no more powerful marketing platform in the world.

Those that get it right like airlines Emirates and Singapore, supermarkets such as Waitrose and Tesco, high street stores such as Boots and John Lewis and banks such as first direct, can proudly boast of being great and we all nod sagely.

And the last crime I forecast will happen in 2009, again committed by the worst organisations. This will be a retreat by management from the real needs of the business and the customer that requires mountains of analysis work, pouring over reports for trends and new ideas and so more meetings and discussions than ever.

Reverse business psychology

What this crisis needs is more hands on, back-to-the-floor living. It also requires working closely with staff and customers, picking up trends on the spot, hearing what customers really want and then acting on it fast. It needs quick thinking, responsive management who care for their people and their customers, with a passion that leads and motivates staff and is picked up on by them so they give discretionary work, new ideas and sales opportunities.

Most importantly, it leads to these organisations having a head start when we come out the other side – which might be sooner than the doomsayers expect.

Quite a large part of this whole issue could justifiably be considered as made even worse by some elements in the media, as large chunks of the general and broadcast media just await the next bad news story and disaster. I, on the other hand, applaud those organisations out there who have already announced increases to their workforces, expansions of their stores and distribution centres, and increased footfall and turnover.

They are the ones who choose not to learn from the 'dinosaur' organisations who only know the practice of cutting costs, reducing staff levels, and to hell with the loyal customers.

I look forward to greeting all of these positive, and successful, organisations on the other side of the downturn. May they lead us all to future success, in the right way.

Paul Cooper is director at the Institute of Customer Service