Why Customer Service Fails

Why Customer Service Fails.

 By Niels Kjellerup, Editor of this Website and Senior Partner in Resource International Ashgrove, June 4th 2001.

 Note : In this article I'm taking you on my own road of discovery to find out how & why so many companies and Call Centres fail in servicing their customers and ultimately fail themselves. My intuitive logical-trail might not be your way of reaching conclusions, but I hope you like and can use what I found.

 Background and Situation :

Customer satisfaction levels are falling in Europe, Australia & in American customer satisfaction levels have declined for a second straight quarter  The American Customer Satisfaction Index (ACSI) fell by 0.6% for the first quarter of this year, now standing at 72.2 out of a possible 100. The five sectors studied for the first quarter of 2001 were utilities, parcel delivery/express mail, airlines, telecommunications and hotels. Contact: Univ. of Michigan Business School. Read Fast Company April 01 : “Betrayed – The greatest lie in America ‘ The Customer is in charge’ ”.

The ongoing cost cutting exercise is hurting Service Delivery and despite IT investments in Call Centres to the tune of yearly +$ 20 billion very few Companies are getting the needed Return On Investment. Many TV commercials today are aired claiming ' call us now, you won't be put on hold in a Call Centre'

In a very short timeframe the Call Centre Industry risks becoming the fall guy for the customer disenchantment with Service Delivery and risks becoming synonymous with bad or indifferent service. The move by major corporations to outsource Call handling to India is not helping this situation nor the perception.

Why : 

The obvious reason is, that most Call Centres adopt flawed or False Benchmarks to measure, how they add value to the organisation. 

What we need to examine is how the productivity measure ‘Number of calls taken from customers' or 'the length of the average call ’, came to be seen as the Call Centres  main contribution to its sponsoring organisation. Somewhere business logic went off the rails. Where or When ?

The data trail:

The first clue to this puzzle came to me in the form of an article in the Economist ( April 14, 01) “A revolution of one - Michael Dell invented a business model that all the world wanted to copy. Yet after all these years, almost nobody has. Why? “ ( interestingly the article fails to come up with a real why). I remember an interview with Michael Dell from November 1992, where he outlined the Dell Computer business Model as follows ( quote might not be accurate, but the gist of it  is) :

1)     We build high quality PC’s at affordable prices, not necessarily the cheapest.

2)     But we build these PCs to order and keep our inventory costs at minimal levels 

3) We sell directly to the End user &

4)     then we deliver a Service-Experience beyond the customers wildest dreams.

“ I’m not afraid to tell you this because  our competition ( Compaq, IBM, HP my note ) can’t copy this model, as  they have too high overheads to ever equate cheap prices with high quality service delivery “. “ We plough our profits right back to the customers as improved service and warranties ” . Could it be, that anyone attempting to duplicate Dells business model, is missing this key ingredient – “ The we deliver a service-experience beyond the customers wildest dreams “ ?

Here’s what Jack Welch, now ex-CEO of GE, has to say : “We at GE only have two sources of Competitive Advantage : 1) The ability to learn more about our customers faster than the competition &  2) The ability to turn that learning into action faster than the competition".

Mike Ruettgers, CEO of EMC Corporation, known for his fanatical commitment to  customers : “ When a customer believes in you, they’ll stick with you almost no matter what ”. Read the story of how EMC, a data storage company, leaves the competition dead in its tracks by elevating customer service delivery to EMC’s no.1 priority ( June 01 issue Fast Company).

Conclusion :

These three leaders of very successful companies are all fanatical about their customers and see call centres as core business activity to maintain customers relationships and get feedback from the marketplace 

The call centre business logic is lost in the prevailing business model, which identifies customer service delivery as a Cost and not as revenue creation or part of the sales process.  Senior Management may pay lip-service to the importance of Customer Service Delivery, but Sales are seen as events, rather than an ongoing process and Service plays no part.

The Real Why :

By maintaining Outmoded Business Models, which fails to identify Customer Service Delivery as a key component in the sales process, service is relegated to become a cost activity with no revenue value attached to it and Customer Relationship programs falter.  

As a consequence, investment in IT/Voice/Data/CRM platforms will continue only, if Customer Service  migrate from Cost to Revenue creation with sustainable ROI-models. 

The Solution :

The simple truth that Service is Selling and Selling is Service must be reflected in the Business Model of any company.

Service Delivery and in particular Call Centres MUST become or be treated as revenue centres and be integrated with the Sales processes. How ? By tearing down the outmoded Model of Selling as an Event. Sales must be redefined as a key element of the Customer Contact Process and be integrated with the continual process of customer interaction.

For any one working with CRM-strategies and implementation, this re-engineering of sales will probably also handled most of the ‘Silo-problems’ encountered. This will also help revigorated the Call Centre & Internet eNabled contact centre and cost justify the needed investments in CRM enabling software with realistic ROI’s.

But first and foremost, companies need to have a good look at their basic business model and ensure Service Delivery is recognised for what it is : Vital to the current and future company revenue stream.

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