WHITEPAPER

The Importance of Customer Service to Your Organisation’s FutureHow traditional processes are harming your ability to competeStuart Evans, Chief Technical O�cer, Invu

By retaining, �nding and leveraging information in your organisation you can make a huge di�erence to the quality of

your customer service.

Whitepaper: The Importance of Customer Service

How important is customer service really?The Institute of Customer Service identi�es a direct link between high quality customer service and customer retention, reputation and business performance1. No wonder it’s an increasingly high priority, especially when customer expectations and demands are rising.

In these days of social media, it’s easy for a business’s reputation to be damaged and for that damage to be broadcast and writ large on public or industry perception.

But is it really important? In 2006 Bain & Co. strategist Frederick Reichheld identi�ed that:

• Over a 5 year period a typical business may lose as many as 1/2 of their customers over a 5 year period.

• Acquiring a new customer can cost 6 to 7 times more than retaining an existing customer.

• Businesses that boost customer retention rates by as little as 5% see increases in their profits. This can range from incremental uplifts of 5% through to an astonishing 95%2

Customer service may play an even more important role in achieving customer satisfaction and retention than the quality of your products and services. Reichheld condenses this as an index of future prosperity via the widely used Net Promoter Score and Golden Rule3. But, what makes for a loyal customer?

Once you’ve won a new customer it’s essential to deliver and to meet their needs and expectations.

The Institute of Customer Service concludes that there is a clear relationship and consistency between ROI and customer service. Accenture concluded the same in its 2006 research, establishing for example that almost 50% of US customers switched service provider due to poor customer service. For technology businesses (often a predictor for other sectors), “companies whose customer service capabilities are only as good as those of their competitors will likely lose nearly 75% of their customers, and companies with which customers have a moderately high level of satisfaction stand to only get about half of those customers to buy from them again.”4 So, standing still isn’t good enough.

Customer service is less of a cost and more of a necessary investment, whether �nancial, time or cultural.

This paper examines the importance of customer and supplier service. It takes the wider de�nition of customer service as being any engagement with your customers and considers the

impact of traditional operating processes.

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1. “Return on investment in customer service” – Institute of Customer Service 2011

2. Havard Business Review – “Learning from customer defections - The Customers you lose hold the information you need to succeed”

3. Harvard Business Review - http://blogs.hbr.org/cs/2011/10/profiting_from_the_golden_rule.htm

4. “Superior Customer Service Capabilities: Key Factors in the Journey to High Performance” – Accenture, 2008

The same report highlighted genuine di�erences in its sample between the most common priorities of organisations and those of their customers:

Priorities of organisations

• Increasing revenue creation opportunities from service and support• Increasing customer self-help capabilities via the web• Becoming more efficient in handling service calls• Improving product quality through insight and action based on customer service data• Improving call resolution times• Improving underlying information technology systems for customer service and support• Improving the quality of agent support our customers receive• Doing more selling during the support process• Increasing customer self-help capabilities via IVR• Selling new extended support agreements

Priorities of their customers

• Completeness of solving my problem 69%• Speed of solving my problems 65%• Solve my problems with one service agent 45%• Use a logical and efficient process to solve my problem 38%• Ability for me to quickly reach a live service agent when desired 35%• The ability for me to solve a problem myself with online tools 13%

Figure 1: Company priorities vs. customer priorities (Data: Accenture 2008)

The results showed that the two parties often have aims that are at odds with each other. This is hardly going to breed trust. In fact, this is exacerbated by the fact that many businesses perceive their own performance far more optimistically than their customers do5. And, with the landscape increasingly awash with routes to obtain feedback on an organisation’s performance the savvy customer is able to obtain good intelligence on other’s experience. At the same time, unless your organisation is a monopoly, your competitor’s promoters and advocates will provide reasons to jump ship - publicly.

Understanding your customer or client is not only essential it’s also an area where complacency is dangerous.

It is therefore worthwhile comparing the typical organisational needs and typical customer’s wants shown above. Of course, there’s no such thing as a typical organisation or customer but there are strong patterns which emerge across a cross-section of organisations and their end-customers. This is what the Institute of Customer Service has done in compiling the base data to establish those activities which organisations ought to be focusing on to improve business growth and delivering ROI. Across a number of sectors (including public as well as private and charity) it recognises the eight key most e�ective customer service changes which you can make in your organisation.

5. “Superior Customer Service Capabilities: Key Factors in the Journey to High Performance” – Accenture, 2008, p.3

Whitepaper: The Importance of Customer Service

Figure 2: Customer service activities delivering ROI (Data: ICS, 2011)

The key components of ROI centre around enabling trust and breeding con�dence as an organisation. Consequently, many of the eight items are “soft” changes. These are the most di�cult to quantify. These are also identi�ed as o�ering the greatest potential competitive advantage. However, they are not the only elements to consider. Looking at the interaction points, it is striking that exceeding expectations and creating a “delight or wow” factor directly impact on the customer relationship and customer satisfaction. In turn, these impact on loyalty and advocacy. Business process improvement and employee engagement with customers bolster this by in�uencing reputation and brand.

All of these activities are boiled down to form the Institute of Customer Service’s key recommendations. Amongst these is concrete advice to review your investment approach and to investigate new tools and methods.

A typical operational scenario?A customer queries the fact that an order has not arrived or is only part complete. The �rst thing that takes place is a check on the order itself – what exactly was ordered? This is information which is either in a �nance or ERP system or as a paper record or an email. If it’s a paper record this involves a trip to a �ling cabinet. If it’s email, there may be some checking to be done in an individual’s mail or a group/shared mailbox. Once the order is found the items and quantities need to be compared to see if they match. Maybe there is then a query as to whether any of the requested items are on backorder. This might be by reference to a packing slip and this could be �led separately, maybe even in a separate location like a distribution warehouse. If the query is still unresolved the shipping documents need to be veri�ed to check if the order was processed in batches or as a whole. For split orders, did the whole batch actually get dispatched? Matters can get messier still if the order is shipped via a third party courier.

Invoice queries are taking place every day – they are standard operational fare across any trading or cross-charging organisation. However, it is this sort of run-of-the-mill customer interaction that

often de�nes the customer’s perception of the whole business or body.

Much of this interaction is based on paper-based documents – take a look at the way your customer facing teams work and the number of transactions which involve access to paperwork and �ling. As we’ve seen from the example, these documents hinder service speed. Customers wait whilst the necessary paperwork is hunted down. Service quality can also be a�ected if information is in separate �les or locations or simply mis�led. This is the same paperwork which also carries high acquisition, storage and handling costs. So, where information like invoices is held in disparate physical or electronic media which is not quick to �nd or incomplete the resultant customer service experience will be impaired. It will be slow and it may be incomplete. What does that say about your organisation?

The logical answer to this is greater automation of customer service functions and tighter, more integrated and ultimately expensive back o�ce systems. Allied to this is a raft of operational and cultural changes. The bene�ts could be huge but consider also the �nancial investment, the short- term operational impact, the sta� upheaval or the risks involved in major projects. Big bangs are dangerous and take sponsorship from the top, commitment and planning. Here we highlight a more pragmatic middle way.

Want to know more? Call 01604 878 010 or email info@invu.net

Whitepaper: The Importance of Customer Service

Evolving from traditional operating processesWhat do you need to provide good if not excellent customer service? In addition to the softer, human elements there are information and systems related requirements in line with the Institute of Customer Service’s targets already identi�ed:

igure 3: Using information in a customer service environment

Paper documents must be handled manually. Emails may be in local stores or di�cult to �nd. Electronic documents may be sitting in a shared network drive many levels deep. A mixed set of media can compound the issues. Let’s look at how Document and Content Management solutions can eradicate these issues and support these key information attributes.

Speed of information accessIn our example above the time taken to �nd the relevant invoice will be measured in minutes at least. And this is a reactive process which will undoubtedly interrupt other activities. Technology allows Document (eDM) and Content Management (ECM) applications to pinpoint an individual document immediately based on limited search criteria. The e�ect of the intrusion is reduced and responsiveness to the customer is impressive.

Information completenessIt’s all very well accessing information quickly if only partial information is returned. eDM/ECM systems return the whole document and associated information. You not only get the latest invoice, but also the corrected version and the related order. To maximise the bene�t of your investment and optimise the customer service bene�ts then all documents, emails or artefacts should be lodged in the central repository.

Holistic information viewThe �ipside of complete information is that the right search (say on a customer name, an invoice number or details in a contract) will return not just a single document but also the ancillary records and documents. You may pull back not just the invoice but also the dispatch note, any email correspondence relating to the order, any outstanding invoices, contracts or other queries. In other words you will have a potential 360 degree view of the customer at your �ngertips. This improves the opportunity for a better quality of customer response and provides more background to the sta� member handling the query.

Whitepaper: The Importance of Customer Service

Want to know more? Call 01604 878 010 or email info@invu.net

This in turn engenders any potential relationship building. Let’s not forget the typical organisational aims identi�ed earlier: increasing revenue creation possibilities, doing more selling during calls and selling extended support agreements. Better quality and breadth of information will enable opportunity spotting and therefore potential upsells.

Allied to this is the fact that as a central repository your eDM/ECM system can be accessible irrespective of location. Account managers, case workers and customer support representatives from any location with the ability to add and retrieve relevant information will be able to provide information which was previously silo-ed and not joined up. At this point the solution enables greater collaboration – for organisations with multiple o�ces distributed across regions and even the world, this may be a signi�cant bene�t in its own right. Add in a customer-facing dimension where lack of information previously impacted on speed of service, the e�ects can be dramatic.

Flexibility of informationThe �exibility dimension comes in when wishing to quickly and accurately �lter information. When there’s large amounts of documents and emails it’s important not to try and boil the ocean. The ability to slice and dice the information to see content is very powerful –searching on invoice numbers will provide speci�c order details, whereas the customer name will provide a full order and correspondence history. Searching on, say, a stock unit, will reveal who else has ordered the item, any related information (say a product recall notice?) or a copy of the instructions which the customer is missing.

Information leveragePaper based information is trapped. To release the data it is normally manually rekeyed with attendant duplication of effort and risk of human error. eDM/ECM systems with high quality capture and extraction capabilities can take data from paper documents, pdfs et al and use this as the basis for follow-on activities.

For example, invoice information can be extracted and used as the basis for matching against purchase orders in an ERP or �nance system. This may be automated either directly against the ERP data or it could initiate a task based on the content (for example, the value of the invoice and the identity of the authoriser). Even the ability to manually route a document is a step up from the reliance on paper documents and forms.

All of this enforces and enhances process. In so doing, the speed and quality of customer service rises.

Information complianceLess obviously, documents play a customer service role with a compliance �avour. The retention of operational documents is something we take for granted – invoices don’t get destroyed but preserved until they can be safely shredded/deleted in accordance with statutory requirements. Ensuring access to them can often have unforeseen bene�ts in keeping with information completeness. Preservation of legal documents provides a bedrock also when fundamental clarity is needed.

Together with the implementation of strong business processes and adherence to them, an investment in eDM/ECM solutions ensures rigour and provides confidence. Underpinning this is the fact that eDM/ECM systems must conform to certain requirements to fit within the legal admissibility framework (ISO 15801:2009 / BSI 10008: 2008).

Every document and transaction should be subject to a full audit trail. Versioning also needs to be incorporated. Documents must be preserved in aspic, incapable of amendment. This gives faith in the information and that it hasn’t been tampered with. It also means that the right information is given to the customer and that any history can be con�rmed. On a more subtle level this con�dence also bene�ts the quality of customer interaction.

Whitepaper: The Importance of Customer Service

SummaryWe’ve seen how customer interaction and service is an ever more important lynchpin of business and organisational success. It cannot be ignored and standing still is akin to going backwards. Why? Because customer service and growth are inextricably linked.

Making any improvements to the way you work with customers can reap disproportionate rewards and competitive advantage. However, overly-ambitious or grandiose plans must also be treated with some caution due to the upheaval this may cause in the short and even medium term.

Investment in eDM/ECM is an intriguing and proven route to enhancing the way you interact with customers.

Across a range of sectors this is a practical answer to service level improvements and delivers beyond simply quicker access to your information by adding a qualitative dimension to service. When combined with other softer, cultural changes this is a stepping stone investment which will reap dividends and engender customer approval. It works by bridging the way you work now with your customer service aspirations without wholesale operational upheaval, itself bad for the customer experience.

Let’s return to the activities identi�ed by the Institute of Customer Service as having the greatest business impact and adding most ROI. By overlaying those areas where eDM/ECM has benefit we can see that there is a clear fit. Where there is overlap the correlation is shown by the highlighted elements. The softer human elements (shown faded) are outside the scope of any IT investment. However, combining the two will surely make for a more compelling customer service strategy.

Whitepaper: The Importance of Customer Service

Unless you are happy to be a laggard organisation this crossover makes an eDM/ECM investment something which must be considered if your customer service is to improve - and with it your

organisation’s future.

Invu Services Limited, Blisworth Hill Farm, Stoke Road,Blisworth, Northampton, NN7 3DB01604 878 010 | info@invu.net | www.invu.net