Customer service is crucial to success, so why do so many companies fail to provide quality service?

Jay,

Great question and one which I have struggled with myself. Although, as a consultant, a question from which I have personnally profited.

The only rational suggestions I can provide are

1) Leadership - The CEO is simply too far removed from customer service in almost every large corporation and, therefore, this item never gets adequate attention on the corporate agenda.

2) Investment Horizon - Most publicly-traded organizations are slaves to quarterly results. I realize that this rationale is driven by the desire to govern in the best interests of shareholders. However, there is significant research to support that a longer view of investments in improved customer service provide material returns as represented by increased purchases by existing customers and lower customer churn rates. Both of which increase shareholder value.

3) Contact Avoidance - Large corporations spend hundreds of millions of dollars each year attempting to divert customers away from direct contact with them. This is done in the interest of reducing cost, but completely ignores the hard (increased $ Per Purchase) and soft (improved customer satisfaction) benefits of that contact.

Senior executives who are accountable for customer service need to be more assertive and creative in assessing the value of their contact centre operations so that they become part of the corporate agenda and are viewed a strategically important to the overall success of the corporation - because they are.

Cheers,

William

I concur with much of William has already said. Here are a few additional reasons why so many companies earn a C grade or worse when it comes to customer service:

1) They focus too strongly on the traditional yet dated quantitative performance metrics in the contact center -- e.g., Average Handle Time, # of Calls handled per hour, etc. -- rather than on more qualitative metrics that truly drive customer advocacy and continuous profits, such as First-Call Resolution and C-Sat.

2) There isn't enough value placed on the role of contact center agent, thus the candidates that companies attract aren't committed to customers or quality service -- they merely view the contact center as a temporary stop, a stepping stone to "more important" areas of the business. In contrast, world-class customer care organizations highly value their frontline staff, and reward/recognize and empower them accordingly.

Another reason why many companies provide poor customer service is that their front-line representatives have rarely or never actually experienced high-quality customer service themselves. This is especially true when those front-line representatives are younger and/or have conducted most of their own service-related transactions online (or at many fast food outlets or mall-centric retailers, he added a bit cynically and sadly). A troubling corollary is that many front-line company representatives are managed by people who just plain don't "get" the link between high-quality customer care and sustainable business (or personal professional) success. Great customer care is like almost every other valuable skill -- if you're trying to learn or inculcate it, it helps a lot to experience it directly and repeatedly.

This is not an easy question to answer. In part it is political, companies and CEO's want to provide good service they just don't want to spend money to do so. They may believe that they don't need to, they look at their competitors and say "as long as we are as good as them then its fine" and the race to the bottom is underway.
Beyond the politics there is ignorance, they don't believe they are providing poor service. They have spoken about the value of service, but have no independent point of view to support their supposition.
Perhaps most importantly they have not yet paid the price for poor service. Increased customer churn, front page stoies citing their poor service can prove to be an effective motivator. We secured one engagement while the CEO was on the phone with a TV reporter discussing how poor the call center service was and the fact that it was the lead story on the 6pm news.

Four years ago I wrote a post dealing with this very subject...unfortunately it is still relevant today. You can find that post here
http://thetaylorreachgroup.com/2007/01/01/resolution-service-that-doesnt-suck-2/

Greg, Jeff, and William I think your arguments are totally on target.

I think the Focus.com question, "What's the future of Customer Service?" coincides with this question and I spell out my argument there. I argue that the traditional function of customer service must also evolve with other aspects of an organization.

Here's the link:

http://www.focus.com/questions/customer-service/whats-future-customer-service...

In summary, senior leadership in charge of customer service must spearhead initiatives that promote a reasonable degree of transparency, in turn breaking down barriers to traditional customer service.

-Jesse

Bad service enfuriates me. As I grow my company, all the people I deal with know that customer service is not negotiable on any level. I just don't see how it can be any other way. Why don't other companies have this attitude? It depends on the organisation of course, but I think :

Some just don't care.

Some are making too much money to care.

The company has grown too big, people have just become a number with no motivation to provide good service. Take care of your staff and they'll take care of your customers. (Likewise, take care of your customers and they'll take care of you).

It's not part of the company culture and not driven from the very top.

They are not trained to sufficiently.

Lack of communication between different departments and red tape make customer service a big challenge.

They don't know their service is so bad because they're making so much money (which also just astounds me, but it happens all the time).

Depending on the country, but people don't always like to complain, so the companies just continue to get away with it.

Everyone wants good customer service but few are willing or able to give it. Very few managers hire customer service reps (CSR) for their talent for the job of CSR.

CSR is a very tough job unless you enjoy it and are good at it. CSRs, even if they want to be successful, are people and therefore are saddled with their own learned behaviors.

Managers often invest time and resources to change CSRs behaviors but it takes such a long time and doesn't always work, see CSR industry turnover rates.

There are CSR groups that have very low turnover rates and some of them, if not all of them, have successful managers and hire for talent.

The cheapest and most effective tool to use to decrease turnover and increase job performance is to screen for talent before the job offer is made.

Though one of the reasons is that the passion and the vision/importance of / around Customer Service itself is missing, one of the other inter-related reason I have found is that the right execution of the Customer Service Strategy is missing. I have seen people stuck at making the Customer Service Center a profit centre in some way or the other to meet the financial figures of the company. Even though that approach might be correct to a certain extent, it certainly isn't correct to start compromising the Customer Service function as a whole.

There is a sense of failure to understand that a Customer Service Centre happens to be an investment for Customer Retention and in a way it is a profit centre though may not be too easy to prove by numbers.

Even though CEO's and top cadre of any organization will talk really well about how important their Customers are, the creation and execution of a Customer Service strategy is mostly found missing. The Customer Experience Management remains to be a mystery for lots of businesses and they're just lost in number and trust me the one's who're taking care of their customers well are adding their numbers and not just backfilling customers.

I think upper managememt's talk says one thing and their feet go in a different direction. Their perception of the front lines--who have the awesome responsibility of interacting with and being responsible for the customer--is a necessary evil, a cost center, rather than an investment in their employees. In today's world, customer service is the differentiating factor and should not be taken lightly.

The myopic view of seeing everything through cost control or reduction gets the hit to customer service, wrongly so I may add.

Most people want to do the right thing. The challenge is...it's hard. Great customer service equates not only to a commitment to your customers, but at a very rudimentary level to your staff. Company's (and the leaders within) have to be open to digging deep and acknowledging the root of the problem: an unwilllingness to invest in people - commercially and personally - is the deal-breaker in customer service.

Companies deploy processes and operations every day, yet they often forget that above all, people drive those processes and operations. If people are not bought in on an interpersonal level, critical goals such as great customer service are not likely to be achieved – at least not with any level of effectiveness or efficiency. Companies must find innovative ways to generate competitive advantage, and again, this can only be achieved through people - thus the criticality of leaders within organizations that understand that people make up the organization and those specific people create great customer service - or a lack thereof.

It is far more than walking the talk - it is about investing in people so they have the capacity and capability to create superior customer service. Demonstrating great customer service service should (but isn't always) a given, but supporting, teaching, and investing in people to create superior customer service is another thing altogether. As leaders learn and actively seek to go beyond themselves, even beyond the organization, and understand what actually drives success at its most basic levels, they will focus on investing in people to create the customer service that will ultimately drive organizational success, and as a result - self success.

Several people mentioned management's lack of passion for customer service. It may be the passion is there, but it presents as fear. How many customers call customer service to praise the company? How many customers call customer service to complain?

I've seen something similar when company execs reviewed comments submitted as part of an anonymous "speak your mind" suggestion campaign. "Oh, I know who that guy is, he's always complaining." "We've already taken care of that." The negative comments hurt and these executives simply swept them away instead of dealing with them.

While I have no data to back this up, it seems to me that companies with poor customer service also have poor communication between the C-suite and the employees doing the work. Communication travels two ways and there may be negative feedback.

Speaking from a Contact Center perspective – a growing Customer Care Strategy is the move away from viewing the Call Center as a “Cost Center” - where Average Speed of Answer (ASA), Average Handle Time (AHT) and Maximizing Calls per Agent per Hour are emphasized as the Key Performance Indicators – and evolving to operate the Call Center as a “Profit Center” - where the Key Performance Indicators are Customer Satisfaction and First Call Resolution (FCR).

There is a growing recognition of the need for Customer Service Representatives (CSRs) who are better able to serve and communicate with your customers. Customers want their questions/issues resolved by a CSR who acts professionally – is easily understood - who is not a ‘script reader’ - and who is empowered to make this a “one call & done” experience.

It’s all about the quality of the ‘Humanware’ you deploy in your Contact Center to begin with.

A tightly-scripted Call Center environment is typically found where the primary focus is on Cost Containment. In order to maximize Average Speed of Answer (ASA) and minimize Average Handle Time (AHT) Agents are usually required to rigorously follow a script. A tightly-scripted Call Center environment is also sometimes determined by an Industry Sector: such as Financial Services/Insurance/Healthcare - or by a Client’s Service Level Agreement (SLA) for an Outsourcer.

An unscripted Call Center environment is typically found (and should be encouraged) where your Key Performance Indicators are Customer Satisfaction and First Call Resolution (FCR) – and where you operate your Call Center as a “Profit Center”. That’s not to say that an unscripted Call Center environment shouldn’t employ training aids/general ideas/key phrases. Ideally these should form a framework of points upon which an Agent drapes their own personality and phraseology.

Scripted and unscripted call handling are discrete and different pursuits - requiring separate Personality/Job-Fit/Temperament Factors. Someone with the Intellect & ‘Verbal Artistry’ to serve a caller in an unscripted fashion is rarely a good fit for a tightly-scripted Call Center environment. Equally – it is rare for someone who performs well in a tightly-scripted Call Center to successfully make the transition to unscripted caller interactions. Few people possess the ability to work successfully long-term in both a scripted and unscripted Call Center.

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Josh, you wrote "... it seems to me that companies with poor customer service also have poor communication between the C-suite and the employees doing the work. Communication travels two ways and there may be negative feedback" and I think you are correct. Almost 20 years ago my employer hired a management firm to help save the company. We were close to maxing out our line of credit which means that what we owed the bank was fast approaching what our clients owed us. If our line of credit was shut off, we could not issues paychecks--out of business

Anyway, one of the methods used to help the board of directors understand the employees was employee interviews by the consultant of all the top people and most other employees. During the debriefing the consultant said he did know how to present their findings so for two hours he read employee comments. It was clear there was a major communications problem. A common thread among the directors was that employees complain when times are good and complain more when times are bad, employees just complain.

The funny thing is the bank manager went to my brother (a CPA and well-versed in such problems) to ask him how to manage such a dysfunctional organization. After listening to the symptoms for 20 minutes he told the bank manager that the company was the XYZ company. The bank manager was shocked since she never mentioned the company name, town, industry nor even the number of employees. He told her his brother had worked there for 20 years and told him the same story. The board didn't seem to listen to each other let alone the bank manager or their employees.

At the first ever directors/associates meeting (which was held after I conducted the first ever associates only meeting) all of the directors said they had good communications with their associates--they were stunned to learn we did not agree with them, one-way communications is not adequate but it is preferred by many executives.

I've never known a company that didn't want happy customers. It generally comes down to the trade-off between the desire for customer satisfaction and the budget available for achieving customer satisfaction. I have seen three situations that lead to the difficulty.

The most straightforward one is the company that is generally struggling and all departments are lacking the resources to achieve their goals. All the departments push to do the best they can.

The second is when a company is attempting to be extremely efficient. The best practices to achieve satisfied customers is well understood, but companies will look for innovations / shortcuts to reach the desired results with fewer resources. It is a great thing to look for ways to be more efficient, but customers often suffer while different ideas are tried. If a significant breakthrough in best practices is the desired result, that is an ambitious goal that will likely lead to the customers suffering for quite a while.

The third situation that causes poor support is when there is a major drive to achieve a goal and many of the resources in a company are redirected to reach that goal. Management makes the choice to let the support level drop for a time to complete the goal which is designed to better serve the customers long term.

The challenge for customer service management is working with the executive management to ensure the company has the balance between customer satisfaction and budget they desire.

They simply don't believe in it.