Ideally where should Customer Service sit within an organisation?

I know I'm a little late in the game, but I just had this conversation with my Sales, CS, & Operations team last week, so if I may.

In our B2B Factory Direct (Manufacturing) model we found that CS is best suited to be separate from Sales and Marketing, and work directly with Operations to suit our Customers immediate needs with any Work In Progress. Simply put CS deals with the tangibles and Sales deals with the intangibles and Operations can only ever work with one of those.

So, in our world, sorry Mr. Anderson, Customer Service is more a function of Operations than it is Sales. But that is only because it suits our Customer's needs the best. And that's what this all boils down to. Every business will have to adapt and place their Customer Service in a Department where it best Service's the Customer, as the very nature of its title suggests.

Because customer service can be the backbone of many business & can dictate whether they succeed or fail.........maybe they should be their own department. If that's not a possibility, then sales.

I would take exception to the notion that Customer Service should reside in Operations. In my experience, Ops is necessarily process driven. Efficient and repeatable processes is what makes it great.

All too often, Customer Service is reactive and in order to satisfy their customer, they frequently have to make it up as they go along. This is difficult if not impossible for Operations to do as it is against their very nature.

What cannot be overlook if CS is to reside in Sales or Marketing is the need for an excellent working relationship between them and Operations. in many cases, satisfying the customer requires significant actions by Operations and their interdependence with Customer Service is critical.

A good working relationship between equal functions in the business is essential.

The growing influence of social-media & KRA defined for sales/marketing team, don't seem to kinda converge to put CS into the sales/marketing grouping. More often than not, I have seen a gaping hole in measurement of performance aligned with CS within sales/marketing team, which hence puts the pressure on CS eventually leaving it high & dry.

The growing competitive landscape, 24x7 operations, global expansion plans etc, to me demands that CS works as a standalone ops with the Management team, given the dynamics involved in suiting the CS process across each geographies..

Our experience demonstrates the need for total integration between sales/marketing and customer service. When we work with both departments to increase communication between them as well as with the customer, we have consistently met/exceeded their goals for both revenue and customer satisfaction. Once that became obvious, we have been worked with those in Operations to create the same level of trust and interaction. Bottom line, sales and customer service are the primary contact with the customer, so they should be together as a team. Beyond that, the whole company needs to be in concert to maintain the company reputation for quality.

Thank you for your answers, I cannot argue with any of them.

Phyllis,
You state that in your experience you need total integration between sales, marketing & CS & exceeding goals has been the result. I clearly understand the principle that having all of the customer facing staff aligned &working together, but specifically what creates the difference & the resulting growth.

Would any of you mind if I used your quotes in a paper I have to write, I will obviously reference you.

Thanks again for your input.

Spot on Troy, Customer Service is a process driven function, as is Operations, albeit with a humanistic focus. Rather than placing C/S within Operations, consideration should be to place both - on equal footing - under Supply Chain. With this structure it is easier for the communications and understanding of the issues that effect, and are effected by, the customer.

Having all the supply (or 'supplying') functions under one umbrella provides a more effective and efficient service to customers, whilst also ensuring commerical considerations (ultimately profit) also remain in high focus. Keeping these functions at arms length from each other generates separate goals and agendas, even if done for the "right reason". Customer service and profit should be synonymous, not opposing or even perpendicular to each other.

And having both report to the one manager, desicions can be made and problems resolved a lot faster - and within the appropriate authority levels. This ensures a true balance between the cost of servicing customer and losing business.

With both under the same umbrella, not only are issues resolved but the specific knowledge of each is combined to reduce potential issues by discussing them before they happen. C/S get a better understanding of the supply constraints and can advise the customer or work with the Customer and Operations to find a work around without fear of "stepping on toes". Operations will acquire a better understanding of the needs and wants of Customers and can fit these into planning and processes.

Daniel.. Pls go ahead & use my views at it deems fit for your purpose, my pleasure.

Thank you & thank you for the input...

I believe that every business is different & therefore different approaches may generate better results depending on the conditions. One of things which is driving my question is not necessarily the communication, but the direction for customer services. In this instance I want to assume that email, telephones, F2F meetings will maintain the quality of communications across functions whichever department they report into. Given that all organisations are becoming more fluid & should be communicating more effectively does this effect any of your answers..?

I would like to see Customer Service be their own department, supporting sales, supporting operations, and supportng other touch point departments. Customer service is three fold: People, Process, Technology and I believe the customer service department should have a heavy emphasis on the people side. The technology is there to support the people, not replace them.

The importance of, and commitment to, Customer Service is indicated by how it is organized and where it reports in an organization. If a company is really serious about Customer Service excellence it will be a separate functional area / department reporting to the COO in large organizations or President in smaller companies.

One thing I can say for certain is that Operations, Customer Service, or IT should never report through to the CFO or any other finance department head for that matter. I have had first hand experience with this arrangement and it has severely impacted our customer relationships externally and internally, our productivity and our creativity by constantly looking at the short term costs and not the longer term potential. The role of Customer Service is critical to the success of any company large or small and should be led by a commercially minded person. Ideally I would suggest under a COO who reports directy to the CEO.

The issue is not really one of structure or lines and boxes on an organization chart. And, true enough, a one-size-fits-all solution doesn't newer the question for any number of businesses that are different in product, customer, culture, and values from one another.

But, in general, the superb customer service operations are part of an entire customer service culture, in which every component of the organization is driven by serving and satisfying (dare we say delighting?) customers. Realistically, the CEO and/or COO can't function as operational CS leaders, but they can model the CS mentality. That said, whomever leads a designated CS unit must be connected very close to the top.

To the point raised by others, the comprehensive CS responsibility has to include preventive processes (that will be executed by others, including Sales and Operations). By the way, even the CFO has to get the picture regarding 21st-century CS as an investment in building a base of customers-for-life, rather than a necessary evil, a cost of doing business.

Great answers thus far.

My own experience has been that, as "Marketing 101" courses teach, "nothing happens until someone sells something." While sales is not usually directly associated in peoples' minds with service to customers who have already purchased, I would add another Mktg-101 tidbit: "the least expensive sales you will get are follow-ons with existing clients, and just behind that "your best sales people are satisfied customers."

So the question: "are your customers happy with you after they buy?" While there may be many ways to organize your organization and operation to make and keep them happy, it seems that the goal is clear, making its realization legitimately one of your most important objectives.

Finally, from a cost standpoint, there is another factor to be considered: in the long run, making an unhappy customer happy again (if that is even possible in most cases)is much more difficult, complex and costly than keeping the customer happy in the first place. While the mechanics of dealing with customer issues may fall on tech support or other more operational groups within your organization, the first warning of a festering customer problem is the service rep who gets the calls and provides the first line of address. Given this, one can make a pretty good case that well-prepared, sensitive customer service pays for itself in the long run.