Call Center Management Featured Article
How To Sell New Investments in Customer Experience Improvements to Internal Decision Makers
In 2014 NewVoiceMedia (News - Alert) released a study that traveled like wildfire through the executive offices, marketing departments and call centers of the nation. The research suggested that U.S. businesses lose $41 billion each year due to poor customer service. Bad customer service can cost companies in many ways: customer churn, abandoned shopping carts (both in brick-and-mortar stores and online), lost opportunities for upselling and cross-selling, wasted time due to duplicate errors and mistakes, and even public boycotts when a bad customer support experience goes viral.
But $41 billion a year? That’s a lot of money.
Most executives understand the importance of a great customer experience on paper. Unfortunately, many of them also think a great customer experience can be had by yelling louder at the departments responsible for customer contact. They don’t want to hear about understaffing, aging legacy equipment, improperly integrated communications channels, siloed databases or tyrannical managers. Correcting all those things costs money, and in today’s business climate, most things that cost money are considered unwelcome.
In a recent article for Customer Think, Jeff Toister recommends that managers hoping to get executives to improve more resources for the contact center show the C-layer some hard numbers regarding how bad customer service is affecting the organization’s bottom line. For starters, writes Toister, calculate the costs of customer churn. Also take into consideration the rates of repeat business, average order value, abandoned shopping carts, returns and even the average lifetime value of your customers (average spending per month times the amount of time the customer has been a customer). Now, calculate how valuable even a small – think five percent – improvement in all these numbers could be. Back up your data with solid evidence regarding how much new technologies such as an omnichannel contact center platform, an updated CRM solution, or a workforce management solution could contribute to improvements in the customer experience.
“Your executives are much more likely to listen if you can convincingly show them that investing in better customer service will generate more revenue,” wrote Toister.
Better service, of course, will also reduce existing business costs such as high employee turnover, duplicated efforts, errors in shipping and order fulfillment and first-call resolution in the contact center. Be sure to add these estimates into your final figures. Finally, Toister recommends taking into consideration the marketing benefits of providing a good customer experience.
“Track the number of new customers you gain via referrals from existing customers,” he wrote. “(You can also use a Net Promoter Score survey to gauge your customers’ likelihood to refer.) Calculate the value of these new customers using Average Lifetime Value or a similar statistic. Estimate the revenue gain from improving your referral rate.”
The goal is to help decision makers and C-level executives understand that offering less-than-stellar customer support is actually costing the organization money. Recommend some judicious purchase of key technologies that will show the most return on investment – quality monitoring, analytics and workforce management are great places to start – and you’ll be closer to reaching your goal of a better budget for customer support.
Edited by Stefania Viscusi