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February 2009 | Volume 27 / Number 9

Is Contact Center-Delivered Loyalty Overrated?

By Brendan Read
Senior Contributing Editor, Customer Interaction Solutions

Today’s hot business catchphrase is customer loyalty. Obtaining and ensuring it sustains sales and revenues, and also generates these from other customers through word-of-mouth and increasingly text-in-online advertising with peer, friends, and family.

The need to have customer loyalty is one key reason why contact centers have not been as closed as quickly and their staff rosters decimated as badly as they might have been in this downturn. Firms are finally believing the advice from industry experts and vendors that delivering poorer service through lengthening queues and shortening calls can drive some customers—and their scarce dollars—away.

The route to customer loyalty, professionals and suppliers, say is through improving first contact resolution (FCR) via investing in agent training, analytics and in CRM, EFM (enterprise feedback management) solutions, performance management tools, and presence/unified communications. The more satisfying the customers’ experiences are when they reach out to firms such as via their contact centers the greater their loyalty to them is the operating theory.

Yet is this formula: better customer service = customer loyalty=sales valid? Are contact centers and their parent or client organizations perhaps spending too much time and limited resources in trying to make this solution work?

There is plenty of evidence that questions the relevance of service quality, and loyalty, to revenues. Do we choose an item from a particular seller because they have great contact center-delivered service even if the price is high and the features are not exactly what we want? Or do we choose a comparable good that has a lower price, and has more functionality from a company that makes us endure long hold times or bounces us around from agent to agent?

Also, think of why we pick and stay with those particular vendors? Is it because they are excellent firms or are they the lesser of multiple evils or that changing them would be more hassle than it is worth?

Two cases in point are airlines and banks. What matters most: being on hold for 20 minutes or making your connections and not having your luggage lost? Banks have become customer-service-centric because they have realized that such service is a key market differentiator. Yet when you have complex accounts, like IRAs, loans, and mortgages with them will you change institutions if the service begins to worsen?

Questionably-applied CRM software probably has done more to wreck customer loyalty via contact centers than all the poorly-trained agents combined. Forcing the 80 percent of the masses to endure IVR menus from Hades followed by eternity queues so that the top 20 percent can get treatment worthy of the gods guarantees resentment and a ‘get lost’ from the lower ranks.

Moreover, if a product or service is obsolete or, especially in this economy there is no demand or that the customers want the items but cannot afford them then the best contact center service in the world will not keep buyers and sales. For example there are great deals to be had on SUVs, but is the quality service from the automotive financing contact centers making any difference in getting buyers into the showrooms and signing the paperwork?

The only time where contact center-delivered service truly matters is with technical support i.e. the help desk. Being able to get problems fixed right and quickly makes a substantial difference, in general, in the ability to use these products and services. Yet there are cases where service does not matter: i.e. where the prices and profits are so low on items that they do not warrant support, such as for mice, keyboards, landline phones, printers and many packaged consumer software.

Moreover, there is little point focusing on FCR and other such loyalty-aimed metrics when customers are calling in complaining about your products, service, and delivery. Annoyed buyers will not buy again unless they have little choice, in which case spending money on contact centers will not make much difference in obtaining increased revenue from them.

The key to customer loyalty and income is not on having great contact center service but by making the products and services right and pricing them intelligently. A firm is only as good as the last customer’s experience with their wares. If they got what they wanted from it and have need of it again they will lay out the resources; if not then you can kiss them goodbye no matter how nice and friendly the contact center agents.

By concentrating on the product design, delivery, and marketing fundamentals up front, loyalty, and contact centers take care of themselves. The fewer the complaints, the more the sales means more time and resources can be devoted to providing great customer service.

CIS Magazine Table of Contents

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