The service sector of the global economy continues to grow year after year. In 2020, the service sector accounted for nearly two-thirds of the global gross domestic product (GDP). In countries like the United States, the percentage is even higher at three-fourths. As the service sector continues to grow, companies have put a lot of time, money, and effort into improving their level of customer service. Unfortunately, their investments don’t seem to be paying off. As the amount of service-related business increases, the level of customer satisfaction has stayed stagnant or has even decreased. For example, the American Customer Satisfaction Index (ACSI) has identified that customers have become increasingly dissatisfied since 2017. The Q2 2022 survey resulted in the lowest satisfaction since 2005.
This is cause for concern. The service sector is increasing, and companies are focusing more effort on improving customer service, yet their efforts aren’t producing the desired results of increased customer satisfaction. Maybe it’s time to re-evaluate the approach to improving customer service.
The need for improvement is evident. Anecdotal stories and documented research have proven that happy customers continue to purchase, purchase more over time and tell others about the good experiences they have (positive word of mouth WOM). It just makes sense. If a person is happy with the products and services they receive from a company, they will continue to buy those products and services, try new products and services, or buy more products and services. They will also tell others about their good experiences. This equates to the best (and cheapest) form of marketing there is-social proof. Likewise, if customers have a poor experience, they will likely tell many more people about their poor experience and post reviews on several social media sites where WOM can reach thousands of people. Customers who return, buy more, and tell others about their good experiences are loyal customers. Research shows that reducing the customers’ effort to do business with an organization leads to customer loyalty. This research is detailed in the book The Effortless Experience: Conquering the New Battleground for Customer Loyalty by Matthew Dixon, Nick Toman, and Rick DeLisi.
Customer service is more than just talking nice to customers…the “soft skills” we often hear referred to when customer service is discussed. Customer service is also often referred to as being “common sense”. However, even our own experiences as customers tell us good customer service is not all that common and Customer Satisfaction Scores are proof of that. A 2018 report by New Voice Media estimated that poor customer service is costing companies about $75 billion annually. With customer satisfaction scores continuing to plummet, it only stands to reason that amount only continues to rise. Companies can have a significant impact on customer service by focusing on making it easy for customers to do business and making the experience enjoyable. These two basic principles can look very different among companies and industries. However, they produce the same result-satisfied customers who continue to buy, buy more, and tell others about their good experiences. After being useful, Forrester Research concludes customers want their experiences to be easy and enjoyable.
The journey to improve customer service starts by mapping the customer journey-what the customer experiences when doing business with you. Additionally, identifying what good and poor customer service looks like along this customer journey will help identify areas for improvement. Mapping the customer journey will most surely reveal “Moments of Truth”. This idea was made famous by Jan Carlzon in the 1980s when he was with Scandinavian Airlines. This approach worked then, and it still works today. Carlzon and airline employees focused on those key critical times airline personnel interacted with passengers and implemented changes to improve those interactions. The results were nothing short of amazing. Scandinavian Airlines went from near the bottom in punctuality (rated 14 out of 17 airlines in Europe) in 1981 to being named Airline of the Year in 1983. Additionally, the airlines went from losing $17 million in 1981 to turning a profit of $54 million in 1982. Regardless of the type of business or industry, we all have customers, and we all have Moments of Truth. Focusing on improving those Moments of Truth is a winning strategy. Carlzon’s book details all his work surrounding Moments of Truth.
How does a company improve the Moments of Truth? A robust Voice of the Customer (VoC) system is a great place to start and absolutely necessary to collect customer feedback. Following a simple feedback loop for customer experience can be extremely profitable and it all starts with gathering feedback.
14, Last modified: July, et al. “Voice of Customer: Benefits and 5 Strategies to Improve Your VOC Program.” ProProfs Help Desk Blog, 14 July 2022, https://www.proprofsdesk.com/blog/voice-of-customer/.
Gathering customer feedback for satisfaction, effort, and how likely customers are to promote your business are macro-measures that are important. Digging even deeper and gaining customer insight into those Moment of Truth interactions is where a company can really make a significant difference. Improvements in these Moments of Truth will lead to improvements in Customer Satisfaction, Customer Effort, and Net Promoter Score (NPS). Constantly and consistently collecting customer feedback and connecting the feedback to improve processes, systems, and procedures used by the organization will result in improved customer satisfaction and increased customer loyalty. Once the feedback has been collected, following the remaining steps on the feedback loop will lead to an improved customer experience.
Companies can elect whether they just require Appleton Greene for advice and support with the Bronze Client Service, for research and performance analysis with the Silver Client Service, for facilitating departmental workshops with the Gold Client Service, or for complete process planning, development, implementation, management and review, with the Platinum Client Service. Ultimately, there is a service to suit every situation and every budget and clients can elect to either upgrade or downgrade from one service to another as and when required, providing complete flexibility in order to ensure that the right level of support is available over a sustainable period of time, enabling the organization to compensate for any prescriptive or emergent changes relating to: Customer Service; E-business; Finance; Globalization; Human Resources; Information Technology; Legal; Management; Marketing; or Production.
Our service mission is to assist businesses of all sizes to improve the level of service they provide their customers. Improved customer service has proven to increase customer loyalty. Loyal customers continue to buy from companies (repeat customers), buy more products and services over time (increased share of wallet), and tell others about the good experiences they have (positive Word of Mouth). According to Gartner, the likelihood of customers doing these three things is very high if they receive a positive experience.
What does this mean for the bottom line? What’s the return on investing in customer service and experience? After all, that’s what matters, right? Watermark Consulting analyzed companies using data from 2007 to 2019 and determined that customer experience Leaders significantly outperformed their competitors. CX Leaders generated a cumulative return that was 3.4 times greater than the Laggards.
The Leaders experienced revenue growth, reduced expenses, reduced customer churn, increased employee satisfaction, and increased customer loyalty. That’s a significant return on investing in customer service and experience.
Our simple, but effective strategy and process of mapping the customer journey, identifying Moments of Truth, identifying, and implementing improvements, and capturing customer feedback through a Voice of the Customer system has proven to be effective in companies of all sizes. The result is an organization that has satisfied and loyal customers, increased revenue and profits, and reduce operating costs.
Key Issue Addressed
Our service offering addresses the key issues facing companies of all sizes and industries.
How can we differentiate ourselves from our competition?
How can we justify the ROI of investing in customer service and experience?
If customers can’t tell (or experience) the difference between companies, rationally they make a choice mostly based on price. If customers can see and experience the difference in service, price becomes much less of a factor in the decision-making process. In fact, most customers will spend more if they feel valued, and appreciated, and that they are receiving good service. Research exists that found that up to 86% of consumers said they would pay more for better service and a better customer experience. It doesn’t take much. Consistently delivering at the Moments of Truth will lead to a differentiated customer experience.
It also doesn’t require a huge investment. A methodical approach to analyzing and improving the experience at the Moments of Truth, supported by, consistent and recurring training will deliver the expected results of increased customer satisfaction, increased revenue/profit, and reduced operating expenses. As shown earlier, the return on the investment in customer service and experience can lead to significant growth for an organization through differentiated customer service and experience.