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Can customer value and a valued customer co-exist?

While the latest eCommerce and associated technology provides many consumer advantages and expands the market for sellers, it hasn’t always fostered a better customer service experience. Is the calculation now changing?

“The customer is king” – or so the adage says. But does that still hold true in today’s 24/7, increasingly globalised and highly competitive business environment?

The days of the small town shopping experience, where every company would address the customer by name, remember ‘the usual’ order, and be willing and able to make recommendations tailored to the customer’s individual needs, seem to be long gone. Globalisation and the online world brings the customer tremendous benefits in terms of choice, convenience, opportunity, availability and crucially price, and the delivering company tremendous scope in terms of market expansion. But it also obviously creates issues as companies try to serve customers dispersed over geographies and time zones, who are ever more discerning in their requirements.

Businesses today are wise to the ‘value’ (in terms of additional potential sales, incremental growth, brand recognition, cost to serve, etc) that a long-term customer relationship can deliver, and are well able to balance the cost of customer recruitment against the cost of customer retention. However, recognition of customer value does not always translate into excellence in customer service. Companies are having to balance customer and business ‘needs’ on a scale larger than ever before. And how successfully they manage that balancing act is increasingly a critical business differentiator.

The customer perspective

As a customer, the ‘service’ issue is actually remarkably simple. We often don’t care whether we are dealing with a global conglomerate, or the small town shop if the product meets our expectations. If we buy something, we expect it to be available on time, as promised, in the right specification, and at the price we were prepared to pay. If something goes wrong, we want to be able to speak with someone who will be able to fix it, quickly and efficiently themselves. We want our lives to be easy.

We are more demanding than ever before. We are used to any time, anywhere information availability, to 24-hour TV on demand and shopping from our smartphones. So when we want something, we want it right now.

For the customer therefore, the ‘holy grail’ of service still harks back to the small town experience of yesteryear – when our habits are known, our needs can be predicted, but value can also be added and(most importantly), in a non-intrusive, and friendly manner.

The business perspective

From the other side of the fence, very few companies would say they don’t recognise the importance of serving their customer well. The issue for businesses is how to deliver the best possible customer service, in the most cost efficient way. In the current economic landscape, customer service plays a major role in brand and reputation differentiation. But with process streamlining and business efficiency drives the new norm for most business functions, balancing how to deliver on the customer promise in a cost effective manner (and meeting shareholder expectations), is an increasingly important, yet potentially contentious topic.

Companies generally adopt a two-pronged approach to customer interaction – support and engagement. Neither is exclusive, and indeed, for most organisations, the real added value for the customer experience comes in the confluence of the two. But in essence, one is about getting the basics right – delivering on time, giving clear information, providing solutions to problems; the other is about making the customer feel loved – part of the in-crowd, valued, wanted, and their expectations validated. But what is key to both is just being there – on the end of the phone, at the service desk, behind the portal – and having something meaningful to say.

The general response is to look to deliver service according to the perceived value of the customer. At a practical level, this means balancing the effort of serving that customer against the benefit that customer brings to the business.

This is not a new concept, but when companies have to deliver service on a global scale, people-power alone is not enough. This is why technology is increasingly used to bolster customer service and support – and why customer self-service is an increasingly key element of customer service delivery.

The potential of technology

Technology already plays an integral role in how organisations interact with their customers. Centralised call centres, free phone support, remote PC agents and online orders are now part of our everyday life. We are used to buying into the (customer relationship management) system so our last visit can be ‘remembered’, and recommendations made based on our recent activity. But we’re also increasingly discerning about the standard of service we expect to receive. We want to be recognised and acknowledged, and the companies that do that are the ones that we like. The standard for support keeps creeping up, and when the companies we do business with don’t measure up, it makes us question whether they are competent in their core business, whether that is flying planes, looking after our money, or supporting our PC.

Technology has revolutionised the way organisations look at their relationship with the customer, using data mining to try to replicate an old-fashioned knowledge base; social media for customer dialogue; and location-based technology to help customers find what they want, when they want it. But technology-driven approaches to customer service just don’t work if the human element of customer communication is forgotten. Moving customer service to a numbers-driven, nameless, faceless environment dehumanises the experience for both the customer service agent and (of course) the customer. A systems-driven customer service model runs the risk of removing the valued customer from the concept of customer value.

Of course, technology can and should be used to enhance the human element. Companies are already ‘crowd-sourcing’ to offer solutions to technical issues, tailoring products, scoping demand and bringing ‘interested individuals’ together to provide advice, configurations, fixes, and extensions that can make a product do even more – for the benefit of all. And customers are turning to each other to find ideas, information, and guidance. YouTube has a million and one ‘how to’ guides online already, the majority of which were created by users, and user-created content is continuing to grow exponentially.

The challenge for business is how to harness the power of the crowd, without alienating it. We are all aware of the negative power of the online rumour mill, and the disgruntled customer today has the opportunity to immediately share their story far and wide. Through customer engagement, close collaboration, transparency, recognising customers’ knowledge, skills and experience, companies can create a ‘real’ relationship – even if in a virtual world – where true value is perceived and realised on both sides.


So in an ideal world, what should customer service look like? What do companies need to do in order to maximise the value of their customer relationship?

  1. Business efficiency. Uncover the weaknesses of the supply chain and fix them; monitor performance; get feedback.. Knowing your business inside-out will help you communicate effectively with your customers.
  2. Set SMART goals for your business. Specific, measurable, achievable, realistic and time-specific goals will help keep your business on track.. Whether your business is a commodity one or a high end niche operation, build your service chain to reflect the type of business you want to be and tailor your customer service accordingly.
  3. Know your customer. Engage with your customers and continually work at strengthening meaning relationships with customers.
  4. Use technology well. Use the right mix of customer-touching solutions for your business, and integrate them into the fabric of your organisation. Help those who interact with customers understand your business, give them access to the right information and empower them to provide solutions. Avoid “one size fits all” technology solutions for diverse customer groups.
  5. Be transparent. Give customers the ability to check things for themselves – from an online portal so they can check on service status, track the delivery, order the upgrade to the ability to track resolution of a problem.
  6. Make it simple. Let them check in via the order number, or their phone number, or their user name, or their password. Give them direct contact details: a phone number, an email address, a portal, a virtual agent – all of which have access to the same, useful information that can resolve a customer’s issues. Make it easy for the customer to ask for help – and ensure your team has the skills, competence and experience to find a solution for them quickly and simply
  7. Be prepared. Have a plan in place to deal with the unexpected – the delivery failure, the seasonal demand peaks, the faulty product. If you’re prepared, you’ll minimise the impact of any issues on your customers.
  8. Build your social networking engagement: Tools like Facebook, Twitter and You Tube are the best well known and customers are using social media in their daily lives. Build forums for interested and engaged customers, and seek to promote the power of  social media for customers to engage with your business

The bottom line

At the end of the day, how a company manages its customer interactions has a direct impact on its brand, its reputation and its bottom line. Technology has the potential to transform the customer experience and has a key role to play in helping the customer feel valued while delivering shareholder value. If a company builds its service with the customer front and centre of the process, that can only be beneficial to all.

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John Karabin

John Karabin

John Karabin is the Area Vice President responsible for Verizon Business in the Australia/New Zealand region. His career path highlights a period of mergers and acquisitions, development and growth in the ICT and IT security industry.

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