Strategic Customer Service: Managing the Customer Experience to Increase Positive Word of Mouth, Build Loyalty, and Maximize Profits - Hardcover

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John A. Goodman (Arlington, VA) is Vice Chairman and co-founder of TARP World­wide, an organization Tom Peters has called “America’s premier customer service research firm.”

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INTRODUCTION

Why Strategic Customer Service?

EVERY ORGANIZATION’S SUCCESS depends on its keeping customers

satisfied with the goods or services that it offers, yet most executives

tend to view the customer service function of their business as little

more than a necessary nuisance. That strikes me as paradoxical. Companies

that spare no expense to build their brands, improve their operations,

and leverage their technologies often skimp on investments that preserve

and strengthen this final, vital link in their revenue chain. Indeed, leaving

aside the investment aspect, many of these same companies simply

don’t have a customer service strategy to manage the end-to-end customer

experience, from sales to billing.

That is why I have aimed this book at all senior management, with

an emphasis on finance and aspiring chief customer officers. The book

will not focus on answering the phone, but rather on the revenue and

word-of-mouth implications of having or not having a strategic approach

for all customer touches and managing an end-to-end experience.

As we all know from being customers ourselves, poor service can

undermine all of a company’s efforts to retain and expand its customer

base. As customers, we know how we respond to poor service: We go

elsewhere, and we often tell our friends and colleagues to do the same.

But as businesspeople, we undergo a kind of amnesia that prevents us

from seeing how that same mechanism applies to our customers. Not long

ago, I was speaking with the CFO of a leading electronics firm who suffered

from this amnesia. As an engineer, he felt that the superiority of

his company’s electronic products ensured their superior market position.

I then asked him what brand of car he drove and how he liked the dealership.

He scowled and said, ‘‘I hate them! They’re just terrible.’’ When I

pointed out, ‘‘You have customers who feel the same about your company,’’

he immediately saw my point.

Some executive teams, blessed with extraordinary empathy or insight

(or perhaps competitiveness), do understand the role of customer service

in the growth of their revenue, profits, and business. My work with organizations

that consistently excel at this responsibility has led me to conclude

that they have one thing in common: a strategic view of, and

approach to, customer service.

A strategic view perceives customer service as vital to the end-to-end

customer experience, and thus to the customer relationship. This view also

considers customer service to be a full-fledged member of the marketingsales-

service triumvirate. Such a view starts with setting expectations,

moves on to selling and delivering the product in ways that suit the customer,

and extends through superb support and clear, accurate billing. A

strategic approach also recognizes that the service function produces a

wellspring of data on customer attitudes, needs, and behavior. These data,

when combined with available operational and survey data, can be used

as input in virtually every effort to shape the customer experience, from

product development to marketing and sales messages, and from handling

of customer complaints to the overall management of the entire customer

relationship. In these ways, customer service acts as a strategic catalyst

for every organizational function and process that touches the customer.

Why a strategic catalyst?

Strategic customer service stands at the point where all organizational

strategies come to fruition in a great customer experience—or

do not. Product development, operations, marketing, sales, finance,

accounting, human resources, and risk management all affect the cus-

tomer in myriad ways, for better or worse. But when something goes

wrong, customers don’t call the director of product development, the

manager of operations, or the vice president of marketing (and they probably

shouldn’t be calling salespeople—about which more in Chapter 3).

They call customer service. When they do, customer service must preserve

the relationship, gather information, and improve the process,

wherever the problem originated.

As a catalyst, strategic customer service can, like any catalyst, transform

the entities and functions it touches, making the organization more

proactive, accelerating its responsiveness, and boosting its effectiveness.

Service can help marketing, for instance, move from sales messaging to

capitalizing on customer intelligence and improving products and services.

For example, Allstate is now contacting the parents of young

motorists as they turn 16, before they pass their driver’s tests. The company

suggests a parent-teen contract, explains how the impending rate

increase will be calculated, and provides guidance on coaching new drivers

(including an extremely popular Web video whose music has moved

into the mainstream). This program results in calmer parents who feel

more in control and who exhibit significantly greater loyalty to Allstate.

Likewise, strategic customer service can accelerate product development

and uncover new distribution channels. It can relieve salespeople and

channel partners of troubleshooting duties so that they can focus on selling....