Posts Tagged ‘Customer service’

How do we calculate the result of poor customer service?

January 19, 2010 1 comment

Poor customer service is costing businesses £3.4bn each year concluded a recent study by Merlin Stone  for Oxford Brookes University. My first reaction was this is just stating the ‘bleedin’ obvious’ and why was money spent on it.

Of course, all I was seeing was the press release and so there is probably a lot more weight to this – especially if Merlin Stone is behind it. I have followed his thinking on service for over a decade and it could never be described as lightweight. And I am sure the sponsor wanted some facts particularly around the amount of money involved/lost to poor service to help them shift product. Interestingly there was another report at the back end of last that put the cost of poor service at £15bn to UK businesses  – anyway the fact remains that we all know instinctively that poor service costs businesses and the numbers are little more than guess work.

My more considered second thought was that the process of trying to simplify the ‘poor service equals lost business’ equation down to that single number means much of the detail is lost as to how one gets to that point.  Understanding that calculation is important in running a service business (is there any other kind?).  The difficult bit is knowing what aspects of poor service affect the customer’s buying habits and how big their direct and indirect effects are. There are plenty of supposedly “poor” service companies doing well (sorry to mention Ryanair again) and “good” service companies struggling eg British Airways.

As an aside here do we mean customer experience rather than customer service

There is a slight problem with supposedly instinctive understanding. How do we know God exists? Because the evidence is all around us. Faith works for believers but not for bean counters so the effect of good service needs to be calculated. Otherwise we could be spending millions on services the customer doesn’t care about or is going to leave us anyway or nothing at all because the manager can not justify it to the CFO.

Someone, somewhere, will have done a formula for the effects of service on sales and profit (what about share value or market share?). It will have a number of variables in it – the customer demographic, their spend, the market, your strategy/goals, the competitive landscape, the regulatory landscape, your brand and so on. Sadly it means the calculation is always going to be a very individual one for each business.

These sorts of research surveys are really only there to get people thinking about the impact of poor service and to get publicity for the participants, so don’t place too much faith in them.


Poor service is a collective responsibility not just the waiter’s

October 28, 2009 Leave a comment

Consider the lot of the frontline service professional.  When consumers complain about poor service their venom is nearly always aimed at a person – the call centre agent, the waiter, the check out person – but on almost every occasion they are not the ones at fault.

Responsibility for service delivery is a management issue and not one that can be delegated (or is that abdicated?).   In a recent blog Tom Johansmeyer  identified several characteristics of poor service.  His points relate to the experience with the person not the situation.  I don’t particularly disagree with his thoughts but they are still all failings of management not the people.

Service companies can only invest a high degree of expectation in their frontline staff if they have given them the tools to the job – information and training (including attitude, civility etc) are two important aspects but so is giving them that feeling of being supported, of having a team behind them, of having their manager’s backing.  By abdicating responsibility for service to an individual and expecting them to rescue every situation through charm alone you betray that individual and throw them to the lions – and let’s face it customers are getting more and more confident in their right to complain.

This situation is also true with senior management and the service department.  The service a company provides is not the sole responsibility of the service department.  They need to have the team behind them – abdicate the company’s service strategy to the service department and you betray them and your brand.

One last semi related point.  Isn’t it sad that in a civilised society we need to have signs in customer service areas that say something to the effect that ‘physical and verbal abuse of staff will not be tolerated and offenders will be prosecuted’.  But the abuse happens:  train staff are harangued for the failure of rolling stock; Jobcentre staff because of  government policy; shop staff because the company has changed its returns policy.   So another important message for managers – the failure to deliver the infrastructure and processes doesn’t just damage your brand, sadly they also threaten your staff physically and emotionally.

Of course the responsibility for the abuse lies personally with the abuser and there is no excuse.   Clearly there is something deeply unpleasant in the psyche of many complainers.  Effectively it’s a desire to bully rather than an emotional reaction to “poor service”.   I’m no sociologist but perhaps it is a vestige of our class system where new social aspirant thugs are taking the “right” to lord it up over “lower class” serving staff and treat them like punch bags.  Who knows, but it is a disturbing trait and reflects the nation’s low perception of customer service.