Poor service is costing companies big bucks – so why does it happen?

Contact centre

In the last few days, the Ombudsman Services has published data suggesting that poor customer service costs companies somewhere in the region of £37bn.

This calculation comes from figures that say more than a quarter of customers took their business elsewhere last year – or spent less money with a company – after receiving shoddy service.

So why does this happen? And what can organisations do to improve customer service?

The report makes for interesting reading – and these were just a few of the stats that stood out…

Customer service report

I also particularly liked this…


It does sound simple, doesn’t it? So why is there so much discontent with levels of customer service, when this report says that customers want simple fixes?

We work with a lot of teams whose function is primarily customer service. These teams either work in retail environments – delivering the brand experience to customers who shop in bricks and mortar stores. Or they work in contact centres, handling calls and getting into correspondence via webchat, email and good old-fashioned letters.

And I’ve yet to meet a customer services professional who gets up in the morning thinking, “Right, who can I annoy today? I’m going to push my unhelpfulness levels to the limit…”

The people I meet in customer services roles like working with people. They’re often chatty and bubbly – and they care very deeply about the organisations they work for.

So where does this disconnect come from? In my experience, there are a number of sources. In no particular order…


Risk aversion and defensiveness

If you’ve ever complained to an organisation – particularly if you’ve done it in writing – you’re probably not aware that one of the first things that tends to happen is for your communication to be categorised.

Is it actually a complaint? I’ve worked with some teams who don’t categorise communications as complaints unless they actually have the words “complain” or “complaint” in them. After that, is it a serious complaint? Some organisations categorise seriousness depending on the kind of event you’re describing – and others who categorise seriousness depending on who you’re complaining to (so if you write to the CEO, rather than to the customers services team, your complaint may automatically be deemed more serious).

Regardless of the means of categorisation, if your complaint feels serious – and like it has the tiniest potential to end up in court – some organisations train their teams to go on the defensive.

I cannot tell you how often I meet teams who say: “We can’t apologise – that’s an admission of liability.”

And I say: “Yes, but this chap is just put out that after being a customer of yours for the last 20 years that you wouldn’t do a cream tea for him and his wife because their bus was late…”


The word “legal” can put people in a spin

The whiff of the word “legal”, in my experience, is enough to make many customer services teams freeze in their tracks. The customer services professionals love the company they work for and they want to protect it. And they’ve been trained to believe that if they put a foot wrong in handling a situation like this, they could end up costing their company gazillions. So they fall back on procedure and correspond in stiff, 1950s-formal legalese.

The customer of 20 years who viewed the tea shop as his weekly treat with his wife is confused and enraged. Because the company hasn’t just let him down – it’s now betraying him. The complaint may escalate. And sadly, so may the defensiveness.

The man who complained decides never to darken the company’s doors again… and may grumble about it over his next game of golf.

And what’s happened here is that in trying to protect the company from an every-so-remotely possible gazillion dollar lawsuit, the customer services team (who are the people who generally deal with complaints) has lost real custom with real value – and has probably dented its possibility of gaining future custom with people from the golf club.

What’s the answer to this? I find it’s talking to legal teams and getting them:

a)   To be more available to chat to customer services teams

b)   If needed, to be less rigid about legal wording

It’s also about empowering customer services teams so that a bit of common sense can prevail – and they feel comfortable and supported in doing what they feel is right for the customer.

As an experiment with one client a few years ago, we contacted a handful of their customers who’d (quite justifiably, in my opinion) harrumphed off into the sunset over incidents like the one set out above.

We sent them a little card (no stiffly formal letters, thank you very much) which said: We’re reviewing the way we handle feedback from our customers – and we think we made a hash of it when you contacted us. Would you like to come in for a coffee, and maybe we can catch up and start again?

One of the eight cards we sent out was ignored (or the person had moved on, we’ll never know). The other seven came for a coffee and seemed very impressed that the organisation cared enough to ask them.

I wish we’d been able to track their behaviour beyond that coffee – but resources at the time didn’t allow. I’m hoping they came back into the fold and became passionate brand advocates. Because what we see time and time again is that well-handled complaints generate great loyalty and recommendation. And by well-handled, we don’t mean that compensation is automatically offered. We mean that there’s a genuine “sorry” if things have gone wrong – and a clear demonstration of what you’re going to do to fix it.

You can see my thoughts on apology here.


Customer service is seen as a cost centre


Just for a minute, think of a corporate organisation like a fairy tale kingdom. There are gently rolling hills, some streams and forests – and then on top of a beautiful hill, its turrets surrounded by silvery clouds, is a castle.

Let’s call this castle “head office”. Inside the castle walls are all the functions of the corporation deemed to be profit-making. These functions have a hallowed position at the heart of court and generally include things like operations, finance, HR, marketing and more recently, customer experience.

These functions are kept close to the beating heart of the organisation. They’re included in brand awareness campaigns. They’re likely to know what’s going on in the organisation. They get budget.

Out below the forest, however, in less salubrious surroundings, are some of the corporation’s other functions – things like customer services, contact centres and store teams (if the corporation is a retailer). When things change at the castle, it might take a long time for the news or initiative to filter down to them. In fact, they can be the last to know. They’re also often the last in line for budget.


Slick messaging in head office – hand-made posters in customer service environments

If you were ever to journey from the castle to the forest huts, one of the things that might strike you is that inside the castle, all the shiny posters and video displays that reinforce the branded way to work are replaced by hand-made signs and props bought out of Wilkos.

In my experience, the teams who have the most direct contact with customers are often the people who have the least contact with the brand and with the company’s resources.

Sometimes they are literally in a different location than head office – head office real estate doesn’t tend to come cheap, which often prohibits housing call centres in them. Sometimes these functions are just metaphorically at arm’s length.

But the result of the distance – whether literal or metaphorical – is the same. These teams often develop their own cultures and focuses – and their own interpretation of what the brand and branded behaviour should mean.

Meanwhile, the edicts that do make their way through from the castle – clearly and regularly – tend to be all about efficiency. Because the corporate approach to cost centres (any part of the organisation that chips away at profit, rather than contributes to it), is to reign in that cost.


Screen Shot 2017-02-24 at 09.10.12

Nowhere, I think, is this more apparent than in contact centres – where measurement and metrics have sometimes taken on Kafkaesque proportions.

With some wonderfully rare exceptions, contact centres often operate to complex frameworks of systems and processes that are geared up to enhance efficiency by measuring and assessing every last aspect of an interaction with customers.

  • How long was the call?
  • How long did the customer wait to be answered?
  • Did you deliver the correct wording?
  • Did you say the words in red?

A quality team will assess each call handler on 20+ questions like these. The requirements are prescriptive, robotic. And only in the most enlightened organisations – like M&S, for example – is customer happiness a focus, and are teams empowered to have genuine conversations.

These labyrinthine systems have become a science in themselves – and it’s a real achievement to become proficient in them. And when people do, they become proud of this achievement and try to help others reach their high standards.

Then quite quickly, the processes and the software become king – and it’s easy for call handlers to forget they’re speaking to human beings, because the focus, the measurement and the reward are all about ticking the right boxes, eliciting exactly the right responses from callers and using time “efficiently”.

Back at the castle, the operations and finance teams are happy that cost is being controlled. The call handler gets a good quality score because their call wasn’t too long and they said the right words. And on the end of the phone sits a customer who’s fed up with being “processed” and who feels like they’re being fobbed off and they don’t matter.


Customer service could be a source of insight and data

What’s the answer? In our experience, it’s putting the breaks on everything, unravelling the quality control metrics, creating new quality control questionnaires that align with the brand, training teams to communicate with warmth and interest – and starting again.

We’ve worked with massively innovative customer services teams who’ve abolished things like AHT (average handling time) as a quality metric – so no call handler is assessed by how much time they spend on the phone. Why did they do that? Because what’s the point of saying, “Fab, you only spent 90 seconds on this call!” if the customer then rings back another six times and gets angrier each time? Better to get it right first time (first time resolution) than to tick a fruitless box. That doesn’t mean they don’t measure how long people spend on calls – because that’s useful information. They just don’t share that data with call handlers, because they don’t want them to focus on anything that doesn’t put their customers first.

More broadly though, there has to come a point when organisations stop seeing customer service as pure cost – and look to it as an invaluable source of data and customer insight. The software is there to allow this to happen. It’s just going to need a different way of thinking.


Putting brand front and centre in partner contracts

Of course, not all customer service is given by employees of a company. Often – especially with contact centres – the function is outsourced to international companies who provide support to bazillions of other corporations as well as yours.

And this can be a really good way of looking after things. It means you’re able to offer out-of-hours customer service and it can give you a way of controlling cost.

But beware. Ginormous providers of contact centre support have become efficient and profitable by having their own cookie-cutter systems and processes – and as a result, they often offer a very generic style of customer service.

Which is kind of OK as a base level. But you really need that company to be able to talk to your customers in a way that feels right for the personality of your organisation. The bottom line is that you want to have a relationship with your customers. The provider wants a relationship with you, not your customers.

I’ve seen examples where – with a generic contract in place – a company is banging its head against a wall because the provider is ticking all the “right” boxes, but not giving the kind of service that the commissioning organisation can be proud of.

The answer, I think, is to spend time developing a contract that’s explicit about what you expect your customers’ experience to be. Otherwise the provider may simply think that “branded” means answering the phone with a “Hello, Company ABC, how can I help you today?” instead of, “Hello, Company XYZ, how can I help you today?”

Then you need to invest time in training the provider (and ideally having the contract state that they invest their own resources in this too) – showing their teams what you want customer conversations to sound and feel like, and aligning quality control to your brand objectives rather than simply to generic contact centre objectives.


Not hiring the right people

Christmas shopping

© Copyright Derek Harper

Customer service jobs ebb and flow over the course of a year. There’s generally more of a need for people over Christmas, for example, than there is in April.

In some organisations, this can mean there’s a frantic scrabble to get bums on seats – or bodies in store – in time for peak periods.

Back at head office, there’s a steadier approach to recruitment. There’s time to evaluate and assess whether a person is a good fit, as well as having the right skills. A more progressive organisation may also have developed a branded approach to recruitment – so that people coming on board are being inducted even before they go through induction.

But in the cost-centres, the pressure to get people in post is greater – and that can sometimes mean putting a headset on someone who really isn’t best suited to that kind of work.

What’s the answer? I think it can only be investing in a decent on-boarding and induction phase – and having the courage not to graduate people who can’t deliver your brand promise. Or in other words, if somehow a monosyllabic, grumpy bum makes it through to the induction stage, the induction itself should be structured to be able to identify her or him – and find something else for them to do, or say, “Sorry pal, I don’t think this is for you…”


Better customer service is possible

It is. I’ve worked with so many lovely customer services teams that I know it is.

Customers, at the end of the day, want two things: To be treated as human beings and to feel that there’s a personal connection between them and the organisations they buy into. If you provide those things, customers will be supporting, forgiving and loyal. But providing those things needs a shift from the way some organisations give customer service right now.

At head office level, I think there’s a massive opportunity to shift the way customer service is viewed as a function. I’d like to see organisations bringing customer service into the fold – getting customer service people involved in new product development, getting them involved in marketing campaigns, getting them talking to and sharing data with buyers and procurement teams. Why? Because they’re the people who are speaking to customers every single day. They see what customers struggle with. They hear what delights and what annoys. There’s no way on earth that the teams generating this insight should be treated as “pure cost”.

I met someone recently who at one point in their past had worked in CS and then had moved to marketing in the same organisation. She’s now involved in product design. She said: “All my ideas come from my experience in customer service, but of course when I worked in customer service, no-one wanted to listen and there was no way to get anyone to listen. Now I’m in marketing it’s different.”

I think this is probably a common experience for people working in customer service – they don’t have a way of feeding ideas into the organisation. But it makes zero sense.

At the delivery end, I’d love to see CS teams knocking on head office doors, bearing gifts of data and insight and demanding to be brought into the heart of the organisation to be the advocate of the customer in everything.

Clearly, nothing is black and white. Clearly, there are organisations out there giving fabulous, creative and innovative customer service. But as the report from the Services Ombudsman shows, there’s still a lot of room for improvement.

As ever, if you’d like to chat about any of this – give us a call. And if you’re working in customer services, remember we think you’re fab and you’ve got the power to make a huge difference in your organisation.



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