Profiting from Customer Service

Businesses that think of their customer service centers as cost centers rather than centers for profit are not only missing out on revenue but also neglecting perhaps the last sustainable competitive advantage they have in the marketplace today.

A strong customer relationship, which is driven by a great customer experience, has become of paramount importance in our real-time world in which the competition is only a click or phone call away. Another way of defining customer experience is brand experience.

Many companies spend hundreds of thousands of dollars on integrated marketing campaigns to build their brand impression in the customer’s mind. Few companies invest in training and sustaining a customer service center that makes a good brand experience possible. The mistake is in thinking of customer service as an obligatory repository for complaints. Smart companies that turn those customer contacts into opportunities for sales and customer retention can increase profits by up to 30 percent in a year.

Here’s how the smart companies do it. It starts with realizing that keeping existing customers is far less expensive than finding new ones. Your chances of selling something to an active customer are 60 percent to 70 percent, while your chances of selling to a new customer drop dramatically to somewhere between 5 percent and 20 percent. With these figures, it’s not hard to see that investments in customer service are a bargain. Not only can a trained, dedicated customer service department ensure a better chance of keeping the customers you have, but also it can go one step further by selling those customers based on the department’s knowledge of the business.

If you really want to increase your profits and sustain them, start by replacing untrained hourly or part-time customer service representatives with full-time, dedicated professionals whose sole job is to know your business and leverage that knowledge to build trust and confidence with your customer.

Invest in training your customer service representatives with businesses that specialize in customer contact management. They know the formulas for turning a complaint or question into a positive customer experience that is the basis for building a lasting, profitable customer relationship.

Here are some techniques for turning your call center into a profit center:

* Start by setting up a metrics system to track profits and losses so you can measure the profitability of your customer service center.

* Hire dedicated and trained personnel who have a passion for the discipline and who take pride in generating incremental business by practicing good customer service techniques. They can handle more customer contacts than part-time employees who have minimal training so they are able to generate more sales per hour than lesser-trained employees.

* Train dedicated agents to provide backup technical support for additional field sales staff as well as for new or first-time customers in your market area.

* Use soft-selling or up-selling tactics at the end of a phone conversation or e-mail to add value to the customer contact. This saves you from having to double your sales efforts by contacting that customer again later.

* Provide 24-hour service and electronic response programs to continue the positive brand experience. Respond to a customer contact within minutes. Today’s business customers will not limit themselves to your company’s staffing hours.

* Allow customer service agents flexibility to set appointments to return calls and offer alternative purchase programs. These can be achieved only with a well-trained, dedicated service agent.

When you add to these programs full systems integration for more sophisticated business tie-ins like referral programs, lead generation and customer segmentation, you’ll begin to see significant positive impact on the bottom line. Think of your customer service center as a gold mine of information that dedicated, trained customer service people can use to generate profits for almost every area of your company. For example, your service representative can track product suggestions, ideas for improvements in packaging, delivery records and more.

Look at the results of one company that turned its once “costly” customer service center into an instrument for profit and customer loyalty. Its trained staff, armed with some of the programs mentioned above, as well as with broad business knowledge, increased customer service effectiveness by 50 percent. The staff added value to 15 transactions per hour; whereas, in the prior year, its lack of knowledge slowed them to 10. The difference in cost savings over one year for the company was nearly $5 million.

Add to that the value-added services of innovative programs and the kind of positive customer experience that keeps customers happy, and you can see why this company grabbed market share from its competitors whose businesses relied on initial product sales alone. In a real-time economy in which customers have access to a world of goods and services and in which loyalty depends on their customer experience, the company with the advantage is the one that actively manages the customer relationship.

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