The business case for excellent customer service

Customer service is more than Goodwill.

The title of this post sprang instantly to mind on seeing the latest post from Matt Cutts of Google. His was entitled “The business case for goodwill“.

I will come back to goodwill later but first let us explore customer service. Perhaps everyone in Canada is currently much more aware of customer service given the lamentable Customer Service from the Canadian Cell Phone Companies. Currently it seems to be getting even worse with the oligopoly of Bell, Rogers and Telus braving the wrath of many customers as they squeeze every customer for as many dollars as they can. They are clearly acting against their own best long-term interests and some government control is essential if government is to reflect the will of the people. It’s no surprise that Canada is seriously falling behind on the mobile Web but that is another story.

Some companies realize the importance of excellent customer service. One of the best case studies is that of Portakabin in the UK. Portakabin hires and sells permanent and relocatable buildings. Its clients include hospitals and schools, government ministries, universities and major business players such as Sony, Vodafone and Tesco. It is the leading brand in this market with 16% of the UK market.

Portakabin has unique Customer Charters for its sales and hire customers. These set out, in detail, the high levels of service that customers can expect. They include:

  • completion of every project on time and to the agreed contract sum
  • a service response within 24 hours from the customer services team
  • picking up the phone within four ‘rings’ – and by a person, not an automated system
  • a response or visit within 24 hours of a request
  • to be included in the customer care programme.

For Portakabin, good customer service is vital. It is aware that satisfied customers return to the business and ensure that healthy profits are made. They also help to build a good reputation. It knows that if customers receive good service ‘This time, next time, every time,’ then they are more likely to return.

Matt Cutts refers to a blog post by Carolyn Y. JohnsonHurry up, the customer has a complaint. She cites examples where firms monitor the Internet looking for dissatisfied customers. If you blast a gripe about Comcast on the social network Twitter, then Frank Eliason who is ComcastCares will likely be in touch to try to fix the problem. Dell is also listening carefully to what customers have to say on its DellIdeaStorm website. .. and they are are not the only ones.

Surprisingly Matt Cutts did not refer to customer service but rather to goodwill. As he questioned:

The fly in this ointment is how to make a business case for listening. What are the metrics that argue for having someone engage with a community, listen to feedback, and push for changes? Any smart person intuitively knows that good community relations are a solid idea, but how do you prove that? In a company of size X, how many people should pay attention to or be dedicated to community relations? Id be interested if other people have thought about the business case for goodwill, or know of resources that discuss this.

Perhaps the reason why a Googler would talk goodwill rather than customer service is that Google may feel it does not have customers. It provides its search results for free and its real concern is for its advertisers. That may be a somewhat short-sighted view of reality.

Sometimes public corporations go for short term results to please the stock market. However such short-term results are often achieved at the expense of long-term growth. Kaplan and Norton in their Balanced Scorecard approach suggest that other factors are important for long-term success:

The balanced scorecard retains traditional financial measures. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in long-term capabilities and customer relationships were not critical for success. These financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation.

Satisfied customers can represent an important long-term asset. Short-changing customer service is a false economy that will be paid for by much bigger losses of revenue in the longer term. For graphic examples of this, just watch the progress of Rogers, Bell and Telus in the Canadian telecom market in the months and years to come.