• October 1, 2006
  • By Coreen Bailor, (former) Associate Editor, CRM Magazine

Service Sells

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Winning and keeping new business is at the top of any company's wish list. But as commoditization continues, the service-and-support factor is often the missing link to building brand loyalty and retaining profitable customers. As companies across the country prepare to celebrate this year's Customer Service Week (October 2 to October 6) to recognize the significance of customer service and front-line service employees, it's important to keep in mind how exceptional customer service can boost a company's bottom line.

Siloed information and processes continue to plague customer retention and loyalty efforts, according to Lior Arussy, president of consultancy Strativity Group. He cites an example of a large, U.S.-based insurance company that didn't know why customers were defecting because of its no-questions-asked customer service policy: If a customer wanted to close an account, the company did so without garnering any information on why the customer wanted to end the relationship. But when CSRs began to ask customers why they wanted to take their business elsewhere, the insurer retained 17 percent of callers initially intent on canceling. Even so, a customer service executive was actually penalized, not receiving his bonus because it took longer to close the calls. "Companies think in silos and don't see the complete picture," Arussy says.

The siloed approach can also widen the gap between what companies promise and what they deliver in a service experience. "The most natural sense of selling is when you fulfill your promises and you fix your problems," Arussy says. Verizon Wireless, for example, focuses on listening to customers to strengthen its service experience, using various types of surveys to capture customer sentiment. "What we heard back was they wanted us to streamline our IVR, make it easier to get through, as well as [wanting us to] enhance our self-help service in the IVR," says Marquett Smith, vice president of customer service. "We've done that."

Naturally, good customer service often leads to customers expanding their dealings with you. One way to begin: Ensure that front-line reps are well trained, and equipped with access to a comprehensive knowledge base and to customer history. "When the service representative starts to ask you smart, scripted questions based on your segment and your value, it can very quickly lead to an upsell," says Liz Roche, managing partner at CRM research and consulting firm Customers Incorporated.

Remember, customers often tell friends, family, and colleagues how good or bad service was. "There's no question that companies are growing by leveraging the effective use of their product or service by their existing customers," says Jeff Marr, vice president at research and consulting firm Walker Information. Word of mouth, according to Roche, is really about brand equity. Many companies take the advertising approach to raise and strengthen brand awareness and loyalty, but "advertising is only going to raise my expectations," Arussy says. "If you're going to tell me that you're committed to customers, I'm going to expect to hear people on the phone behaving that way."

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