Mis-management of customer service

By Nils Randrup (Magnificent AB, AVT Business School), March 2011

More that 80% of company sales typically comes from existing customers, and it is 4-6 times cheaper for a company to grow sales with existing customers than to acquire new sales from new customers. Key to securing and growing sales to existing customers are not to annoy the customers so much thru the customer service, that they will choose to change supplier.

However, many customer service managers find themselves in a situation where customer satisfaction is not up to scratch, even though the performance measures seems fine.

When asking customers what really matters to them in terms of customer service, the two top factors is that the person answering the call is knowledgeable and can take care of business, and that the issue can be solved during the first call. However, these two criteria are seldom included in the performance management system of customer service departments. More than half of the customers in a recent customer survey across industries say they’ve had a bad service experience, and nearly the same fraction think many of the companies they interact with don’t understand or care about them. On average, 40% of customers who suffer through bad experiences stop doing business with the offending company.

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