How to transform the Customer Services function (Part II)
In this post I continue the conversation I started in the previous post. To recap, this conversation is about transforming the Customer Services function. When I say transform I am pointing at something different to change. Take a good look at change and you will find that change often deals with changing the content rather than the context which gives rise to the context. Transformation deals with the context.
What does Customer Services really do?
Step outside of the content of handling calls, emails, or providing agents to respond to ‘click to chat’ requests and look at the Customer Service function. What do you see? I see the bigger picture. I see the powerful functions of Marketing, Sales, Ecommerce, Operations, Logistics, Finance creating ‘garbage’. This garbage lands in the lives of customers and the customers don’t like it.
Within the current context it is taken for granted that organisational functions will create garbage. Perhaps it is more accurate that this creation of garbage is hidden in the background and not even noticed. Marketing creates waste by misleading customers, or not providing them with the information that they need. Sales creates garbage by selling the wrong product or promising and not delivering. Operations creates garbage by making/sourcing products that don’t do what they are supposed to do. Or are difficult to setup and use. Logistics creates garbage by not delivering the products on time. Or not even providing a date when the product is going to be delivered. Finance creates garbage by getting the billing wrong or not explaining the charges adequately. The Ecommerce unit creates garbage by not designing the website so that it is both useful, usable and responsive.
This garbage lands in the lives of customers and the customers don’t like it. So they turn to the people in the business who can help with cleaning up this garbage: Customer Services. Put differently, within the current context the Customer Services function deals with/addresses/cleans up the garbage created by the rest of the organisation.
The access to transforming the Customer Services function is to focus on what is outside of the Customer Service function
It occurs to me that it is madness to focus on improving efficiency and reducing the cost of the Customer Services function. Why? Because that is simply finding more efficient ways of dealing with the garbage. If we use the manufacturing analogy then we have a whole bunch of people creating waste. This waste lands in the lap of the Customer Services folks to fix. The Customer Services folks are fixing it as best as they can whilst the rest of the organisation is hell bent on cutting their resources and expertise. Is this not insanity?
Surely, the lever for transforming the Customer Services function lies outside of the Customer Services function. Who is the cause of the garbage in customers’ lives that drives calls into the Customer Services function? Marketing, Sales, Operations, Logistics, Ecommerce, Legal, Finance etc. If these functions did not create the garbage in the first place then there would be a huge reduction in the call volume coming into Customer Services. And accordingly a huge reduction in the cost of the Customer Services function.
I say that the access to transforming the Customer Services function is eliminating the garbage that the rest of the organisation is creating in the lives of customers. Put differently, learn from manufacturing and build quality into the system so that the default functioning of the system is quality.
Which begs the question, how to do build quality into the system. I say you start by disturbing the complacency of the existing system. And a great place to start is to:
- Analyse the demand coming into Customer Services into ‘value demand’ and ‘failure demand’ where ‘failure demand’ is the demand falling onto Customer Services because of the garbage created in the lives of customers by the rest of the organisation;
- Code the ‘failure demand’ into buckets where the buckets represent the organisational functions (Marketing, Sales, Logistics…) that are the source of the ‘failure demand’; and
- Charge each of these organisational functions – on a monthly basis – 200% of the cost of dealing with the ‘failure demand’ generated by that functional silo.
Please note that for this to be effective, the charge has to be a real charge. It has to hurt by reducing the money that the organisational functions have to spend whilst being held accountable for meeting their objectives.
Why charge the organisational functions 200% of the cost. To get these organisational functions present to the hidden cost of creating garbage. When an organisation creates garbage in customers’ lives there are two costs. The first cost is the cost of cleaning up the garbage – the cost incurred by Customer Services. The second, hidden cost, is the damage done to the relationship and thus the lifetime value of the customer.
You might be wondering how this would transform the Customer Services function. Here is how I see it. If that which I am proposing was implemented rigorously it would disturb the system. The organisational functions feeling the most pain would be motivated to produce less garbage. And to do this they are likely to seek out the Customer Services folks to get a helping hand in better understanding the issues from the customer perspective. Together they would reduce the ‘failure demand’ falling on Customer Services and take the Customer Services function out of the business of ‘cleaning up the garbage’ thus freeing up capacity some of which could be used to focus on stuff that genuinely adds value to customers and leave them surprised and delighted.
Notice that within this context, Customer Services shows up as a valuable function. One that acts as an independent check on the health of the organisational functioning. And acts as a catalyst for keeping the various organisational actors ‘honest’ and ‘in sync’ with the needs/expectations of customers. Doesn’t that constitute a transformation?
Clearly for this transformation to occur it has to be led by the CEO and supported/enabled/enforced by the CFO. And their commitment or lack of commitment discloses all that one needs to know about the importance of the customer.
Posted on January 29, 2013, in Customer Service, Leadership / Change / Transformation and tagged customer service, failure demand, leadership, transformation, Transforming Customer Services, value demand. Bookmark the permalink. 6 Comments.