This is a sequel to my last post on
Customer Cost or Care. 

Several people left comments, and I got even more email with opinions and questions about the real value of keeping or losing a customer, and the real cost, and P&L impact of providing care.

By the way, my husband is still in the UK,
and the bag will need to be checked one more time before I see it!

Let’s start by reviewing the things that we all know.

Getting a new customer is way more expensive than selling more to an existing customer.  Selling more to an existing happy customer is the lowest cost of all.  Having happy customers reduces your marketing costs as it refers you more new customers for free.  Having happy customers also reduces your liabilities – angry customers tell their stories more than 10 times more than happy ones.

Your customer service strategy can not be separated from
your business strategy.

Your decision on how much you are willing to invest in customer care is a big one.  It should not be seen as a peripheral or functionally isolated cost.  How you decide to treat your customers is fundamental to your business strategy.

If you don’t value keeping customers, your cost of customer care will go down and your cost of customer acquisition will go up.  Your overall costs will not necessarily do down, nor will your profits automatically go up — because reduced customer care will almost certainly result in reduced revenue.

And you will also forfeit an advantage that your competition can’t copy and the market can’t commoditize — treating your customers well.

Some ideas for the real world.

I’m not suggesting that you should provide limitless service and not worry about cost at all.  Every business needs to reduce the unit cost of doing business year over year.  It is the only way to stay competitive and fund innovation.  But don’t just squeeze cost out of customer care without considering the holistic value of keeping happy customers.

OK, so that all sounds nice.  But say you manage the service organization for a company who is not focused on customer care.  You would love to provide exceptional service, but you are being told that you can’t afford it, and that margins can’t support it.  You are being pressured cut cost and to increase the profit margin of your service and support business.

Two ideas:

1. Be the voice of the “Customer Value” line in the corporate P&L.

Expose the real cost of losing a customer just so it is clear to the whole organization. Do the numbers.  What is the actual value of keeping a customer in your business?  Be the one to show the hidden costs of losing a customer.  That should drive your customer service investment.

Calculate the actual cost of losing a customer in your world.  Things to factor in:

• Loss of new, incremental revenue/opportunity
• Loss of opportunity to create a “lifetime customer”
• Loss of annualized recurring revenue
• Cost of replacing a customer – marketing cost per lead that turns into a closed deal
• The cost of supporting the sales process
• Cost of viral effect, how many other customers will you lose based on bad referrals?

I spend about $120/month with Verizon.  They seem to have calculated that the cost of losing me as a customer for a few years is a few thousand dollars.  Verizon has on more than one occasion gone around their standard policies to invest $50-$100 in keeping me.  AT&T on the other hand has never done such a thing, and in fact has what I can only refer to as predatory methods for squeezing more money out of people by making mistakes then pretending it is the customer’s fault, and never refunding anything under any circumstances.

It’s really important to associate a specific value with the loss of a customer.

You need to connect the dots between customer care and increased revenue, not just between customer care and increased service cost.  If you don’t you will be inclined to squeeze your service and support organization on margins independent of understanding how it really impacts your business growth and profit.

2: Improve Service without spending more money.

There are a few things you can do to improve service even if you don’t spend any more money.

1. Personally use and test your standard service processes.
Get a first hand experience of how good or bad the level of service is.  Fight your way through your voice menus or website interfaces.  You will never improve it if you don’t have first hand experience. Even things like changing the hold messages, or not selling to people more than once while you are forcing them to hold, can make a huge difference in customer satisfaction.  Bank of America is the worst at this.  They over sell at every moment, (You can’t even activate a credit card without hearing six sales pitches) and they consistently deliver dreadful service.

2. Note what you like, and what embarrasses you.
You will be surprised at how much you can improve service by changing scripts.  How about having someone say, “I’m very sorry I couldn’t help you, would you like me to email you a survey form so you can provide your direct feedback to our company”, instead of the infuriating “I apologize for the inconvenience, can I do anything else to help you?” when you haven’t been helped with the first thing.  Also make particular notes about where your level of investment is creating a negative feeling in what you experience, so you have that as data for future budget discussions.

3. Spend a shift in the call center, on the help desk regularly.
All executives should do this.  Experience personally what customers call in about and how they are treated by your processes.  Get their reactions directly.   I guarantee you will uncover broken processes, mis-cues in scripts or service books, or repetitive or chaotic tasks that degrade both productivity and service.  You can fix many things for free if you just show up and pay attention.

4. Involve the team in cutting cost without degrading service.
Offer an award each month in each region for the most creative approach to reduce the cost of providing service without diminishing customer care. You can accomplish this if you involve the people doing the work to help figure out how.  One call center realized that a significant percentage of their calls were people asking questions.  They decided to make the answers more accessible, and their call volume decreased substantially.

If you don’t give your team a chance to help solve problems, they will have no motivation to do anything other than follow the process you put in front of them.

It’s your choice:

You can reduce the cost of customer service without cutting the care. It’s possible if you start with the strategic decision of providing care first, then cutting cost as a tactic, not as a strategy.

Special Note for People in the Bay Area

This year I am holding only two sessions of my Career Workshops in the Bay Area.

This is a chance for a small group of people to spend a day with me building a plan to manage their career, be more effective, build their Personal Brand, increase their influence, and grow their network.

I have about 4 seats left for June 4th, in San Mateo.

If you are interested don’t wait to sign up.  There will only be one more bay area session later in the fall.

I do this workshop because I like to help talented people get their break-throughs.  It’s been wonderful to hear the stories about the big promotions, and the career and life changing events that people have been able to create for themselves as a result of this workshop.

You can learn more about it, read what attendees say, and sign up here.

Whether you are looking for a
better job or to protect the one you have…

You need to take control of your career,
and make sure you are not getting stuck
on these common career hazards.

#1.  YOU ARE TOO BUSY

Working too hard can get you stuck. 

If you are consistently working really hard and delivering great results, but consume all of your time doing it, you will not stand out as a top performer. You will be seen as a “workhorse”.

One of the biggest factors in increasing your value is that you are able to get out of “workhorse mode” and show that you can get on top of the workload, lead, think strategically, and take on more.
(and you’ll enjoy your life more too.)

Two realities:

• No one other than YOU has any motivation to make you less busy.

Your boss, your company, your peers, your team, only benefit from your tireless output. Why would they want to help you stop giving them the benefit of your hard work?

• Successful people were not the ones who were less busy along the way – they were the ones who figured out how to deal with it.

You have to find a way to not get fully consumed by the activities of your job, but still deliver results really well, AND make room for more.   No one will do this for you, it’s up to you.

#2. THE DECISION MAKERS DON’T KNOW YOU

People often fail to get recognized by the decision makers in their own company. Whey they are ready for a promotion, they feel like the need to go to a new company to get it.   When there are layoffs, they feel very exposed because they are invisible to upper management.
 
There’s a simple reason. At a new company you are given an opportunity to sell yourself to the decision makers. The trick is to create that same opportunity in your current environment.

Building credibility and positive visibility is critical.  But it’s not about politics either.  That can backfire. 

You need to understand who all of your stakeholders and influencers are and create appropriate connections with them. 

You need to build a strong Personal Brand through excellent work and consistent behaviors.  You need to establish positive, constructive communications and relationships in a non-political and non-annoying way.  You need to do your work in a manner that creates positive visibility for yourself and your team. 

The more visible you are, and the more credibility you have built, the more valuable you are to your team and your company. 

#3 NOT ON “THE LIST”

This is related to #2 but there is more to it.

If you are targeting a top spot there is only one way to get it — You need to be on the short list of people who are considered for the job.
 
There is always a List. If you’re not on it, no amount of hard work and results are going to get you that opportunity.

You need to find out how this works in your environment, and get yourself on the List of people who are being considered for what you want to go after. 

#4. AFRAID TO ASK FOR HELP

Many people are afraid to ask for help because they think they will be viewed as less competent. 

If you are advancing your career, by definition, you will be in over your head from time.  All successful people have moments when they don’t know what they are doing. If your career is growing and you feel terrified, you are doing it right!  — as long as you get help.

Asking for help can actually signal high competence if you do it in a productive way. The last thing a manager wants is to have you suffer and struggle, and not get the job done.

Asking for help builds trust, and getting the job done well builds value and confidence.  Suffering alone and failing breeds disappointment.

I have seen people who’s egos prevent them from getting help when they are struggling.  It’s not pretty.  It often signals the end of their career growth, and either gets them on the unfortunate, don’t consider-List, or on top tier for the layoff list.

Never fail alone. 

Get as many mentors as possible. It makes an enormous difference.

#5.  NOT GETTING THE RIGHT EXPERIENCE 

Don’t leave this to chance. 

It’s very important that you don’t expect your current job to provide all the experience you will need for your next one.  

You can burn a lot of time in the same job failing to get new experiences.   A friend of mine once put it – make sure you are getting six years of experience in six years, not 3 years of experience twice!  

The most common mistake people make is to get experience in all the stuff that your target job manages – this wastes a lot of time and means you are getting experience in everything BUT the job you want.  You need to develop opportunities to get experience in the actual job you want before you have it!

This is another reason why it important to make room in your current job, and not be continually overwhelmed by the activity of it.  You need to nail your current job, but do it in less time, so that you can spend the extra time building your experience base for your future role.

#6 MISSING THE REAL REQUIREMENTS FOR BIGGER JOBS

Many people make the mistake of thinking that excelling in their current job will qualify them for a bigger one, or that talking about past successes alone will impress people.

It’s important to understand that relying on your current and past success is not enough.

You need to show how you will lead differently in a new role with a bigger scope, which requires a completely different leadership strategy to succeed.

What you value, how you lead, and what you measure, all need to change.

This is why #5 is so important – you need to get experience in the job you want before you go after it, even if you don’t have the title yet. That way you’ll learn all the things that are actually involved in doing the bigger job well, and be ready to talk about it, and win it, when the opportunity comes along.

WANT SOME HELP WITH ALL OF THIS?

If you want to a better job, or to protect the one you have, I invite you to attend one of my Career Building Workshops. 

The next ones are in Feb and March, and there is a discount if you register by Feb 1.

You’ll get to spend a day with me, and network with peers from other companies, and most importantly, learn what you need to do to build your own plan for your career success.  

I hope you’ll join me.

Patty

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