Discovering the value of customer service

Posted on: February 18th, 2016 by Art Barger

How much is your customer experience worth? When it comes to the financial value of your customer journey, executives rarely ponder the question because they generally see customer service as an operating expense, not a money-generating or money-saving process.

But according to the recent article, “13 Ways To Calculate The True Cost of Customer Service,” maybe they should. Along with improving customer satisfaction and retention, the revenue, costs and marketing associated with customer service can directly impact overall business profits. That’s something that will surely get the attention of any executive team.

Looking at your customer journey through a financial lens can help identify where the value is, and what areas of your contact center have the biggest impact your business profits.

  • Customer churn rate: Your banking experience can play a big part in your overall customer satisfaction. According to a 2014 NewVoiceMedia study, U.S. businesses lose $41 billion a year because of poor customer service. Multiply what a customer is worth to your bank each year by the number of customers you lose on an annual basis, and you’ll come up with a solid value for good customer service.
  • Lifetime value: Similarly, multiply what customers spend each year with your bank with the average amount of years they stick around and you’ll build a strong case for re-investing in customer service.
  • Employee attrition: The value can work the other way, too. Keeping your call center agents happily employed and productive reduces the costs of recruitment, training and lost productivity. Combine these expenses with the average agent’s hourly labor earnings, divided by their contacts per hour. The answer is employee attrition is important to your bank’s overall revenues.
  • Contact reduction: When you identify the reasons why your customers call you, you can address how to resolve the problems that drive up your call center labor costs. Multiply the number of contacts by the costs per contact and you’ll realize the savings you can make by resolving problems before they become calls to your contact center.
  • New customers through better customer service: Nothing influences your customers or endorses your brand more than happy, loyal customers. When your customers spread the word on how pleased they are with your service and how you treat them, they become a powerful extension of your sales and marketing team, without the sales overhead.

For most businesses, any part of your customer experience can lead to frustrated or unsatisfied customers. Re-evaluating components of your service customers can help put a price on the various functions and outcomes of your customer journey.

For example, automating operating services such as customer authentication can help speed up service in a cost-effective, more customer-satisfying manner. Using telephone network forensics, the TRUSTID® Physical Caller Authentication solution proactively identify callers before the phone is picked up. This eliminates unnecessary customer identification processes such as knowledge-based authentication (KBA), which require customers to endure time-consuming telephone interrogations to prove who they are. This process, which can add up to a minute or more on each phone call, drives up labor costs. With TRUSTID, contact centers can save upwards of .50 cents on each call. Depending on your annual call volumes, the savings can add up really fast.

We’ve known for some time now that outdated security questions or no longer predictive or cost prohibitive for call centers. Deploying tools that make telephone agents lives easier while streamlining the overall customer experience can provide tremendous value for your customers, as well as your business profits. And that should be enough for any executive to sit up and take notice.