THINK TANK: Customer service - Service providers. Service levels are still falling short of customers' increased expectations. But what can marketers do to bring them up to scratch?

Customer service. Everyone's talking about it, yet as far as many

customers are concerned, there's too much talk and not enough

action.



In a recent Royal Mail survey, 96 per cent of respondents said being

treated professionally in communications by businesses was important,

but only 64 per cent felt this was actually happening.



For some, the benefits of improving the level of service they provide is

being realised. Olympus, for one, has commissioned Stepping Stones, a

specialist HR consultancy, to oversee a complete market research project

to help it improve relationships with all its customers across all its

product categories.



The majority of consumers, however, still seem dissatisfied with the

service levels they are experiencing. So when it makes obvious sense for

businesses to keep customers happy by providing them with a good

service, why are so many of them still complaining?



Alistair Welham, marketing director of Mercedes-Benz Direct, which sells

new and used Mercedes direct to consumers, puts a lot of this down to

customers demanding more in return for their money and the data they are

asked to provide. "Customer expectations have risen," he says. "We

expect organisations to get our names right and banks to know exactly

what accounts we have. But the crucial thing we crave is to be treated

as a human being, which is the one element we don't get."



All the panelists agree that the problem is more to do with how customer

service is perceived by organisations and the different actions they

take to solve it. Kath Ginn, senior data planning consultant at Rapier,

an agency specialising in technology companies, says: "Too many firms

still see customer service as cost."



Of course, doing it properly with all the necessary resources in place,

such as trained staff and the technology to even pre-screen calls

according to caller location data, is an expensive business. "A lot of

our clients talk about call-avoidance strategy," says Welham. "That way

it's much cheaper."



Neville Upton, CEO of call centre solutions specialist Listening

Company, agrees. "Businesses need to treat contact offices as a profit

centre, a chance to understand the customer and to connect with them.

This matters not only in terms of customer lifetime value, but also true

cost of acquisition."



Acquisition versus retention



Five per cent of the UK population is employed in call centres.

According to the panel though, in these potentially recessional times

their main focus is beginning to change. Often call centre staff are

phoning up and acquiring new customers rather than focusing on

retention. Michelle Henderson, head of direct marketing at Carphone

Warehouse, says this is because companies face a constant battle for

market share, and to win this, they have to go out there and get new

customers.



So with tough times ahead, is there a danger that existing customers

will continue to be overlooked in favour of wooing new ones? "Firms

spend a disproportionate amount on acquisition compared to looking after

existing customers," says Upton. Ginn believes this is because

acquisition activity is much easier to understand and evaluate than

retention strategies, which get bogged down among active, dormant or

simply vanished customers that have records but will never return:

"There's a fear of moving spend away from acquisition to retention, even

in this climate. With acquisition marketers know what they're going to

get."



Where spend is allocated depends on how firms want to treat customers,

says Ash Tailor, corporate relations manager at Lever Faberge UK, part

of Unilever. He believes people buying its premium products, like

Persil, shouldn't be given any better value of service or call than a

Surf user: "It's the opposite of screening. Each customer is equated

with the same value. We don't expect to get more money from one

particular customer calling us."



Unilever doesn't specifically use the data it receives to

compartmentalise callers. In its simplest form, it provides a service.

It receives calls from people asking how to wash red wines stains out

from carpets to people actually offering advice on stain removal. If

enough similar calls are noticed, tip-filled booklets are produced for

consumers. Tailor believes a mistake many organisations make is to

regard all calls from customers as a sales opportunity. He says it

should be more a two-way process for the customer and the company to get

to know each other better: "Our centres are there to give that

one-to-one service to every customer. We can leave it up to the ad

agencies or other channels to target them. We don't want to be seen as

harassing them."



Offering this kind of service is crucial for good customer service, and

Dan Douglass, managing director of direct marketing agency DP&A,

applauds Lever Faberge's approach: "It's value-added, which is part of

the 3Rs rubric - Remember me, Recognise me, Reward me. The value-added

in terms of this type of interaction is vital."



Carphone Warehouse is attempting to do the same thing. It launched its

direct marketing department only last February, charged with targeting

specific groups of people with more focused messaging and overall brand

reinforcement. Henderson explains: "We're trying to establish a means

where we can add value and find a reason to speak to the customer,

rather than going to them with a blatant message. It's about adding

value and being innovative in our customer service."



The company sends every new customer a welcome pack with an incentivised

questionnaire in a bid to find out what customers are thinking and how

they feel about the service they're getting. "Every customer is treated

the same," says Henderson. "It's worthwhile spending time and money on

this ethos because these are the customers that are going to bring us

business."



Mass customisation



But not every company can go to these depths in terms of customer

service, and where this is the case, Douglass believes mass

customisation can work just as well. He praises e-tailer Amazon. It

recommends products based on a customer's previous choices through

intelligent software. "Amazon does great customer service," says

Douglass. "All it does is recommend books and CDs of a similar genre.

People know how it's done, but it makes them feel understood. It's an

illusion, a form of mass customisation, but you accept it."



The question is, should all customers be treated the same in the name of

good customer service? Welham believes the answer is yes, but says many

firms don't treat people equally. He has noticed this in the motor

industry, especially at the top-end where companies tend to prioritise

according to status.



He also believes firms need to be aware of the risks associated with

this form of selection: "Considering the way people can interact,

influence and network these days," he reasons, "it is wrong to assume

that any one customer is less influential than another."



There are nods of agreement around the room, and even more at Welham's

next point: "We all understand what good customer service is, but when

we come to work in customer service, we seem to take our awareness hat

off."



Asking for information



One obvious way to get to grips with what customers want is to ask them.

But all too often though, companies are reluctant to do so. "People are

often afraid to ask the customer for information," explains

Henderson.



"They say the customer won't give that to us, but if you don't ask,

you'll never know."



Welham believes customers are much keener to share information about

themselves these days: "With the preference services and the Data

Protection Act, people are realising that the environment is being

regulated. Therefore there's almost a willingness to share a certain

amount of data to get the right sort of response from whoever they're

interacting with."



But keen as they may be, the common criticism is that call centre

advisors are still inadequately trained and unprepared to deal with

customer queries and requests. Upton blames it on unworkable systems: "A

lot of the time it's not their fault they can't deliver customer

service," he says. "It's often the way they've been set up. They're not

empowered and don't have the right system."



Inadequate training, he adds, also contributes to the high turnover of

staff, a fact which blights call centres. This, too, has a negative

effect on customer service levels.



Because of the Lever Faberge UK approach, staff do stick around long

term. 'We need advisors who are going to be there not only for six weeks

during their summer break, but for years. We need that experience," says

Tailor.



The trouble is, not every organisation shares these feelings. Upton

explains: "We work with lots of clients. Some want six or ten-week

training, while others ask if they can get away with half a day. Some

talk about call avoidance while, at the other end of the scale, some say

they want to talk to everyone. It depends on their ethos and

culture."



Still, those businesses which do take service by the scruff of the neck

can learn a lot from their customers. Why? Because customers are

themselves becoming more savvy about what they want. Offering

value-added customer service is increasingly important.



Importance of customers



So what do our panelists think really improves customer service levels?

Welham believes it is crucial to reinforce how important customers are.

"I love the story about how one company's payslips has the words 'direct

from the customer' printed on them, so every time they got paid they

realised where the money was coming from." Carphone Warehouse does

something similar: "On the back of our business cards, we've got a list

of golden rules, such as 'we're in business because of the customer',"

explains Henderson.



At Lever Faberge, Tailor says it's not just about training call centre

staff to deal with customers. Emphasis must also be placed on helping

brand managers understand the customer. "All our brand managers spend

time in a call centre so they find out exactly what people are

thinking," he says. "That's key for inspiration in the call centre and

within the rest of the organisation."



The emphasis from all our experts was clear: listen to what customers

have to say and offer them a value-added service. And you can't do this

without investing in customer services staff, both in terms of training

and systems.



As Welham sums up: "I applaud those business leaders who actually go

into work and spend time with their staff, listening to what customers

have to say. That's the only way of really understanding customers."



Marketing Direct is pleased that our Think Tank is in association with

QAS, the addressing systems specialists. For more information contact

David Pope on 0207 498 7777



THE PANELIST LINE-UP



Dan Douglass managing director and executive creative director, DP&A



One of the founders of agency DP&A in 1991, Douglass was part of the

team that helped launch the Goldfish credit card. Previously he worked

with the KLP Group's main agency, KLP International and as copywriter

and creative director of its direct arm, KLP Direct.



Kath Ginn senior data planning consultant, Rapier



Ginn joined Rapier from data analysis consultancy Macon, where she was

director of marketing. Before that she spent five years at First Direct,

where she led the development of its customer marketing strategy.



Ash Tailor corporate relations manager, Lever Faberge UK



Tailor manages the press office for the UK, developing marketing and

advertising campaigns for major product launches.



Alistair Welham marketing director, Mercedes-Benz Direct



Welham started his career at the Bristol & West Building Society in 1991

where he became marketing director. In 2000, he joined Lex Autosales,

which was taken over by Mercedes-Benz to launch Mercedes-Benz Direct. He

is also a member of the Royal Mail Media Forum.



Neville Upton CEO, Listening Company



Upton trained as a chartered accountant with Coopers & Lybrand. At

Listening Company he works with clients on financial modelling, call

centre analysis, the business context for a call centre, pricing and

contracts.



Michelle Henderson head of direct marketing, Carphone Warehouse



Henderson joined Carphone Warehouse earlier this year as its first head

of direct marketing. Previously she was customer development marketing

manager at NTL.



THINK TANK: WE'D LIKE TO HEAR FROM YOU



We are interested in hearing your ideas for issues to discuss in Think

Tank. If there is a subject you think deserves an airing, please contact

Holly Acland, editor, Marketing Direct, 174 Hammersmith Road, London W6

7JP. Tel 020 8267 4234 Fax 020 8267 4192. Email:

holly.acland@haynet.com.



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