Service culture is an important indicator for business image and reputation. Companies spend hundreds of dollars every day to analyze the customer service their customers are receiving. In the race for competitive advantage, service is one of the main aspects to consider.
Measurement and proven methods of improvement, easy-to-use, tactical tools provide effective and fast results.
Creating a strategy for achieving financial and reputational results is possible on the basis of objective indicators.
For 3 years, 4Service Group has been conducting fundamental research for service diagnostics in the CIS countries through their study “Service Machine”.
Their goal is to identify the strengths and development areas of building a service system in a company to determine the vectors of quality service. Their results give a reliable assessment of the level of customer service as a business segment. Indicators are used as a tool for setting and solving problems.
The diagnostic tool “Service Machine” has been developed both on the basis of practical research conducted since 2002 and the experience of cooperation with more than 500 companies across 5 key industries in Eastern Europe. The author of the study is Elena Tsysar, expert and founder of SMOOZIE Service Management Center.
Since 2017, more than 220 companies across CIS countries have participated in the testing. We share insider statistics obtained as a result of the “Service Machine” study.
The main target group of the customers surveyed were those frequenting retail, banking, food, and telecommunication outlets as well as gas stations. The duration of cooperation between 4Service Group and the partner companies ranges from one to ten years with the average cycle being between two to three years.
Some 61% of partner companies indicated that they have developed and implemented a service strategy, but, according to statistics, only 10% of companies in the market manage to achieve and retain a high level of customer service.
Retention rates depend directly on the customer’s life cycle. For example, trends and dynamics of food retail will be noticeable within 3 months. Restaurant chains will feel the response of customers within six months. For automobile salons, this time range increases and imposes obligations to maintain the level of customer service for a period of up to 3 years.
According to 4Service Group’s experience, if customer and employee surveys and the promoter’s net score (NPS) give an overall customer service score of 85% or higher, this has a positive effect on the company’s KPI.
It is possible to achieve and, what is more important, to maintain high indicators only if a complete system of customer service is created. This will benefit businesses and increase customer satisfaction in the long-term.
Every successful company has key components of customer service. The test contains five key elements of the service management system: responsibility center, service standards, service evaluation and control, internal processes of the organization (HR, PR) and management procedures for building the service.
It is with these elements that a business can build a customer service system and reap the benefits, whether they be associated with finances, marketing or image.
The test contains a quantitative result. If one of the elements received a score of less than 50%, this element of the service system should be considered a development zone. However, when looking to obtain objective data, it is also important to take into account the content of the answers and the specifics of the business.
The first block in the “Service Machine” test is dedicated to the center of responsibility for customer service. Some 71% of partner companies have already defined a center of responsibility, while 75% of companies have top management involved in working with customer service. However, only 33% of partner companies involve all necessary departments, such as marketing, HR and operations.
The involvement of the departments helps to implement initiatives and improve service more efficiently:
But without the influence of the General Manager and a single service strategy, the interaction of departments is often out of sync. In order to best work together, all departments need to move in the same direction and regularly hold joint status updates on the service.
The General Manager motivates and implements goals and if they lose focus, service will not be able to offer the company an advantage over its competitors.
The ideal model and trend of recent years is the creation of a separate department within the company which is responsible for customer service. In theory, this practice is the best solution. However, it is imperative that this department has the support of the General Manager as well as access to all the resources listed above.
The last but most important person accountable for the responsibility center is the Local Manager, who acts as a translator of goals and motivations of customer service from above. The local leader is a key figure, without whose attention and trust in the service, the company’s efforts are useless.
A comprehensive center of responsibility is a condition for competent construction of the service.
According to the survey, 56% of partner companies have already developed customer service standards. Standardization helps to achieve a common understanding of what quality service is. Among 4Service Group’s clients, 97% have already developed a standard.
An important issue facing customer service standards is who developed them and when. A service document detailing standards issued five years ago is no longer relevant to today’s market. We recommend that you review the standards every two years, as well as when new positions, product launches and significant market changes occur.
In most companies, a serious mistake is made when standards are developed only by managers or those in charge and based on their experience and vision. According to our data, only 30% of companies, when developing standards, take into account the opinion of their customers and employees. This means that the standards are not focused on customer expectations and that the organization does not have an understanding of whether the new service rules will satisfy or disappoint their customers.
Employee surveys are also worth conducting. They can help not only collect best practical experiences but also to significantly reduce the resistance of staff at the stage of the implementation of new standards.
The second error committed when working with customer service standards is the omni-channel mistake. Some 39% of respondents say that the documents are not developed for all channels. Often companies only standardize the sales stage and achieve only short-term results with service increasing only the conversion rate of the purchase but not making customers more brand loyal as they are disappointed in other points of contact.
When creating / updating standards, it is important to cover all points of interaction with the customer and conduct a 360-degree research program including focus groups, customer surveys, brainstorming with employees, market research, competitor analysis, expert recommendations and world experience.
The third block consists of five self-diagnosis questions with each question covering a set of tools for monitoring the service. These tools include quantitative and qualitative research, internal measurements of service quality, analysis of data from open sources and work with complaints.
In CIS countries, quantitative tools for service control have become firmly established: 70% of the partner companies regularly conduct NPS, Mystery Shopping, CSR (satisfaction level), CES (indicator of “customer efforts”).
In 72% of organizations, internal quality measurement tools are used such as personnel certification or enabled supervision in the trading floor. Internal checks are important for objectivity and comparison with external results, when location managers do not trust the assessment of external auditors and/or secret buyers. Their own assessment helps to see the real picture and become even more critical of the service they provided.
According to the results of the diagnostics, only 39% of companies regularly analyze customer complaints and comments despite these helping them to identify problem points, make changes in the business processes of the organization and reduce the level of customer dissatisfaction.
Qualitative research is used to collect deep, detailed information about customer service and its perception by the consumer, as well as to test ideas and suggestions before implementation. Nevertheless, high-quality tools for evaluating service are often forgotten in the service strategies of some companies and are used by only 28% of organizations.
Focus groups, in-depth interviews and brainstorming sessions are the best sources to use for inspiration before upgrading customer service, to find new ideas and come up with WOW-standards. They provide the ability to learn the opinion of real customers but it is vital for companies to take heed of what is said in these sessions and implement the suggestions to make sure customers do not go to competitors or make complaints.
Combining research and all data into one “service diagnosis” is a convenient way to bring together the financial, marketing and HR aspects of the company in order to assess the effectiveness of investment in the service.
The fourth block of the study consists of questions on the organization of HR and PR processes. The British Institute of Service Management has proved that there is a direct relationship between employee satisfaction and customer satisfaction. One unit of employee engagement growth provides a 0.41 increase in customer satisfaction.
The test showed that the relationship between customer service and the HR processes is traditionally high in partner companies. Some 67% put a customer-oriented filter at the entrance, selecting friendly employees who do not consider customer service work shameful and unpleasant.
Around 64% of companies take into account the customer service factor in the course of adaptation, training and certification of employees. They provide training sessions on customer service, training standards, role-playing and business games. Furthermore, customer service is closely related to motivation. Approximately 62% of companies believe that the material motivation of employees depends on the level of customer service. Individual ratings, comparison of locations and linking bonuses to results is common practice.
However, without offering incentives, customer service will not improve and also comes with great risk. Customer service improvement cannot be built on a principle of “smile, otherwise we will punish you”. This approach will also be visible to the customer.
In the process of building a customer service system, it is also necessary to use methods of non-material motivation. This not only saves money for the company but also creates a positive atmosphere for staff and a positive emotional charge. Unfortunately, only 56% of surveyed companies use non-material motivation to improve customer service.
Praise and pay for customer service: it creates a system of competitions for high results, contests, nominations, title changes, awards, bonuses for special education, career growth and promotions for employees.
The problem most companies face (according to results generated by diagnostic tests) is the lack of PR communication on customer service. Only 42% of companies organize PR events relating to customer service, such as conferences, meetings, field meetings, brainstorming sessions, etc. Around 44% of partner companies also do not even cover customer service efforts or achievements. However, if a company is silent about a service, employees, the market and consumers will discuss stories of negative service.
Service ideology allows you to form a positive attitude to service through developing internal PR-processes, talking about service through all channels of communication and creating information occasions for all categories of staff.
Create your own myths and legends surrounding customer service and broadcast them to the world. Internal PR works perfectly through simple messages. Show examples of competent service and WOW factors. Every employee should know that service is important to the company.
The main condition for the retention of customer service is its cyclical nature and regularity. Setting goals, planning results and summarizing results is a key element of the cycle.
The fifth and final set of research questions showed that 75% of respondents regularly set goals for customer service and developed a plan to achieve them and, once achieved, summarized the results. However, in 38% of partner companies, work on customer service is irregular and erratic.
Without regular management, all achievements made by the company can be devalued. The company should have a new way of life to constantly keep the service at a high level.
It should also regularly act on the principle of:
And based on this premise, conduct events for the service:
Everyone should benefit from a good customer service, from the company to its customers
Counting the benefits of customer service is a development area for CIS countries. Only 36% of companies associate service with their KPIs: sales levels, HR practises, marketing indicators directly affect the image and KPIs of the company.
The point of contact and the level of trust between the company and its customers increases sales, increases loyalty and increases the number of positive reviews.
High-quality service contributes to the effectiveness of the actions, reduces the number of customer complaints and decreases the rate of staff turnover. As a result, loyalty to the employer increases, which has a direct impact on financial results, since the cost of finding new staff is reduced.
It is also necessary for companies to evaluate the basic level of customer service offered and to analyze how customers view their service. The first task is to determine whether your company is customer-oriented and for how long you will be able to maintain that level.
Evoke new perspectives in the vision of the service, generate ideas and be one step ahead of the competition. After all, you create a culture of service in your company and in your country.
4Service Group helps to determine the “service diagnosis”, to derive an integral indicator with a set of necessary business studies at the moment.