Getting service levels right and the high cost of getting them wrong, by Principal Consultant Mark Turner
“Bad customer service costs companies £37bn in 2016”, said Sky News earlier this year[1]. Research from Ombudsmen Services, revealed that 28% of people report losing loyalty for a brand after receiving bad service. It estimates that spending less with a company or taking business elsewhere cost companies £37bn last year.
Customer service is a priority for businesses – central to a strategy which seeks to retain existing customers while stimulating growth on the back of great service delivery.
Measuring how well service is being delivered is a multi-dimensional challenge involving sales, complaints analysis, customer comments and scores captured from surveys. There are various views on the value of each of these outputs, but they all contribute to the assessments we make of how well service objectives are being delivered.
The one constant and, arguably, most controllable measure is the speed with which we respond to customer requests: from the percentage of calls answered within a desired number of seconds, to the time taken to respond to tweets and good old-fashioned letters.
In 2016, a survey by yopa.co.uk[2] found that ‘quick service’ ranked among the top five things expected of customer service teams. The others are: ‘someone who can speak English and understand what I am saying’; ‘politeness’; ‘the ability to talk to a human straight away’; and ‘promises which are kept’.
With the growth of social media, expectations on response speed are higher than ever. Research from Gocompare.com[3] said that, in 2016, UK companies paid out more than £65m in compensation and free gifts to those who complained on Twitter and Facebook.
Around 15% of the country’s consumers use social media to resolve their problems, with more than half reporting that their issue was resolved quickly. Long gone are the days when you would send a letter and happily wait for 28 days before expecting even an acknowledgement.
Identifying the right service levels to meet is of paramount importance. There is little value in committing to an ill-conceived level of service delivery, if the only benefit is your ability to colour your dashboard green because you have achieved a soft target.
Customers will not invest time in telling you that your response time is too slow; they will simply vote with their feet and enjoy the faster reactions of your competitors.
In working with our clients at Curium, we have had some interesting discussions around the logic and rationale behind an existing service level – irrespective of whether this is being delivered successfully.
We have witnessed situations in which an embedded service level is too high and not fit for purpose, resulting in unnecessary resourcing costs, as well as frustration when this target isn’t met. Equally, there have been occasions where a service level is being consistently delivered, but hidden impacts frustrate the customer and create unnecessary waste.
As much as service level measurement provides a constant barometer for assessing your performance outputs, there is always a risk that these benchmarks are not tested to assess whether they are still appropriate.
Ask yourself: when did you last revisit your SLAs? Do you think it might be time to do so?
If some of the challenges above resonate with you, and you want to find out more, please feel free to email me at markturner@curiumprod.wpengine.com
[1] http://news.sky.com/story/bad-customer-service-costs-companies-16337bn-in-2016-10768337
[2] https://www.yopa.co.uk/blog/press-research-british-customer-service/
[3] ‘Power of social media is worth £65m in compensation payouts’, The Independent
