Customer Service By The Numbers
October 9, 2010 § Leave a comment
Most businesses have always measured their performance in terms of inventory, terms, gross margin, and net profits and almost never in terms of Customer Service.
Every staff member, every telephone or fax line, every e-mail address, Facebook Page, Twitter Account, Yelp, and Foursquare account is a contact with your customers, and customers are anybody making contact with your company or within your company. To put this in perspective, we all know what we do when ignored on the phone or standing the till of a company. What would a CEO do if the VP of Marketing didn’t bother to return his or her calls? What is a vendor who can’t get a return call think about the company that they are dealing with? What would they tell their family and friends about that company? The point is that every point of contact is an opportunity to build your business because every contact relates to the bottom line.
There is a local company that I am very familiar with that has been measuring the performance in terms of Customer Service as well as financially and operationally. They simply quantified the customer service relationship. They calculated the number of customer service contacts they have and divided gross revenue by that number. They even went so far as to divide gross profits by the number of customer service contacts (to sound fancy and MBAish I should call these CSC’s).
$100 / 10 CSC’s = $10/CSC
They measure this quarterly, annually and use it as a measure of impact of specific marketing campaigns. What they have found is when they simply invested in customer counts (advertising to increase traffic) the revenue per CSC only increased marginally and in some cases when backwards. When they invested in programs that focussed on Customer Service, $/CSC increased by 15-20%. When they invested in customer service programs and supported that with advertising to encourage more customer contact, not only did gross revenue and profits increase, but the $/CSC jumped 50%.
Here is the other thing they realized. Greater loyalty and engagement from their customers and staff. Messaging to staff no longer had to be dumbed down, rather messaging to staff encouraged discussion debate and innovation. Wierd hey?
If you are not doing this at company start. Start my simply creating a starting point by doing the math. Gross Revenue/Customer Service Contacts.
Thanks for reading this.