Experton Group Weekly IT News

The Best Service Is No Service

By: Cal Braunstein

A just-released book by Bill Price and David Jaffe called "The Best Service Is No Service" sheds new light on how business and IT executives should address customer service. The book offers solutions on how to liberate customers from customer service, keep them happy, and control costs.

Focal Points:

• Messrs. Price and Jaffe point out that 75 percent of CEOs believe their firms provide above average customer service, according to an Accenture Ltd. study; however, almost 60 percent of those same firms' customers were upset with their most recent service experience. The standard for most service organizations is to report and track how quickly things are done and not how well they were done or how often, the authors pointed out. These measures, they claim, hide more about customer service than they reveal.
• In contrast to these metrics, the authors offer up a focus on "CPX" – contacts per order, contacts per unit shipped, contacts per transaction, and contacts per customer. These are metrics used by Amazon.com, which is amongst the top ranked firms according to the University of Michigan's American Customer Satisfaction Index, and where Mr. Price was a senior customer service executive. The goal of these metrics is to avoid creating a need for a customer to contact the company in the first place. Hence, the focus is to ask how often the customer needs help and why, and then to find ways to eliminate the interaction.
• Some specific recommendations offered were to hold weekly operations meetings to review the CPX scores. Teams are then assigned to zero in on "root causes" and solve the problems. The writers also suggest charging back the cost of customer support to the product teams the caused the need for the support. This allocates the costs of the expense to the right business units and can potentially result in the product team correcting the problem.

Experton Group believes business and IT executives, for the most part, still fail to recognize the strategic importance of customer service to company image, customer loyalty and the overall corporate value proposition. Too often enterprises choose to outsource their customer service function on the assumption it is an operational necessity, but not a strategic one, whose interactions are moments of truth that can impact image and loyalty, and therefore future revenues.

 How customer service is addressed, funded and resourced is just as important as how it is measured. Business and IT executives should reassess the strategic value of its customer service organization, fund and position it accordingly, and then measure its effectiveness and success using metrics such as those proposed by the book's authors.