What is the ROI of Customer Service?
Globally speaking, we are sucking at customer service. Sorry, but it’s true. It’s not really a question of whether customer service needs improvement. It’s more one of why aren’t companies trying harder?
In a lot of cases, perhaps most, it really boils down to a reluctance to make the financial and time investment that is required to move the customer service bar. And the reason people are reluctant is because they know that at some point, somebody’s going to ask them to justify they commitment. Someone’s inevitably going to look at a customer service training or other initiative and say, “What’s the ROI of this?”
The "ROI of customer service" question is a trap
On the surface, it’s a great question. An awesome question. An absolutely must-be-asked question. But it’s also a trap–because the very nature of the question ultimately leads to squishy and unconvincing answers. Here’s why:
The impact of outstanding customer service is both dependent and cumulative. It is dependent because customer service is not a single, tangible thing. It is one of three components which collectively build customer trust. And even though it is the most important of the three, attaching a direct, linear outcome to just customer service is like asking which of the last five breaths you just took were the most meaningful.
The ROI is cumulative
Customer service is more than a series of isolated situations. The impact is cumulative. I have a good experience at a restaurant. A month later, I take a friend there. We both have a good experience, so a month after that, we each take someone there… You get the picture. Six months down the road the restaurant might see a nice lift in its repeat customer metrics – but that’s assuming that they stuck to their guns in their customer service training, coaching, etc.
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Customer service is like vegetables
it’s kind of like vegetables. We all know that there is a mountain of evidence telling us how good vegetables are for us. But what was the ROI of that carrot you had at lunch today? What metric do you have to prove that last night’s salad directly impacted your health? Silly questions? Of course. Yet we still pile them high on our children’s plates.
Is there an ROI to improving your customer service? Absolutely. Want to measure it? No problem. Just don’t try and do it monthly or weekly.
Make a commitment. A real commitment. Look at core business metrics like number of complaints, repeat business, average sale value and – yes – overall sales. Then do everything in your power to get good at customer service and stick with it solidly for a year.
Then look at the numbers again.
“I’ve never seen a company fail because its customer service is too good.” – Shaun Belding, Entrepreneur Magazine
