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The True Cost of Customer Service?

Customer Experience

The True Cost of Customer Service? image 20121219 153349

According to a recent report commissioned by Oracle, 81% of European consumers would happily hand over more of their hard-earned for a better customer experience and that consumers will eventually turn away from brands who just don’t service them the way they’re expected to. But seriously, does paying more for the customer experience actually guarantee the quality of service ?

Europeans are a funny lot, especially the British (of which I am one) who seem to believe that cost equates directly to quality. There’s a good folk tale of a well known coffee maker who created a rich tasting new coffee that bombed on the shelves. They couldn’t understand why and much executive brainstorming ensued until one upstart marketeer offered ‘why not hike the price up ?‘ Incredulous as it sounds that’s what they did and it flew off the shelves. Why ? Because it was now regarded as a ‘premium‘ coffee and of course you want to impress the neighbours when they pop round for a cup and gossip….

And so we fall to customer service and the cost of a good experience. Would you actually pay more to receive the same level of service you did before? Would the premium halo effect cloud your judgement in thinking that because you’re paying that little bit extra you’ll be the envy of your fellow man, or would you claim it as a right to complain just that little bit louder when it all goes wrong ?

It’s true that there is now an intrinsic link between customer service, social and revenue growth, that creating processes and systems that respond to demand and real-time situtations are critical in creating an experience worthy of repeat business, but it’s also true that in order to achieve this you do not need to charge a premium, that’s just a cheap and lazy management mentality.

Profitability and revenue drive the ability to change and constantly improve service processes that in turn drive customer satisfaction levels through the roof that in turn get coverage and increased business that in turn drive sales and profitability….

The true cost of customer service doesn’t lie in how much you charge for it, the true cost is actually zero because you should want to provide it as standard. And if you don’t, then the true cost is your failed business.

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  1. Cheby says:

    “…but it’s also true that in order to achieve this you do not need to charge a premium, that’s just a cheap and lazy management mentality.”

    I couldn’t agree more with your statement. Pricey doesn’t always mean high quality. Filipinos (I am one) directly equate imported goods with high quality. The good news is, due to the unstable state of the global economy, different cultures across the world are slowly walking away from their old ways of thinking and most of us catch ourselves when we start thinking high price = high quality or imported brands = high quality.

    It may also be that the “freemium” business model also influenced people out of the old ways of thinking on the correlation of price to quality. Businesses nowadays make sure they have something truly valuable before they start charging for their products and services. We at Offerchat, for example, are building a live chat tool with premium features but no charge which small businesses can use. Unlike other companies, we offer the chat tool for free and our plan is to earn through manpower. That is, when our clients decide to have more live chat agents for their ecommerce sites. Which means their business is growing and they can afford to pay for other services they might want from us. It’s a win-win situation and provides them with real value before they take out their wallets.

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