Customer service is key to ROI

man in suit holding out hands filled with coins Organisations must fundamentally alter the way in which return on investment (ROI) in customer service is measured and reported, according to new research from the Institute of Customer Service.

The publication, ‘Return on Investment in Customer Service: the Bottom Line’, is the result of 12 months’ quantitative and qualitative research by the Institute and Ashridge Business School.

While the research finds a weight of evidence proving the link between customer service and profit, it warns that organisations across all sectors of the economy are still using the easier to measure indicators, such as customer satisfaction.

“To position return on investment in the boardroom and establish customer service as a key strategic issue for all organisations, we must shift customer service away from just measuring simple customer satisfaction into much more complex areas, such as how customers perceive the value of their relationship with that organisation,” says Jo Causon, the chief executive of the Institute.

Jo Causon

The research consisted of an online survey, case studies among some of the UK’s best-known brands, including 02, Eurostar, Kleinwort Benson and T-Mobile, and a review of empirical research into ROI.

It found that 81% of respondents believed that gaining an understanding of service ‘from the customers’ viewpoint’ is very likely to lead to a positive return on investment, with 74% believing that gathering and acting on customer feedback will produce real business ROI.

The work also indicated that organisations needed to place more value on the contribution of front-line customer-facing staff, who will become more important in the future.

Cheryl Black

“This should inform recruitment as well as remuneration of front-line staff,” said Jo Causon. “Currently they are under-rewarded compared to the impact they can have on financial performance and overall business efficiency.”

Cheryl Black, customer service director at 02, added: “It is all too easy to say what’s good for the customer is good for the business and leave it at that. This report challenges us to start thinking about how we measure changing customer behaviours, and the role our staff have to play in it.”

16 Mar 2011 - Filed under Call Centre News