11th Apr 2016
While there are few businesses that would disagree about the importance of customer service, many still consider it a matter for day-to-day discussion between managers and employees. Jo Causon, chief executive of the Institute of Customer Service, explains why customer service discussions should be brought to the boardroom.
While financial measures tell a board about historic business performance, focusing solely on financial measures can mean it’s too late to influence the direction of business. Customer satisfaction measures provide early indicators of the drivers of future business performance.
Customer service is integral to reputation and risk. Poor customer service can affect an organisation’s reputation, adversely affecting customer and shareholder confidence. The growth of social media means that the word-of-mouth consequences of negative feedback are greater in scale, highly visible and more immediate than in the past.
As well as corroding trust in an organisation, poor or inconsistent customer service can lead to costly and time-consuming complaints, which become harder to resolve the more time elapses. In many cases, customers who experience problems don’t report it – they simply take their business elsewhere. Yet many of these costs of poor service may not be measured or visible to boards.
Customers increasingly judge organisations not just on the quality of products and services or the outcome of a complaint, but on the way the relationship is managed – how easy or difficult it is, how it makes them feel. Engaged employees, who understand and connect with the organisation’s purpose are a key point of differentiation, are fundamental to customer service performance. As the economy moves into growth, the influence of employee engagement on organisational performance is set to grow in importance. Boards therefore need to recognise the role of employee engagement and ensure that management teams are able to demonstrate how they are building and maintaining a culture that develops it.
Leaders need a new set of skills and competences to motivate and engage their employees, combining rational analytical and organisational skills with emotional intelligence – the ability to communicate directly and connect with the heart as well as the head. Yet this kind of engaging leadership places greater emotional demands on leaders than traditional command and control approaches. Leaders need to develop a broad range of communications skills and emotional resilience to meet these challenges.