Reducing Customer Problems Provides Differentiation for CSPs
July 24, 2014
July 24, 2014
When your competitors are offering to buy out your customers’ contracts to get them to switch, there’s no time to waste in improving the customer experience. This is especially true for communication service providers (CSPs) that remain consistently at the bottom of both NPS rankings and Temkin Experience Ratings.
While cost and coverage have been the two primary areas of competitive advantage for CSPs, cheaper is no longer better. Cost and coverage are not the differentiators they used to be. Instead, it’s time for CSPs to consider that delivering a better customer experience is becoming a key business driver due to the operational cost of problems. To put this in perspective, J.D. Power research proposes that a 5 point reduction in problem incidence equates to 16 full-time employees for every 1M customers. At an average cost per FTE of $75K, the cost of problem incidence adds up.
Problems often occur when something a customer expects to happen doesn’t, or when something happens that isn’t expected, given the nature of the customer’s relationship with the organization. Recovering from a problem with a customer is difficult. Whether it escalates to a complaint is not the point. As J.D. Power points out, “The distinction between a problem and a complaint is academic; if the customer thinks it’s a problem, it’s a problem.” This point makes the case for why prevention should be preferred over recovery. However, a preventive approach requires a shift in mindset to organizations that treat customer service reactively, rather than proactively.
Traditionally, contact centers were established to solve customer problems. They were considered a cost center and poised to provide reactive, after the fact, interactions with customers. The modern customer of today expects much more. Recovery mode should become the last resort, superseded by proactive and preventative service. This is true not only from a customer satisfaction and retention perspective, but from a view toward account expansion.
These three shifts will help customer experience professionals to improve the way your customers view your brand, increasing loyalty and promoting more profitable relationships.
In a highly competitive marketplace, CSPs must move away from customer service focused on outdated values to a strategic approach that prevents problems from occurring in the first place. With a proactive focus on improving customer experiences, customer service agents will be more effective in building the profitable relationships CSPs need to retain advantages in a continuously shifting marketplace.