Customer Service: One of the Smartest Investments Your Competitors Aren't Making
A winning strategy to give you an edge on your competition is to focus on your customer service and use it as the vital tool it is in winning and retaining customers. If you start to look at it as an investment (and therefore expect a return on it) instead of a cost, then you are on the right track.
Challenges in Customer Service
Businesses often struggle with inefficiencies, high expenses, and lost opportunities for improving customer satisfaction because they take a reactive approach to customer service rather than a proactive one. This reactive method leads to increased costs and weakens customer relationships.
Tailored Customer Service Solutions
A better solution is to outsource your customer service to a partner like 3C Online. This way you get a tailored customer service solution that is designed to meet your specific company's needs. A professional outsourcing company can seamlessly integrate with your existing systems and you'll get access to their often better technology platforms. Their business is to know how to lower your costs while strengthening customer relationships. This is the formula for business growth.
This Is How Outsourcing Customer Service Can Work
The arrangement with an outsourcing company should be based on mutual success. You pay for their service and for a better outcome but you can do so at a lower cost than if you were providing your own customer service solution? How can this work for them? Do they cut corners?
The reason is because outsourcing professionals work proactively. They get to work immediately focusing on the volume of customer cases and the handling time. By reducing the number of cases and handling time, they manage to lower your customer support costs while enhancing customer satisfaction (more on this later). Their success is directly tied to yours and that drives commitment to continuous improvement.
Example of Cost Savings
Consider a retail company handling 24,000 customer service cases annually. Each case typically takes 5 minutes to resolve, at a cost of £4 per case. By partnering with an outsourcing professional and implementing their strategic solutions, it is possible to reduce case volume by 30%, lowering the number of cases to 16,000. Additionally, their process improvements can easily decrease handling time by 20%, reducing the time per case to 4 minutes.
- Original case volume: 50,000
- Original handling time: 5 minutes
- Original cost per case: £4
- Total original cost: 50,000 cases * £4 = £200,000
After implementing proper solutions:
- Reduced case volume: 35,000
- Reduced handling time: 4 minutes
- Reduced cost per case: £3.20 (reflecting time savings and efficiency gains)
- Total reduced cost: 35,000 cases * £3.20 = £112,000
This results in a total savings of £88,000 annually. These savings demonstrate that significant cost reductions and efficiency gains are achievable without substantial investments, solely by optimising existing processes and leveraging expert customer service strategies. This not only reduces operational costs but also enhances customer satisfaction and loyalty.
Effective Customer Service Strategies
Any customer service outsourcing specialist is going to focus on these main areas:
key metrics, analysis and cost-effective improvements.
Key Metrics
The three most important key metrics to focus on in order to reduce customer service costs are:
-
Cost per order:
Minimizing the customer service cost per customer invoice/order by reducing the number of cases generated per order.
-
Customer service proportion relative to order volume:
Lowering the proportion of customer cases relative to the number of orders issued for more efficient customer service.
-
Cost per case:
While this figure may increase as total case volumes decrease, the overall goal is a lower total cost for customer support.
Analysis
Conduct a thorough analysis of past customer service data to identify areas needing improvement. In particular, these unknowns are what historical data can shed light on:
Case volume per category:
Targeting the most common reasons why customers contact customer service in order to maximise impact.
Handling time and FCR (first contact resolution):
Reducing the time to resolve cases and increasing the proportion of cases resolved at first contact for greater efficiency.
Escalation and customer satisfaction:
Minimising escalations and enhancing customer satisfaction to create a positive customer experience.
Cost-Effective Improvements
Most often, investments in new systems or tools are unnecessary and should be avoided. In stead, significant efficiency gains can be achieved with existing resources by focusing on:
Training and education:
Ongoing training for agents to handle common queries efficiently and solve problems independently.
Dialogue management:
Guiding conversations to make customers feel seen and heard is a very powerful tactic that builds trust even when immediate solutions aren't available.
Simplified routines:
Streamlining case handling processes saves time and increases efficiency.
Other Proactive Strategies
To further reduce case volume and enhance efficiency, some additional measures to focus on are:
Simplified communication:
Clear and concise communication throughout the customer journey to minimise uncertainty and reduce the need for customer service contact.
Increased resolution rate (FCR):
Empowering agents with the skills and authority to resolve issues on first contact improves efficiency and customer experience.
If the goal is to deliver cost-effective customer service that enhances customer satisfaction and loyalty then outsourcing your customer service needs can be a wise investment. By optimising the customer service process, a partnership where both parties benefit from shared success and long-term growth can be achieved.
