Can HR strategy save business from the customer service slump?

by Stephanie Zillman17 Jul 2012

According to the findings of a new global customer service barometer, a whopping 40% of Australians have said businesses do not normally meet their customer service expectations.

And a poor service interaction comes at a cost no business can bare – the majority of customers tell others about their negative experience. Where’s it all going wrong?

The 2012 Global Customer Service Barometer by American Express, found some 36% of Australians declared there was now less attention on service, while 13% said they didn’t believe companies even cared about their custom.

The survey results are not all doom and gloom though – there is a significant opportunity for HR to improve the outcomes. As a case-in-point, earlier this David Jones CEO Paul Zahra flagged poor service as one of the major reasons for declining retail sales. In recognising that staff were “ambassadors for the brand” he restored the staff discount to 20% from 10%, commissioned the first employee engagement survey in 10 years, and set a goal to halve the staff turnover rate from about 40% to 20% in the next three to five years. “I’m not doing this just from a cost-of-doing-business point of view, but from a service improvement one,” he said.

The cost of losing employees and recruiting, inducting and training new staff is, however, estimated to be as high as one year’s salary, and in a workforce of 10,000 that’s a significant expense.

Leadership programs have also been introduced for David Jones’s top 50 executives, and a future leaders program will be launched next year aimed at the next rung of 100 managers. “People generally don’t leave their company, they leave their manager,” Zahra said. “When you go up the management chain it’s much less about management skills and much more about leadership skills.”

For those businesses that do provide excellent service, the rewards are clear. Nearly three quarters of Australians confirmed that they’ve spent more with a business because of their history of quality customer service, and 71% said they would be willing to spend more on excellent service, the Amex report found.



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