The message from a major new report is that if you have staff involved in customer service you better get them engaged and trained up: the alternative could be loss of competitiveness, an increase in your staff turnover rate and even longer-term business failure. Why? Because technology and increased international competition will make good service even more important to business success in the coming years and decades.
“While weaker firms are investing more heavily in standardised service processes, leading firms are prioritising staff training and development, and also working harder to define service standards and goals.” This was one of the conclusions of the Economist Intelligence Unit report, which questioned nearly 500 business leaders from across the world on the customer service ‘megatrends’ they expected to see over the next few years.
As a case-in-point, new David Jones CEO Paul Zahra saw one of the major reasons for declining retail sales was poor service and, 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.”
Customer service staff – key findings
Economist Intelligence Unit Service 2020 report
Global competition will drive up standards of customer service: 55% expected to compete primarily on service by 2020, not quality or cost of their products and/or services.
Customers will expect service faster, and won’t compromise quality: 82% said their clients and customers expected faster service than they did five years ago, and expected that trend to continue, with companies that save their customers time likely to be more successful.
Good employees will remain vital to good service: While there’s more focus on ‘DIY service’, like buying online or using self-serve kiosks within businesses, the importance of qualified, competent staff will remain vital – 82% said personal interaction would remain part of their customer service.
Outsourcing service will increase: Many companies forecast they would employ specialist experts, perhaps on a freelance basis, to handle specialist queries.