Rethinking customer service: No longer the weakest link in the customer's journey

New research shows that high performing organizations are investing in service innovation to digitally transform customer service into a customer engagement engine for driving business growth and loyalty.

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                 Technology can make service more human 

Andy Kelly, @askkell, Unsplash

When it comes to the customer journey, service is both the Achilles heel and an overdue opportunity to deliver new experiences and value. Over the years, executives viewed service less as a touchpoint to enhance customer relationships and instead, viewed it as a cost center. Limited by traditional mindsets and constructs, promising new technologies and process improvements were limited in their potential and only seemed to distance customers from meaningful engagement and mutually beneficial outcomes. Support was transactional rather than experiential. Modernization, digitization, and upgraded resources weren't measured through a lens of customer experiences, but instead by efficiencies and scale and time and resources saved. Considering the critical role customer service plays in a most vulnerable touch point, businesses can no longer afford to not invest in human-centered experiences, relationships, and ultimately lifetime value. 

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The pandemic has cast a bright light on the vast array of choices customers have at their disposal. They're learning that they are more than empowered to exercise them. 

Investments in innovation and relationships must finally prioritize technology, processes, and event agent empowerment to deliver value and unexpected moments of "wow" to win customer's hearts and minds again. Doing so, especially in a time when people need help the most, will positively stoke customer emotions and transform the weakest link in CX into a competitive differentiator and growth driver.

Customer Service isn't a Cost Center, It's an Investment in Customer Relationships and Loyalty

Good customer service should always have been a commodity. But here we are.

In a post-pandemic world, improving customer service can no longer be viewed as a cost center. There's just no way you can compete against other companies that are going to shift service from a transactional state to experiential engagements. I promise you this will happen.

Moving forward, service must be viewed as such, a critical touch point that should communicate that your business, in that moment, is, "at your service." It's a means for solving a pivotal weak link in the customer journey.

Even before the pandemic, customer service was hardly engaging, instead aimed at facilitating problem solving quickly, efficiently (cost and resources), and at scale. Over the years, it was deemed that humanity should be stripped from service in favor of outsourcing, IVRs, scripts, self-help libraries, and escalation hierarchies (often disconnected from one another). It was a mindset, and it served as the foundation for all tech investments, processes, and performance metrics. It should come as no surprise that the words, "I love contacting customer service" were hardly uttered by most customers.

The secret to meaningful relationships lies in how we treat one another in our time together. This is why truly customer-centered businesses have and always will focus on enchanting customer service as a differentiator. They fly a banner of service as a symbol of what their brand stands for in all marketing and communications. They spotlight exceptional customer service as a value proposition.

COVID-19 Changed the CX Game for Better and Worse

The pandemic didn't just disrupt businesses. It also disrupted multi-year digital transformation roadmaps and the bureaucracy and decision-making that forced them to lag. But more so, the pandemic also disrupted everyday people, how they navigate life, and ultimately how and why they make decisions.

As it relates to your business, this means they were forced to adapt their behaviors for a suddenly digital-first world in almost everything they do. From work to learning to entertainment to shopping, a new world of choices and abilities opened up. This gave way to digital-first instincts and expectations, which conditioned customers to expect and even demand new personalized standards for engagement.

The service industry took notice. According to the 2020 Salesforce "State of Service" report, 87% of service professionals said that customers were using digital channels more during the pandemic. As service volumes are expected to rise, and the psychology of change is well beyond the 66 days it takes to make new behaviors automatic, this trend will only continue and grow.

On the other side of the equation, your customers estimate that 60% of their interactions with companies during 2021 will take place online. This is why service leaders reported that they are accelerating digital initiatives (81%). They have to. But buying into digital doesn't directly correlate to better customer experiences, relationships or growth.

Without intentionally enhanced, customer-centered service and experience innovation, businesses are more likely investing in the digitization of existing service models and not the digital transformation of them.

Service Innovation is a Competitive Differentiator and Instrumental in Driving Business Growth

If you Google "customer service innovation 2021," you're presented with about 1.5 billion search results. Links featured on page one include lists of common trends that point to the rise of social media service; the need for chatbots; the importance of hyper-personalization; evolution in customer expectations; the role of customer experience in strategy; expansion of remote service; the demand for AI, automation, real-time and self-service capabilities; and upgraded data analytics. Yes, service innovation is all these things. But if you unpack each of those trends, what they really reveal is that most businesses are woefully behind the times across many technological fronts. It also falsely suggests that merely integrating bright and new shiny objects will automagically transform service experiences.

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Customer service report cards give away the true, not so flattering state, of progress, or lack thereof. In the Salesforce "State of Customer Service" report, a gap between industry leaders and everyone else was stark. For example, those exceling in key areas of performance demonstrate where stragglers need to accelerate meaningful transformation.

Percentage of those that reported they are exceling in the following areas:

  • Response times – 29%
  • Handling times – 26%
  • Fist-contact resolutions – 22%
  • Hold/wait times – 20%

Seeing innovation through a lens of legacy service models and standards doesn't leave much room for game-changing improvement or invention. To accelerate change, companies could benefit from getting back to the basics, and building digital-first experiences that are human-centered. This can be done by prioritizing service innovation in parallel with digital transformation efforts.

Service innovation is defined as "a new service or such a renewal of an existing service which is put into practice and which provides benefit to the organization that has developed it." I would add, in addition to organizations, that service innovation should also benefit those who experience new and renewed services. And it's those very people, your customers and also employees, who have changed during the pandemic and continue to evolve.

The pandemic has fundamentally changed how customers expect to engage with businesses. It has since day one. The unfortunate (or fortunate) result is that they're open to choices and experimentation and this is setting the stage for even more disruption. According to Salesforce, 59% of customers say that the pandemic has raised their standards for customer service. This means that what was tolerable before COVID-19 is no longer acceptable.

In fact, purveyors of inferior experiences are already seeing a customer exodus. During the early days of the pandemic, customers explored their options en masse out of opportunity and necessity. According to McKinsey research, a whopping 75% of customers explored a new brand, retailer, or site and 60% reported that they will stick with their new choices post-pandemic.

This translates to loyalty being up for grabs. Customers are exercising their power of choice because they can. If service is a point of weakness, no amount of marketing can convince customers to stay if they don't enjoy the holistic experience of doing business with you. Retention is now vital. Acquisition is open to all who prioritize experience, and that starts and ends with CX and service.  If this doesn't create a sense of urgency, what will?

Service Innovation Starts with Putting Customer Experiences at the Center of Engagement

There are real people on the other side of every screen. They are not the customer you knew, or thought you knew, prior to pandemic disruption. That's why, when it comes to the customer's experience (note the apostrophe), it's important to shift perspective from existing B2B or B2C nomenclature and approaches to that of P2P, people to people. When people feel they're valued, reciprocity flourishes. That context doesn't change because someone is a business customer or consumer. They are -- we are -- all human.

To that point, research shows that 80% of business customers and consumers equally state that the experience a company provides is as important as its products and services.

Meaningful and productive engagement also directly ties to business ROI and growth. An overwhelming number of customers (91%) report that good customer service makes them more likely to make another purchase.

Companies that not only modernize tools, but also humanize engagement by demonstrating flexibility and understanding are primed to excel. As testament to that, 71% of customers say that businesses that show empathy during the pandemic will earn their loyalty.

This all adds up to technology in partnership with agent empowerment and training. Leaders must empower agents to be creative, to sanction their judgement to deliver enhanced customer experiences in the moment.

Among innovative organizations, agents aren't just present to solve problems and move to the next case. They have a gift of customer need and attention. Beyond empathy, this is also a moment for customer enchantment, to sprinkle some magic beyond scripted conversations, chat bots, and self-help solutions. Customers are more than ready for this.

For instance, 77% of agents say their company views them as customer advocates (and they are). High performing service organizations, those defined by high customer satisfaction, are actively investing in the human side of service innovation. Successful agents report that they have clear guidelines on how flexible they can be with customers (88%), feel encouraged by management to be flexible with customers (86%), and have received training on how to be empathetic (83%).

These activities result in a new post-pandemic playbook for service excellence. As customers change and evolve, so do high performing organizations. Innovators are already leading the way, blazing new trails for aspiring transformers to follow.

High performing organizations are prioritizing the following areas for transformation and service innovation.

  • Workflow and processes – 84%
  • Adapting policies to be more flexible – 83%
  • Technology needs – 81%
  • New technologies – 78%
  • Customer engagement methodologies – 73%

Combined with integrated and intelligent relationship management systems -- including systems of record that are connected across customer-facing business organizations, upgraded policies, data-centricity, frictionless journeys, all enhanced through automation and AI -- service innovation will transform organizations with purpose.

Customer Service is a Way of Business, Not Just a Department

When it comes to customer service, organizations must think beyond a department. The companies of tomorrow must plug service into a leading role in reimagining customer experience and journeys as a whole.

Customers view a company as a whole, rather than as individual departments. When they have a disjointed customer journey, it can leave them in search of a competitor, as we saw in McKinsey's research.

Not only do they want digital-native engagement, 76% said that they want to see integration across marketing, sales, and service. And 53% revealed that they feel like sales, service, and marketing don't share customer information. And they're right.

On the hand, over two-thirds of high performing organizations report alignment across marketing and ecommerce, with even greater alignment (82%) with sales. In an earlier Salesforce report, the "State of Marketing," 63% of elite marketers said that they use the same CRM system as sales and service departments.

Underperformers (defined as service teams with fair or poor customer satisfaction), however, are far more likely to report misaligned organizational structures.

The reality is that without integrating systems, processes, and a greater vision for service innovation and experience design across critical customer engagement functions, delivering an integrated experience isn't possible.

Agents are in agreement. Seventy-nine percent say it's impossible to provide great service without a complete view of customer interactions.

What Gets Measured Gets Done; What Gets Done, Should Serve Customers and Businesses

Legacy customer metrics often served companies more than they did reflect customer preferences and happiness. Call length, for example, isn't terribly useful in context of engagement. As customer standards evolve, and only accelerated by the pandemic, metrics must also evolve to align with what it is customers learn to expect and value. You're basically sending customers away on purpose.

We know that customers dread reaching out to customer service.

We know that customers think it takes too long to find or reach an agent, if at all.

We know they don't enjoy engagement when agents are reading from a script and don't personalize interaction.

We know that they abhor being repeatedly transferred, or worse, dropped.

We know that IVRs, self-help systems, and knowledge bases aren't designed with humanity in mind, but instead deflection, automation, and scale.

Leading organizations, however, are rethinking metrics to measure the things that chart improvements in customer experiences (71%) due to the pandemic.

The five most important KPIs tracked by leading companies are as follows:

  1. Customer satisfaction
  2. Revenue
  3. Customer retention
  4. Customer effort
  5. SLA performance

Customer satisfaction remains the most essential service metric, but a relatively new success measure — customer effort — is now ranked among the most indispensable KPIs. It measures how much time and how many steps customers take to find an answer or solution. A lower customer effort leads to increased customer satisfaction as a result of connecting customers to desired outcomes few steps.

What's more, 88% of high-performing service teams share common goals and metrics with sales teams.

Markets aren't returning to the normal we once knew. The crisis changed the world. Customer service too has changed. Executives must now shift away from pre-pandemic mindsets, standards, and metrics, to strive toward a new gold standard for excellence in service. That new future starts with shifting to digital-first, customer-centered engagement, and reimagining the roles of people, process, and technology through service innovation and experience design.

Customer service can no longer be relegated as the weakest link in the customer journey. It now has an opportunity, an overdue need, to become a great unifier across other vital touch points to meet and even surpass the evolving expectations of evolving customers. And great service starts with a complete view of the customer and all of their interactions across their journey.

Thanks to the pandemic, service is [finally] now, not a department or a silo. It's mantra, to serve, as a way of business, shifting from a cost center to a strategic asset for customer experience and business growth.