Last updated: Customer service model: What brands need to know

Customer service model: What brands need to know


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Even as the economy begins to open back up, it appears likely that the relationship between customers and businesses has been permanently altered by the pandemic. Although customers have missed in-person shopping, they don’t want to relinquish the convenience – and the feeling of safety – that e-commerce provides.

As a result, the customer service model of today looks much different than in years past. Here are some key trends reshaping how organizations manage customer service:

1. Customer service has become a strategic priority
2. Agents are expected to have a deeper understanding of the customer
3. A shift away from a focus on products to customer outcomes
4. Subscription services is driving more investment in customer service

Tom Sweeny, CEO and Founder at ServiceXRG, and Esteban Kolsky, Chief Evangelist at SAP Customer Experience, recently discussed how customer service is changing for the better this year and beyond.

Customer service model: Critical for CX

The shift towards e-commerce has vastly increased the importance of the customer service function in virtually all organizations. As customers seek to shift seamlessly from physical store to e-commerce site, the service function becomes a unifying force, creating continuity across different types of interactions.

According to Sweeny, one of the key drivers of change in the customer service function is the recognition that service plays an ever-increasing role in customer satisfaction and the overall relationship between a company and its customers.

It’s no longer possible, as he puts it, “to create a product and throw it over the wall to a customer.” In that scenario, the customer only contacted the company if there was a problem. Now, however, companies are viewing service as a way to continue engaging with the customer.

At the same time, companies have a long way to go in terms of elevating customer service to the strategic level that it warrants.

As Kolsky explains, even though companies profess to understand the importance of service, the level of investment in technologies that genuinely improve the customer experience is lagging. The common factor across many of these technologies is that they enable customers to engage with the company when, where, and how they prefer.

Just as customers have grown used to controlling the various stages of the shopping experience, they now expect a similar level of control in the service arena.

The new model for customer service is personalized

At the same time, customer service is evolving to focus more intensively on (wait for it) the customer. Traditionally, customer service representatives only needed to have a deep knowledge of the products in the company’s portfolio. They weren’t expected to have an in-depth understanding of the customer at an individual level – not least because there was no easy way for them to tap into that data.

“The biggest change we have seen is how decisions are made, because the representatives have the data at hand to understand the specific needs and preferences of an individual customer,” Kolsky says.

This might mean knowing that the person on the line is a loyal, 10-year customer. Or, it could mean better understanding their frustration because you know this is their third time calling in.

It’s about outcomes, not just products

Another important shift in the customer service model is the need to focus less on the product itself and more the outcome the customer is trying to achieve.

Suppose the company is a subscription-based pet food company, and the customer is a pet owner whose dog has trouble digesting store-bought food. In this case, the outcome the customer is seeking to achieve is not merely pet food delivery, but a happy, healthy dog. That means the customer service reps should follow up to find out whether the dog’s health is improving, and whether any adjustments need to be made to the ingredients.

It’s this focus on outcome vs. product that will differentiate many companies in the new economy.

Subscription-based economy makes its mark

Another factor that’s reshaping the customer service model is the massive shift toward a subscription-based economy. Once you engage a new customer “the revenue only continues to come in as long as you keep that customer,” Sweeny says.

In other words, customer service essentially becomes the face of the company – whether it’s shaving supplies or pet snacks or underwear. For this reason, Sweeny sees the subscription economy as the primary catalyst for the next wave of investment in customer service.

Measuring customer service success

As with other business investments, a key concern around the customer service function is how to effectively measure success. Even though customer satisfaction is, on the face of it, the most important metric, it’s also crucial to understand the impact on customer retention along with recurring revenue from each customer – particularly important given the shift to a subscription-based model.

“Measures like these are traditionally not part of the lexicon of customer service – but they need to be, because service plays a critical role in the financial health and well-being of a company,” Sweeny says.

It takes a village

One thing that Sweeny and Kolsky both agree on is that every function within a company has a role to play in the customer service model.

In an electronics device manufacturer, for example, it could be the product design team informing the service organization that some customers may need assistance with a certain element of set-up – think, for example, of the nettlesome clock on a microwave oven.

Or it could work the other way, with the service team letting the designers know that a certain issue keeps recurring. In other words, the service function will, by necessity, continue to become more fully integrated into the overall operations of the company.

Better agent efficiency, more loyal customers. Get the Aberdeen report to find out how B2B service leaders do it HERE.


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