Report exposes lack of ROI insight from customer service

The gap in businesses’ measurement of customer experience means they don’t know what customers really want, research finds

Two out of five businesses are not measuring the return on investment from customer service, a report has revealed.

The research from the Institute of Customer Service and Manchester Business School found that significant shifts in customer behaviour are changing the customer-service environment – but many businesses are failing to adapt.

See also: Poor customer service costs businesses £37bn – Research has shown time and again that bad customer service hurts the bottom line.

Customers are now using multiple channels to interact with organisations and have heightened expectations of speed of response, according to the report.

It goes on to emphasise the importance of measuring the impact customer service has on the bottom line after revealing that 28% of organisations do not measure the cost of customer service, and 40% don’t know the ROI.

‘Our latest research has highlighted the dramatic shift in the way we do business and what business leaders need to do to operate in this new environment,’ said Jo Causon, CEO of the Institute of Customer Service.

‘We have moved from a transactional to a relationship economy where an organisations’ success depends on the quality of their relationships, with customers, suppliers, partners and employees so it is critical that they understand how their customers prefer to interact with them.

‘In this relationship economy, customers seek to interact in multiple ways with organisations they trust and to be intimately involved in co-creating products and services. Those organisations that proactively seek collaborative partnerships in order to enhance their agility will be best placed to meet changing customer needs.’

The research involved in-depth interviews with 45 senior executives across 15 organisations, a survey of over 120 executives at different organisations, and recent global academic studies into customer service and business performance measurement.

It also included case studies to demonstrate how companies from a range of sectors approach measurement of the customer experience and link it to business performance.

The report has highlighted a difference in perspective and language between the most senior executives interviewed and others in senior operational or insight roles.

Managing directors and CEOs naturally made the connection between the organisation’s vision, business-performance measures and the customer experience.

Others in the organisation were highly focused on operational metrics and customer behaviour measures, but did not always clearly relate these to the organisation’s vision for its customers.

According to the Institute of Customer Service, the findings support its recommendation that employee engagement is key to delivering the best customer experience, but a focus on customer service needs to come from the very top of an organisation.

The research showed that organisations that have improved business performance through customer service continually gather insight about their customers, measure across their whole customer experience and identify the relationships between their customer service metrics and key business performance measures.

Praseeda Nair

Kellen Rempel

Praseeda was Editor for from 2016 to 2018.

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