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As you face a New Year, it is probable that your organisation will be thinking about Customer Service in some way. Whatever your challenges with Customer Service - launching, improving, changing, cost cutting, off-shoring – if you don't know what good Customer Service Skills are worth to the business, its near impossible to make the best response to the challenge. So…

How do you Value Customer Service?

As you may imagine, for a large service based organisation, valuing Customer Service Skills is a major challenge. If you are not financially minded, it can be a daunting prospect.

At 3C we have developed a practical approach to valuing Customer Service. This process is part of our HATS™ (Human AsseT Statements) Programme.

The first stage is to identify the importance of Customer Service to the business or business unit. It is usual to involve Marketing, Sales and Finance in this process, as well as the Customer Service team.

When estimating the importance of Customer Service there are 2 founding principles:

HATS™ Principle 1

Customer Service must have SOME value (i.e. it is not worth nothing). If Customer Service has no value, the organisation should not be providing it.

HATS™ Principle 2

It is unlikely that Customer Service represents the TOTAL value of the organisation. Every organisation has additional resource such as knowledge, process, or environment as part of its customer offer.

From these two principles, it is clear that Customer Service represents between 0 and 100% of the VALUE of the business.

These principles apply whether the organisation is public or private, large or small.

For many organisations, taking on board these two principles provides a major shift in thinking. So that if, for example, your contact centre is treated purely as a cost to the business, it is unlikely that the best investment decisions about its development will be made.

The next stage is to estimate, from the Customers Perspective , what is the VALUE of the Customer Service your organisation provides as a proportion of the total customer spend? Once again you will need to involve at least Sales and Marketing in the process as well as the Customer Service team. Remember that the VALUE of good Customer Service Skills may be unrelated to the COST.

At this point you will have to start segmenting your customer base. Some will value Customer Service Skills much more than others. You may be able to segment your customer base by the products they buy, but where you offer a uniform product, for example, utilities or public sector services, you will need to use customer satisfaction surveys and market research to help you.

In the next issue we will look at how to use these two key building blocks, the importance of good Customer Service Skills to the business and the value of Customer Service to the client in order to build a picture of the value of Customer Service.

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