Moving from Customer Service to Customer Experience

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1 LearningDiscoveriesClub Learning for tomorrow Moving from Customer Service to Customer Experience Discoveries Report Winter 2012/13 To view the full 36 page report, please register to become a member of the Learning Discoveries Club. KnowledgePool Group Ltd

2 Contents Foreword 3 The importance and benefits of great customer service 4 Why has there been a shift in focus from customer service to the customer experience? 6 Developing excellent customer service 9 What role does training play? 12 A best practice approach to customer service training 15 Case studies The customer-centric retailer John Lewis 18 Creating FANS, not customers Metro Bank 20 Improved client retention through better customer service - Halifax 22 Building a service strategy - Waitrose 24 Improving market share with better call centres - British Gas 26 Analysis of the supplier market 28 Which supplier should I use? 31 What next?

3 Foreword The customer is King and the trend in the market amongst the most successful companies is a shift in focus to the customer experience. These are organisations who have built their brand and company values around delivering the best possible customer experience. Investing in the customer experience for these companies means tailoring their entire business; revolving it around what the customer wants. They seek to ensure that the customer is so happy with the service they receive that not only will they return, but they will also recommend the company to friends and family. This shift from having script-oriented service staff to customer-centric organisations where the objective is to create an experience that surpasses expectations, means that the focus of training and development has also needed to evolve. Rather than a piecemeal more remedial approach which tends to use defined processes to fix a customer service mentality or build skills to fit a more traditional proposition, training in the new world of the customer experience will be built around behaviours. It will look at changing the mindset of staff and ultimately the culture of a company, so that everyone s focus, whether they re customer-facing or not, is on how to improve the customer experience. Training for a company with this type of culture is about making valuebased decisions, viewing complaints as opportunities to deliver great service and being proactive in constantly challenging or questioning processes to ensure consistent client delight. A customer-centric organisation will look to create a workforce that not only strives to deliver a positive customer experience, but also one that lives and breathes customer service. Rachel Firsht, Strategic Market Analyst, KnowledgePool 3 KnowledgePool Group Ltd

4 The importance and benefits of great customer service The consumer market is a competitive field, whichever sector you re operating in, and there are certain types of products where customer service is the deciding factor which makes a customer opt for one provider over another. Offering a high quality of customer service has been shown to deliver significant returns in customer loyalty and retention, higher sales and improved employee engagement. The key to retaining new customers is offering a service that ensures they remain satisfied Higher Sales For the first time this year, the Institute of Customer Service s UK Customer Satisfaction Index (UKCSI) looked at the link between customer satisfaction scores and sales, and found that the two correlated. The Index is released every six months, and from the most recent figures in July , we can see that most of the retailers covered by the UKCSI had seen sales increase during this period. ASOS, which comes in at the top spot with an overall customer satisfaction rating of 91.6, reported an 8% increase in UK retail sales for the three months to 30 June 2012 and a 31% increase in global retail sales, compared to the same period in Amazon in at second place with an overall score of 90.6 announced a 29% increase in net sales over the same three months 3, while gross sales at John Lewis and Waitrose 4, both in the top 10 overall performers, went up by 12.8% and 6.6% respectively in the six months to 28 July Customer Loyalty and Retention However, the return on investment a company can see from increased sales and profit as a result of investing in a customer service approach is nothing compared to the damage that can be caused by gaining a reputation for poor customer service. This is likely to lead to existing customers leaving and will make it much harder for businesses to attract new ones. Companies are very good at attracting new customers with incentives and special offers, but the key to retaining these customers is offering a service that ensures they remain satisfied. The UK Retail Banking Satisfaction Study from JD Power and Associates 5 found that almost 40% of customers left their bank due to poor customer service and a further 43% said a low level of customer satisfaction would be the main reason they would leave their current bank. And this trend is not limited to the banking industry. Organisations across all sectors that offer consumer products and services will lose a significant amount of clients if their customer service is not up to scratch. 4

5 Employee Engagement Although it might not be the first thing that comes to mind when looking at the benefits of providing a high quality customer service, there is an undeniable link between high levels of customer satisfaction and employee engagement. Engaged organisations have strong values, as do those companies who offer a high level of customer satisfaction. engagement 6 by the Department for Business, Innovation & Skills (BIS) found that a number of companies with higher levels of employee engagement have recorded a better financial performance. The report also noted that 70% of engaged employees indicated that they have a good understanding of how to meet customer needs, compared with just 17% of non-engaged employees. Engaged employees will have an emotional commitment to their organisation and its business goals, which means they care about their work, the success of the company and its reputation for customer satisfaction. A report entitled Engaging for Success: enhancing performance through employee A perfect example of employee engagement translating into a high level of customer satisfaction is with John Lewis. The retailer consistently scores well in customer service surveys, and the partnership model of the business ensures that employees are engaged and work there because they believe in the company s values. 1 Institute of Customer Services - CustomerSatisfactionIndexresults.html 2 ASOS trading statement press release 10/07/ rns-announcement/ Amazon press release 26/07/ John Lewis Partnership press release 13/09/ press/y2012/press-release-13-september-2012-john-lewis-partnership-plc-interim-results-for-the-halfyear-ended-28-july-2012.html 5 J.D. Power and Associates 2011 UK Retail Banking Customer Satisfaction Study 6 Engaging for Success: enhancing performance through employee engagement - uk/files/file52215.pdf 5 KnowledgePool Group Ltd

6 What next? If you have a specific learning requirement - be it to do with customer service training or another aspect of learning - then please contact our consultancy team who will be more than happy to discuss your specific need. Phone: info@knowledgepool.com About KnowledgePool KnowledgePool is Europe s leading provider of managed learning services and Report an independent expert on best Extract practice in the training supplier marketplace. We specialise in improving the performance of learning for dozens of global corporations, managing hundreds of thousands of training activities and thousands of suppliers on their behalf, building up unrivalled market intelligence in the process. About the Learning Discoveries Club Designed specifically for learning and development professionals, the Learning Discoveries Club provides an independent and research-driven view on an increasingly fragmented training market. Our series of Discoveries Reports focus on specific subject matter areas, and are the must-read guide for learning & development professionals, highlighting what works, where it works best and how to do it yourself. The club also runs Innovation Days, Webinars and Breakfast Briefings which provide the perfect opportunity to network with like-minded professionals and hear about innovative new learning programmes. For more information or to become a member go to or learningdiscoveries@knowledgepool.com To view the full 36 page version of this report, please register to become a member of the Learning Discoveries Club. 6