Perfecting Service Management

Issue #33

Tuesday, December 9, 2003

Newsletter Distribution Challenges

Many of our subscribers did not receive the last newsletter, and those that did may have experienced problems with the links provided within. The title of the last newsletter, "Preserving a Healthy Customer Base," apparently triggered anti-spam filters. Going forward, our newsletters will be titled "Customer Centricity Newsletter."

In addition, at the time of the initial sending, our Newsletter Management service was experiencing a problem which caused most of the links on the newsletter to fail for the first 24 hours.

We apologize for any inconvenience that this may have caused. Anyone who did not receive the last edition of our newsletter can view it on the newsletter page of our website.


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Preserving a Healthy Customer Base (Part 2)
by Will O'Keeffe

This is a multi-part series presenting eight simple rules for preserving a healthy customer base. The last issue discussed: Forecasting the Customer Base and Avoiding the Free Agent Dilemma. Two more rules are presented in this issue.

Organize for Retention
All too often the responsibility of renewing and retaining customers falls squarely and solely on the shoulders of the field sales representative. Executive focus comes only after the situation has hit critical. The problem here is that the sales rep is being pushed and pulled between new deals and existing customers, and the executive, who has the power to bring key resources into the loop, isn't positioned to act. Ideally, there will be account managers, whose primary job is managing the installed base, teamed with customer care professionals who are likewise incented to keep a healthy base. An executive who owns the customer base (and leads the forecast reviews) and can provide reinforcements, muster his peers, and offer proactive support completes the teaming.

Prioritize the Customer Base
We want to keep all our customers, but the simple fact is that we can't treat all of them equally. Resources needed to retain a customer are busy retaining multiple customers as well as simply keeping the business going day-to-day. Clearly prioritize the customers by revenue and profitability (Note: Don't get hung up on the intangibles, they usually don't enhance decision making). Use this to deploy your retention resources properly. For true strategic accounts, you should be more willing to invest the top of the line resources, but for smaller accounts you may adopt a simplified approach. Furthermore, you should be actively looking to weed out unprofitable customers as part of the prioritization. In the end, this is addition via subtraction and will help the company. Nevertheless, most companies are afraid to break off certain customer relationships even if the relationship is a money loser.

The next two articles will present the final four rules for preserving a healthy customer base. If you want help preserving your customer base, feel free to contact us.

Rewarding and Incenting Customer Service Representatives
by Craig Bailey

We are pleased to provide this series on "Rewarding and Incenting Customer Service Representatives" to respond to one of our subscribers, who asked us to cover this topic.

Effectively rewarding and incenting customer service representatives can be complex. The types of incentives and rewards are important to consider, but certain prerequisites must be in place to ensure that your rewards and incentive program is truly effective. To be comprehensive, this series will cover the following topics:

  • Be careful what you ask for
  • Empower the front-line personnel
  • Align the rest of the organization
  • Provide immediate recognition
  • Financial incentives

Be careful what you ask for

Said differently - you get the behavior that you measure and reinforce. This became glaringly clear to me during an experience I had upon inheriting a customer service organization. As I began the process of coming up-to-speed on the inner-workings of the organization, its personnel, processes, levels of performance and customers, I discovered that we were primarily focused on production metrics, such as: Average speed to answer, call wait time, abandonment rate, etc. To reinforce this set of performance metrics, our employees' quarterly bonuses were tied to the achievement of goals in this area. We were performing fairly well against the goals that had been established. However, when I spoke with customers I realized the effect that this "production focus" was having on customer satisfaction. That is, the customers could tell that our customer service organization was focused on processing calls as quickly as possible, and that "resolving my service issue or question is secondary to efficient call processing." We were getting precisely the behavior we were rewarding, just not the behavior we wanted.

To be clear, production metrics are important barometers to monitor in managing a customer service organization. If your organization focuses on production metrics as the "primary" performance indicator, you will get what you asked for. That is, you will perform highly "efficient" transactions with customers. However, you will NOT generate "effective" relationships with your customers. In fact, the customer will KNOW that you are trying to get them off the phone as quickly as possible, to take that "next call." The reality is that you want to ensure that each customer feels that they are the most important call that your company is taking (at that time).

Metrics to consider for ensuring that focus isn't merely on production include: number of repeat calls (for the same issue, by the same customer); first-touch resolution; and, most importantly, customer satisfaction.

At my company, after we realized that we were focused on production metrics rather than the customer relationship or satisfaction levels of our customer-base, we decided that it was time for a change. While we continued to watch the traditional call center metrics, we changed our bonus program to be focused on customer satisfaction. And, guess what quarter-over-quarter customer satisfaction continued to climb! And, the company was subsequently rewarded for this by being acknowledged as #1 in customer service, for their industry.

Subsequent newsletter editions will share other elements for effectively rewarding and incenting customer service personnel that augment the item covered above. If you have interesting ways to reward or incent your customer service personnel, enter our contest (see information in right panel).

Newsletter Distribution Challenges

Recommended Reading

Preserving a Healthy Customer Base

CCI Contest

Rewarding and Incenting Customer Service Representatives


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Recommended Reading
In his article No More "Jam Tomorrow", Nick Langley discusses a problem many companies are facing: how to get quick ROI with minimal IT investment.

View full article

CCI Contest
Customer Centricity's goal is to promote availability of information that Customer Service management will find effective in addressing their most pressing business goals and objectives. To this end, we are running a contest through the remainder of 2003 to generate a list of as many unique ideas as possible on how people reward and incent their customer service personnel.

Contest details: submit your unique approach to incenting / rewarding your customer service personnel to A panel of 3 Customer Centricity consultants will review the submissions, identify the 3 best ideas and announce the winners in our first newsletter of 2004. Winners will see their name in electronic print (within our newsletter) amongst their peers in industry (other subscribers just like you) and can also choose an item of their choice from the Customer Centricity logo shop.

About Customer Centricity, Inc.
We strengthen overall company performance through better service delivery and management.

We boost efficiencies in front-line customer service and technical support teams, order processing, fulfillment, field service, logistics and other key operations functions.

In short, we align the resources of your organization to exceed your customers' expectations in the most effective and efficient manner possible.

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