Perfecting Service Management

Issue #35

Tuesday, January 6, 2004

Preserving a Healthy Customer Base (Part 4)
by Will O'Keeffe

This is the final article in a multi-part series presenting eight simple rules for preserving a healthy customer base. Previous newsletter issues discussed the first 6 rules:

  • Forecasting the Customer Base
  • Avoiding the Free Agent Dilemma
  • Organize for Retention
  • Prioritize the Customer Base
  • Don't be a Stranger
  • Have a Customer Retention Strategy

The final two rules are presented in this issue.

Develop Renewal Offerings and Programs
Give customers an incentive to stay with you or a reward for being in a longer-term relationship. This can take the form of incentives for early renewal or clear benefits (e.g., higher level of customer support) for committing to a multi-year deal. These rewards don't have to be financial, but they do need to be tangible. In addition, use contracts positively—not as a bludgeon. Build in price review mechanisms that extend the relationship if you need to lower costs and look to make your relationship evergreen—with a remedy period and tail that precedes any cancellation.

Build the Retention Mindset
Retaining customers means looking to deepen the existing relationship so that switching is more difficult. For Operations, this means continuing to deliver and where it is cost effective, over-deliver. For Sales, this means looking to develop the account, which may imply forsaking short term gains for a longer term pay-off. For Customer Service, this means being proactive. Be up front in demonstrating the value that is being provided to your customers and actively seek the opportunities to solve problems for your customers—even if they are not asking for it. For Senior Management, understand your customer base. Know the relevant details of the customer forecast, and make yourself available for specific actions to retain customers.

If you would like more information about how best to preserve your customer base, feel free to
contact us.

View Previous Articles In the Series

Rewarding and Incenting Customer Service Representatives (Part 3)
by Craig Bailey

In response to a request by one of our subscribers, we are pleased to provide the third article in the series on "Rewarding and Incenting Customer Service Representatives." In previous editions we reviewed two key prerequisites for rewarding and incenting your Customer Service Representatives, that are in the direct control of Customer Service Management. In this issue, we review an important item that will require cross-functional support.

Align the rest of the organization

A common goal of many customer service organizations is to resolve each customer's inquiry on the "first touch," without the front-line having to hand the customer off to other parts of the organization. However, customer satisfaction and retention do not rest solely on customer service. The front-line maintains a critical dependency on the "rest of the organization" to effectively service and support the customer base. Organizational dependencies key to achieving high levels of customer satisfaction and retention include:

  • Product Management – Ensuring that products and services are released only when they are ready, and customer service personnel provide input and receive training on new products and services – in advance of market availability.
  • Sales and Marketing – Ensuring that expectations are properly set regarding the capabilities, delivery, implementation timeframe and/or performance of the products and services. By doing this, the service organization can effectively meet or exceed these expectations. Have you heard the phrase "under promise and over perform?" Too often, the service organization is placed in the opposite position. That is, something was "over promised" which results in the customer service organization attempting to recover from the situation where the firm is "under performing" to the customers' expectations.

  • Technical Support – Ensuring a timely response to, and resolution of, customer issues that require a higher level skill set, based on predefined guidelines and priorities. Additionally, ensuring that there is an effective process in place to perform scheduling, planning and notification of upgrades / maintenance activities to minimize / eliminate unanticipated impact to the customer-base. Finally, to continuously push capabilities to the front-line to increase "first-touch resolution."

  • Engineering – Ensuring a timely response to bugs and enhancement requests. This includes providing customer service with a specific timeframe for response, based on predefined guidelines and priorities. The response could include a "commit date" for resolution or an indication that the item will not be addressed at all, and why. This ensures that customer service is not "stuck in the middle" without the ability to set customer expectations. (See the article "Bug Fix Promises?" in issue #32 of our newsletter for more information related to the topic of managing bug reports.)

  • Senior Management – Ensuring their awareness of, and engagement in, responding to trends that are impacting customer service, satisfaction and retention, by allocating resources to invest in their prevention and/or resolution. To capture the attention of senior management and obtain such a response, you will want to appeal to their concern for customer retention, profitability and operational efficiencies. These are items that are the easiest to put a number (dollars) against. Typically, customer service organizations focus on customer satisfaction, which is important, but can be more difficult to quantify in dollars.

Once your Customer Service team knows that the entire organization is aligned to ensure high levels of customer service, satisfaction and retention, they will be much more motivated to effectively serve your customer. Additionally, you will achieve significant improvements in operational efficiencies (cost savings).

In closing, we have now provided 3 prerequisites for ensuring that your Customer Service reward and incentive program is truly effective. Not having these prerequisites in place can make your rewards and incentive programs an effort in futility. Subsequent newsletter editions will share the "how to" portion of effectively rewarding and incenting customer service personnel.

View Previous Articles In the Series


Recommended Reading

Preserving A Healthy Customer Base

Rewarding and Incenting Customer Service Representatives

And the Winners Are...


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View previous newsletters

Recommended Reading
To complement our current series on incenting and rewarding customer service personnel, we recommend an article by Mary Sandro, founder of ProEdge Skills, Inc. In her article "Four Ways to Motivate Service Professionals- A Guide to Getting Wow Performance," Ms. Sandro discusses four strategies for motivating service professionals. View full article

And the Winners Are...
As announced in previous newsletter editions, we are holding a contest to acknowledge our readers that submit the most unique approaches to incenting / rewarding their customer service personnel. We are now wrapping up this contest and pleased to announce the winners. The top 2 submissions were selected for the breadth and uniqueness of their approaches.

And, the winners are, in alphabetical order:

- Robyn Grable – Director, Solution Center, ADP National Account Services

- Pat Killebrew – Sr. Director Enterprise IT, Digex

We will feature their approaches to rewarding and incenting customer service personnel in subsequent newsletter editions and on the Customer Centricity web-site. We know that you will enjoy reading their approaches and benefit from giving them a try.

Congratulations, Robyn and Pat!


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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