One credit card company, for example, found that its one-size-fits-all approach to service was not working and customer churn was climbing. It avoided the temptation to put in operational fixes for ongoing glitches in service delivery and instead designed a new customer experience program. The company took the inside-out approach by giving its clients the ability to select their preferences from a menu, including channel (does the customer want to communicate by phone or online?) and product (does the customer want a regular, gold, or platinum card?). Doing this allowed customers to fine-tune their own experience while allowing the organization to simplify and standardize delivery. The company also realized that high-value customer segments did not automatically demand high-end service. In one of the company’s two high-value segments, people wanted to deal with an agent; in the other, they preferred the online channel, which reduced servicing costs.
3. Measure the true customer experience. Measuring the impact of the customer experience on a company’s bottom line is both essential and difficult, and it takes careful consideration of both qualitative and quantitative feedback. Customer satisfaction scores, such as those from the American Customer Satisfaction Index or J.D. Power & Associates, do not automatically correlate statistically with key indicators such as revenues or profitability. Measuring customer loyalty yields a stronger tie to return on investment and other key indicators. Customer loyalty benchmarks include changes in customer retention, cross-sell, share of wallet, and conversion of referrals to new customers. In addition, service excellence requires ongoing tracking and management of customer touch points to ensure there is consistency enterprise-wide, for example, in a bank across branches, between call centers and branches, and even among staff at the same branch.
Companies should also seek a comprehensive view of the customer experience by gathering the right sets of qualitative and quantitative feedback across the organization. One retail mortgage organization wanted to know why a large number of referrals were not being converted to new customers. An analysis found that the company did not track the end-to-end referral process. By piecing together the data puzzle across sales, credit, operations, and IT, the company uncovered not only the source of the leak but also such lost opportunities as failures to follow up with customers who were approved but did not activate accounts.
4. Close the loop. To develop the ability to continuously read and address the changing needs of customers, organizations should establish communication and information loops across their organizational silos. They must also build in the capability to constantly monitor their customers, staff, and competitors. To that end, organizations are starting to build creative capabilities such as simulation, in which a company tests customer reaction to proposed service offerings, along-side performing the more traditional online and phone surveys.
There is no single, perfect approach for organizations to effectively deliver a mutually rewarding customer experience. For some companies, customer service responsibilities may be decentralized; for others, they may be assigned to a dedicated department. The right choice depends on the organization’s culture. At the heart of it, customer service excellence is the product of powerful processes that cut across organizational functions and are reinforced by strong and explicit leadership.
Timothy Hoying is a vice president with Booz & Company based in Chicago and New York. He leads the firm’s service operations work for the banking, consumer finance, capital markets, and insurance sectors.
Ashish Jain is a principal with Booz & Company based in Chicago. He works in service operations and financial services, focusing on banking, consumer finance, and insurance sector clients.
Madhu Mukerji-Miller was formerly a principal with Booz Allen Hamilton in New York.