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The benefit of empowered advisor common sense customer service: Andrew King Stafford - Andy King - Blog

The benefit of empowered advisor common sense customer service: Andrew King Stafford

So what is empowered advisor common sense customer service?  Well it’s all about giving call centre customer service advisors the ability to make a common sense judgement when dealing with customer issues.  Let’s look at an example:

A customer purchased and had delivered a £60.00 vacuum cleaner 13 months ago from a leading UK high street and online retailer. The original machine developed a fault after 6 months and a replacement was provided.  Now 7 months on the replacement too had failed with exactly the same fault.  The customer took the broken vacuum into her local store to see if anything could be done as the machine was now 1 month over the original 12 months guarantee provided by the retailer.  The customers’ argument was threefold; firstly the replacement was just 7 months old and she felt that the 12 month guarantee should perhaps begin again when that machine was delivered.  Secondly she was upset that an identical fault had developed twice on the same model in a 13 month period, finally the fault in question caused the vacuum to emit sparks and flames, hence there was an obvious safety issue.

The store assistant informed the customer that she would need to seek advice from the delivery section of the business as it was they who supplied the item.  Now this is where the empowered advisor common sense customer service should have kicked in.  The advisor could have taken it upon herself to apologise for the problems, offer the customer a pickup of the faulty vacuum and delivery of a new but different brand machine to the same value of the original.  Cost to the business, one five minute phone call from the store and delivery of a new vacuum to the same value of the original sale.  Benefit to the business would be a happy customer who would more than likely use the business again in the future, but more importantly, make recommendations to family and friends etc.

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So now let’s take a look at what really happened and see what effect it could have on the business if multiplied throughout the call centre on a daily basis:

The original telephone call from the store took 5 minutes.  The customer was advised that she would have to obtain and pay for an independent electrical engineers report, send it into the business and if the machine was deemed to be at fault, a replacement would be provided.  The customer left the store with the faulty vacuum feeling disgruntled that she now had the hassle and delay of seeking a report.

On the way home from the store the customer was surprised to receive a call on her mobile phone from the same customer service advisor she had spoken to a few minutes ago.  The advisor informed the customer she had spoken again to her team leader and it had been decided that they were prepared to provide a replacement vacuum after all.  The customer asked if she could have a different brand of the same value as she had lost faith in the original one.  The advisor again went to speak with her team leader returning after a few minutes with a negative response, the same model or no deal!  The customer asked if she could discuss it with her partner and let them know later.  The advisor agreed and said she would place a message in the order on the companies’ computer system so any other advisor could take the call when the customer got back in touch.  This second exchange had taken a further 10 minutes of the advisors time, not to mention the cost of a 10 minute call to a mobile phone and the issue was still yet to be resolved. 

The customer contacted the company a few hours later to say that reluctantly she would accept the offer of a like-for-like replacement as she didn’t want to waste time and money arranging an engineer’s report.  However, the order was not correctly messaged with all of the required information and so a 13 minute conversation now took place while the story was explained and the facts established.  Finally the customer service advisor decided she wasn’t empowered to authorise the replacement and informed the customer that she would email another department and they would be in contact the following day. 

The call didn’t materialise as promised and so the very fed up customer sat and typed out a lengthy complaint email to the company’s customer service ecommerce section.  Within 20 minutes of the email being sent the customer received a telephone call from an advisor who had now received the original internal email from 2 days ago.  She arranged a pickup of the faulty vacuum and delivery of the same model replacement.  This took a further 5 minutes.

 The complaint email sent by the customer was answered 2 days later from an ecommerce advisor explaining that he could see the matter was now resolved and hoped it hadn’t put the customer off shopping with the company again; this email response took another 5 minutes to write and send!

So how could this episode affect the business and what if it wasn’t an isolated incident?  The following information gave us the answer:

Assuming the following figures –

Customer service advisor hourly rate = £6.70

Customer average spend per transaction for the business = £32.30

The total customer service advisor time spent on this particular issue was 38 minutes.

Multiply this time by the hourly rate that we know to be £6.70 and we get an advisor time cost of £4.24

However the real cost comes when we start to look at the effect of poor customer service and how many times this type of problem occurred each day in the contact centre.

It was established that similar incidents took place on average 200 times daily.

Therefore the advisors cost worked out to approx £309,520pa.  Subtract the £40,734pa - 5 minute per advisor per call cost if the issue was resolved at the first point of contact and you get £268786pa.

The issue occurs 200 times per day = 73000 customers per year (assuming no duplicated customers).  Multiply this by the average spend and you get a total of £2,357,900pa.

If just 10% of these customers chose to switch to a competitor then the loss of revenue would be £235,790pa.

It costs 5 to 6 times as much to obtain new customers as it does to service existing ones and so the amount needed to replace those who defected would be approx 66% of lost annual revenue, i.e. £155621.

Research shows that a dissatisfied customer is likely to tell 10 friends, family, colleagues etc about their bad experience with a business.  So again, assuming that just 1 in 10 of those told about the experience chose to shop elsewhere we have another possible revenue loss of 7800 potential customers multiplied by the average spend = £235,790pa.

So what does all this add up to?

Unnecessary advisor time spent resolving issues = £268786

Loss of customer revenue from defection = £235,790

Cost of new customer acquisition = £155621

Loss of potential new customer revenue = £235,790

Total possible annual loss by not empowering advisors to make common sense decisions = £895,987

Compare this to a cost of just £40,734 by empowering advisors, allowing them to resolve the same issues at the first point of contact.  This doesn’t include any additional revenue generated by a happy customer telling others about the good service which would almost certainly negate the cost many times over.

As you can see, simply by empowering customer service advisors to make common sense decisions themselves, not only can large savings be made but a company’s reputation for providing good customer service can be enhanced.  Remember, these are decisions that will probably be made anyway so why not let advisors make them at the first point of contact instead of by a team leader or manager some way down the line.

A final thought on empowered advisor common sense customer service

You might be worried that by empowering advisors to make decisions themselves they will simply agree to all customer requests or demands thinking they are providing good customer service.  You may be surprised! 

The same company referred to above, found that compensation being issued to dissatisfied customers’ was rising steadily year by year.  They experimented by empowering one team of customer service advisors to make the decision on compensation levels themselves instead of having to wait and ask already busy team leaders likely to snap judgements.  The result; compensation levels fell by 40% over a 3 month period for the empowered team with no apparent loss of customer service.  The team members also reported a greater sense of work satisfaction having been given the extra responsibility.

These are just 2 examples, there are lots of ways to empower your advisors enabling them to provide a more efficient and customer focussed service.  

Publish Date: November 25, 2009 10:15 AM

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