Insight: customer service should not be diminished at any price
Retailers have to be very careful in the current tough environment that cost cutting does not lead to a reduced level of customer service because this is the key tool they should be deploying to differentiate their propositions.
There are clearly cost pressures on retailers, according to Jo Causon, chief executive of The Institute of Customer Service (ICS), but she says: “I can see that the obvious solution is to cut but it will bite you if you are not careful. It’s possible to improve processes in order to reduce costs while also still improving the customer experience. Retailers must not just say ‘let’s take out 10% of costs’ because they still need to improve the experience.”
Customer experience is a big differentiator
The focus on the experience is absolutely vital at this time, she says, because consumers have more options than ever before and they now shop across channels as well as having high expectations.
“It’s a challenge for retailers because people no longer fit into neat packages. In a world of 24-hour shopping they have more options and so they might sometimes want to deal with a retailer on a purely transactional basis but at other times they might need advice and human interaction,” explains Causon.
In a world where it is easy to deal on the transactional level the creation of real engagement with customers is increasingly valuable. It is this that ultimately creates trust with customers and this is the primary reason why they buy multiple products from a retailer and stay with that organisation as a loyal shopper.
Not a soft fluffy thing
This human interaction is not a “soft, fluffy, pink thing but is hard economics”, she says adding: “Where an organisation scores above average on customer engagement they also outperform on profitability. Customer service matters and it has hard-nosed benefits,” says Causon.
Although the retail industry performs well in the annual ‘UK Customer Satisfaction Index’ from the ICS she warns that such is the competitiveness within the sector that there is no room for complacency. “Retailers do not necessarily need to change anything [at this time] but the reality is that customers have more choice, are more savvy, and less money, so the sector has to continue to work hard,” she says.
Training and development is crucial
The key place where work should be done is on the combination of training and the ongoing development of employees as this feeds directly through to impacting the customer interaction. This should be aligned with retailers delivering a product that does what it says and matches customer expectations.
The other vital aspect of the customer experience, according to Causon, is how effectively retailers deal with complaints. Problems have to be fixed and such interactions and resolutions have to be undertaken with timeliness. “Good companies are brilliant at all these things – the hygiene factors and then some. And when things go wrong then they also have to show that they care,” she says.
Showing you care
Showing that an organisation cares is very much delivered through a human interaction because empathy is not something that translates through automation and robotics. But there is no doubt that robotics and Artificial Intelligence (AI) are going to play a major role in the area of customer engagement in the future.
To this end the ICS is undertaking a research project – ‘Robots versus Humans’ – that will launch in July and looks at robots and automation with a focus on three areas: what are organisations doing now with AI; the customers’ point of view; and the employers’ point of view.
Causon says it is very early days in the development of AI and that she is being “careful not to scaremonger, it’s not doom and gloom”. She adds: “AI will grow but I do not see it as a bad thing. I’m happy to self-serve for things like train tickets and receive recommendations and if AI makes life easier then it’s positive. AI can release people to add value, with higher levels of empathy. We’d have a rise in the level of customer experience.”
Her biggest worry does not involve robots taking over the world, because her view is that humans need human interaction, but is instead around those companies that become internally-focused and cut costs when they come under pressure.
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