Customer service as a revenue center

Traditionally you can view customer service as either a cost center or a profit center.  If you treat it as a cost center, you’ll try and minimize costs, and likely make customers unhappy as a result.  If you view it as a profit center, trying to upsell callers, you’ll likely also upset your customers.  Both approaches require a delicate balance between cost or profit and lost customers.

There’s another approach, and one that works well in a crowded market: view customer service as a revenue retention center.  I called American Express the other day with a complex problem.  The agent who initially fielded my call quickly realized that someone with greater expertise was required and I was immediately transferred.  The new agent was helpful, and took the considerable time needed to understand and research the matter and initiate a solution.  She was empowered to dig all around in their system and to solve my problem.  In addition, she was friendly, professional, and good-humored.  I got my solution and didn’t resent the time I spent on the phone with her (which was a while).  This is why I stick with AMEX.

It costs AMEX more money to provide that kind of service: to hire better than average people and to train them.  But they get happy, loyal customers who don’t even pay a premium for the AMEX service since the card (at least my business card) is free!

There’s a lesson here: cost cutting isn’t always the answer; increasing value to customers is often a better strategy.


This entry was posted in competitive advantage, customer loyalty, customer satisfaction, customer service, Uncategorized and tagged , . Bookmark the permalink.

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