Topic: outsourcing Oftentimes, businesses target their customer service departme
ID: 1190686 • Letter: T
Question
Topic: outsourcing
Oftentimes, businesses target their customer service departments as costs to be eliminated (to which I agree to an extent). Customer service costs, however, are tied to quality, rework, pride in product, employee turnover, and a myriad of other variables. Would you agree?
How difficult is it to get this concept across to management, whose intent is to reduce customer service costs? Any experiences to share?
Would the organization be better off targeting the reduction of these other variables, the root cause of customer service costs, versus the customer service department, per se?
Explanation / Answer
The customer service is the core department of any organization. The feedback of the current customers may drive the potential customers to buy or not to buy the product of the organization. Of course the customer feedback depends on the service quality, timely and satisfactory service and employee behavior among other factors. The targeting of the customer service department costs may hamper the growth of the organization in the long run by affecting the core revenues of the organization from the sales.
The organization may sometimes feel that training and other technical updates to the customer service department are just overheads and adds no extra value. These costs may give returns in the long run by increase in sales generated through positive feedbacks.
One of the examples which come in my mind is that of Nokia Mobile Co. the company handled its customer service so effectively that the sales went up and the organization hold on to the market share of mobiles for years in the largest market of India. Now take the Samsung Mobile Co., the company has grown out from nowhere taking the advantage of fall of Nokia due to first mover advantage in Android based smartphones. But the customer experience about Samsung is extremely negative which has started driving its sales to other brands like apple and htc. The only reason is quality and service. I don’t think that it can keep its market share intact for the period Nokia did.
So the organization should evaluate all processes in the organization, even the customer service department and rationalize the costs by taking appropriate measures.