• by Jack Loechner , Staff Writer @mp_research, February 4, 2015

According to a new report from Forbes, even companies using sophisticated technology are still view customer service through a traditional lens of serving the needs of the customer, despite its usefulness in marketing, building brand equity, up and cross-selling, driving loyalty, and capturing the voice of the customer. Even when serving customers is seen as a strategic goal for the entire organization, few companies seem to be leveraging customer service as a true organizational strategy. 

Modern customer service is entrenched in most companies: 88% of executives say they are making good or excellent progress at offering modern customer service. 75% of all executives surveyed believe they are performing better than their industry peers, as do 86% of those who believe they are making excellent progress toward modern customer service.

At the same time, organizations may not be grasping the full importance and impact of customer service as part of a corporate strategy beyond customer retention, says the report. Customer service is an organization-wide strategic goal for just 38% of the companies surveyed, and some sectors are at the forefront. It’s the most important strategic goal for 48% of technology companies and 49% of B2B & B2C businesses; and it’s part of corporate culture (42%), customer experience (49%) and/or the mission statement (35%) for communications and telecom companies.

Only 15% of companies consider customer service a key component of their marketing message or brand, says the report. Many companies see customer service primarily as a post purchase function. They don’t yet recognize its role in informing and converting potential customers at pre-purchase.

Even as many companies begin to see customer service through a strategic lens, measures of success remain primarily the traditional efficiency metrics, says the report. 40% of the companies surveyed track key customer service performance indicators, which focus on efficiency and satisfaction. Time-to-resolution (40%) and customer satisfaction (38%) are key metrics for all companies. But only 20% consider new customer acquisition, and only 28% consider the impact on sales. Reviewing individual metrics shows that uptake on newer measurement tools such as net promoter score (22%) and customer effort score (37%), which are strong predictors of customer retention rates, is uneven.

Most of the executives surveyed think they are offering modern customer service. When asked how they would assess current progress toward delivering it, only 11% reported that they were just getting started: adding new channels, offering self-service and enabling customer forums. 61% of respondents believe they are making good progress: offering standardized service across channels, a single knowledge base of consistent answers and service as a brand differentiator. 28% believe they are making excellent progress, with use of centralized customer data, personalized customer service and customer satisfaction scores above 90%.

Businesses that say they are making excellent progress toward modern customer service are more likely than their peers to see retention and reducing turnover as a primary business objective for customer service. They are also much more likely to view customer service through the lens of brand differentiation and improving competitive position or market share, and to realize the value of customer service in improving product or service offerings.

With the focus on these broader strategic goals, it’s a surprise that seemingly related business objectives are viewed as less important. This group is much less concerned about using customer service to produce more with less effort and cost (18% vs. 25% for all respondents); and they are less concerned about the role of customer service in improving the number of customer advocates (14% vs. 19% for all respondents), which has a strong impact on differentiating a brand from its competitors. 

It is also a surprise that these companies do not view customer service through the lens of employee satisfaction (17% vs. 24% for all respondents), says the report. The most successful customer service organizations understand how critical agents are to creating and maintaining the customer experience. Agents who are frustrated by a lack of good support tools, or who don’t feel valued,  reflect that in their demeanor, which impacts the customer’s perception of the interaction itself and the company as a whole.

Even as customer service is evolving, some companies still see it only as a post-purchase function. They don’t yet recognize its role in informing and converting the potential customer at pre-purchase. Just 30% of all respondents see customer service as a brand differentiator, and only 35% see it as an opportunity to convert prospects or visitors into customers.

B2C executives overall do not see customer service as a way to retain customers at the same level as B2B businesses do (51%). And hybrid companies who operate in both the B2B and B2C space are the most likely to cite customer retention as a business objective. At 67%, that is well above the figure for other business models.

Indeed, notes the report, with B2B’s focus on holding on to existing customers, they were also the least likely of all business models to see serving customers as an opportunity to convert prospects into customers (26% vs. 35% all respondents and 43% B2C), even though they are also much more likely to view customer service as an opportunity to maintain competitive position or market share (38% vs. 31% all respondents and 27% B2C).

The report concludes by saying that customer service has an opportunity to be a much more strategic weapon for businesses that understand its power. To do this means moving away from what has traditionally been viewed as a back-end operation and cost center to what is now being viewed as a brand-focused profit center. The primary driver of this sea change is engaged and empowered consumers, who want to get the answers to their questions anytime, anywhere, on any device they choose. 

Nuff said; For the complete story and graphics, please visit Forbes here.