Top 4 Risks for Customer Service Teams

by Debbie Wang

All Articles

Posted on January 9, 2019

Customer service, the team that enables, supports and manages customer relationships. When things are going good and customers happy, you don’t hear about them. But when things are challenging, you best believe that you’re going to hear an uproar.

The challenges that this team faces varies day by day. On any given day, the customer service team may be faced with an angry customer, an outage or issue, requests for discounts that can’t be given, requests for features that won’t be built, questions that can’t be answered, or a backlog of tickets…just to name a few.

Understanding the challenges that this team faces helps give management insight into areas of opportunity and growth, including potential risks for the team and organization. For customer service teams, it may seem like these risks are difficult to qualify and measure. And as they say: What doesn’t get measured, doesn’t get managed. But there are a few pain points for customer service teams, that, if left unattended, can lead to larger risk exposure for the entire organization.

The top 4 process risks that customer service teams need to be aware of are:

  1. Disgruntled Customers
  2. Inadequate Information Systems
  3. Training
  4. Warranty

Let’s break these down in more detail.

1. Disgruntled Customers

If the organization is unable to meet customers’ expectations, the customer service team may have to deal with unhappy customers and find ways to mend potential damage to the relationship. This could result in discounts, additional/bonus service hours or in the worst-case scenario, customer churn.

Keeping track of upset customers and the tactics, amount of time and processes required to deal with them will help management identify trends in customer dissatisfaction and implement action plans if these issues arise. By closely monitoring the reasons that a customer connects with customer service and how it is dealt with, the business can identify opportunities for improvement as well as growth.

The Net Promoter Score

A key metric that all customer service teams should be aware of is a company’s Net Promoter Score, or NPS. Let’s break down what this metric is, how it’s calculated, and why you should care about it.

What is NPS?

The NPS is widely accepted as a proxy to 1) assess overall customer satisfaction with a company’s product or service and 2) measure a customer’s loyalty to that company. Companies are scored on an index scale from -100 to +100. Average NPS benchmarks can vary by industry and region, but in general, a score above 0 is considered “good” and a score above 50 is considered “excellent”. Remember, because NPS is a measurement of customer loyalty, any positive score means you have more loyal, satisfied customers than not.

How is NPS Calculated?

Customers are asked only one question: On a scale of 0-10, how likely are you to recommend this company’s product or service to a friend or colleague?

Respondents are then grouped into 3 categories: promoters, passives, or detractors:

Promoters scored your company 9 or 10. They are your most loyal customers and will sing your high praises all day long. They love your brand and are enthusiastic about referring other buyers.

Passives scored your company 7 or 8. They’re happy with your product or service but won’t go out of their way to recommend your company to someone else. They don’t have as strong loyalty as Promoters, so if you don’t nurture these customers, they could be swayed to switch to a competitor.

Detractors scored your company 6 or lower. These customers are probably unlikely to buy your product again and can damage your brand by potentially spreading negative word-of-mouth.

Your final NPS is calculated as follows:

NPS = % promoters – % detractors

Using NPS to align to your Goals

The ability to retain customers (and keep them happy!) is critical to a business’ ability to increase ROI and continue to grow. Find opportunities to turn your detractors into promoters with great customer service as research shows that promoters are 6 times more likely to forgive a company if they had a bad experience. And because promoters are more loyal, it is also easier to find upsell opportunities to these customers too.

2. Inadequate Information Systems

In today’s always on and connected world, customers expect that the organizations that they deal with will be available to them 24 hours a day, 7 days a week. But if your organization doesn’t have the technological infrastructure in place to be able to do that, then what? Understanding your limitations as it relates to the needs of your customers, especially regarding being able to support them as they engage with your product or service is crucial. Some of those limitations may include:

Technology that is difficult to use and navigate

Systems like instant chat, customer forums, wiki pages and help desks, are all expected as part of the new customer experience. But if it’s not clear where a customer should be going to for assistance, it can increase the time it takes to resolve a customer’s issue, add unnecessary workload, and possibly lead to a customer reaching the wrong first point of contact to help them answer their question.

The Threat of Technology Disruption

As mentioned before, passives and detractors are the most likely customers to switch to a competitor. If your systems are down when they have an issue and you have no business continuity plan in place, you can almost guarantee you’ll have a very disgruntled customer who may spread negative word-of-mouth.

The Human factor

It may not be the first thing you think of, but humans are also a type of information system. If your customers are not clear when they approach your customer service team with their issue, it can cause confusion and take longer for the issue to be resolved. On the other hand, an organization’s customer service reps could also not be knowledgeable enough to answer a complex question. To address this, companies should have frequent training sessions for their customer service reps.

Take a guided tour of Resolver’s ERM software.

3. Training

Part of giving your employees the tools they need to succeed is proper, and consistent, training. Without the right training, your customer service reps are ineffective at helping your customers. Start off by training your reps to use your product. Your customer service reps can’t help your customer use your product if they themselves don’t use it frequently. Give your customer service reps dummy accounts of your software so they can learn about the possible pain points your customers might have. This will better equip them to address common issues that may arise.

But some things can’t be learned from training. There are some traits that a good customer service rep inherently possesses. Some characteristics of a good customer service rep include:

  • Patience and empathy. Rarely do you have a customer reaching out to your customer service team because they have no issues and are 100% thrilled. They are often frustrated, and their own patience may be limited. A good customer service rep will take the time to listen to a customer’s problems and fully understand the issue before providing an appropriate answer.
  • Clear communication skills. A good metric to tell if your reps are clearly communicating is how many responses it takes to fully resolve an issue. If a similar issue usually takes about 3 responses to resolve, but takes one rep 5 responses, it may be a sign they haven’t been properly trained on how to address the issue.
  • Ability to see the bigger picture. Customer service reps need to be attentive and be able to read between the lines of what is being asked. Sometimes a small issue is indicative of a larger problem that should be addressed. For example, customers may not be saying it outright, but there may be feelings that the dashboard and/or reporting functionality isn’t optimized or laid out in a way that makes the most sense for their business. They probably won’t say “hey, the UX sucks!”, but may be saying things like “how do I find this?” or “where can I see all of this?”

4. Warranty

Warranties are a common way to improve customer satisfaction and encourage brand loyalty. By offering a warranty on your product, it shows that your organization is confident in the product you are selling and is a simple way to keep customers coming back. However, un-communicated changes in warranty policies or unclear warranty policies can create a lot of friction for customer service teams that can become swamped with questions, taking away resources from resolving other issues.

One argument for getting rid of warranties completely is that warranties can distort how customer service teams determine what types of requests should take priority over others. In the age of social media, if a customer doesn’t have a warranty on a product and are unhappy, they can simply express their frustrations online. If your customer service team’s resources are being allocated towards resolving warranty issues that affect only a handful of customers instead of monitoring customer reactions on social media, this can result in long term harm to your organization’s overall brand perception. It’s entirely possible that by trying to save the relationship and dollars from one customer’s warranty, you drive away other potential customers who may be looking to see how, and if, you respond to messages on social media.

How Software Can Help You Manage Customer Service Risks

All these risks, if left unmanaged, can lead to incidents that have potential to have damaging impacts on your business.

Resolver’s risk management software helps risk managers and owners easily manage their risk environment by adding, updating and describing risks that could impact the organization’s goals.

To learn more, take a guided tour of our ERM software now.

About the Author

Debbie is an SEO Specialist at Resolver.

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