The truth about support costs vs. customer satisfaction

As Jack Nicholson said, “You want the truth? You can't handle the truth!”

The truth is, we need to understand customer interactions, at the ground level, in order to improve customer interactions, and improving customer interactions not only retains and grows the customer base, but it has this interesting side effect of actually reducing support costs. I know this because the company I work for has been consistently achieving 10-20% increases in customer satisfaction concurrently with 20-30% decreases in applicable customer support costs. Those results contradict the assumptions of many, who assume there is a conflict between raising customer satisfaction and meeting cost reduction targets. Knowing that the companies we've worked with who are implementing this truth are outperforming their peers in profitability and market value, what will you do with the truth?

Back in the day, Henry Ford remarked, “you can have the car in any color you like, as long as it is black.” We know that we don't live in that world anymore, and we've seen the wreckage from companies who lost market dominance from not listening to customers. A case in point is Motorola, who lost control of a market that they owned when an upstart from Europe started making colorful mobile phones. Do you think any customers told them they wanted more style, more pizazz? I'm sure many did, but no one was listening, at least no one with an orientation toward larger business issues and market drivers. But those are the competitive advantage benefits to listening, we are focusing here on the more pragmatic, near term objective of improving contact center performance.

Traditional methods of analyzing customer support grew because they were readily available and they generated simple metrics. These methods include the metrics generated from call center equipment, the analytics generated from CRM and other IT systems, QA montoring and surveys. They have their uses, but not for telling you what is really happening on calls and how it can be fixed. At best, they provide a trailing indicator of the performance of customer facing operations. You know, the metrics that look in the rear view mirror and announce, “yep, we ran over a customer back there, don't know how that happened.” They also have the pitfall of being one-dimensional: focusing on a measure like handle time just adversely affects other important measures, like customer satisfaction, retention, and first call resolution. And while it is true that QA monitoring is a listening technique, it raison d'etre is process conformance, not process improvement.

So if we want to improve the customer experience, and we acknowledge that this customer experience is formed by the real interactions they have with us (I call these "moments of truth"), the solution must involve getting inside those interactions. We need to be able to understand real interactions as they occur, observing real customer behavior. I'm not "in the moment" when I respond to a survey, I am just using my imperfect recollection.

So you want the truth? You can handle the truth: support costs can be reduced while also increasing retention and customer spend. But it is done not by chasing one-dimensional metrics (e.g. handle time, reported CSAT) but by improving interactions: their flow, sequence, key moments and events, and missed loyalty-building opportunities.