Recession 2016?? So, customer service??

The global financial situation has been fluctuating since the dawn of the 1st day in the new year (2016). And the analysts predict a far more tougher recession in 2016 than the one we had in 2008. I am not a financial expert to validate the recession forecast nor I want a recession in 2016.

BUT…if we were to face a recession in 2016…of course, tough days are ahead of us. Both personally & professionally. Being a customer service guy and experiencing the world of customer service during recession twice (2003 & 08), my gut says its time for the customer service teams to be ready. Ready to deal with the challenges that will be posed to the customer service teams across organizations in times of financial crisis.

We know it very well from past seasons of financial crisis….when it’s time to cut costs, customer service and contact centers hit the financial radar much before any other part of the organization (unfortunate) given majority of the headcount in the organziation comes from customer service and also due to the fact that CS teams are considered as mere cost centers in most places. And we also know that its not a wise long term move to chop headcount from customer service just for a quarterly financial gain. But, we are not going to debate that here. This is about having a pro-active game plan to protect the customer centricity while driving increased efficiency during tough times of recession and doing what’s right for the business.

Obviously, the top-down ask is going to be headcount reduction in customer service teams to save $$$. No doubt, this will challenge your fundamental ability to serve your customers. AVOID the situation of blanket headcount reduction process without a logical strategy. So, whats the game plan to give back efficiency and cost savings to the larger organization in times of financial crisis as well as preserve the customer centricity and continue providing an excellent customer experience from your contact centers?

Two folded approach;

  1. Increase efficiency without impacting experience: Look for ways to eliminate waste without impacting the service to your customers. WIN:WIN
  2. Transformational measures for effective communication with financial executives: Use strategic and innovative measures to quantify the “real” cost avoidance / savings rather than conventional measures.

Lets take this one by one.

1. Increase efficiency without impacting customer experience: Identify efficiency opportunities that helps with quantifiable financial savings without impacting the experience of the customer. For example;

  • Can you eliminate email support (the lowest efficiency channel) and significantly increase chat support (the highest efficiency channel)?. Conventionally chat as a support channel has a higher customer satisfaction and the employees are able to manage multiple chats at the same time for increased productivity. This would also help increase efficiency significantly while improving customer satisfaction? WIN:WIN?
  • Do your customers really need 24/7 support or do your customers prefer getting a great service during business hours. I have seen teams have 24/7 support just for the sake of it when the customer base doesn’t really need it. Just keeping your shop open for 24 hours is not of value to the customers. So if your product needs a 24/7 support then so be it, else this might be time to re-evaluate. This can help put some $$$ back without losing focus on customer experience.  One example I can think of is; there was a detergent manufacturer who used to provide 24/7 customer support (not anymore).
  • Repeat caller reduction: This could be another area that can drive significant savings while improving the experience of the customer. According to a general statistic, 15% of contact center volumes are due to repeat callers. And a key driver for that is inaccurate resolution provided during the first contact and a low first time resolution rate. Identifying those top repeat call drivers and reducing them will help the balance of cost reduction while improving customer experience.
  • Offshoring strategy: This is the magic wand that most companies use to drive signifiant savings. “Move it all offshore!!!”. This has a bigger backfire risk if there is no underlying long term strategy.  The best way to quickly adopt an offshoring model, drive down cost without impacting customer experience is to focus on moving your non-phone based customer service channels to offshore centers while retaining channels like phone and video support onshore. This will help reduce your cost while utilizing your onshore resources and offshore base more effectively. Also give back organziation some quantifiable cost savings.

2. Transformational measures for effective communication with financial executives: This is a crucial one during tough financial seasons. You can present pretty slides and charts all day long talking about how you increased efficiency while balancing customer experience. But the organization / finance leaders are going to need more from you and the customer service teams. It’s important to tie your efforts to transformation and larger financial measures than just the $$$ savings and the efficiency metrics improvement. Below are two of my favorites;

  • Customer service as a % of revenue: This is a powerful financial exec metric that ties your cost center to the direction the larger organziation is moving. This can also help you and the rest of organization understand the actual financial impact of customer service on the overall organziation beyond just what is the budget and how much is being spent.
  • Cost per customer satisfaction: Cost per call/email/chat is a very commonly used measure, but do you know what is your cost per customer satisfaction?. Ultimately, its not about how many calls you are handling but what matters is how many customers are satisfied and what was the cost for that. This metric can sometimes be an eye opener, especially in terms of offshoring decisions. ‘Moving it all offshore’ models can provide a large artificial savings back in to your balance sheet but in reality you might end up spending more to satisfy your customers which might take away the benefit of offshoring in the first place. This metric can help keep a sanity check on your offshoring decision (Provided you have a good / statistically valid customer satisfaction surveying methodology)

At the end of the day, these recommendations hold good irrespective of the health of the organziation’s financials or market situation. The sign of a great customer service organziation is to effectively balance between customer experience and cost efficiency irrespective of the financial dynamics. Thinking and striving for that balance will always help stay ahead of the game within as well as outside your organziation.

About the Author: For more information, contact Balakarthik Venkataramanan at LinkedIn Profile:

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