Good Customer Service Part 1

After my posts about the PayPal and Yahoo customer service failures hit, I got a few messages effectively telling me that “good” customer service isn’t possible, and asking why I think differently (since I clearly do). If you were one of those people, I’m glad you asked – and even if you weren’t, you might want to stay tuned, because what follows is a multi-level explanation of how customer service can be made to work. At this point I’ve had about 10 years of customer service experience, plus another 7 years of management consulting and 6 of graduate school, and I’ve noticed a few things that might help settle this question. Just keep in mind that I said good customer service was POSSIBLE; I never said it was cheap, or easy to accomplish…

At the first level of customer service, everything depends on the customer service representative (hereinafter CSR), and specifically on the training, support, and authority that is given to those individuals. Most companies don’t bother with any of these requirements because of the turnover in CSRs; if people will move on (or get fired) after a few months, there is no point in spending money training them – and they certainly can’t be trusted to make any decisions. This usually comes down to wages: if all you are paying the CSRs is minimum wage, you can’t really expect them to stay on the job once a better position opens up, or to care much about the job in the first place. Where this becomes a problem is when the low quality of your CSRs (and the low quality of the service they provide) starts to cost you customers, thus increasing the market share available to your customers and reducing your own…

This isn’t to suggest that you will need to pay MBA wages to get good CSRs; offering $3 per hour above local minimum wage ($7.40 in Michigan as of this writing, so $3 higher would be $10.40 per hour) will get you your pick of entry-level hourly personnel, and offering double minimum wage (still less than $30,000 a year) will bring in applicants with college degrees and years of work experience. But given the cost of recruiting, screening, background checking and training new personnel, any increase in employee retention generated by these modest wage increases will pay for itself very quickly. And if you can offer even rudimentary health benefits you can attract and retain some very good people without any additional effort…

Once you’ve got your first-level CSRs, the next critical step is training them, and specifically teaching them what a customer is and is not. Someone who wants to give the company money in exchange for goods or services is a customer; someone who might give the company money in the future (or encourage other people to do so) is a potential customer; somebody who wants the company to do something that will cost money and provide no benefit whatsoever is not a customer. A CSR must also have enough knowledge of the product or service to answer questions and handle minor problems, the authority to correct problems or issue refunds, and the ability to refer anything the CSR can’t handle to higher echelons that can resolve the issue. Exactly how much knowledge and how much financial responsibility a Level 1 CSR needs will depend on the product or service offered and the industry you are in, but they can’t be expected to handle anything really involved or placate anyone who is truly irate (e.g. swearing, cursing or threatening). That’s where the second echelon comes in…