Most businesses follow at least one common rule: If you want to make money, you’ve got to spend money. The way they do so, however, may overlook something really important.
Lots of companies will allocate financial resources to hire and train salespeople, as well as the dollars required for tools such as a CRM that help them gather and use important data about customers and prospects. They’ll have no problems writing a cheque or using their credit cards to spend on advertising and other forms of marketing. Customer service, however, tends to be thought of as a necessary evil, where any and all investments should be as limited as possible so as to put more into the things that are seen as actively contributing to business growth.
It’s not that companies don’t want to help their customers or address their issues. It’s just that customer service is so often thought of as the area where mistakes get sorted out, or where complaints get addressed.
What if, instead, customer service was seen as a profit center rather than merely a sunken cost? How might small and medium-sized businesses rethink the way they spend on it -- maybe even giving it a budget of its own?
The exact calculations for a customer service budget will depend on the nature of the SMB in question, but here’s one way to start the process. Beyond focusing on the notion of service and support, some organizations now talk about a budget for “customer success,” recognizing the long-term value of not only ensuring you generate sales, but that those sales lead to happy after-sale experiences. In the Age of the Customer, you could argue that nothing is more important.
Either on your own or with your team, think through some of the following variables to determine what kind of investment your customer success strategy will require.
Hours Spent Onboarding
While it tends to be a term that’s more popular in the tech sector, “onboarding” refers to the length of time it takes for a customer to get up and running with a product or service. This means everything that happens once they’ve taken something out of the box, downloaded something or signed up for a service. It lasts until the moment when they are essentially doing whatever it was they wanted to do before they made the purchase, and that they can be more or less left to their own devices while doing so.
When companies don’t invest in onboarding as part of their service strategy, it means they face an onslaught of phone calls, emails, social media messages or in-person visits from customers who simply aren’t sure of how to take the next step. A strong customer service strategy allocates budget dollars to self-service tools to assist in this area, whether it’s online documentation, a tutorial video or a chatbot. For more complex kinds of products and services, there might be specific staff dedicated to onboarding so that troubleshooting and other questions don’t overwhelm the rest of the service team later on.
Customer Churn Rate
It can take a lot of time and effort -- and money -- to win over customers. This includes the dollars invested in marketing, as well as any and all of the expenses a sales rep puts into reaching out and making their pitch. When it comes time to sell to that same customer and they refuse to purchase again, it means the sales and marketing team is essentially starting all over again to find fresh prospects.
One of the biggest contributors to customers “churning” or walking away from a company is to improve the experience they have in the latter stages of their buying journey. If it’s fast, easy and pleasant to deal with any problems they have with a purchase, in other words, they’re far more likely to be open to a follow-up conversation with a rep. This is one of the most measurable ways in which a company can justify and optimize the amount they allocate towards a customer service strategy.
Employee Turnover
Customer service staff work just as hard as those in sales and marketing, but the level of negativity and stress they encounter can be even higher than what their peers in other departments experience. It makes the risk of burnout high, as well as a propensity to look for greener pastures and quit for a new job. If that happens a lot within a given organization, it means even more will be spent having to train new hires, which in turn can increase the time it takes to serve customers and leads to greater churn.
Imagine the difference, on the other hand, when customer service teams are armed with tools designed to make them -- and customers -- more successful. This can include tools that make it quicker and simpler to look up account history and other information, or tools that route a customer question or complaint to the best source of expertise. Or it could be self-service tools that ensure staff are only getting involved in the areas that offer them higher-level but fulfilling issues to address.
Final Thoughts
Companies may not have defined a specific budget for customer service in the past because developing it seemed to be a bit of a mystery. After all, how do you know how much care and attention your customers will need if your products and services are well-designed?
The difference today is that technology allows us to track much more data than ever before, which can not only improve the way we serve customers, but also analyze the resources that go into serving them. That means a customer service budgeting process can be just as data-driven as the techniques you use to execute your customer service strategy. The more thoughtful you are about this process, the more likely you are to find that investing in customer service is some of the best money you’ll ever spend.
