Attitudes to ROI from customer service must change says ICS

Organisations must fundamentally alter the way in which return on investment in customer service is measured and reported, according to major new research from the Institute of Customer Service.

The publication, return on investment in customer service the bottom line, is the result of 12 months quantitative and qualitative research by the Institute and Ashridge Business School.

While the research finds a weight of evidence proving the link between customer service and profit, it warns that organisations across all sectors of the economy are still using the easier to measure indicators, such as customer satisfaction.

 “To position return on investment in the boardroom and establish customer service as a key strategic issue for all organisations, we must shift customer service away from just measuring simple customer satisfaction into much more complex areas, such as how customers perceive the value of their relationship with that organisation,” says Jo Causon, the chief executive of the Institute.

The research consisted of an online survey, case studies among some of the UK’s best known brands, including 02, Eurostar, Kleinwort Benson and T-Mobile, and a review of empirical research into ROI.

 It found that 81% of respondents believed that gaining an understanding of service ‘from the customers’ viewpoint’ is very likely to lead to a positive return on investment, with 74% believing that gathering and acting on customer feedback will produce real business ROI.
 
The work also indicated that organisations needed to place more value the contribution of frontline customer facing staff who would become more important in the future.

 “This should inform recruitment as well as remuneration of frontline staff,” said Jo Causon, “Currently they are under-rewarded compared to the impact they can have on financial performance and overall business efficiency.”

Cheryl Black, customer service director at 02, one of the report’s sponsors, added: “It is all too easy to say what’s good for the customer is good for the business and leave it at that. This report challenges us to start thinking about how we measure changing customer behaviours, and the role our staff have to play in it.”

The research was sponsored by 02, BT wholesale, and South Yorkshire Passenger Transport Executive.