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Leadership and Keeping Your Customers
Written by: Ray MillerArticle Overview: This article presents a brief real situation, case study which illustrates the critical importance leadership plays in customer retention, employee retention, customer loyalty and profitability.
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Free Download - The Consequences of Poor Service in the New Economy By Ray Miller |
Leadership and Keeping Your Customers
Jeff was desperately trying to fix it this time. He knew the risks were incredibly high. If he didn't handle this situation correctly it would mean the loss of one of his most valuable clients. He knew that he had to resolve this issue once and for all. The problem had happened before and this was his last chance to get it right.
Let me back up a little. Jeff is a Client Service Representative for a large financial institution. He's been in this role for almost three years and has a reputation with his clients for being the go-to-guy when there is a problem. He prides himself on the care and attention he gives to his clients. He always tries to exceed their expectations. Now back to our story...
During the call with his client he gets an idea regarding what might be the cause of the problem his client has encountered. He is about to ask his client some questions to verify if he is correct, when his boss passes him a note which says "You have been on this call for too long and the phone queue is backing up. Finish the call and get back to work!"
Here's a little more background. Jeff's boss, we'll call him Bill, is a real stickler for efficiency and has a priority for ensuring call wait times are as short as possible. He tells his staff that the quality and number of calls are both extremely important but seems to watch call times like a hawk. A few days earlier he told Jeff that he was slower than others in the Call Centre and Jeff had to increase his volume of calls handled.
Now on with our story.
Jeff asks his client to hold for a moment and then mentions to his boss that this is a really important client and that he is trying to resolve a recurring problem. Bill tells Jeff that as far as he's concerned all their clients are important and that he should call his client back after the lunch hour when things are not as busy. Jeff says to Bill, "You don't understand I have to fix this now!" Bill replies "You don't understand. Your job is to handle more calls than you do. Tell your client he is a priority but that you will call him back at 2:00PM." Jeff says "But this is a serious situation!" To which Bill replies "So is the backlog of calls in the queue. Do It!"
This is a real situation. Jeff recounted this story at one of our Customer Focus workshops recently. So what did Jeff do? What did the client do? What about Bill? I will tell you at the end of the article.
Here are a few background facts that you need to know:
- The client problem was something that recurred 3 previous times. The cause of the problem was the result of a processing and record keeping issue which was the responsibility of another department. While the other department was aware of the problem, fixing it required a considerable amount of reprogramming work which was not allocated for in their budget. The manager of the department could have diverted money earmarked for the installation of new carpet and artwork in their area but didn't want to sacrifice this in favor of fixing the processing problem. He apparently did not think it was that important since the Call Centre was aware this problem could happen and knew how to fix it when it occurred. The department could also not get an interim approval to spend the money and was advised to try and include it in the next year's allocation. The next budget period was eight months away.
- The reason Jeff was not handling as many calls from the queue was that, because of his reputation for significant customer focus, clients were calling for him specifically and in most cases their problems required considerable time to resolve.
- The primary reason for the increased call volume at this time of the month was the result of other clients encountering a similar problem with their records.
- Bill's last performance review was satisfactory but he got chastised for the higher than permitted call wait times and he was told to improve this. The quality and level of client satisfaction related to these calls was never mentioned.
You can have the best service providers on the planet working for you but unless leaders provide an environment where service excellence can flourish, you will never build a good service reputation. There is irrefutable evidence that customer retention and loyalty are directly related to the quality of service they receive. And in this economy, customer expectations regarding service are higher than normal.
So what are the leadership issues lacking in Jeff's story?
First of all, there was a definite lack of internal service evident. The processing department's manager did not understand the potential negative financial consequences of his decision not to fix the problem nor did he see this as his concern. Given the volume of repeat calls about this issue, the Call Centre Manger did not do enough to ensure that this process problem was made a priority and fixed immediately. It would seem that he also did not realize the financial consequences of not taking action. The costs involved here included; the cost to fix the problem, the cost for Call Centre staff dealing with this customer issue rather than other important calls, the cost associated with losing business, and the cost associated with acquiring new business to replace the business lost.
A customer-focused leader would have the forethought to make the other manager aware of the cost of inaction and if necessary escalate this to the highest levels and fight for the budget needed to fix the problem. A customer-focused leader would work with other managers upon whom his or her department relies to build strong internal partnerships which focus on correcting processes which cause client problems and which focus on how they can work together more effectively for the benefit of customers.
Jeff is a rare breed. He's the kind of Client Rep that Customer-Focused leaders dream of having. His customers trust him and rely on him. In fact the customers in this story were loyal to Jeff not his Company. A customer-focused leader would recognize Jeff's talents and utilize his knowledge and skills to coach other call reps in how to deal with customers and resolve problems. Then there would be more go-to-reps. instead on relying of Jeff alone.
In this case Jeff's capabilities were ignored and the priority became the number of calls he handled. Customers don't care about how many calls are processed in an hour. They only care about getting their problem fixed fast and permanently. A customer-focused leader also recognizes that how the call is handled and how quickly problems are resolved are more important than call wait times. If wait times are an issue, a customer-focused leader will analyze the cause of the call traffic, and take actions to eliminate the root causes of problems and/or staff the call centre appropriately when increased call volumes are expected.
Bill's boss is also to blame. While Bill initially told his staff that quality and call volume were both important, clearly Bill's boss was only interested in call volume. The lack of commentary about it at Bill's last performance review is pretty good evidence. You may have heard the expression, "You get what you measure." In truth you actually get what you pay attention to. Your employees will adopt your priorities at the expense of everything else. Why? Because at their next performance review they don't want to be chastised. In this story, even if Bill's boss believed that the quality of calls was important, his actions in only pointing out the unacceptable level of call wait times clearly demonstrated to Bill what was most important.
Exceptional service requires managers and supervisors who are customer-focused leaders. Your customers require managers and supervisors that are customer-focused leaders. And in this economy so do your shareholders, or business owners. No one can afford to lose customers because of a failure in service quality.
So what happened to Jeff?
I met Jeff while conducting one of our customer focus workshops at a competitor of the financial institution where this story occurred. Jeff got fed up and left that company. In fact he was approached by the boss of a friend of his who worked at the competitor. Jeff was put is charge of coaching call centre reps to enhance the service experience of their customers. A couple of his clients from the other company also defected to the new firm.
What about the client?
He closed his accounts and when he found out that Jeff had relocated he opened an account with Jeff's new Company. This included his $1.4 million in business.
What about Bill?
Last I heard Bill was still with the same institution. I also heard through the grape vine that they have lost quite a few clients. I called the call centre a month ago and had to wait for 12 minutes. Apparently they had to let a few call centre staff go because of budget cut backs. Apparently that process problem has not yet been fixed but the new budget period is now only a couple of months away.
If you want to find out more about Customer-Focused Leadership please read our article entitled What is Customer-Focused Leadership which you will also find on this website.
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Article Tags: customer loyalty, customer retention, customerfocused leadership
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About the Author: Ray Miller RSS for Ray's articles - Visit Ray's website Ray is Managing Partner of The Training Bank, an international training and education firm. We specialize in classroom based and online training in Leadership, Management and Supervisory Skills Development, Customer Service, Customer Focus and Customer-Focused Leadership training. Ray is author of That's Customer Focus and The Customer Focus Companion. These exceptional books help readers develop and implement a highly effective Customer Focus strategy. He is also author of Management Training By the Book I and Management Training By the Book II. Ray has been working with organizations, large and small, for over 20 years. "Our business is global. We have clients in Canada, the USA, the UK, Europe and the Pacific Rim. Our clients use us because we create training that actually works and gets results. We focus not only on providing the very best content but also on embedding the training into participant day-to-day performance." Our books have been purchased by individuals in over 50 countries as well. Click on the link provided here and you can complete our How Customer Focused are You online assessment. This will help you determine your company’s current level of Customer Focus. Click Here to get you access code. For more about The Training Bank, go to www.thetrainingbank.com. or visit www.thatscustomerfocus.com Click here to visit Ray's website Customer Focus |
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