Customer service as a revenue center

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Traditionally you can view customer service as either a cost center or a profit center. If you treat it as a cost center, you’ll try and minimize costs, and likely make customers unhappy as a result. If you view it as a profit center, trying to upsell callers, you’ll likely also upset your customers. Both approaches require a delicate balance between cost or profit and lost customers.

There’s another approach, and one that works well in a crowded market: view customer service as a revenue retention center. I called American Express the other day with a complex problem. The agent who initially fielded my call quickly realized that someone with greater expertise was required and I was immediately transferred. The new agent was helpful, and took the considerable time needed to understand and research the matter and initiate a solution. She was empowered to dig all around in their system and to solve my problem. In addition, she was friendly, professional, and good-humored. I got my solution and didn’t resent the time I spent on the phone with her (which was a while). This is why I stick with AMEX.

It costs AMEX more money to provide that kind of service: to hire better than average people and to train them. But they get happy, loyal customers who don’t even pay a premium for the AMEX service since the card (at least my business card) is free!

There’s a lesson here: cost cutting isn’t always the answer; increasing value to customers is often a better strategy.

Ralph

Republished with author's permission from original post.

Ralph Mroz
Since 1978, Ralph Mroz has managed or implemented nearly every step of the marketing process. His experience spans hands-on tactics to corporate strategic planning, encompassing large corporations, small companies, as well as start-ups.

1 COMMENT

  1. Great argument for customer service being a revenue center versus a cost center. And, you used one of my favorite companies as an example: American Express.

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