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.


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. 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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