The Formula for Success: Improved Quality = Lower Costs and Higher Revenue

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On August 27th, the Associated Press put out a short story about Sprint cutting 800 customer service jobs. Contact center job reductions are not exciting news, but the justification for these specific cuts is noteworthy. Sprint is quoted as saying, “As customer satisfaction improves and, in turn, calls to customer care decrease, our staffing needs in this area decrease.” The point is that service quality matters, at each step of the customer journey. Improvements in these areas can yield substantial cost savings, as Sprint has proven.

Contact centers, customer service departments, back-office operating environments and most other people-intensive departments are constantly being asked to reduce operating costs. The obvious way to realize cost savings is to reduce headcount. The problem is that if this is done without concurrent changes in processes and systems, it often hurts service quality, service delivery and the customer experience. For a contact center, this means that customers have to wait longer to have their call or email answered. Fewer sales or service people in a retail branch mean that prospects and customers have to wait longer for help. But the situation gets worse. Cuts made to improve productivity typically result in the remaining people being asked to handle the same amount of work with fewer resources; as a result, employees rush customers and prospects, and pay less attention to detail. This creates a cycle of poor service quality, frustrated staff and disappointed customers. It’s a phenomenon that we’ve all seen and experienced too often, as it is disappointingly common.

This is not to say that companies should not strive to improve productivity. They should – but there is a right and wrong way to do it. Sprint, finding itself caught in the cycle of poor service and quality, as reflected in their all-time-low customer satisfaction ratings in 2008, decided that it was time for change. Senior management finally determined that it was time to fix their service problem. Sprint made many substantial investments in quality-oriented applications in their contact centers, retail branches and other operating departments. They trained and empowered their staff, and have prioritized changes that enable employees to resolve inquiries and issues during the first touch. While there is still substantial room for improvement, as reflected in Sprint’s recent customer satisfaction scores, they are now being rated similarly to other US cell phone providers.

Lessons Learned at Sprint

There is a lot than can (and is) being said about Sprint’s service turnaround, but here are some of the most significant lessons learned:
1. It is possible to change and improve the service culture of a company, but this process must start at the top and be supported by all employees.
2. Service quality matters during every step of the process.
3. It is essential to track and measure what happens to customers and prospects during every touch point in the customer journey.
4. Companies must look at the service experience from the perspective of customers, who see the company as one organization and do not care which department is to blame.
5. Employees should be rewarded and recognized for doing the right things.
6. Investments should be made that enhance quality and the customer experience while improving productivity and reducing operating costs.
7. Outstanding service and support will reduce customer and agent attrition.

Sprint has proven that improvements in service quality and investments in staff can yield substantial cost savings and improve a company’s bottom line. As importantly, the right investments will enhance productivity and reduce operating costs while improving customer retention and increasing sales.

1 COMMENT

  1. Donna,
    Thank you for sharing this fantastic case study of how customer service can hit the bottom line in a positive way. Too often companies look at efforts as an expense instead of as a revenue generator.
    As you have pointed out, nothing can hit the bottom line either positively or negatively more significantly than a firm’s customer service focus.
    Teresa Allen
    Author: Common Sense Service: Close Encounters on the Front Lines
    http://www.AllenSpeaks.com

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