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Could an idea as old and familiar as good customer service really be a new challenge for business? "You bet," according to a new research study. The report concludes that because the market for many goods and services has become increasingly commoditized, over crowded and price conscious, customer service has become critically important as a potential source of strategic differentiation and profits.

The study calls for a major shift in thinking about how companies should interact with their customers. They must become, "empathy Engines," it urges, and execute an organization wide approach to providing service to customers. The challenge for most companies, however, is that they have an incomplete understanding of what constitutes good customer service and, as a consequence, their interactions with customers often leave a lot to be desired, the authors contend.

Called, "The Empathy Engine: Turning Customer Service into a Sustainable Advantage," it was conducted by Michaels Opinion Research and sponsored by Katzenbach Partners LLC, a management consulting firm. It is based on interviews with customer service executives from companies across a range of industries, which are widely viewed as leaders in providing customer service, along with a telephone survey of more than 1,000 American consumers.

By identifying what these leaders are doing right, the report draws attention to where some companies are falling short. The report also lays out recommendations on what companies should be doing to improve, so they can reap the benefits of delivering great service to their customers on a consistent basis.

"What we confirmed by talking with some of the best is that great customer service can't be delivered through simple algorithms, such as sripted call center responses. Instead, it takes a broader, more empathetic response: A sustained effort by every employee to think about how what they do ultimately impacts the customer's experience," says Traci Entel of Katzenbach Partners and one of the report's authors.

Some widely accepted customer service best practices actually undermine the customer experience, according to the report. Following are some of the myths of customer service.

• Believing that the customer always comes first. Instead, managers should focus on putting their frontline employees (those who interface directly with the customer) first, so that they, in turn, have the resources and freedom they need to care for customers.
• Basing call center service on scripted responses. Scripts, do more harm than good because they reduce the frontline's flexibility in responding to customer problems and requests. Frontline employees need the flexibility and resources to resolve customer requests as effectively as possible.
• Thinking of customer service as a cost center. Instead, companies should look at customer service as a potential wellspring of innovative thinking and profits.
• Relegating customer service to organizational silos. Companies should instead place the responsibility for customer service on the company as a whole, involving not only the frontline, but managers and senior executives.
• Believing "Wow!" experiences show customer service quality. Relying on one off incidents of special treatment as the tool for building customer service is bound to fail, according to the report. Instead, companies should focus on delivering sustained high quality outcomes with a customer every time.

The consumer telephone survey component of the report indicates that virtually all American shoppers, believe customer service is an important factor in where they shop. This is almost identical with the 95 percent of respondents who said price is an important factor.

Furthermore, more than three out of five of consumers polled say they will not make future purchases from stores or other service providers where they feel they have had a bad customer service. This is, "Pretty clear evidence that companies that don't succeed at providing consistently high quality service to their customers are going to pay a heavy price in the future," says Entel.

"We've introduced the term 'Empathy Engine' to capture a way of thinking about and organizing a company so that it can, as an institution, put empathy into action via its customers," she says. Companies that want to improve their delivery of customer service need to become, "Empathy Engines," in which not only frontline employees, but also managers and senior leaders, work together to collectively stand in their customers' shoes in order to better understand and address customer needs.

Rather than thinking about customer service as a single interaction with the customer, the Empathy Engine takes a holistic approach to customer service. Creation of an Empathy Engine calls for the following:

• Understand and resolve customers' problems at minimum cost to customers.
• Create a company wide culture of empathy.
• Empathize with and give decision making power to their frontline employees, so they can focus on generating excellent customer service.
• Sustain a service ethos through the company through storytelling.
• View the front line as a hotbed for innovative customer service.
• View customer service as a profit generating activity and important contributor to shareholder value, rather than, "just a cost center."

 "Becoming an Empathy Engine requires a major commitment from the entire organization to see the world from the customer's perspective, and to act accordingly to deliver a consistent, high quality customer experience," says Sarah Grayson, a Katzenbach Partners' consultant. "But, in our experience, the benefits, in terms of increased customer loyalty and business, and enhanced employee satisfaction, are well worth the costs of getting there."

Article ID: 79