Customer service plays a critical role in maintaining customer relationships, yet it often struggles for recognition within the larger organization and is often painted as a cost center. Service leaders can counter this narrative and demonstrate the value of their organizations with strategies that deliver quantifiable metrics or expose other parts of the business to the information and customer experiences that service encounters daily.
“ Service leaders can teach the value of service to others by sharing information, experiences and data”
Gartner research found that leaders can take two congruent approaches to demonstrate the value of the function: Collaborative and data-driven. Or they can combine the two. “There is no single right way to demonstrate value, but considering these two approaches will help you decide which will be most beneficial,” says Sarah Dibble, executive advisor at Gartner. “Both approaches have benefits, opportunities and trade-offs.”
Collaborative: Prove value through understanding
Through collaboration, service leaders can teach the value of service to others by sharing information, experiences and data. This approach is relatively inexpensive, takes the least amount of time to implement and provides small victories that can add up over time. These programs rarely guarantee long-lasting results, though, so they may have to be repeated every time stakeholder support or buy-in is needed.
“Collaborative strategies provide mutual benefit to all parties involved,” says Lauren Villeneuve, executive advisor at Gartner. “Here you may illuminate an ‘a-ha’ or eye-opening moment on the value of the service organization and how that may affect other areas of the business.”
“ Collaboration can also leverage service’s most valuable asset — voice of the customer”
To demonstrate value to other departments, some organizations engage in shadowing initiatives that enable employees to experience service firsthand. This exposure can also help to increase coordination and reduce inefficiencies. For example, regular coordination with IT partners enables service reps to share when technology tools and resources are either cumbersome or frustrating to use in live situations. This exchange could lead to changes in IT technology development or purchases.
Collaboration can also leverage service’s most valuable asset — voice of the customer (VOC). A customer role-play could show, for instance, when customers are confused by marketing campaigns or annoyed at product features. VOC insights can directly lead to remediation that reduces contact volume and provides value to business partners as they plan future product launches, ad campaigns or website changes.
Realistic or data-driven: Prove value through metrics
“In contrast to the collaboration approach, the data-driven approach focuses on individual projects that highlight financial outcomes,” says Villeneuve. “These projects are centered on the assumption that leadership cares most about the financial impact that service has on the organization.”
Service leaders can use metrics to show the return on each dollar invested in service, and assign monetary values on aspects of the customer experience. For example, metrics can look at loyalty behaviors and customer repurchase rates and place a dollar value on high-quality service interactions. This reinforces the value of service provides that encourages customer loyalty or prevents customer defection.
“ Most organizations will make trade-offs when deciding which strategy to pursue, and will end up combining the two approaches to whatever degree works for them”
Data-driven strategies require significant resources, including funds and staffing, and so will likely need leadership buy-in and take longer to get off the ground. Given the large upfront commitment of time and money, some companies ultimately may not be satisfied with the return on investment.
Another data-driven opportunity is service-to-sales programs, in which service interactions are used to drive cross-sell or upsell opportunities and create new revenue. To succeed, organizations have to provide service reps with the appropriate coaching, tools and culture to take advantage of opportunities to upsell or cross-sell. This might require a fundamental change or heavy investment from the organization, but can help change the perception of service purely as a cost center.
Combine the two
Service leaders will determine the most appropriate strategies based on their own situations. Which approach will leadership likely respond to best? What resources are available? How urgent is the need to demonstrate service value? Most organizations will make trade-offs when deciding which strategy to pursue, and will end up combining the two approaches to whatever degree works for them.
This framework illustrates the spectrum of realistic versus collaborative strategies, mapped by the amount of the resources needed.
“It’s not a one-or-the-other approach,” says Dibble. “There are strategies that bridge the two approaches along the spectrum.”