Research by specialist customer and change management company Customer Consulting Ltd (CCL) suggests that an average of 40 per cent of all calls to contact centres could be prevented – principally by overcoming ‘failure demand’. Failure demand occurs where an organisation fails to deliver clear and timely information - about a product or a service - to a customer. That failure generates a demand for customer service. Often that demand is registered via the organisation's customer contact centre.

Putting in place a strategy that eliminates failure demand will not just save 40 per cent of the costs of the contact centre and produce more satisfied customers – both of which are key goals for any company – but it will also improve staff morale and engagement levels.

Brian Jopling, associate director of CCL, explained: "Knowing that 40 per cent of what you do is unnecessary, wears you down. Staff morale and engagement levels fall - causing rising human resources-related costs.

“In practice, the way we reduce failure demand is to work with a client to identify the root causes and eliminate them,” said Jopling. “This often affects other departments outside the contact centre and so requires a strategic approach - enlisting Board level backing and involving such training activities as teambuilding programmes across the organisation - to achieve success.”

Developing Jopling’s viewpoint, Alistair Morrison, of Strathmore Business Consulting, commented: “Whatever the prevailing economic conditions, organisations must continue to remain competitive – gaining and keeping customers. So they need to develop training programmes where the accent is placed on ‘learning smarter’. This means building an organisation’s performance and competitiveness by gaining ‘employee engagement’.”

Employee engagement is a deeper commitment to the success of the organisation than mere ‘employee motivation’ and is built on effective internal communication. Morrison believes that employee communication needs to be planned, kept fresh and provided for each audience in an appropriate ‘voice’ – combining consultancy, internal communications, training, self-paced learning materials and various performance support tools and techniques.

Simon Rustom, managing director of CCL, which works on customer and change management issues with train operating companies (TOCs) such as First Great Western (FGW) and South West Trains; financial services specialists such as Aviva, Legal & General, Zurich Financial Services and Riyad Bank; logistics companies such as National Express and Aer Lingus, and others including BUPA, Orange, Anglian Water and Mothercare, commented: “Currently, we’re working on helping TOCs’ staff to adopt a relationship-based approach, rather than a transactional-based approach, to customer service. In particular, communications between the TOCs and Network Rail, which controls the UK’s railway tracks, have not always been at their most efficient and effective – and this has implications for the railways’ customers.”

Successful customer relationship management – and customer retention – depends on offering the right product or service at the right price in way that makes it easy for the customer to both buy from, and trust, the supplier. The problem is that companies tend to be happy spending money on brand advertising, channel incentives and direct sales – but see customer service and retention as a cost rather than as an investment in their future prosperity.

Rustom explained: “In a recession, companies tend to ignore the old adages – that it’s more cost-effective to keep a customer than to find a new one. So they tend to devote a high proportion of their resources to finding new customers, rather than spending their budgets on keeping and growing existing customers. Yet, our experience – and that of our client base - over the years has been that, if you give your customers a high level of service, you find opportunities for cross-selling, up-selling and so on.”

Jopling added: “Moreover, many companies believe their customers want to be promiscuous – but, in reality, that’s not true. Customers tend to view their relationship with a provider like a marriage rather than a one-night-stand. Of course, this means that both parties in the relationship need to work at cementing their commitment to each other.”

“Customers are always prepared to put in some effort to make the relationship work. They are more prepared to consider buying more products and services from the same supplier because they want to believe that they made the right choice of provider in the first place,” he explained.

“Many people like convenience, simplicity and the ease of having to deal with only one company. That’s why Tesco is doing well at the moment – because it is offering its customers a wide range of products and services, from food to motor insurance in a one-stop-shop at a competitive price.”

“Customers want to be loyal – so companies should make it easier for them to be so,” said Rustom. “It’s not just about having loyalty schemes, although these can help. It’s really about helping customers to ‘buy in’ to the company’s values as well as its products and services.”

This means reducing failure demand. In turn, that means devoting more resources to improving workers’ knowledge of the products and services that their company offers;  improving the degree of teamwork, not just within departments but also between departments in a company, and training staff to communicate their company’s values to customers through exemplary standards of service.

Rustom believes that, "Failure demand results in more costs for the business because of the time and resources spent in responding to additional customer enquiries and complaints as a result of processes that do not work. Not only are these costs hidden within the operating costs of the contact centre but they mask the real problems that the organisation is facing in not meeting customers' wants and needs first time.”

By Bob Little

For over 20 years, Bob Little (http://www.boblittlepr.com) has specialised in writing about, and commentating on, corporate learning – especially e-learning – and technology-related subjects. His work has been published in the UK, Continental Europe, the USA, Singapore and Australia.  He blogs at http://www.hotdigits.co.uk/cgi-bin/diary8/journal?user=bob  and you can contact Bob via bob.little@boblittlepr.com

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