In a recent article by Jo Causon, Chief Executive of the Institute of Customer Service, she points to the fact that many organisations have made a decision to reduce the amount of customer service training that they are planning to undertake this year. ICS research points to the fact that 30% of organisations have already made cuts to their customer service training budget and 21% have shed customer-facing staff in 2011.
Jo states that this “slash and burn approach” to reducing expenditure could result in long term damage to customer relationships. This comes at a time when marketplace competition is intense.
I certainly share this view, and Jo is clearly a person after my own heart as she highlights a very pertinent, yet often overlooked fact. In the short term, the expediency of making staff reductions and reducing customer service training can often result in creating major long term issues. I also concur with Jo’s message for UK organisations which is that they need to stay focused on their long term customer service vision and continue to develop a team-based culture in order to win and retain customers.
Recessionary pressures has resulted in consumers re-evaluating how they spend their disposable income and they are becoming far more considered and discerning with regard to where and how they conduct their business.
A particular example of changing customer buying patterns was evidenced by the recent high profile industrial dispute at Royal Mail. Considerable long term damage has been done to their overall credibility and which will inevitably result in businesses and consumers continuing to re-evaluate how they communicate and ship parcels.
A recent research study undertaken by ICS highlights the fact that companies with a reputation for service excellence can generate 24% higher profit margins than their competitors who lack that same level of customer endorsement. In addition, organisations with a good reputation can achieve up to 71% more profit per employee.
There are many examples of the pitfalls of focusing on the training budget as one of the first places to cut costs. This is particularly relevant to the High Street, because in the present business environment there is fierce competition in the battle to maintain and gain market share.
I recently experienced the harsh reality of the downside of an organization reducing staff numbers. Whilst having dinner at a local Italian restaurant chain it soon became apparent to me that the restaurant appeared to have only one waiting staff member. With at least six other tables occupied, the poor waiter was doing his very best to deliver a good service and keep everyone happy.
At the time we were with our young daughter and as she was ready to eat immediately we ordered a child’s pizza as soon as we were seated. However, the pizza took around half an hour to come, which, if you have a young child, you’ll realise that it’s not much fun when you have a hungry and impatient child with you. With frustration building, I could see the pizza finally sitting on the counter, but going nowhere fast. So, with some trepidation, but only intending to help out, I went up and collected my daughter’s pizza. And to my astonishment, I was admonished sternly by the manager who incidentally, had just appeared the very first time!
We then had a pleasant meal and although the service continued to be slow I could see the waiter was giving his all to provide good customer service. However, my “chilled” attitude was not quite shared by others. Three of the six tables got up and walked out of the restaurant. Some had ordered but could no longer continue to wait and others hadn’t even had the chance to get that far!
I enquired of the manager if there were any mitigating circumstances – such as someone calling in sick. But she said no they hadn’t; but they were never normally this busy on a Tuesday so they usually coped with one member of staff! No apologies, nothing.
It is fairly unlikely that any of the three tables who walked out would eat again in that particular restaurant and it may also have put them off the restaurant chain for some considerable time.
So, as Jo quite rightly points out, cutting staff numbers is potentially a recipe for disaster. No pun intended!