The true cost of customer service ?

Customer ServiceAccording to a recent report commissioned by Oracle, 81% of European consumers would happily hand over more of their hard-earned for a better customer experience and that consumers will eventually turn away from brands who just don’t service them the way they’re expected to. But seriously, does paying more for the customer experience actually guarantee the quality of service ?

Europeans are a funny lot, especially the British (of which I am one) who seem to believe that cost equates directly to quality. There’s a good folk tale of a well known coffee maker who created a rich tasting new coffee that bombed on the shelves. They couldn’t understand why and much executive brainstorming ensued until one upstart marketeer offered ‘why not hike the price up ?‘ Incredulous as it sounds that’s what they did and it flew off the shelves. Why ? Because it was now regarded as a ‘premium‘ coffee and of course you want to impress the neighbours when they pop round for a cup and gossip….

And so we fall to customer service and the cost of a good experience. Would you actually pay more to receive the same level of service you did before? Would the premium halo effect cloud your judgement in thinking that because you’re paying that little bit extra you’ll be the envy of your fellow man, or would you claim it as a right to complain just that little bit louder when it all goes wrong ?

It’s true that there is now an intrinsic link between customer service, social and revenue growth, that creating processes and systems that respond to demand and real-time situtations are critical in creating an experience worthy of repeat business, but it’s also true that in order to achieve this you do not need to charge a premium, that’s just a cheap and lazy management mentality.

Profitability and revenue drive the ability to change and constantly improve service processes that in turn drive customer satisfaction levels through the roof that in turn get coverage and increased business that in turn drive sales and profitability….

The true cost of customer service doesn’t lie in how much you charge for it, the true cost is actually zero because you should want to provide it as standard. And if you don’t, then the true cost is your failed business.


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Categories: Customer Service, Disciplines, Loyalty, Workplace Reality

Author:Theo Priestley

"I had more creative ideas from Theo in 6 months than I have had in 6 years from most people." Theo Priestley is one of the most recognised independent technology industry influencers and evangelists, ranking in the Top 100 thought leaders across Virtual/ Augmented Reality, FinTech, Artificial Intelligence, Big Data, Internet of Things and future trends. Theo has written insights for Forbes, Wired, The European Magazine, Venturebeat to name a few, and has been interviewed for many online publications including the BBC on his thoughts on technology and the future. A regular paid keynote speaker and panelist at conferences and events, Theo is engaged for his forthright views and isn't afraid to challenge conventional thinking and the marketing hype surrounding the industry when presenting, never pulling punches to get the message across on how technology can be applied to improve business and the customer experience. He has also successfully organised and run TEDx and Ignite events. Highly active across social networks, he sits in the Top 1% for social media engagement on Kred and Klout and is constantly sharing articles and his analysis that he feels his audience would be interested in. Theo is also active in the startup community, mentoring within UK and US accelerators and sits on a number of advisory boards. Former VP and Chief Technology Evangelist at a Top 25 European enterprise software company with a career spanning both innovation strategy and delivery of software and business change in Financial Services, and as an independent technology industry analyst. Follow Theo on Twitter @tprstly or connect here directly for constant insights on tech and marketing trends. • Top 1% Influencer on Kred (915) • Top 1% Influencer on Klout (70+) • 12,000+ Followers on LinkedIn • 13,000+ Followers on Twitter • Recognised Top Influencer in AI, Virtual/ Augmented Reality, Fintech, IOT and Wearable Tech, Big Data and Analytics.

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4 Comments on “The true cost of customer service ?”

  1. December 14, 2012 at 11:28 pm #

    I am currently in the Four Seasons Hotel in the Maldives. I can tell you that paying (vastly) more does get you exemplary customer service. But what I have observed is that money does not buy class. The well-healed young Russians, Japanese and Americans here are rude bordering on obnoxious and treat all the staff like dirt. The staff all smile sweetly, but privately I hope they piss in their coffee.

    So money does buy you customer service. But having money does not make you a good customer.

  2. December 18, 2012 at 5:56 am #

    Customer service is usually th first place that management of a company will try to cut cost because its usually post sale.Not reliazing that they will loose customers these companys usually go out of business like Circuit City. Out sourcing call centers to countries like India is a death nail because customer get tried of repeating themselves and being put on hold constantly. I saw a lot of this when i sold consulting services to call centers. To often the call center management is not skilled at making a businss cases to upper management to improve training and invest in new technology.Its a major mistake that each generation of new managenet makes that is new to a company.

    • December 18, 2012 at 5:59 am #

      Good feedback, Jim. What was the solution to the problem of poor business case skills? Was there no solution?


  1. Does paying more guarantee customer service? #customerservice « Ian Gotts - December 14, 2012

    […] Preistly asked a very interesting question in a recent blog called The true cost of customer service? : Does paying more for customer service actually guarantee the quality of the […]

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