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Customer service in GTM

Can Customer Service Operate as a Growth Motion?

For years, T-Mobile operated a prototypical customer service department: rank after rank of agents, picking up simplistic calls and handling them as quickly as possible. But after an investment in self-serve technology and the development of a comprehensive knowledge base, their workload composition began to change. With customers solving easy questions themselves, the remaining calls became steadily more complex. 

Enter Callie Field, executive vice president of customer care at the cell carrier. She recognized that their customer service demands had shifted and began building a new service model.

“In the end, we had a simple goal: customer happiness,” she told Harvard Business Review. “We figured happy customers would stay longer, spend more with us, and recommend us to others.”

Field threw out the old factory setting. In its place, she implemented a structure borrowed from B2B account management. She arranged T-Mobile’s customer service agents into Teams of Experts or TEX. These were cross-functional groups of 47 people: one team leader, one resolution expert, eight technical specialists, four coaches, a resourcing manager, and 32 customer service reps ‘dedicated to a single, geographically-based customer market’. 

Working as a cohesive unit, a TEX team tackled not only the toughest customer queries and challenges but also helped surface unique trends and persistent issues in every geography. Because each TEX team owned the P&L for its market, it was basically its own small business within T-Mobile, staffed with care agents, managers, and leaders. Success was measured at a team level and using metrics that aligned with T-Mobile’s larger business goals.

Three years into Field’s radical customer service experiment, the stats were encouraging. T-Mobile’s overall cost to serve decreased by 13% and its Net Promoter Score increased by 60%. Perhaps most impressively, its customer churn rate dipped to an all-time low.

Field’s transformative work at T-Mobile stands out. Not only because this way of customer service is operationally exceptional, but also because it’s so unusual. 

For decades, customer service has played a simplistic and functional role, reactive in large parts. If you ordered a sweater online and the package never arrived, you called the retailer’s customer service department. The agent would take your order number, plug it into a third-party tracking system, and read you the response. Typical customer service rarely goes beyond support. 

But a handful of business leaders like Fields are challenging the status quo. They’re thinking from the point of view of impact and asking, “What more can customer service do?”

Customer service can foster trust

Founders, executives, and commentators pay much attention to how businesses bring new products to the market. The majority of go-to-market strategies fall into one of two buckets: product-led or marketing-led.

The former relies on the product itself as the primary driver of customer acquisition, conversion, and expansion. Dropbox is a prime example. Relying on viral, freemium, bottom-up distribution, the cloud storage platform acquired an army of individual end-users. Those users drove adoption within their organizations, leading to wider growth.

The latter leans more heavily on marketing and sales. These go-to-market strategies target buyers rather than end-users, selling into whole teams and organizations. Most marketing-led GTM strategies focus on acquisition, rather than retention and development. Companies like Starbucks and Southwest Airlines exemplify marketing-led growth. Their products and services—coffee and air travel—are comparable to their competitors, yet their fortunes are dramatically different.

The problem with these approaches is their ambivalence toward what comes next. What happens after you capture a consumer’s attention and attract them to your storefront? Other than basic remarketing and lead-nurturing workflows, both approaches are silent. They’re silent because the challenge is hard. Sell too hard and you risk pushing away leads. Stand off entirely and you will inevitably lose sales.

What a handful of businesses are demonstrating today is that customer service can step into this strategic void between acquisition and retention. Indeed, when tasked with building trust and reinforcing relationships, few business units are better positioned.

customer service for retention

Customer service has more contact with customers – existing and potential – than any other function. A buyer may engage with a marketing team’s ad or talk to a salesperson during the purchase process, but it’s the customer service team they turn to when they have queries and questions. At this intersection, engendering trust – for the sake of cooperation and resolution – is critical. 

Consumers are already demanding a lot of customer service. Yet research from PwC says that only 38% of people find that customer service employees understand their needs well enough. In fact, 46% of buyers will abandon a brand if its employees aren’t knowledgeable. 

Weakly integrated customer service may buttress existing efforts by simply reinforcing chosen positioning, messaging, and playbooks. Fully harnessed, it can operate as a strong supplementary channel to marketing and sales, capable of bridging the doubt gap between customer and business to illuminate a clear path forward.

Although radical, this approach is no longer purely theoretical. Frontrunners like Field are proving customer service’s potential impact on business growth. What’s more, she isn’t entirely alone.

When customer service drives standout experiences, growth follows

In 2010, Mauritius-based Naiade Resorts was floundering. The Great Recession had decimated economies across the world, wiping out discretionary income. Occupancy rates at the hotel chain were plummeting, and losses were mounting.

Enter Paul Jones, career hotel manager turned hospitality executive, who took over as CEO and began driving wholesale change.

“The company was in really poor shape,” he told CNN. “At the time we had negative cash. We had to ramp up revenue, which meant we had to increase our occupancy and increase our rates. We came out with some pretty innovative thinking.”

His go-to-market strategy was four-pronged:

  • Changing Service Culture Through Training
  • Vision, Purpose, and Values
  • Innovation and Differentiation
  • Measurements, Feedback, and Incentives

For years, Naiade Resorts had trained its employees using strict scripts. If a customer asked for a room change, the agent answered like this. If they requested an upgrade, they answered like that.

Jones recognized that “highly scripted employees are often less able to be imaginative or empathetic about a customer’s true needs.” To use customer service as a growth lever, Jones needed employees to identify service opportunities and create moments of delight.

He implemented a new customer service regime, comprising “extensive training across all levels of the organization, an alignment of expectations of service standards, and a psychological and tangible breakaway from the old Naiade Resorts.” Importantly, Jones taught his new employees to empathize with guests, understand their concerns, and create real solutions.

“By mid-2011, Naiade Resorts saw an improvement in its service and this quickly translated into improved financial performance,” writes Jochen Wirtz, Professor of Marketing at the National University of Singapore. “Since then, the company has witnessed substantive and consistent service culture improvement and financial performance growth.”

Within two years, Naiade Resorts (rebranded as LUX* Resorts & Hotels in 2011) dominated four locations on TripAdvisor’s Top 10 list for the country. As the company’s reputation swelled, revenue growth followed. By 2013, revenue, earnings, and profits had all increased by 300%.

Seizing a new growth lever

Businesses can reach potential customers in hundreds of different ways. Pinterest and Facebook grew through exclusivity, limiting their early user base with an invite-only policy. PayPal opted for aggressive paid acquisition, offering users $20 to sign up and driving 10% daily user growth. Subway harnessed cheap franchising. Huel re-wrote the rulebook on paid social media advertising.

But customers gravitate towards a different channel—customer service. When they have a question, query, complaint, or problem, customers are far more likely to contact a customer service agent than a sales rep or marketer.

In our complex, digitally distributed world, there is a glut of channels for brand discovery, consumption, and interaction. Many organizations prioritize those channels, opting to ignore customer service. But as we’ve seen with T-Mobile and Naiade Resorts, organizations thrive when they buck the trend. When customer service is harnessed for growth, engagement improves, customer loyalty spikes, and increased revenue follows shortly behind.

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