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customer service

Customer service deserves a seat at the executive table

Contact centers are no longer a Dilbert cartoon punchline.

Visit Twilio’s head office and you will see some peculiar office decorations: old shoes.

To understand why you must go back to 2012. Jeff Lawson, CEO at the San Francisco-based cloud SaaS platform, was exploring his company’s values, specifically its claim to being customer-centric. The value was important to Lawson, but he thought it had become bland and diluted.

“Everyone says it,” he wrote in Inc. “I imagine most state motor-vehicle departments talk about being ‘customer-centric,’ but if you’ve ever stood in line to get your license renewed, you know how well that’s working out for them.”

To illustrate how central customer-centricity was to his company and its strategy, Lawson devised a plan. He commissioned a run of Twilio-red Chuck Taylor All-Star shoes and offered his customers a deal: “Give us a pair of your shoes, and we’ll give you a pair of ours.”

Within weeks, he’d acquired hundreds of pairs of shoes—worn-in trainers, leather loafers, chunky boots, beach sandals, and more. He hung up his customers’ discarded footwear throughout Twilo’s headquarters. It was his way of saying, “Our customers are different. They’re not all the same. We need to remember that.” It was his way of reinforcing the importance of their customers in everything they do.

Twilio, however, is an outlier. As Lawson said: Most companies claim to be customer-centric, but few truly are. Even fewer go so far as hanging symbolic footwear around their office.

Indeed, the voice of the customer is missing, not just on the office floor, but also at the top. Without a c-suite executive who owns customer service—most often a chief customer officer (CCO) or chief experience officer (CXO)—organizations stand little chance of elevating or prioritizing customer service.

But just one-third of organizations include a CCO or CXO role at their executive table. The majority (54%) relegate their customer-focused executives to subservient positions beneath either CMO or COO, where they compete with myriad other priorities. Worse, 10% lack a CXO or CCO entirely.

While creating a CCO or CXO adds credence to the importance of customer problems, it’s often a symbolic gesture.

“The hire is rarely anything significantly impactful for the business,” wrote customer experience futurist, Blake Morgan, for Forbes. “A business will often give this c-level executive some influence, some resources, and a pinch of authority across the business, but not enough necessary to impact real change.”

As subservient or powerless executives, they lack the means to overcome organizational inertia and drive change—and the cost to standing still is immense. In 2016, Accenture estimated the cost of American customers switching due to poor customer service was $1.6 trillion. Today, across the entire world, that figure is likely far higher.

For organizations to thrive and reap the benefits, they must offer customer service a seat at the executive table with all the authority, autonomy, and budget necessary to translate street heat into business problems and drive genuine change.

The message is clear: Customer service deserves a seat at the table, and organizations can’t afford to exclude it for much longer.

Dollars and cents

The importance of customer service is no secret. More than half of senior leaders recognize customer service and experience as the most important factor in differentiating their brand. Yet, for years, it remained the punchline to any number of Dilbert cartoons and little more.

Businesses cleaved their customer service departments from their core business units and off-shored the function to countries with lower labor costs. Customer service was peripheral to company strategy. Executives left local bosses to manage the day-to-day operations and deliver a minimum level of service. So long as customer calls were answered promptly and agents stayed polite, that was enough.

But times have changed. If you want a new cell provider, you can choose between Verizon, Leap, AT&T, Metro PCS, T-Mobile, and more. While there are minute differences, most carriers deliver a practically identical service. With the increased competition and the commoditization of products and services, customer service can no longer remain a punchline.

Indeed, 73% of consumers rate customer experience as an important factor in their purchasing decisions. In fact, nearly 1 in 2 would pay more for welcoming, positive experience with a business.

Individual customer actions ladder up into broader corporate performance. Using datasets from two multibillion-dollar businesses, behavioral scientist Peter Kriss discovered that he could quantify the impact of customer service—and that the effects are huge.

Customers who had the best past experiences spend 140% more compared to those who had the poorest past experience.

Harvard Business Review.

Forrester Research confirmed Kriss’ findings. Combining their Customer Experience Index survey questions with industry-level data, Forrester analysts demonstrated that good customer service leads to client retention, enrichment, and customer advocacy. 

With a direct link between customer service and revenue growth, the question of customer service’s place at the executive table is settled. The contact center is not a functional cost center, it’s a key strategic player—one that deserves a voice. For the businesses already championing customer service, the rewards are tremendous. 

Built on service

Customer service can create an outstanding customer experience and drive sustainable revenue growth. But for a handful of outliers, it’s so much more. Customer service is part of their identity, purpose, and marketing.

At first blush, Zappos is hardly an innovative brand. Originally an online shoe retailer, the company grew to include handbags, eyewear, clothing, watches, and children’s merchandise. While other eCommerce brands expanded through exclusive product lines, aggressive advertising, or acquisition, Zappos took a different tack: service.

Since 2007, the company’s tagline has been, “Powered by Service.” Its first core value—Deliver WOW Through Service—has been in place even longer.

“We want to distinguish the service experience for every customer, on each and every phone call,” Megan Petrini, an onboarding strategist at Zappos, told Forbes. “The connection can be anything, as long as it authentically relates to the customer. Hear a dog bark, connect over pets. Hear a kid in the background, ditto.”

For Zappos, service isn’t just a means to revenue growth. It’s existential.

Warby Parker, another famously customer-obsessed organization, empowers its reps to go above and beyond for their customers. In one particularly memorable story, Warby Parker heard about a customer leaving their beloved reading glasses on the train. The eyewear retailer sent the frustrated customer two replacement pairs along with a personalized note from the retailer’s founding general counsel, Anjali Kumar.

This is just one example of Warby Parker’s moments of customer service heroics, many of which have gone viral, earning the company worldwide exposure and strengthening their brand.

JetBlue is another prime example. The airline monitors its social media, searching for small ways to thank customers. When a frequent flier tweeted that he was flying out of a small terminal without a Starbucks, the airline arranged for someone to deliver a venti mocha to his seat.

These are admittedly customer service edge cases. Many—perhaps most—organizations won’t have the resources to emulate such service levels. But they demonstrate how business leaders can use customer service beyond its basic function.

The time is now

According to The New CX Mandate by Freshworks, contact center volumes across the world spiked to an all-time high in 2020, while agent capacity dipped to its lowest ever. Customer service departments had to adapt and evolve under unprecedented circumstances.

Through the experience, many leaders began to question its role in the organization. Once a thoroughly defensive function, customer service evolved into an offensive role at the forefront of businesses, and now it’s there to stay.

Customer service deserves a seat at the executive table today. As the pandemic continues to disrupt everyday life, customer fluency will mean the difference between success and failure. Among hordes of established executives, service leaders are uniquely positioned to direct organizations towards this goal. They can look past workflows and metrics to drive connection on a human level, both with employees and customers.

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