March 4, 2024

By Mads Fusilius, CEO and Co-Founder of dexaMarket-changing customer service platform.

When you look up the definition of “cost center,” it probably refers to an essential but unprofitable part of the business. in many casesthe customer service (CS) function is explicitly seen as a cost center, seen as only generating expensive overheads and dealing with the necessary evil of customer inquiries and complaints.

However, the needle has been moving for some time, with some Upcoming brands Realizing the capabilities that the service function must provide to provide tangible added value. This article will be the first in a series that explores this shift in customer experience to be seen as a center of value. Within them, I will explore how the service function has become a greater source of value, as well as what service leaders can do to extract more value from it.

For customer service leaders, the fact that they can and are increasingly delivering value may not be a new thing. They have always known that with the right tools and investment in place, they can do more than just be considered an expensive complaint department. However, in my view, most service leaders still struggle to build a case that links service to business growth. And that’s where we’ll start this series: the analogy.

measurement puzzle

The field of Customer Experience (CX) is on the rise, with many organizations globally having a dedicated Customer Experience Leader with C-Suite representation. As the function evolves and becomes an essential part of achieving business growth, the way we measure its impact should also be an essential part.

With customer service (CS) leaders tasked with one thing – playing defense – for so long, subsequent measurement structures are underdeveloped and often do not reflect how the function can function as a value enhancer.

With countless metrics now available, it’s easy for leaders to get lost in numbers. But in my view, there is a set of metrics that can show how the service function delivers value by protecting, growing, and strengthening the relationship with customers: the three pillars of customer loyalty.

1. Protect the relationship

The first pillar of any measurement framework is to capture the current state of the relationship between the brand and the customer. More importantly, the metrics show how job plays a key role in protecting this relationship.

Most brands will have a CSAT scoring system, as it is the easiest way to understand how customers perceive a company’s approach to providing customer service. With customers seeking fast and efficient service, another important metric is First Contact Resolve (FCR), which shows agents’ success rates in handling inquiries the first time.

Other metric CS leaders need to consider in this first pillar is the Customer Effort Score (CES). One of the best things you can do is respect your customers’ time, and having a hard-to-use product or service doesn’t help. This is even worse if they have to spend the time waiting to speak to the service agent. CES will allow you to understand, from the customer’s point of view, whether your brand is making it easier for them to deal with their problem.

2. Relationship growth and building

All of these measurement tools give companies insight into how well they can protect a relationship. However, as explained Gartner, it should not be presented in isolation, because “good service interaction by itself is not sufficient to achieve the desired loyalty outcomes.” If service leaders want to increase loyalty, it is not so much about solving immediate problems on a transactional basis as it is about helping customers see value in products and services.

This is where the Value Enhancement Score (VES) comes in. In short, VES is concerned with the value customers place on a product or service. This does not mean only the ability of the customer to The use of the service or product in question, but also how happy or confident they are with their purchase and spending money on it.

This is important because, according to Gartner’s own research, “Increasing positive customer sentiment toward these two concepts increases the value they derive from the product or service purchased.” This makes them more likely to want to continue engaging with that company, proactively advocate for that company with others and increase the amount they are willing to spend with that company.

3. Brand strengthening

For most brands, these first two pillars may be enough to secure a purchase. But to me, customer loyalty is a triple seat, and you need the third stop to show that customer service increases your potential value – two is not enough. The missing part are the metrics that show the level at which customers will be willing to recommend or actively endorse the product or organization on the back of interaction.

One of the most effective ways to measure and report this is the Net Promoter Score (NPS). Ask your customers to think, “Would you recommend our company/product/service to someone?” With this, you can get a holistic view of how customers feel about your product, service, and company, as well as monitor loyalty trends and increase revenue through reviews, referrals, and sales.

framework for proof of value

Leaders should realize that the CX metric is an ever-moving puzzle, and there are other metrics you can take advantage of. However, when all of these elements are combined together, it becomes an incredibly powerful way to show how the service functions as a center of value for the business.

The bottom line is that customer service has the potential to change from being a cost center to a value center, but only if the right frameworks of measurement are in place. Realizing this value will not happen overnight, and this framework should provide a good starting point.

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