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Redefining Customer Service: A Strategic Approach to Drive Revenue and Loyalty

When most people think about customer service,  they think about fixing something that went wrong: The package that arrived late. A double-billed service. Power and internet outages. It’s true that solving problems is an important role of service. But it should no longer be the sole focus.

Customer Service

For decades, customer service has functioned as a silo and focused on efficiency—solving problems and answering questions at the lowest cost possible. Service has been stuck in a maintenance phase at the end of the customer lifecycle. Reactive and transactional, it has been a cost of doing business, not an engine for growing it. Most companies have been investing in better digital capabilities, including self-service, artificial intelligence (AI) and automation. Their goal: faster, less expensive and more flexible service. Though important, that goal alone misses the larger opportunity to transform service into  a growth driver

Imagine service as a function so essential to  your organization that it engages customers at  every step of their journey—from learning and  purchase to usage and, ultimately, repurchase.  It’s integrated, indispensable, influential and  seamlessly embedded into your operations.  It's a driver of continuous innovation. It reduces  customer effort, helps customers achieve  maximum value from their purchases and provides customer insights into product development. No longer a traditional cost center, service contributes  to business growth, customer loyalty and trust. This is End-to-Endless Customer Service.

Leading brands are shifting the focus of the traditional service center  

Focusing only on the speed, efficiency and cost of reactive customer service is a race to the bottom. It also puts revenue at risk. It’s time to seize larger, more strategic opportunities in service of growth. Our research has revealed that leading companies are already embracing an end-to-endless customer service mindset. This approach is paying off. These companies have shifted their model and transformed service from a cost center to a value driver.

  • 1 in 5 view service completely as a value center: A small proportion of companies are fully committed to service as a value center that improves customer relationships and drives sustainable growth.

  • 3,5x revenue growth: These companies drive more than triple the revenue growth of companies managing service as a cost center.

  • +50 basis points: These high-growth companies are spending an average of only 50 basis points more of their revenue on customer service.

This transformation starts with a mindset shift around customer service—from treating it as a problem solving function and a cost center to viewing it as a value creation function responsible for delivering memorable customer experiences. Our study asked customer service executives how leaders within their company perceive the customer service organization. Leveraging a 5-point scale, we found that only one in five organizations fully views service as a value center. These companies achieve 3.5 times more revenue growth than those perceiving service entirely as a cost center.

These high-growth companies are not spending a lot more, either. In fact, compared to their peers, they are spending, on average, only 50 basis points more of their revenue on customer service.

Putting the customer  at the center to fuel growth 

Service transformation must extend beyond technology investments and process redesign to also focus on re-imagining the service and experience that is delivered to customers. As experience becomes increasingly important to growth, service plays an even more critical role in exceeding expectations for all customers across all channels. Customers want interactions that align with their motivations, desired outcomes and preferences for how to achieve these outcomes. A purely cost-centric approach to managing service will fall short in delivering the experience customers want and value. Customer service. Customer care. Customer support. No matter what you call it, how can you transform service interactions into an opportunity for shared value creation? Our research and advanced modeling uncovered three key opportunities to activate customer service as a value center today.

Three key opportunities for end-to-endless service

  1. Grow Trust with proactive, predictive service: Mitigate the severity and frequency of customer-initiated effort by injecting proactive and predictive capabilities  into end-to-endless service. 78% B2B customers indicate proactive service solutions are important but less effectively provided.

  2. Grow Usage by helping customers get more value: Maximize value delivered to customers by providing personalized and contextually relevant strategic advice on how to get  the most value from their purchases. #2 value driver B2C customers benefit when service helps them get more value from their products.

  3. Grow Possibility  by activating  service insights: Modify how products and services are developed by integrating insights from the service organization into  the product innovation process. 10X+ higher revenue growth when companies involve their service organization in the development of new products.

Is customer service a functional silo within your organization— only engaging with customers reactively when they have an issue? Or have you created the skills and capabilities to monitor, identify and proactively resolve customers’ problems? Even with this increased value of service, one-third of customers still view service as a utility—something they need but don’t think much about unless they have an issue.

Grow Trust

We measured 19 different service experiences to gauge how important they are to B2B and B2C customers. These service experiences ranged from anticipating a potential issue before it becomes one to advising customers on the best products and services based on their history/usage. We also asked how well their providers deliver these experiences. We discovered customers highly  value proactive service experiences and communications. These are also the experiences underserved by most organizations. By shifting to a more predictive service model, businesses have an opportunity to provide greater value to customers and drive growth for  the organization.

It’s human nature to try to resolve an issue when it arises. Well designed self-service tools enable a customer to address their own needs quickly and easily. That’s a good outcome for the customer and the company. An even better approach is to predict and proactively address an issue to further reduce customer effort and avoid negative impacts to customer experience. Truly proactive support demands a deep understanding  of customer needs with predictive capabilities powered by  data that anticipates and identifies when you’re at risk of  not meeting customers' expectations or promised product or service performance. When you take responsibility for proactively understanding, anticipating and meeting customers’ needs,  your company becomes an “invisible” presence they know  they can trust. Customers don’t just want proactive service; they are also willing to pay for it. Compared to those who do not consider proactive service important, customers who do are 30% more likely to pay  a premium for proactive service.

As you shift your support model to incorporate more predictive and proactive service, it will be important to: 

  • Identify when and where to apply these capabilities to improve customer journeys. 

  • Define triggers for predictive problem identification  and proactive customer communication. 

  • Establish analytics processes for consuming and analyzing data in support of proactive trigger identification. 

  • Invest in the technology capabilities required to enable your proactive customer engagement strategy.

Available data sources are vast and ever expanding. They extend beyond “traditional” support channels, making it critical for service to have a scalable data and analytics strategy. For example, consider data generated via IoT wearables. This data can inform proactive, personalized recommendations to help improve a customer’s product usage. As part of advanced infrastructure monitoring, IoT sensors can also help predict maintenance needs and timing. Beyond your own data, consider external events that could trigger a need for proactive communications or issue prevention. With their vast physical infrastructures, communications and utility companies need to track environmental and weather concerns. This monitoring is key not only to protecting assets but also to proactively communicating with customers about potential disruptions and offering tips for preparing or recovering from  a weather event.

In our study, companies reported lack of adequate technology as the top barrier hindering their customer service organization’s ability to deliver growth outcomes. Only 13% of service organizations operate heavily in the cloud  (>60% of workloads). The companies they support are realizing higher revenue growth compared to those that have not started or just started migrating to the cloud. 

Grow Usage

Does your customer service team focus on both solving customers’ problems and increasing their return on  investment? Our research reveals customers' strong desire  for service interactions with a trusted advisor. Instead of  solely focusing on issue resolution, an advisor is committed  to maximizing the value customers realize and helping them achieve their targeted outcomes. 

When customers experience greater value throughout their experience, they consider you and your product indispensable. That, in turn, can improve both product adoption and loyalty. 

We have long asserted that what people experience as B2C customers flows into their expectations as B2B customers. Now we are observing a flow in the other direction. B2C  customers increasingly want more B2B-style experiences in their service interactions. Popular in B2B software and other high-tech companies, customer success is a dedicated organization focused on helping customers get the most out of a company’s products and services. In B2B relationships, customer success managers help educate customers and drive adoption by empowering them to maximize the value of their investment. 

By focusing on aiding customers to achieve their desired outcomes, customer success managers highly influence the customer relationship and value realized. When it comes time to repurchase or renew, the decision is an easy one for customers. Our research found that businesses with leadership that perceive service entirely as a value center have an 80% higher adoption rate of customer success functions within their organization. They see the value in service, and service helps their customers see the value in what the company provides. Those products and services then become indispensable—driving loyalty, satisfaction and referrals. 

95% of B2B customers have some kind  of dedicated support

A trusted advisor approach is not new in the B2B world. Assigning a dedicated sales or account rep or even  a customer success manager is standard practice when serving business customers. In fact, our research found  that 95% of B2B customers have some kind of dedicated support working on their behalf. Today, technology advancements and AI have created the opportunity to implement dedicated support teams, or the choice to repeat to the same customer support agent, unlocking more dedicated relationships at scale.

Maximizing value by leveraging customer data insights

 Desired outcomes and support needed to achieve them will vary by customer. Data gathered throughout the life cycle of interactions with a customer is invaluable to customer support and customer success teams as they help customers achieve their objectives. By leveraging data with AI, you can increase your impact as a trusted advisor supporting customer success. 

You are gathering essential data from a customer’s first interactions with your company through every point of their journey. Along the way, you gather a wealth of data providing valuable insights about a customer’s behavior, preferences and goals. For example, which marketing channels or campaigns has a customer interacted with? More importantly, which of those prompted that customer to purchase or upgrade? Understanding the customer's objectives at point of purchase or sales pitch that led to a purchase may speak volumes about how  a customer intends to use your product or service— in other words, the outcome they want to achieve. 

These insights are also important in more traditional, reactive service interactions. To understand what a customer is experiencing and what they need for success, you need context. Such insights are essential to fully understanding and truly resolving a customer’s situation. Even customers with the same issue at the same time may have very different ideas of what constitutes an appropriate service response. To understand what a customer is experiencing and what they need  for success, you need context.

Artificial intelligence  makes it scalable 

Savvy service organizations are already using AI to deliver personalized experiences at scale. For example, one AI solution identifies and predicts subtle patterns of behavior to better match customers and employees. This behavioral pairing results in higher-quality interactions that drive transformative, measurable increases in customer satisfaction and revenue. Of course, value-added service does not always require interactions with a live agent. Sometimes the service need  or question is sensitive, and customers will feel more comfortable interacting with a machine than a human.

In other words, serving as the “trusted advisor” is what makes a product indispensable. The key is for companies to use a combination of automation, AI and human advisors to help customers grow value from their products and services.

Grow Possibility

No function is closer to your customers than service.  Every day service channels collect feedback and input  from customers. How are you capturing, analyzing, distributing and leveraging this information? How  are you using it to inform product development? Our research suggests that service should be highly influential in creating and improving products. In a world where 95% of new products fail, service can help you identify—and solve for—unmet product needs. 

By undervaluing service insights,  companies leave revenue on the table. For this research, we gathered 200+ data points to  identify the role of service in driving higher revenue growth. When we verified their correlation with revenue growth, we narrowed those to 20+ relevant data points. These data points fall within four service competency areas: Technology, Product, Emotional Responsiveness and Organizational. We wanted to understand: Which of these service competencies has the greatest impact on revenue growth? 

  • Technology: How well are companies maximizing digital capabilities to support customer interactions? 

  • Emotional Responsiveness: How well do companies understand and  respond to customer needs and behaviors? 

  • Product: How are companies using service to influence product development? 

  • Organizational: How adaptive and effective are companies’  operating models and talent to drive a collaborative approach to service across the organization?

Product prevails 

Our econometric models suggest that companies can  improve revenue growth the most by strengthening service’s influence on product development and new offerings. About 60% of businesses surveyed often or always  involve service in product development. These same companies also experience higher revenue growth. Companies that report always involving their service organization  in new product development are  achieving up to 10X+ revenue growth than companies that  keep these functions separate.

Activating service insights grows the possibility to create value beyond traditional functional boundaries. Customers who offer feedback want to feel heard and acknowledged. They notice who pays attention. In fact, B2C customers are twice as likely and B2B customers are 37% more likely to spend more with companies they perceive as actively listening to their feedback on improving the product. 

Our findings suggest that every customer interaction should be an input into richer insights. You can  use these insights not only to improve an individual customer’s future experience but also evolve overall customer product and service experiences. For many companies, this is no easy feat. In our survey, only 59% of companies enable customers to provide feedback on product and service functionalities. Nearly one-third (31%) reported that addressing feedback in a timely manner is a challenge. To activate service insights in product development and management, leading companies are getting disciplined about listening and learning from the voice of service.

Modifying product and service development Many companies have already established Voice of the Customer (VOC) programs to provide a formal mechanism for capturing and understanding customer feedback. To drive greater revenue growth, consider listening  to the voice of service. In other words, focus on gathering  and analyzing structured and unstructured data from across all service channels and, more importantly, elevating and activating these insights for the rest of the organization. 

  • Collect: Gather information from all service interactions  and channels. 

  • Act: 

  • Short term: Empower customer-facing employees  to follow up with customers and fix issues in real time. 

  • Long term: Activate service-generated insights  to build and improve product experience. 

  • Analyze: Translate data into opportunities to improve marketing information communicated at point of sale, customer onboarding, product improvements... and more! 

  • Govern: Implement continuous learning and processes  to react to and address issues affecting the  customer experience and product development.

Among the customer service leaders we surveyed, 29% cited collecting data in real time as a barrier. Automated agent assist and customer analytics tools can help break through that barrier, capturing opinions and sentiments across the entire customer journey. And don’t forget the channels you don’t own. When comparing generations, Gen Z and Millennial B2B customers are 21% more confident than older generations that brands are tuning in to these external sources.

Learn from the voice of service  

One of the greatest challenges in using service to grow possibility is infusing service-generated insights throughout the front office and into product design. Success hinges  on learning from people, processes and insights enabled by technology. In most organizations, culture needs to adapt— committing to service as a growth driver from the C-suite  to every level of the front office and beyond. From a process perspective, consider using “service connectors”—specialized talent that will bridge, translate, innovate, ideate and deploy feedback from service. Service connectors help route insights to the team best suited to make the needed product or experience improvements. For many organizations, advanced analytics and AI will be a crucial tool in monitoring and continually improving customer interactions. It is also vitally important to getting the most  out of both structured and unstructured information. Advanced analytics are ideal for identifying patterns of customer confusion and product complication. They help separate the signal from the noise so you can understand where and how your product or experience needs to be simplified or otherwise improved.

Generate more customer value by using service to shape product

In both B2B and B2C, half of an existing customer’s  value can be attributed to two factors: product quality  and service. Our study proves that service can have  a significant impact on improving product quality— positioning it as a significant lever for revenue growth. To drive higher revenue growth,  view service as a value creator— and use it to generate better products  and experiences. Nurture an organizational culture that values  not only what you sell but also  the service you wrap around it.

Shape the future of End-toEndless Customer Service

Our research illuminates the untapped potential  of service as a growth driver. Our analysis points  to three key opportunities for growing trust, usage  and possibility. What does it take to transform? 

  • Think differently: Transforming service from cost center to value  creator starts with a different mindset about how  you deliver value to customers. 

  • Shift to value: Assess how current capabilities support the  journey to realign service around proactive,  predictive support, customer success and  service-informed product development. 

  • Make an impact: Build—and then pursue—a roadmap for turning service into a driver of value for your customers and your organization. 

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