Why do I need to know about it?
There’s a well-known saying in customer service that an unhappy customer will tell 10 people. In the case of United Airlines that figure is in the millions. A video of a passenger being ‘re-accommodated’ from an overbooked flight and bloodied in the process has been viewed almost four million times on YouTube. Within 24 hours of the video going viral $1.4 billion was wiped off the value of United Airlines’ stock. It is unlikely that this came as a surprise to the airline’s board. Customer service (or in this case lack of) is often seen as a key business performance indicator.
The most recent UK Customer Satisfaction Index (UKCSI) from the Institute of Customer Service (ICS) seems to reinforce this. In 2016 Tesco’s year-on-year sales rose by 2.2%. In the same period it also recorded one of the sector’s biggest increases in customer satisfaction scores (+1.2%).
Joanna Causon, CEO of the ICS, says that the link between customer satisfaction and business performance has long been recognised. “There is a huge correlation between customer satisfaction, employee engagement and the overall financial performance of an organisation,” Causon explains. “The role of HR is to help deliver that performance through the organisation’s people.”
What do I need to know?
In a follow-up report called The Customer Knows the ICS examined this correlation in more detail. It showed that a 1% increase in employee engagement leads directly to a 0.5% increase in customer satisfaction scores. Carolyne Creed, people director at Holiday Extras, has seen this correlation firsthand: “Over the past few years we have seen a move from a transactional economy to a relationship economy. Our engagement ratings of 89% have bucked industry trends for several years now, and equally our customer satisfaction ratings remain high.”
The UKCSI ranks Amazon at number one with several other familiar names such as John Lewis and Nationwide filling out the top 10. Causon reveals that the organisations that make the list do so on a regular basis thanks to their workers. “It’s about how you train and develop your staff. It’s an overused term but ‘empowering’ your staff will enable them to deliver to your customer group.”
Where can HR add value?
According to Caroline Cooper, a customer service and engagement specialist, HR needs to start by redefining the term ‘engagement’. Cooper, who was formerly the head of training at Sodexo, says: “You can have an employee who has an involvement with their job that is mistaken for engagement… but that can be to the detriment of the customer because the employee will only end up defending the business to the hilt rather than listening to the customer.”
Cooper argues that getting customer service right begins at recruitment. “Many organisations will hire people who are technically very good but have no aptitude for working with people. It’s relatively easy to measure technical skills but how do you measure people skills? HR has a role to play in helping line managers define that.”
Cooper also lists reward and recognition, investment in people, and leading by example as ways for HR to make a difference.
Lindsay Southward, group director of people development at Malmaison and Hotel du Vin, says that focusing on these areas is key to delivering high levels of service. Since introducing a range of new incentives and initiatives the hotelier has seen staff turnover decrease by 10% year-on-year and engagement scores rise. Southward says: “Behaviour breeds behaviour. If your staff are happy your guests will be happy.”
Scarcely a month goes by without more news of the AI revolution. Causon thinks it could present a golden opportunity for customer service. She argues that customer service skills such as problem solving, decision-making, conflict management and high-level stakeholder management will still be needed. “AI may take away some of the transactional activities but that presents a great opportunity to make customer service roles more interesting. When I look at our research on the top five priorities for customers none of them are about process or price. They are all about people.”