1. The Importance of Customer Service Key Performance Indicators to Improved Profitability

2. Improving Profitability
Traditionally Financial Performance
Business Growth Models
Franchise
License
Direct Sales
Distribution
Products/Services
Existing customers
New products and services
New customers and markets
Diversification
Customers

3. WHY Customer Service ? Economy impacts customer behaviour
Competitive marketplace
Harvard Business Review – proven link
One point change on Customer Satisfaction Index = 4.6% change in market value
Consistent superior customer experience = more stable cashflow and greater gains in shareholder value

4. Harvard Business Review
University of Michigan National Quality Research Centre
American Customer Satisfaction Index (ACSI)
Hedge Portfolio
200 companies, 40 sectors, 65K consumers/year

5. Customer Experience Detractors
Telephone Techniques
Staff attitude
Poor problem handling
Inappropriate account charges
Response times
Accuracy of information
Xerox customer loyalty research

6. Key Performance Indicators
Specific performance measure
Important to long-term success
Consistently quantifiable
Correlation to area of improvement
Foundation to maintain competitive advantage
Monitor to identify and improve

7. Customer Focus Strategy Benefits
Optimise Operations
Produce additional profit as more frequent orders
Less price sensitive
More likely to remain loyal longer
Minimise operating expenses
return fewer products
reduce sales and marketing costs
reduce warranty and service costs
Promotion
More likely to recommend company and products
PR Opportunities
Case studies
Web quotes

8. a) Customer Satisfaction and Loyalty
Impact on Staff
The Service Profit Chain 1997 *
1st set of hard data quantifying links between:
a) Customer Satisfaction and Loyalty
b) Employee satisfaction, enthusiasm, loyalty, commitment and capability with
c) Financial Results
Gallup 2003
Productivity, Retention, Safety up 50%
Profits up 33%
Customer Loyalty 56%
* The Corporate Leadership Council

9. Sample KPIs First fix % Number of complaints Response times
Number of repeat orders in given time period
Average order value/profit/volume
% Client relationships <12 months

10. Customer Service Errors
Zero dissatisfied customers
Over service complaints
Segment customer profitability
Customer lifecycle expectations sales, service etc

11. Customer Service Trends
Transactional vs. Relationship
Focus on loyalty
Customer retention cost 10:1
Referrals
Poor experience spread x 20
Feel good factor
Focus on highest lifetime value
Survival v Short term v Long term

12. Summary Tap into Customer Services Immediate opportunity
KPIs simple to implement
Requires minimal investment
Low risk
Motivational
Potentially huge return

13. Further Information www.customerservicemanager.com www.kpilibrary.com
Online free advice and articles
5100 KPIs Process and Industry Sector