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How to turn customer service into a profit center

David Taber | June 17, 2014
'The Producers' profited from an idea that was supposed to lose money. Most companies are happy if their call centers produce zero margins. It doesn't have to be that way.

The Mel Brooks movie/musical The Producers presents an upside-down situation where you can make a fraudulent fortune by creating a money-losing Broadway show. This article explores a legitimate variation on that theme and outlines the CRM and IT infrastructure work needed to exploit the opportunity. (Surprise: If you work for government or nonprofit organizations, don't skip this article.)

Let's start with some background. Most customer support teams run as marginally profitable operations, if not outright cost centers. For many teams, the entire goal is to reduce the cost of providing acceptable service, so the IT and telephone infrastructure is finely tuned to minimize call-time, get the customer to self-support and optimize the number of closed cases.

Many large call centers invest heavily in saving just a few seconds per call, setting up extensive menu trees, automation, monitoring and analytic systems to make sure the people and the process perform consistently.

The crux of this business process design? "There's no revenue opportunity here." While there may be some attribution of per-incident revenue, there's little thought of an upsell - the customer service rep isn't seen as an agent for sales. Further, there's typically an indirect connection between customer satisfaction and support renewal.

Customer Support Is the New Sales Opportunity

Now let's inspect this situation from an entirely different angle. The customer support rep in many companies speaks to a given customer more frequently than the sales rep. This communication comes at an extremely important juncture, when the customer's satisfaction hangs hang in the balance.

If your customer support group simply follows a race-to-the-bottom strategy, it's missing the opportunity to convert a potential customer loss to an upsell. Recall Jan Carlson's Moments of Truth: Profit inflection points come disguised as little crises.

Even when a customer isn't facing a crisis, customer service reps make extremely effective spies: Customers happily confide in them, as sales-driven pushiness doesn't scare off openness. On every call and email, reps should gather information to fuel an upsell cycle, even if somebody else completes the cycle.

This change will likely take some political work with the customer service, marketing and sales teams, but it can be very effective and drive significant improvements in profitability. Why? In most industries, the most profitable deals come from existing customers.

Achieving this, though, requires some training and a ton of application and infrastructure changes. Instead of having a console focused around calls, cases, solutions and the bug knowledge base, customer service reps also needs access to new product information, compatibility matrices, upgrade paths and competitive comparisons.

Further, they need the capability to create Opportunities on the fly and to add call-history info (not just case notes) to a Contact record. This can mean some amusing changes to your CRM system's access control matrix, and it requires new analytics tailored to measuring this new non-marketing-driven sales process.

 

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