Lack of Employee Development Leads to Poor Customer Satisfaction
There is a lot of talk, or mainly noise, about the importance of a strong employee training program in a company, but only the select few organizations invest in the continuous professional development. Implementing a series of videos and having employees review them ever so often is NOT a program that creates a long-lasting impact. It is a "tick-in-the-box" exercise.
I have heard a lot over the years, either when heading up a learning and development department or when speaking to the potential customers: "We have no budget to invest in training because corporate already have a set of video or e-courses that we use." In some instances, training existed but there was no time to attend the classes, because employees were overloaded with daily tasks. Worse yet, leaders chose not to send employees to the development courses, because they believed that an employee was great at what they were doing already and needed no further development to stay in the same job. But, what if that employee was aspiring to do something else or wanted to become a people manager?
Also, many talk about the importance of retaining customers but very few implement effective customer service strategies.
Is there a direct link between effective employee development program and customer satisfaction? - Yes.
Why are companies struggling to calculate training ROI before deciding to invest more in the employee development? - They care about short-term results versus sustainable business growth.
Isn't it a fairly straightforward calculation if tied to the losses of customers from poor services delivered by untrained or unmotivated employees? - Yes. Calculate the cost of losing customers.
It is a proven and known fact that the way a company serves its customers, can either make an organization successful or have it fail. When customers receive bad customer service, they will either complain to a company or will leave without any feedback. Many don’t return to do business and communicate their experience by word-of-mouth to their network. It is difficult to fix problems, when feedback is unheard. Customers who are dissatisfied, impact revenue by leaving a company to a competitor. Keeping customers is a lot cheaper than getting the new ones.
My company recently hired a professional services company who made a lot of promises but failed to deliver on them. The response time to the inquiries was always delayed and the quality of work was extremely poor. When speaking with the representatives of this company about the accuracy of the output, there was always an excuse. Needless to say, after giving a few chances to correct the issues, we discontinued our relationship. Were the employees trained properly? It certainly didn't appear this way.
Customer service is critical to the success of any business and especially when competing with larger organizations. Small businesses might need to charge more for their services, as they can’t scale their operations and production as easily as big businesses. According to the American express research, customers are willing to pay higher prices to the business with good customer service (SBA, n.d.). It is imperative to have effective training for front-line employees, developed strategies to satisfy customer demands, robust procedure to execute them, and customer loyalty programs. Great customer service companies will have high customer satisfaction scores, which will directly impact revenue growth.
Here are the two examples shared by my customers that demonstrate how employee development and good customer service create positive outcomes and bad customer service negatively impacts business.
Example #1: An online retailer set up a website where customers can directly comment on their experiences with the company. They have social media presence on Facebook, Twitter, Instagram, LinkedIn, and customers post their comments there too. They guarantee a 48-hour turnaround to process and ship orders. Customers have an easy access to a customer service representative by phone or through online chat, and they reach a live person within 20 seconds 100% of the time. They get their questions resolved on the first call 97% of the time. When an issue can't be resolved, managers follow up with a customer within 24 hours. The quality of the products and service delivery is very high as 98% of customers reported to the company through customer satisfaction survey.
Due to responsiveness, quality, and ability to access highly-trained service representatives, customers post their positive comments online and tell their connections about these experiences. Good customer service brought over 58% of new customers based on the referrals. In a year, the company expanded their operations and increased revenues by 30%.
Employees at this company received face to face and online training on products, services, processes, and customer service. They have access to relevant training on demand. Managers went through leadership development training at least twice a year which was followed up with effective coaching.
Example #2: To save on labor and leasing costs, a bank outsources their customer service operations to an overseas company. They had SLAs (Service Level Agreements) to answer 80% of all calls within 20 seconds. They also expected 95% of the help desk tickets to be resolved within 24 hours. Over the 6-month period, a company noticed that customer retention rates dropped by 30% and the revenues decreased by 10%. After investigating further, they discovered that several customers complained on social media about long waiting times and poor customer service when contacting the call center. The reports also indicated that the SLAs were missed most of the months. The customers were switching to another bank and the bottom line was negatively impacted. Poor customer service led this company to the long-term losses, as customers weren’t coming back, and instead, switched to the competitors.
Their on-the-job training of customer service representatives concentrated mainly on technical aspects. Outside the original knowledge transfer training, the bank didn't provide any direct training to the vendor. The representatives who performed well within three months were promoted without any specific leadership or management training.
Build Strategies That Incorporate Continuous Employee Development