Why CFOs Should Care About Customer Service

Customer service strategies are taking center stage in 2016, as businesses across industries and verticals recognize the importance of providing consumers and clients with excellent experiences. That is because, in 2016, it is easy to find an organization to purchase from or partner with, and so, what really matters is that companies offer positive experiences at every point in the customer journey.

As a chief financial officer, you might think that the customer service onus falls on your regional managers or chief operations officer. You could even place the responsibility on sales representatives and call center teams. However, that would be a mistake. Nowadays, customer service is more complex than ever, given the number of channels through which consumers interact and the influence that individuals have over others in the era of social media. And, as such, it is every executive's responsibility to ensure high-quality customer service.

Therefore, you should care about customer service as much as every other business leader at your organization. In fact, Chad Yoshinaka, customer experience leader, asserted that CFOs should play a critical role in the management and optimization of customer service strategies, since these individuals, like you, have the ability to invest in those initiatives. And, if done correctly, you will directly impact your organization's bottom line.

A lack of care is lost revenue
Bad customer service is always going to hurt a business. There is no other way to say it.

For one, if customers have a negative experience with a brand, they will be less likely to return to that company with money to spend. Those shoppers or clients will not want to risk having another bad interaction, and because every consumer costs revenue to attract, poor customer service is effectively removing the chance of seeing a return on that investment. Therefore, every dollar spent on getting clients is wasted when experiences don't meet their expectations.

Then, consider the amount of revenue lost when that disgruntled or dissatisfied individual spreads the word on social media - an inevitability in today's Internet-connected world. If a user complains about a company's poor customer service on message board Reddit, a whole community of consumers will take to Twitter to question that brand's practices, and a story such as that is likely to find its way to local news or get picked up by Internet media at the very least.

The cost to repair reputations in either of those two cases will vary, but it is likely that it will exceed the price of just doing customer service right in the first place.

Poor customer service practices will also hurt your bottom line. In other words, consumers don't even need to specifically complain about an experience for it to impact bottom lines. An article on Becker's Hospital Review cited a study conducted by The Advisory Board Company that found the typical company in the health care sector with below average customer service is essentially losing $10 million - or as much as 5 percent of total revenue - every year thanks to a lack of operational efficiencies. Those organizations were asking redundant questions and putting clients through underwhelming experiences, and it ended up costing them more than doing customer service correctly.

When customer service is good
Great customer service can equate more revenue. It is that simple.

Harvard Business Review found that customers will spend 140 percent more of their money with businesses that earned the highest customer experience scores. That alone proves that awesome service can separate the best from the worst, and consumers will always spend with the greatest companies. Forrester discovered similar findings, explaining that optimal experiences can help you add over $1 billion to your bottom line, with companies in communications and travel seeing the most to gain.

There are a few reasons for this steep increase in profitably, Forrester research noted. First, consumers will tell their friends, family and others about their great customer service experiences. Second, if customers have positive interactions when they need tech support or call center assistance, they will be more likely to stick with the organizations that provided timely help. Therefore, there is less churn. Lastly, when a good experience is had, clients will buy again, with confidence that they will not be burned.

Failure vs. success
The cost of failing at customer service will always exceed the price to make all interactions better. In that regard, it is usually in a business's best interest to invest in customer service upfront than to wait until poor experiences are the norm. That is one of many reasons why companies turn to business process outsourcing partners that provide call center services and tech support representatives: They understand the importance of customer service and don't want to risk doing it poorly.