Overview of the research conducted in Lithuania: “How the companies are changing their customer service management practices due to economical recession?”

SPECT-DIVE (Lithuanian branch of DIVE Group) together with AKA (National Customer Service Association) have conducted a special research at national level in Lithuania in the beginning of this year. It was designed to analyze how different sector companies are changing their customer service management practices due to economical recession. The outcome of the research is that in the long term perspective the customer service quality will decline and companies will loose the input of nearly ten years as they are cutting the costs on main customer service improvement tools such as personnel training, financial motivation and measurement (mostly Mystery Shopping). It proofs, that there is still a big lack of understanding that customer service management represents not only a cost, but an investment leading to competitive advantage and that refusal of systematic approach towards customer service management can result in bigger losses in the future, not only monetary, but also non-monetary like company image, customer satisfaction and loyalty.

1 scheme. What is your customer service improvement strategy for 2009?

2 scheme. What actions will you take while cutting the customer service costs?

Summary of main findings and conclusions of the conducted research:

• Customer service management costs are being drastically cut (67% of companies are cutting, 33% are not cutting)
• In order to cut costs companies are mostly moving from outsource to internal resources and significant personnel redundancies

o Comment of author:
If companies will be able to sustain same level of professionalism while using internal recourse (which is significantly reduced in quantity as well) - effects after recession is over can be less harmful, but experience shows that internal people can not be professionals in everything - that is exactly why specialized companies are existing in each market

• Mostly companies are cutting costs by refusing (i.e. total stop of using) of main customer service improvement tools like personnel development (training, attending conferences, financial motivation systems) and measurement (mostly Mystery Shopping)

o Comment of author:
These named tools are extremely important in order to sustain the systematic customer service management and also are hard to replace with internal recourse professionally

• Companies mainly focus and move to usage of tools that are possible to execute with internal resource and require smaller investment at a time: creation and implementation of SOP (standard of performance), complaint/praise management, internal and non-anonymous audits

o Comment of author:
These named tools are needed to use - but used solely without full measurement and personnel development tools, most likely will not guarantee the expected results

• Companies underestimate and do not take advantage to use cheaper but still effective personnel development tools that actually require quite reasonable and affordable investment or are possible to execute with internal recourse, e.g. establishing self-development and self-training systems, individual development (coaching) done by middle level management, online tools (training, testing, etc.)

o Comment of author:
These tools usually require motivated and skilled internal recourse people, a bit more internal initiative and patience- but if used correctly can bring sufficient development results and replace classical training and seminars

Main recommendations for companies to focus and think about before they jump into drastic cost cutting in customer service quality management tools:

• If you choose to use internal recourse instead of outsource - you have to be careful and put enough attention to the professionalism of applied tools (use outsourced consulting at least), especially in Mystery Shopping - because if done unprofessionally it can harm more then help; by doing it unprofessionally you risk with all the input of Mystery Shopping program you have achieved so far
• Main goal is to maintain the systematic use of tools - i.e. to maintain the system of steps: measure -> develop -> motivate -> measure…. When you need to cut costs - then cut on quantities, try to be more efficient in each step rather then refuse of one step totally
• Focus on quality of the services you still choose to outsource - try to get the value for money
• Be flexible, diversify, try innovative personnel development tools like self-development, online solutions, but do no refuse this important customer service quality management system step totally
• High quality customer service is a way to differentiate and win the competition now, during economical recession, and accomplish even more after it will be over! So continue and be ahead!