Customer service training and ROI
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Quality customer service is at the center of any company's success. A business relies upon its customers in order to grow and, if poor customer service is offered by a company, people will simply take their business elsewhere.
As more and more companies begin to sell their goods and services online consumer options have expanded. Today's economic environment is a competitive one and the market is increasingly more customer-driven and business who cannot maintain a stable customer base will quickly fall to the wayside.
Most budget specialists will probably say the costs of hiring and training people is a significant expense, but some may argue this investment to customer service training is well worth it.
Value of customer service trainingCustomer service has grown to become a significant asset to successful companies. When people receive good service they are more likely to return, and in the long run this increases profitability. From an economic standpoint it is much cheaper to maintain current customers than it is to attract new ones (and statistics back this up), so businesses have a firm investment and motive to establish a solid customer base.
This goal is accomplished by having quality people to represent the company. Good customer service entails being knowledgeable, helpful, and possession of strong communication skills. In order to sustain these qualities these attributes often require some training. Strong customer service reps who have been trained in how to deal with the public and effectively answer questions will help portray your company with a positive image (and providing a friendly face never hurts!)
Excellence in customer service is one of the key pieces which enable a business to continuously build and maintain a solid customer base and this is what makes customer service training such a valuable investment. Maintaining this training is costly because a lot of money is directed into this expense account which could potentially be utilized elsewhere.
The company's financial decision makers have to decide whether or not this investment is worth the time and financial efforts involved. This is where calculating a return on investment can come into play and provide some usefulness.
What is a Return of Investment (ROI)?According to Investopedia, a return on investment is a defined as "a performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments". The ROI formula is computed by subtracting the cost of investment from the gain from investment and dividing this figure by the cost of the investment. This formula is a flexible one, meaning the person running the numbers can manipulate the outcome depending on what costs are used in the configuration.
It would not benefit a business to tweak these numbers on such a large investment to slant the outcome in a favorable or unfavorable fashion, but rather use the ROI metric as a baseline to conclude if investing money in customer service training is worthwhile.
Relationship between ROI and customer service trainingAs with most investments, in order to realize a solid return, one has to spend money in order to make it. Investing in strong and excellence in customer service is no exception. Many businesses have sat up and taken notice of the importance of quality customer service in today's industries.
As a result, these companies have seen the value of allocating monies for customer service training. The problem arises when they cannot determine whether or not the expenditures involved outweigh the benefits derived.
An issue associated with this initiative is the fact it is hard to figure if the money invested correlates with higher percentages of customer retention. This statistic is not always easy to determine because it an indirect expense, meaning customer service training isn't always necessarily be directly tied to customer loyalty.
Customer service training is probably a speculative investment, but one worth investigating to see if it is financially feasible and cost-effective. Even though the dollar amounts may not be matched by aligning increased profits with customer service training, if a company sees an overall improvement of customer retention, this is a sign it's working.
The question of whether or not customer service training is valuable is obvious because customer service representatives are the face of your business, but the deeper question for financial decision makers to evaluate is how much training is enough. A business cannot drain its entire expense account into this kind of training, but rather find a way to spend what's needed and not in excess and this is where an ROI can offer some insight. It may not provide the entire picture, but should be able to give a relative snapshot if the costs included are assessed accurately.
Any business does not want to intentionally incur unnecessary expenses. When evaluating whether or not to invest in customer service training, it's important to understand the concept of balance and how cost savings are realized. By using the ROI formula this may give some insight as to whether or not this balance is going to be achieved. A fruitless investment won't generate results, but a carefully analyzed and wisely spent one can.
Businesses can no longer afford to have a staff full of unhelpful or cranky people serving their customers. As the marketplace continues to grow, globally consumers have a plethora of choices and won't tolerate poor customer service.
That being the case, businesses have to invest time, money and resources into hiring, training and maintaining strong customer service representatives. The return of investment on investing in customer service training is invaluable.