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Brands have been built on customer service: Jim Bush

Interview with executive vice-president (world service), American Express

Sudipto Dey 

When you move from customer servicing to customer engagement, you develop a value generating asset for the company, Bush tells Sudipto Dey

Various surveys have pointed out that customers in emerging markets can be more sensitive to customer service than their counterparts in mature markets. What has been your experience?

Generally speaking, customers around the world have similar values and expectations when it comes to service, and the primary differences really are more around the degree to which consumers react. For example, we know that a majority of consumers in markets we've studied said they'd spend more with companies that they believe provide excellent service. That number is much higher in India and Mexico, compared to more mature markets like the United States and Europe. In addition, many more consumers in India and Mexico said they've abandoned an intended purchase because of poor service.

Customers judge your company every day in the service they receive and through the quality of products and services that your company provides. How has technology changed customer expectations?
Social media is raising the stakes for companies when it comes to customer service. The real-time nature of social media raises expectations for those who use this channel for service. The socially networked consumers are demanding engagement, personalisation, and a human touch from the companies they do transactions with.

In fact, our research shows that one-in-five global consumers have used social media to get a customer service response at least once in the past year. Broadly speaking, these "social media savvy" consumers will spend more than the general population for quality service - and are more vocal about service experiences, both good and bad.

Customer reference is paramount. The impact that customers now have through their networks, by amplifying their feelings can change the way in how people think about companies.

Very few companies have got their customer service in a connected world right. Even fewer understand the value of great customer service in this always connected environment. What are the common mistakes that businesses make when effecting a change in their customer service culture?
Effectively changing the service culture requires an organisation to shift its mindset in three primary areas. First is the notion that service is a cost: For many, service as a cost to be managed. In reality, focusing on building relationships with customers can drive loyalty and business growth. Second is the perception that service is all about problems. Problems are actually a small percentage of why customers call American Express, for example, and we've learned that the power of that customer interaction gives us an opportunity to improve the perception of our brand. Then there is the belief that quality service is complex. Fundamentally, service is not as complicated as some might think. It is about following one Golden Rule - treating people in the same way that you would want to be treated by a company.

At American Express, we've moved away from the thinking that service is a transaction and focused on serving customer relationships. To this end we've ditched the scripted and robotic approach and are focused on offering a human approach that empowers our people and lets our employees' personalities shine through. This is our service ethos -we call it Relationship Care - and it creates a competitive advantage for us. To get this right we've acted on the belief that great service starts with the people who deliver it.

Therefore, we've taken a different approach to hiring. We want to select people who fundamentally "offer" service, including people from hospitality and retail backgrounds - as opposed to only former call centre agents.

Investing in service has also helped us drive our business. We know that customers who are "promoters" of our service spend more on our products and leave the franchise less compared to those who are service "detractors."

In addition, we've also seen employee attrition come down, which has helped us contain the direct and indirect costs associated with running our service operations. As we evolved we changed the way we compensated our care professionals. There are rewards for driving the two outcomes - improving the customer satisfaction so that it leaves a favourable last impression and they recommend us to a friend, and on improving the operating margin.

Measuring customer satisfaction can be challenging as each customer is different. How do you arrive at a common parameter for measuring it?
Earlier we measured through an internal matrix without really emphasising our customers to recommend to others.

In 2006 we changed that and adopted the concept of net promoter score by asking if customers would recommend to friends. This matrix drives significant economic value for us. Within our company we have found that customers who recommend us drive 15-20 per cent growth in spending. There is economic value in the way our brand is viewed. The most powerful mode of advertising is word of mouth and we are driving the 'positive' word of mouth.

How can companies use customer service offerings to their advantage?
Before 2006, we thought of customer service in our company as 'back-office function' and the values associated with it were all related to costs.

In 2013, we realise that every query answered helps us to deepen the engagement with our customers. By engagement we generate loyalty, and ultimately shareholder value. It is an investment in a relationship. Every query (by a customer) is an opportunity to build a connection. We have hundreds of million contacts every year. Each contact is an opportunity to change the perception of the customer towards the brand. It is one of the most powerful marketing weapons.

We use the opportunity not just to solve a query, but serve the customer in making a transaction. The impact is profound especially when many customers feel that service companies don't always live up to their expectation of service. In fact, research shows that customers usually walk away from transactions due to lack of service. In fact, two-thirds spend 12-15 per cent more based on the service experience they get.

How should companies go about transforming the work place? How did make the transformation?
We went back to defining the purpose of why we were in the business. We are here to engage our customers and we strive to leave a favourable last impression. We set two objective functions, to improve margins - operating margins and service margins, and not just lower costs. Finally, in the spirit of customer reference, we instituted the voice of customer as a means of measuring our success. Earlier we used to measure ourselves against process efficiency; important in terms of organisational outcome but not in terms of the outcome for customer value.

We had the power of global solutions but never lost sight of the importance of being local. We moved from customer servicing, evolving to customer engagement - a value generating asset for the company. This is where our brand is made.

First Published: Mon, May 13 2013. 00:05 IST