Calculating Customer Service Time

Most innovative executives understand the necessity of strong customer service and making sure the customer feels appreciated. These same executives might even understand how to empower their employees and even what tone these employees should take. Yet many of these executives may not understand the necessary speed that strong customer service should take and precisely when it is necessary to end a conversation with a customer.

These soft skills require knowledge based employees who can make judgments on their own without the overburdening hand of scripts, excessive oversight, and limited training. Depending on the quality of the customer and the amount of money this customer may bring the length of a customer service contact may be considerably longer for clients that spend a lot of money and much less for clients that do not. This is not cold-hearted in nature it is simply businesses must be run if they want to earn high profits.

Take for example Sprint. Certainly one cannot call Sprint a high-profits company after 2006 and competition became fierce. However, one of the methods Sprint used to try and increase their cash flow and low profit margin is to get rid of unprofitable customers. These are those customers that constantly have questions but spend very little in terms of phone contracts, accessories, and services. Therefore, it makes sense to let these customers go to Sprint's competitors.

What Sprint found was that some customers were unprofitable and seemed to jam customer service phones with their irrational needs. When a customer spends very little on the product then customer service needs to be in proportion to the services they spend. When customers spend a lot of money on a product then customer service should be willing to go the extra mile to assure customer happiness. Everything has an equal measure.

Most companies can simply come up with a formula that would tell them how much time and effort the average customer is worth in the customer service department. For example if you were to add up the labor, facility costs, training costs, etc... of the customer service department and divided that by your customers you would come out to a time frame that is extremely small. The better approach is to find out what percentage of people call customer service in any given year and divide the total cost by that amount. You might come out with something between 2-8 minutes of actual talking time.

Once you know how much talking time you can offer the goal is to train your customer service representatives so that they can meet those times and come in under budget but with great ratings. It would even be a better idea if those customer service representatives added to the total sales volume by engaging in suggestive selling. The goal is to focus on customers that make the business money and to hold to account low profit customers.