Once upon a time I wanted to get in to MICA. After receiving an interview call, I decided to look up some alumni. Out of the many I sent friend requests to, only Siddharth Soni replied. We’ve been friends ever since.
Siddharth recently wrote a blog post asking “How much should customer service guys be paid?“. In the post, Sid says that marketing and sales professionals attract customers to a business but it is the customer service people who actually “fulfill the promise” and therefore, they deserve to be paid equally well. Here, he’s not talking of Customer Service as the guys at the call centre, but anyone engaged in the “delivery of the promise”. This could mean the lady at the front desk, the Relationship Manager at the bank or even the aircraft pilot.
My answer to “How much should a customer service person be paid?” is, “it depends“. What does it depend on? How integral is the Customer Service to the Customer Value Proposition.
Let me explain. You go to a small family owned restaurant close to your place for a quick meal. It’s a slow Tuesday afternoon and the owner says that no waiters are available, so it’s “self service”. Will you be disappointed and expect to pay less? I don’t think so. It’s more like “Fine, I’ll get my own grub from the counter, no issues”.
I would, because the Hooters Girls are an integral part of the experience at Hooters restaurant. In fact, for them, I’m ready to pay a premium price on the food. Why is this so? Because the value being promised by Hooters as stated in their Mission Statement is
We are committed to providing an environment of employee growth and development so that we can provide every guest a unique, entertaining dining experience in a fun and casual atmosphere delivered by attractive, vivacious Hooters Girls while making positive contributions to the communities in which we live.
As you can see, no Hooters Girls = “No complete value” as promised by them. My point is this, if the Customer Service (CS) being provided is an integral or a large part of the promised value, then the CS professionals will be paid relatively well. For example – in Management Consulting, the greatest amount of value is provided by consultants so they’re very highly paid. Take banks, where the highest paid professionals are the investment bankers that give awesome returns to investors.
Let’s get back to Siddharth.
Siddharth runs Mississippi Earrings, an online/offline store dedicated to earrings. As you’ll notice, earrings are products while all my previous examples have been of service based businesses. How much value then, can CS offer when customers are walking in for a product?
To answer this, I would like to draw your attention, dear reader, to Apple’s Genius Bars. A Genius Bar is essentially a tech support centre inside every Apple Retail store where highly trained “Geniuses” help customers with any problems they might have. Quoting this Wall Street Journal article, stores have sales associates that are taught an unusual sales philosophy: not to sell, but rather to help customers solve problems.
“Your job is to understand all of your customers’ needs—some of which they may not even realize they have,” one training manual says
And the result: Customer Growth Partners says that Best Buy makes about 1% profit margin (before taxes and excluding online sales), while Needham & Co. reports that Apple makes 26.9% profit margin from its stores.
Can Siddharth do the same with Customer Service at Mississippi Earrings? I think he can. In my opinion, the two most important steps are
- Train his staff extensively on the products available, the latest fashions, the different segments of customers who walk in and make sure they’re super helpful when it comes to giving advice about selecting earrings based on event, dress, personality, budget, use, etc.
- Communicate the availability of this extra value to the customers.
At the end of it all, it isn’t about Customer Service, Marketing or Sales or whatever. It’s about who’s making the paying customer walk-in. Marketing and Sales guys do that since it’s their Job Description. A just-another-CS person doesn’t do that. An exceptional CS person becomes a reason for customers to walk back in, just to hear his opinion or tap upon his knowledge.
Dear reader, if you feel this isn’t correct or have examples that go against what’s written in this post, please do put that down in the comments. I’d love to have a conversation with you on the same.