A Dangerous Game of Truth and Consequences: Revolving Door Staffing Keeps Employee Numbers Up, But Lowers Customer Satisfaction and Loyalty

by Jenkins, Eva Friday, April 20, 2007
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Companies with a Wall Street-friendly track record for quickly and regularly replacing experienced staff with new workers at lower wages “have lost sight of the big picture of their own success,” warns veteran staffing professional Eva Jenkins. Aided and abetted by technology, U.S. companies can create or reconstitute a workforce easily to slash budgets quickly. “But what these red ink/black ink decisions fail to take into account is the consequences of the quick- hire and quick-shed of employees,” Jenkins observes. “Revolving door staffing kills effectiveness in one of the most important departments of all – customer service. And when customer service dies, so does business.” “I know, I’m a consumer as well as a business owner,” Jenkins points out. “So I translate life lessons from my own service experiences into customer-centric business processes for my clients.”

“It’s been proven true repeatedly that customer relationship activities have the most impact on customer retention,” reports Jenkins who was recently stunned by the lack of responsive service at major retailers like Sears, large banking institutions, i.e. Bank of America and at a national healthcare provider’s office. “Every customer service encounter has the potential to gain repeat business or drive it away,” says Jenkins. So, why is it so difficult to receive good customer service?

Failure to Meet Great Expectations
Despite the acknowledged importance of customer service, up to two-thirds of all customers worldwide leave due to unsatisfactory customer service. On average, most U.S. corporations lose half their customers every five years. Yet, despite the proven benefits of an effective customer service team, clearly defined-company standards and practices for hiring and training employees, effective internal communications processes, and a true understanding of customer needs and expectations are “frequently sacrificed on the altar of fiscal leanness.”

In today’s global marketplace, the all-important ‘human face’ of a business is customer service. Promises of knowledgeable, responsive representatives are routinely put front in center in advertising and marketing efforts. “These promises are used to gain market share and increase an organization’s visibility and competitive edge,” says Jenkins.

The impression employees create can make or break, not only the current sale, but future sales as well, Jenkins says. “And the consequences of setting up high CSR expectations and then failing to meet them can be catastrophic.”

Short-Sighted and Short-Circuited
Jenkins points to the recent shake-up at Circuit City. The electronics retailer, facing larger competitors and falling sales, replaced 3,400 store workers with lower-paid new hires. “Minimally trained employees can’t possibly deliver on the promise of great customer service,” says Jenkins. “And knowledgeable in-store customer care is what differentiated the Circuit City buying experience from going to a big-box store like Walmart.”

Faced with unmotivated, uninformed workers, consumers become disappointed, frustrated, angry, “and ultimately come to view a company as untrustworthy,” says Jenkins. “I don’t know what the long term implications will be for the Circuit City chain, but it won’t be good.”

Jenkins believes that far too few executives really understand the direct correlation between customer satisfaction and customer loyalty. “It’s less expensive to continue to sell to a satisfied customer in the long run than to constantly find new customers,” she observes.

The Root of the Evil
Given the incontrovertible evidence regarding the long-term value of good customer service, why aren’t more businesses creating lots of positive memorable experiences? Perhaps it’s because most customer service representatives are “not trained appropriately, if they are trained at all,” says Jenkins. “Customer service personnel, in fact all employees in an organization who interface with customers, need to be trained on how to create and reaffirm solid relationships with customers.” When this is done well, explains Jenkins “customers stay, they buy more, and they refer more.”

Taking service to this level involves empathy and a significant array of communication skills. “But people can and will provide service like that if you train them,” says Jenkins. To do so, a company must first establish “positive, memorable customer experiences” as a goal. Then “that goal must be communicated clearly to every employee through proper training, ongoing assessment, and feedback.”

The marketplace is changing at a breakneck pace, but change doesn’t matter if the customer isn’t getting problems resolved or targeted assistance that goes beyond the customer’s expectations. “A customer who has a stellar experience will remember it and return,” says Jenkins. “Relationships grow and so does your customer base. That’s an R.O.I. that you can measure and ‘take to the bank!”