Every Customer Service Issue Is A Failure Of Your Product

A few years ago, I was chatting with Matt Witt about the challenges that online companies have with building out their customer service operations.

Matt had been COO at Active Hotels, a phenomenally successful hotel booking website that was acquired by Booking.com. I was COO at HouseTrip, one of Europe's fast growing startups.

He said that he viewed any customer service issue as a failure of the product. If a customer needed to call up or email to resolve an issue, that was an opportunity to improve the product. If customers repeatedly complained about the same things, your operations are not scaling. As the old adage goes, you can only make the same mistake once, the second time it's a choice. Whilst I had intuitively understood this to be true, Matt's explicit statement stuck in my mind.

I learnt that it's important to measure and categorise the issues that are received. For example;

  • How many issues? (Daily, Weekly)
  • From where in the product do they originate?
  • What is the time spent per type of issue?
  • What type of customers have the issue?
  • Were the issues easily resolved?
  • What was the cost of each issue type?
  • What is the customer satisfaction rate for customers that contact you? (by issue type)

With this kind of data you can start to build prevention and improvement strategies.

For example, you can start to improve the "self help" areas of your customer experience; on the phone or via the web. More importantly, you can give structured feedback to the product team about the customer experience and work together on improvements that will prevent the issues in the first place.

(We used Zendesk as our platform with GoodData as our analytics engine; they are great tools)

At HouseTrip as COO I had a three way challenge;

  1. Growing the customer service function fast (bookings were growing in double digit % every month)
  2. Constantly increasing the customer satisfaction rates (quality)
  3. Improving efficiency of the customer service function (cost of service as a % of net revenue)

You can't have all three all of the time, you need to choose two that matter most. Whilst we did manage all three over time, it was important to understand the relative priority of each.

Our priority was excellent customer satisfaction. We then had to cope with growth. Efficiency improvements did happen but they came later.

My advice to startups who are starting their customer service operations is to have a relentless emphasis on quality of service first and foremost making sure to constantly improve the product to avoid issues happening in the first place.

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