Does It Pay To Have A Heart?

15 07 2008

Every good marketer knows great customer experiences mean a lot — and that customer service experiences are a critical moment.

As the title of Pete Blackshaw’s new book aptly puts it, Satisfied Customers Tell Three Friends. Angry customers Tell 3,000.

Still, this is typically seen as a back-office operation that can easily be outsourced to save money.

What’s the harm? Is there a hard-dollar impact from skimping on the soft stuff?

Outsourcing Customer Service Is Linked To A Drop of 1%-5% In A Company’s Market Cap

A recent article in the MIT Sloan Management Review says:

“Offshoring’s actual impact on customer satisfaction (…) in most cases is significantly negative—but similar to the effect of outsourcing customer service domestically.”

An analysis was done of 150 North American companies and business units from 1998 to 2006. Those that outsourced customer service saw a drop in their score on the American Consumer Satisfaction Index, or ACSI, a measure created by the National Quality Research Center at the University of Michigan.

Who Cares? Your Shareholders.

ACSI scores tend to move in the same direction as companies’ share prices. The decision to outsource customer service was linked to a drop of 1% to 5% in a company’s market capitalization.

Getting brand experiences right matters.

Even if as an executive you have ice-water in your veins, here’s the bottom line. It still pays to have a heart.

Photo Credit: Fernanda Fronza