Showing posts with label profit. Show all posts
Showing posts with label profit. Show all posts

Thursday, February 27, 2014

Does Combining Customer Service with Sales Improve Company Performance?

Customer service and sales are both important functions for an organization. What happens when we put them together? A study by Jasmand, et. al. (2012) delves into the nature of creating ambidextrous sales-service functions. Their findings determine a net positive result of helping customers with their problems and offering those products/services that better suit their needs. It creates some confusion among employees but seems to improve customer satisfaction and overall sales volume.

There is a natural mental barrier between customer service representatives and sales. Customer service representatives do not view their job as including sales and therefore are less focused on this activity. A lack of perspective limits the abilities of firms to create higher sales through a level of mental merging of the two functions. Training, time and commitment will be needed to bridge the gap and improve upon the integration of both constructs.

Ambidextrous goals and behavior in service and sales can be difficult for representatives. It creates confusion on what actions should be taken and toward which goal. It is a complex skill that low cost providers will have a hard time teaching as the representative will need to know when a better product or service will provide higher levels of customer satisfaction. Most organizations have trained employees to focus on a single activity based on the definition of their job function.

Let us see how this works in a real life scenario. A customer calls in to complain about a product. The customer service representative can log their complaint and check the warrantee to make a return. However, if the customer service representative listens closely and asks important questions they may be able to suggest an alternative product that fits the customer’s needs better (customer satisfaction). The sales portion may come into play if the returned product can be used as credit for a higher level product that actually satisfies the customer (improved sales).

The study found that ambidextrous sales-service activity increases customer satisfaction and sales but reduces efficiency. The total net effect is positive on organizations whereby sales and customer satisfaction improves the company beyond the loss in efficiency. The authors acknowledge that if proper training occurred, organizational resources were adjusted, and the measurements of activities improved, efficiency may rise. For example, if fewer resources are needed from the sales department because the organization is fulfilling some of that function in customer service and developing higher customer retention rates then the sales-service activity improves net efficiency between the varying functions.

Jasmand, C. et. al. (2012). Generating sales while providing service: a study of customer service representatives’ ambidextrous behavior. Journal of Marketing, 76 (1).