Question

In: Accounting

A businessman asks you to provide a profitability profile of his customers. Once you have provided...

A businessman asks you to provide a profitability profile of his customers. Once you have provided it, he remarks: "so i should drop all those customers where the costs of servicing the customer exceed the revenue from that customer?" Answer him and explain.

Solutions

Expert Solution

No you should not drop all those customers where the costs of servicing the customer exceed the revenue from that customer, Here are a few ideas that will help reduce your customer care costs without negative impact on quality.

Hire the right people and train them well

No matter how fancy your software, if you don’t have the right people manning your customer care lines, you’re in for big trouble. By “right”, I mean the few essential traits that your staff needs to have, including:

A helpful disposition,

Strong listening skills,

High-level cognitive skills to understand and address users’ problems

Quick decision making capability,

Ability to pacify irate customers

Genuine personal warmth and empathy that puts the customer at ease

All these qualities make a stellar customer care representative—one that you’ll be proud to have representing your business. Once you have good employees, invest time and resources training them well. Teach them how to get things right in the first attempt, how to mollify heated situations, and how to work together as a team.

As you rightly guessed, such people don’t come cheap. Don’t be penny wise and pound foolish by hiring the least experienced or skilled people who apply to your customer care positions. By investing in talented staff, you will improve customer satisfaction, reduce repeat calls, and increase overall revenue in the long run.

Identify your customer’s problems

Customers call up your support hotline for a myriad of reasons. It could be anything from solving product issues to maintenance requests.

However, with the help of customer support software, it is possible to track the reasons behind why users call and identify those that top the list. Once you’ve identified the top problem areas, work out a way to fix them. Let’s say the majority of your calls are about monthly purchases. By setting up a simple section on your site that allows users to buy monthly subscriptions, you automate the payment process and eliminate the cost of taking user calls for purchases.

Proactively eliminate problems

Mike Cholak from Convergys suggests building a “Customer Experience Map.” Map out the path your customers take through your support system and identify processes or products that make for a poor user experience. Fixing these issues on priority helps improve your customer’s overall satisfaction rate with your company. It will also mean fewer repeat calls, shorter call times, and quicker problem resolution, all contributing to a lowering of customer care costs.

Set up self-service options and make them easy to spot

Customers cite calling call centers and waiting to be served as one of the most irritating things they do in a day. Avoid troubling your customers by offering them information about your product or service upfront, via detailed FAQs.

Some important things to remember about your FAQs section:

Include a search bar in your FAQs section. This makes it easier for the user to find answers for their specific problem without having to read through reams of questions and answers irrelevant to them.

Use simple, conversational language over technical jargon. The idea is to make sure the customer can understand your solution without having to call up customer care for clarifications.

It’s not enough to simply create a great FAQs section; make sure it’s prominently displayed on your website and visitors can find it.

However awesome your FAQ section may be, some users simply can’t go without having a real person answer their questions. They can’t be bothered to “go on the internet” and dig into instructions or forum discussions. To help such customers, create a self-service option on your customer care phone lines, or provide live chat options on your site.

Consider remote work for customer care agents

The technology available today can eliminate the need for having all your customer care personnel under one roof. You can build a support team that works from home and is located anywhere in the world at a significantly lower cost than transporting people to your location, paying rent, utilities and other assorted overhead at a permanent commercial property.

Remote workers have been known to put in longer hours, are less stressed out, and are cheaper to maintain than employees in physical offices. Microsoft’s “Work Without Walls” whitepaper tells you all the different benefits that come with remote workers such as:

Better work/life balance (60% of respondents)

Savings on gas (55%)

A quieter and less stressful environment to work

However, ensure that your customer service agents are equipped with tools and useful software that enable them to work efficiently.

The ability to track your agent and customer support team’s performance through analytics will also be useful in helping your team work better from their respective locations


Related Solutions

A businessman asks you to produce a profitability profile of his customers. Once you have provided...
A businessman asks you to produce a profitability profile of his customers. Once you have provided it, he remarks: "So I should drop all those customers where the costs of servicing the customer exceed the revenue from that customer?" Answer him and explain
Conrad Hilton, what do you think were his strengths and/or weaknesses as a businessman and as...
Conrad Hilton, what do you think were his strengths and/or weaknesses as a businessman and as a person.
You are the Accountant for Duke Street, Inc. and your boss asks you to provide the...
You are the Accountant for Duke Street, Inc. and your boss asks you to provide the bank with a profit forecast for the coming year. Sales and profitability have both been trending downward over the last five years. Technological advancements have made the current product less attractive. Duke has developed a new product consistent with their perceptions of consumer behavior. The company is requesting a loan from the bank to launch the new product; the loan is very necessary. The...
Provide one example for each of the four factors of production which you have personally provided.
Provide one example for each of the four factors of production which you have personally provided.
WHO ARE YOUR COMPETITORS? Once you determine who and where your customers are, you must determine...
WHO ARE YOUR COMPETITORS? Once you determine who and where your customers are, you must determine whom you have to share them with. Find out if similar products are carried in retail outlets. Once identified, search for information on competitors in industry directories, either in print or online databases. WHAT PRICE DO THEY CHARGE? Establish what your competitors charge and list the selling points of their product or service. Try to find your industry's wholesale and retail prices. WHAT PRICE...
You have been provided a mixture containing four amino acids (Glu, His, Pro and Lys) to...
You have been provided a mixture containing four amino acids (Glu, His, Pro and Lys) to be separated by ion-exchange chromatography using a Dowex 50 cation-exchange, prepared in a loading buffer at pH 2.0. The following solutions are made available: The amino acid mixture in 0.04M citrate buffer at pH 2.0. 0.04M citrate buffer, pH 4.5 0.04M citrate buffer, pH 8.0 0.04M citrate buffer, pH 10.5 Is complete resolution of all amino acids achieved if the buffers are allowed to...
A shoe salesman wants to see if his female customers have a preference in the color...
A shoe salesman wants to see if his female customers have a preference in the color of shoe purchased. He notes the color preferences of 100 randomly selected customers. The results: Black=32, Brown=27, Red=15, Navy =13 White =13
L.H asks why his provider discontinued his spironolactone. How would you respond? Explain your answer.Two weeks...
L.H asks why his provider discontinued his spironolactone. How would you respond? Explain your answer.Two weeks later L.H is prescribed furosemide (Lasix). What type of medication is furosemide and how does it work? What are the advantages of this classification of diuretics? Explain your answer. . Abnormal electrolytes and other laboratory test results may occur when taking loop diuretics. Explain the imbalances. Would the following serum electrolyte and laboratory values be expected to increase, decrease or unchanged? SodiumPotassiumCalciumMagnesiumGlucoseUric acidCholesterol What...
Your boss asks you to evaluate the purchase of a new battery-operated toaster for his restaurant...
Your boss asks you to evaluate the purchase of a new battery-operated toaster for his restaurant chain. The toaster [ BT ] costs $9 per unit, and has an estimated useful life of five years. The toaster requires batteries once a week yielding an annual operating cost of $140 per year; salvage value of both toaster and batteries is zero. The alternative is to purchase an electric toaster [ ET ] that will last ten years and costs $50. The...
Apply Competitive Profile Matrix tool on Amazon company. PLEASE PROVIDE ALL SOURCES YOU USE. Thank you
Apply Competitive Profile Matrix tool on Amazon company. PLEASE PROVIDE ALL SOURCES YOU USE. Thank you
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT