Customer service management: complete guide

What is customer service management?

Businesses that thrive don't just meet customer expectations; they anticipate them, exceed them, and create truly unforgettable experiences. This requires a fundamental shift in thinking – one that puts the customer at the center of every decision. As Steve Jobs famously said back in 1997, "You've got to start with the customer experience and work back toward the technology—not the other way around." So how do you build lasting customer relationships and drive sustainable growth? It starts with customer service management (CSM). When you define your CSM philosophy it should be based on the experience you want to create for your customers - the right technology will naturally support those strategies.

Today, many companies have forgotten that the essence of running a business starts with the customer. Being successful at customer service management (CSM) means building and executing a strategy that revolves around a clear philosophy, a plan of action and choosing the right technology stack that supports those plans.

Customer service management is a comprehensive approach that organizations use to oversee all interactions between customers and the company throughout the entire customer lifecycle. It encompasses strategies, practices, and technologies to continuously deliver customer value, ensure customer satisfaction and loyalty, and drive long-term relationships.

Customer service management involves understanding customer needs, preferences, and feedback to tailor services and support to enhance the customer experience (CX). This approach addresses problem resolution and support inquiries and proactively seeks to improve the quality of service and customer interactions across all touchpoints.

A key component of customer service management is the implementation of systems and technologies that facilitate effective communication and problem-solving. This includes customer relationship management (CRM) systems, helpdesk software, live chat tools, and social media platforms.

These technologies track customer inquiries, manage cases, and provide timely responses. They also allow for the collection and analysis of customer data, which can gain insights into customer behavior, identify trends, and inform decision-making processes. Using technology, companies can streamline their customer service operations, making them more efficient and responsive to customer needs.

Effective customer service management also relies heavily on the skills and attitudes of customer service representatives. Training and development programs equip staff with communication, empathy, and problem-solving skills to deliver high-quality service.

Additionally, fostering a customer-focused culture within the organization encourages all employees, not just those in customer-facing roles, to consider the impact of their actions on customer satisfaction. This holistic approach ensures that delivering exceptional customer service is a shared responsibility and a core value of the organization.

Finally, customer service management is not static; it requires continuous evaluation and improvement to adapt to changing customer expectations and market conditions.

Continual improvement involves soliciting customer feedback through surveys, focus groups, and feedback channels and then using this information to make informed improvements. It also means staying abreast of technological advancements and industry best practices to enhance service delivery continually. The goal is to create a dynamic customer service ecosystem that evolves in line with customer needs and preferences, ensuring long-term relevance and competitiveness.

Why is customer service management important?

Customer service management (CSM) isn't just about handling complaints – it's the key to building a thriving business. If customers feel valued and receive efficient, empathetic support, they're more likely to become repeat buyers and enthusiastic brand advocates. When you invest in CSM, you're investing in creating positive experiences at every touchpoint. CSM gives your team the tools and training they need to deliver outstanding support, turning everyday interactions into positive, memorable moments. This leads to happier, more engaged employees who are genuinely excited to help your customers. And the best part? It all comes back to boost your bottom line. By creating a culture that prioritizes customer happiness, you'll see increased sales, stronger brand loyalty, and a reputation that sets you apart from the competition.

Customer satisfaction and loyalty

Customer satisfaction and loyalty are directly influenced by the quality of customer service management. When customers receive prompt, empathetic, and effective service, their satisfaction levels rise, significantly increasing the likelihood of them becoming loyal advocates for the brand. Customer loyalty encourages repeat business and transforms customers into brand ambassadors who will likely recommend the company to others. 

High customer satisfaction and loyalty levels from quality customer service management also contribute to a more resilient customer base capable of weathering market fluctuations and competitive pressures. Satisfied and loyal customers are also often more forgiving of minor issues, valuing the overall relationship with the brand over isolated incidents.

Optimize customer service operations

Effective customer service management sets staff up for success by providing them with the necessary tools, training, and support to excel in their roles. Empowered employees are more engaged, motivated, and capable of delivering exceptional service that meets customers' needs.

Customer service training programs focusing on communication skills, product knowledge, and problem-solving equip staff to confidently handle a wide range of customer inquiries. Fostering a positive work environment that values and recognizes excellent customer service boosts employee satisfaction and retention. 

When team members succeed in their roles and feel appreciated, they contribute to better customer service outcomes and a positive company culture that prioritizes customer satisfaction.

Increased revenue

A well-managed customer service strategy can significantly impact a company's revenue. Satisfied customers are more likely to make repeat purchases and explore additional products or services the company offers, leading to increased sales. 

Reducing churn and creating a loyal customer base allows businesses to build a steady revenue stream. Customer service management also plays a crucial role in identifying upsell and cross-sell opportunities, contributing to revenue growth.

In summary, by investing in customer service, businesses are not just preventing revenue loss due to poor service experiences; they are actively creating opportunities for revenue expansion.

Increased brand reputation/recognition

Customer service quality heavily influences brand reputation in the marketplace. Customer experiences, whether positive or negative, are quickly shared online and can impact a brand's public perception.

Effective customer service management helps businesses get ahead of the game and ensures that these shared experiences are overwhelmingly positive, enhancing the brand's reputation.

A strong reputation for excellent customer service attracts new customers while retaining existing ones, contributing to brand recognition and trust. Businesses known for their customer service excellence often differentiate themselves from competitors, gaining a competitive advantage in increasingly crowded markets.

The 5-step customer service management plan for your business

1. Build a robust, scalable customer service team

The first step of establishing a customer service management plant is putting together your very own A-team. There are two parts to this: hiring and training. Let’s take a look at both.

Hiring the right personnel for your customer service team

People are your most important resource, especially regarding customer service management. Here’s what you should look for when hiring service reps:

Social skills

• Empathy: We start with what’s probably the most essential quality to look for when hiring a support associate. Empathy is crucial because it makes it easier for agents to put themselves in the customer’s shoes and handle difficult conversations better.

• Patience: Customer service reps are often in high-stress situations, with tight deadlines and high customer expectations. However, presenting a calm, helpful demeanor can defuse even the hardest situations and boost customer satisfaction. Having the patience to listen and respond appropriately to situations is an important skill.

• Persuasiveness: A support rep needs to be an effective communicator. This is not limited to getting a message across clearly but means ensuring that the message is persuasive and reassures customers who might not be in the right frame of mind.

Hard skills

• Decision-making: Customer service representatives must make important decisions quickly when dealing with customer interactions. That could mean allowing a concession or making a call on whether an issue needs external support.

• Logical thinking: Keeping a calm head and making calculated decisions is necessary for support reps to analyze situations and solve problems efficiently.

• Knowledge management: Customer support associates need to have the capacity to acquire and absorb essential information about company policy, support processes, etc., to provide customers with the best possible solutions.

Defining roles and responsibilities

The next step in your customer service management strategy is creating well-defined roles for your team members. These roles will depend on the size and scale of your customer service team. But in general, these are the primary members you’ll need:

• Customer service/support associate: The customer service associate or representative is the first line of offense and defense for your organization, making them an essential member of your team. They deal with day-to-day complaints, handle different channels, and reroute high-priority issues to the right personnel.

• Customer support engineer: The support engineer is usually a domain expert or a product specialist who can deal with complex or technical issues that require bug finding or troubleshooting.

• Customer support manager: The manager oversees the work carried out by support engineers and service reps while also stepping in for critical issues as necessary. Understanding the top skills of customer service managers can significantly enhance the effectiveness of this role.

• Technical account manager: The technical account manager is a special role within the support team that is in charge of one or more large customer accounts that require special attention because of their size.

• Support operations analyst: The support operations analyst/helpdesk analyst’s primary responsibility is to analyze performance and productivity data to help managers make hiring and operational decisions.

• Head of support: The director of support heads the entire customer service department. Their responsibilities include strategizing and planning, understanding resource management, and ensuring high-quality customer experience.

2. Customer service training programs and shift management

Regardless of how big or small they are, all customer service teams need to be trained on how to interact with customers. Training programs will vary based on the company, and the customer service philosophy, but they’re critical to the quality of your customer service experience. Here are some areas you’ll need to train new hires on:

• Support process: What is the workflow for solving customer issues? What are the different levels of support? What queries are classified as low or high priority? Customer service management should answer these questions support reps need to know before starting their work every day.

• Channel classification: Identifying the communication channels most relevant to your business/target customer is critical to getting customer service management right. Once you have that in place, train your support reps on each channel's tone of voice and communication etiquette. For example, chat and social media conversations will have conversational tones, while phone and email will likely have more formal tones.

• Crisis training: Customer service associates need to know how to handle high-priority issues where customer and business revenues are on the line. Crisis training prepares team members to minimize improvisation and maximize problem-solving in real-time.

Customer service management also needs to figure out shift timing. You can use various shift schedules and customer service models based on the volume of queries your team supports. Here are just a few examples:

• Follow the sun model: This model is based on the principle of spreading your customer service team across several locations around the world. This customer service management technique is effective when providing 24/7 support and a global presence.

• Traditional 24/7 model: The most commonly used customer support management model where call centers are located in the same geographic region and run multiple shifts.

• Remote/distributed model: A fast-emerging model of support due to situational factors and the flexibility offered with team members spread out and able to work from any location.

3. KRAs and performance management

Keeping track of how your customer service team is doing helps identify the strengths and weaknesses in your customer service management process. Establishing key result areas (KRAs) and key performance indicators (KPIs) helps continuously measure performance and ensures you keep improving your support processes. Here are a few parameters and metrics to help set benchmarks and standards for your support team.

Customer-facing customer service management metrics

Customer feedback is the most important tool in your customer service management arsenal. Without understanding what the customer thinks, you can’t move forward. You can measure three important customer metrics:

• CSAT: The most commonly used metric across industries and businesses to measure customer feedback is the customer satisfaction score (CSAT). CSAT is a simple survey tool that allows customers to rate their experience on a scale of 1-10.

• NPS: NPS, or net promoter score, is a great metric for understanding customer loyalty. Customers respond to the question “How likely are you to recommend our company/product/service to a friend or colleague?” on a scale of 1-10. Customers who respond with a rating of 9-10 are protractors or advocates of your company, 0-6 are detractors, and those who respond with 7-8 are passive or neutral.

• CES: Customer effort score is a relatively new metric that considers how easy or difficult the experience was for the customer and how much time and effort they had to put in during the process. In the survey, customers are asked: “On a scale of ‘very easy’ to ‘very difficult,’ how easy was your interaction with our company?”

Internal support metrics for customer service management

Analyzing your team’s performance is as important to maintaining service quality as gathering customer feedback. To understand who’s doing well and who needs help, here are some metrics you can measure:

• First contact resolution: First contact resolution: Measures the percentage of issues the customer service agent resolved on the first contact or conversation with the customer.

• Ticket volume: Measures the number of tickets your team receives monthly or weekly. It’s one of the factors that go into demand forecasting and hiring.

• Average response time: A metric that tells you how long it takes on average for an agent to respond to a customer query.

• Average resolution time: Measures the average time an agent or support team takes to close out a customer issue.

4. The role of the customer service manager

The customer service manager has to play both a strategic and operational role while enabling the support team to achieve their goals. Understanding customer service managers' top skills is crucial in effectively making these decisions. Let's break down what responsibilities that translate into:

1. Agent roles assignment: The manager is responsible for assessing the skills of agent hires and assigning them the right roles and the right channels to handle.

2. Shift schedule management: The customer service manager's critical role is deciding shift timings and schedules based on volumes, availability, and other factors.

3. Hiring and staffing: The customer service manager needs to have one eye on the team’s performance and support volumes so new employees can be hired if needed.

4. Performance reviews: The manager needs to keep track of overall group performance and customer feedback and take the necessary steps to ensure consistency of customer service.

5. Incident/escalation management: When there is a major issue that junior team members cannot handle on their own, the manager needs to step in and resolve the issue swiftly and effectively.

6. Stakeholder review: The manager will hold monthly or quarterly reviews with the head of support and other important stakeholders to give valuable input on strategic decisions.

5. Choosing the right tech stack

We have now come to the last piece of the puzzle: deciding on your support tech stack. Technology can simplify many operational and administrative tasks while giving organizations greater visibility in their support processes.

However, the biggest reason the right tech stack cannot be overlooked is that front-line agents are the biggest beneficiaries. With that, here are some of the features and functionalities you need to consider when choosing customer service software:

• Self-service: Self-service options such as a knowledge base or an FAQ can be extremely helpful for customers and agents. For customers, it’s a way to find out information for themselves without contacting an agent or waiting in a call queue. You can also build an internal knowledge base for agents to refer to when looking for quick answers to repetitive questions.

• Omnichannel: Email and phone might still be popular channels for support teams, but they’re not always the right support channel for customers who might prefer chat or social media. Having the right mix of channels that match your customer needs is important. A customer service software like Freshdesk lets you choose the channels you want your customers to engage on.

• Chatbots and messaging: Customers today want responses instantly, and the best way to achieve that speed is through messaging integrated with AI and chatbots. With chatbots, you can automate workflows to handle status requests or help customers get refunds on orders. Freshworks’s Freddy AI-powered chatbot helps your team accomplish such tasks and more.

• Reporting and analytics: The last feature needed to complete the essentials of your support tech stack is a reporting and analytics tool. The ability to build customized dashboards and reports to generate actionable insights into your support performance is the most effective way to optimize and scale your team. Freshdesk has a built-in analytics tool that makes it simple to measure and collate all the essential metrics for any support team.

• Reward staff for high performance and aim to create a positive and communication-filled work environment. Rewarding staff for high performance is a crucial strategy in motivating and retaining top talent, and it can take various forms, including bonuses, public recognition, career advancement opportunities, or additional time off. Creating a positive and communicative work environment fosters a sense of belonging and encourages open dialogue about challenges, successes, and feedback among team members. Implementing regular team meetings, feedback sessions, and social activities can further strengthen the workplace culture, making it more vibrant and dynamic.

How to make your customer service management needs a reality?

As we navigate through 2024, the significance of customer service in strategic business planning is increasingly recognized, focusing on leveraging customer insights to strengthen relationships and tailor offerings. 

Investing in artificial intelligence (AI) in customer service is highly beneficial. According to Ultimate.ai, companies see an average 250% return on their AI initiatives. 

Additionally, 56% of brands are gearing up to invest more in AI-powered automation. In comparison, 67% of customers expect generative AI to soon play a central role in support, highlighting the technology's transformative potential in enhancing customer experiences.

Freshdesk integrates conversational customer support and efficient ticketing with the power of built-in generative AI. It propels businesses towards delivering seamless and superior customer experiences. Freshworks enhances productivity and ensures organizations meet and exceed their customers' growing expectations.

The move towards AI and automation in customer service is set to redefine engagement standards, allowing businesses to foster deeper customer loyalty and drive growth. 

As we look ahead, leveraging these technologies through platforms like Freshdesk will be crucial for staying competitive and achieving long-term success in the customer-centric business environment of 2024 and beyond.