In the first article in this series, we discussed the rationale behind providing a differentiating service to customers. This time we consider the arguments for treating all customers equally.

Many organizations have a “one size fits all” approach to customer service. This is an understandable position: it’s simple, it seems ‘fair’ to everyone, and it’s what customers are used to anyway. Imagine how the customer would feel if they found out they were intentionally offered a slower response time or less experienced staff than other customers.

So, what are the main reasons for providing a consistent and homogeneous service?:

1. Simplified operations. It’s not even easy to deliver the same customer experience across all channels, over and over again. Adding the additional complexity of delivering multiple experiences means ensuring that people, systems, and processes can support those multiple experiences, and therefore affects the costs and risks that expectations are not met. Training increases, more experienced staff are required, and there are additional overheads in coordinating both the front office and the back office.
2. Brand positioning and revenue increase. Focusing on a single experience or service promise and delivering it consistently supports a company’s brand positioning and reputation. Over time, customers will gain a clear picture of what the brand stands for and form a rational and emotional bond with you. This leads to customers actively recommending you to family and friends, and leads to the well-known and proven benefits of customer loyalty.
3. Employee defense. A consistent service promise is easy for staff to understand and shows them that the organization has integrity and offers the best possible service to customers. Employee advocacy has been shown to drive client advocacy, as clients feel the passion and commitment displayed by employee advocates.
4. Cost savings. Training customer service and administrative staff to handle multiple experiences will increase training costs, and system upgrades or replacements to support differentiation could be costly. Staff must be trained to handle the experience or efficiency may be compromised as additional resources will be required to serve the same number of customers. This scenario would also increase costs.

If all these benefits are realized without differentiating the service, why would we differentiate? Airlines, for example, differentiate service a lot, but the relative spending of frequent international business travelers compared to occasional interstate travelers varies by perhaps 100:1, and when the level of spending varies that much, companies really have to differentiate the service to align with the respective needs and expectations of customers. By contrast, consumer retail banks tend to offer a fairly ubiquitous service to most customers with variations for a small percentage in private banking.

There is a relatively small variance in customer value of perhaps 10:1 (for example, most new mortgages are generally in the $250k-$2.5m range) for most customers, so in the past it has there has been a less pressing need to go beyond points 1 to 4 above. Telecom customer service is also quite ubiquitous, although in this case it differs in another way, to account for the large number of mobile or broadband plans forced by the competitive and market-oriented nature of the industry.

Summary: If an organization has a very wide range of customer spend, or multiple products or services specific to a segment or group, then differentiated service is appropriate. However, for all other organizations, surely a consistent service for all customers aligned with the brand positioning is the most advantageous.

Well maybe. We’ll discuss which experiences require service differentiation in the next article, but in the meantime we look forward to hearing from you.

David