Customer Service: A Profit Centre, not a Cost Centre 

Customer service is often viewed as a cost centre by companies, leading to budget cuts and a lack of investment. However, this perspective can be detrimental to businesses. In reality, exceptional customer service has a significant return on investment (ROI), with studies showing that customer-focused companies generate up to 80% higher revenue than their competitors. 

The ROI of Good Customer Service: The Facts 

Companies that believe excellent customer experience is just a drain on their resources spend too much time and money focusing on the wrong things, like average handling times, rather than appropriate handling times.  

Statistics consistently prove that focusing on the right customer experience strategies generates amazing results. Gartner says that going forward, 40% of customer service organisations will transform their customer service teams into “profit centres” with a greater focus on audience engagement. Other insights back this idea up, telling us: 

  • Businesses prioritising customer experience can grow their revenue up to 1.7 times faster than companies that fail to engage and delight customers.  
  • Customer-focused companies increase customer lifetime value by around 2.3 times on average, increasing retention and loyalty scores.  

How Excellent Customer Service Increases Profits  

Exceptional customer service positively impacts profits in several ways: 

  1. Preventing Future Issues 

Investing in customer experience creates an opportunity to collect valuable data about customers, their preferences, and their problems. Every issue your customer encounters is an opportunity to improve your business. By leveraging this information, businesses can improve their product or service quality, reduce returns, and reduce customer service costs. 

  1. Increasing Customer Loyalty 

Exceptional customer service leads to higher customer satisfaction, loyalty, and increased spending. Loyal customers spend around 67% more on average than new customers, contributing to higher profit margins. Moreover, investing in customer service reduces churn rates, resulting in operational cost savings. It costs five times more to acquire a new customer than to retain an existing one. This means investing in customer service can both reduce operational costs and increase profits. 

  1. Unlocking Opportunities for Growth 

Advocacy is a powerful tool for any business. Customers who receive outstanding customer service are more likely to advocate for their favourite brands, driving new opportunities. Not only do 92% of customers say they trust referrals from people they know, but customers referred have a 37% higher retention rate.  

How to Turn Customer Service into a Profit Centre 

Focusing on enhancing your customer service efforts in a few key areas can deliver exceptional profit boosts with minimal effort. Here are some of the best ways to transform your customer service solution into a profit centre.  

  1. Invest in knowledgeable, informed agents 

Customers want the customer service representatives they interact with to be knowledgeable, insightful, and equipped to answer all their questions. Reports constantly show that knowledgeable agents are crucial to great customer service.  

Forrester’s report¹ found that agents who can answer all customer questions quickly and effectively can drive up to $667 million in incremental revenue to the company’s bottom line in the airline industry alone. In the retail sector, this profit increase can rise to up to $1.1 billion. 

This will also support first contact resolution rates (FCR) –  which have a direct impact on customer satisfaction scores and customer loyalty, but it can help to reduce operational costs. 

  1. Deliver Personalised Experiences 

Customers connecting with human agents want to see evidence of empathy and compassion.  

Delivering personalised experiences starts with ensuring your service team can support your customers on the channels of their choice. Companies with omnichannel customer engagement strategies retain 89% of their customers. Ensure you’re investing in delivering service across all of the right channels throughout the customer journey.  

Once you’ve mastered your omnichannel efforts, the next stage is leveraging more data to personalise experiences. Using CRM tools and capturing customer insights in the form of feedback can be an excellent way to boost loyalty and profits.  

  1. Empower Your Agents 

Knowing how much autonomy and authority to give agents has long been a problem for contact centre leaders. This issue has only become more complex now that we’re living in a world of hybrid and remote work, with outsourced agents working from locations around the globe.  

While it’s tempting for supervisors to micro-manage their teams, providing them with the opportunity to actively resolve problems is crucial for improving CX scores. Forrester found that of all the customer service drivers they examined, agents having the authority to address problems drove the largest ROI results. For instance, multichannel banks that empowered their agents earned around $434 million in incremental revenue. 

Empower employees by giving them access to the right tools to deliver exceptional service across every channel. Provide everyone with access to the same data, and create clear policies to guide and support your team wherever they work.  

  1. Invest in Innovation 

Leveraging data about the customer journey and common client concerns collected from contact centres can be extremely useful for businesses. The more you know about your customer’s pain points, the easier it is to anticipate the issues they might face and implement strategies to mitigate the need for support. There are so many tools and strategies available to innovate even the most challenging CX landscapes; there is almost always an answer.  

Customer Service: The New Profit Centre 

Customer service should be viewed as a profit centre rather than a cost centre. By prioritising exceptional customer experiences, businesses can increase profits, reduce operational costs, improve customer loyalty, and unlock new growth opportunities. Don’t hesitate to invest in the right strategies and leverage customer insights to drive success. 

Get in touch with the team here at DDC OS today to discuss how we can support you in building out your new profit centre.  

¹”Money On The Table: Proof That Customer Service Drives Revenue”, Forrester, January 30, 2023 


Get in Touch

Gamification in the Contact Centre

Click to view our blog post

Handling Complaints: The Key to CX Success 

Click to view our blog post
Group CEO Headshot

The DDC Group Appoints a New Group CEO

Click to view our blog post