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The Changing Contours of Customer Service: Nordstrom Cuts 106 Jobs

by | Apr 3, 2017 | Customer Engagement, Ratings and Reviews, User Generated Content | 0 comments

Until a few years ago, a phone was the strongest link that connected customers with the customer service executive of the company. Even though that link is still very much prevalent today, its significance is on the decline. A survey by Desk.com, which took a look at service preferences across three demographics—Millennials (aged 18-35), Generation Xers (36-55), and Baby Boomers (56-65), confirmed that 80% considered phone-based customer service inconvenient. The below-listed stats bring us closer to the affirmation that the phone-based way of interacting with customers is a phased out instrument.

  • 71% of those surveyed said they were “tremendously annoyed” when they couldn’t reach a live customer service rep over the phone.
  • 56% were just as aggravated when they had to place multiple phone calls in order to get the right person (or any person) on the line.
  • 67% hung up the phone after a customer service rep failed to resolve a problem.

The prominent reasons for this apparent moving away from the phone can be traced to the increasing tech savviness of customers and the basic change in the customer behavior. Customers now shop from 3 to 4 devices. They want service which will assist them throughout their buying journeys. Furthermore, shoppers now expect other conveniences outside the realm of support, like free shipping and returns, extensive product information, and more. Note that in 2016, 60% of consumers reported having higher expectations in terms of customer service than they did the previous year. And that’s why the role of customer service as a whole needs to be rethought and restructured. Nordstrom is one company that’s reacting strongly to this environment.

Nordstrom Cuts 106 Customer Service Jobs

Nordstrom just eliminated 106 customer service positions that supported shoppers via email, online chat, and phone. It’s not at all surprising that phone support is considered less necessary, but email and chat are popular customer service options. One factor that explains these overall cuts is Nordstrom’s continuing emphasis on convenience and a quality customer experience.

In terms of in-store customer experience, Shopify notes several of Nordstrom’s signature moves that keep shopper complaints to a minimum:

  • Nordstrom’s employee handbook has one rule–“Use good judgement in all situations.” This reveals how they empower their employees, reducing red tape and shopper frustrations.
  • When customers ask where something is located in a store, Nordstrom’s salespeople are taught to walk the shopper to the location of the item instead of just pointing at it.
  • Salespeople can offer to ring up purchases without shoppers ever needing to stand in line.
  • There are stories of Nordstrom employees going far above and beyond the usual standards for customer service, like searching inside vacuum cleaner bags for a lost wedding ring.

When it comes to Nordstrom’s online ecosystem, they also prioritize convenience.

  • The company uses a single sign-on to unify customer accounts across its web properties, ranging from discount sites like HauteLook and NordstromRack.com to its high end Trunk Club and Nordstrom.com.
  • Customers can get online purchases in-store with curbside pickup, or have their in-store purchases shipped to their homes if they don’t want to carry bags around with them.
  • Nordstrom uses a POS system with personal book software that tracks individual customer requests and needs online and in-store.

With innovations like these, it seems more natural that shoppers wouldn’t rely as much on customer service. Indeed, in a statement sent to Retail Dive, a company representative noted:

We’ve made a number of investments across our business to make shopping easier and more convenient for our customers. One of the results of that has been a decrease in the number of customers who reach out to Customer Care for support, which has put us in the position of being overstaffed on that team. We’ve tried different solutions to address the problem, but ultimately decided to reduce roles. Though these kinds of decisions are never easy, we believe this change will position us to best meet the long-term needs of our business.

While cutting jobs is never fun, Nordstrom and other customer experience leaders provide some illuminating lessons about slimming down while keeping customers happy. Let’s take a closer look at some of the principles that make for outstanding customer service and experience.

The Shape of Modern Customer Service 

A) A Proactive View:

AI has enabled companies to map customers’ expectations and provide a solution before the arrival of the problem. We are not far away from a scenario where a device will be put into the fridge to warn customers and reorder food before they run out. Though it’s not for all the products, Amazon’s Dash Button works on a similar principle. And this trend will see a steep rise with more use of the internet of things. This is the approach that customer service executives need to consider if they want to survive and add a competitive advantage to their customer service.

B) The Need to Empower Customers:

The ideal customer service center is one whose existence is hard to feel. In short, it should empower customers in such a way that customers never have to call the customer service center. Remember that up to 75% of users claim that they do not want to talk to a support representative. Instead, they want to be empowered to help themselves and have an easy path to a support agent if needed. Of course, AI, VR, and other new age technologies can help the companies in coming up with this self- service ecosystem. As put across by McKinsey, “such channels are poised to become the gateway and triage medium for all of today’s live telephone contacts”.

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C) A Dash of Human Interaction:

The wheel of tech revolution is moving with such speed that it can easily eliminate the need for any sort of human interaction. The downside of this tech-consumption is that it can jeopardize person-to-person bonds and leave relationship building with the customer in the lurch.

But a simple use of video technology in customer support scenarios can provide the best of both worlds. Customer service teams can enable customers with video and screen recordings to quickly communicate the problem they are having with software and products. It’s easily doable by embedding clips directly into support tickets. It’s in the mutual interest of customers as well as the customer service team, as it saves customers from describing a complex issue in written form, and it gives the customer service team an opportunity to respond with a video or screen recording of their own. Clearly, it’s a more personalized approach. Moreover, it’s a humanization of the whole process, as it gives the sense of the human being behind the support.

D) UGC Should be Woven In:

Up to 80% of the questions that customer service reps get each day are repetitive. It forces them to spend 80% of their time reading, organizing, and responding to questions and problems that they really shouldn’t have to face. Naturally, it is reducing their effectiveness almost to zero.

Now, such a waste of workforce can be curtailed down by using user generated content, or UGC. Ratings and reviews, questions and answers, and visual commerce all help give shoppers more information. Detailed reviews submitted by buyers clarify most of the doubts that customers may have about a product. Reviews’ direct impact can be felt on the reduced inquiries that the customer service team receives, and reduced returns. Visual commerce achieves a similar effect by showing products from a variety of angles and in different settings. Even after this, if some shoppers have doubts they can ask questions on the Q&A platform. These queries can be answered by other customers or the company’s product experts. It will allow companies to go through the heap of questions and save the 80% of the customer service team’s time that goes in answering the same questions. This saved time can be utilized in better observation of customer behavior, or in sending targeted and relevant communication to customers. Consequently, UGC doesn’t just improve the customer experience–it also heightens operational efficiency.

Even though customer service has often been viewed as an essential element of any business, the power that digitalization and social media have given to the people has made it even more vital. One bad customer service experience can take the form of a tiny tweet or long FB post and amplify its negativity by becoming visible to thousands. Along with this detrimental power of being viral, as much as 82% of consumers surveyed by Zendesk said they stopped doing business with a company because of bad customer service. Looking at the sheer gigantic cost of bad customer service, adapting to its changing dimensions should undoubtedly be a high priority.

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