Customer service standards are steadily slipping, and it’s costing businesses billions. Steve Macaulay and Sarah Cook explain, with examples, how HR and L&D leaders can drive a cultural shift towards service excellence, boosting loyalty, reducing inefficiencies, and embedding the mindset, skills, and leadership needed to make customer focus everyone’s responsibility.
The cost of neglecting customer focus is that you end up with robotic and indifferent service, cancellations and delays become normal, and waiting on the phone for hours. In today’s volatile businesses, customer service has often slipped down the priority list. Leaders face urgent challenges, such as cost pressures, digital transformation, and restructuring, but sidelining service comes at a long-term cost.
In the UK, poor service standards are already hurting businesses. It’s costing billions through lost sales, inefficiencies, and wasted staff time. Research suggests employees lose up to four working days a month resolving avoidable issues.
HR and L&D leaders are in a unique position to shift the culture
Customer satisfaction is at its lowest since 2010 in sectors like utilities and transport. These trends signal a deeper problem: customer service is being treated as expendable, when it should be central. Yet this is a solvable issue. HR and L&D leaders are in a unique position to shift the culture: building service excellence that boosts loyalty, efficiency, and growth.
Why service belongs high on the leadership agenda
1. From cost centre to growth engine
Many companies view customer service as a cost centre rather than a facilitator of growth. As such, it is easy prey to cutbacks. However, there is a strong argument to suggest otherwise: businesses with strong customer service ratings tend to outperform competitors in terms of revenue per employee and profitability. Loyal customers spend significantly more than new ones, they are strong advocates of the company and they cost less to service. Furthermore, a relatively small increase in customer retention can substantially boost profits.
For example, John Lewis & Partners invests in expert advisors in store and convenient services, fostering customer loyalty through seamless experiences.
2. The power of emotional connection
Today’s customers seek more than just efficient transactions. They value trust, empathy, and ethical engagement. A significant percentage of customers leave a company because they feel uncared for. Effective problem resolution can be a powerful tool for building loyalty, potentially increasing customer retention.
For example, Monzo Bank’s 24/7 live chat and swift fraud resolution have cultivated customer trust. Companies like Lamy and Le Creuset demonstrate the value of personalised service and free replacements in creating lifelong customer advocates.
Exemplars of service excellence
Several UK firms continue to lead through consistent, customer-first service:
- First Direct: Fast, human-led banking support
- Lush: Expert in-store experiences
- Richer Sounds: Knowledgeable staff and CEO-level involvement
- Octopus Energy: Multi-channel, responsive customer care
- Nationwide: Commitment to in-person service
- John Lewis & Partners: Ongoing staff development and high standards
The critical role of HR & L&D in driving service excellence
HR and L&D working together can play pivotal roles in reversing a decline in customer service, even in organisations where customer service isn’t seen as a top priority. The big danger is that existing programmes can lose their impetus.
These are some strategies, which, when applied with energy and skill, can keep an edge in the eyes of the customer.
1. Maintaining visible leadership commitment
Customer service improvement requires buy-in at the highest levels. HR must advocate for customer service to be a boardroom priority. This can be achieved by appointing a Champion at the leadership top table and aligning service KPIs with bonuses.
Conducting a customer service audit to identify areas for improvement and presenting a compelling ROI (Return on Investment) case to leadership is a vital first step. Importantly, managers need to consistently lead by example, demonstrating excellent customer service behaviours and avoiding at all costs a “service means you, not me” approach.
2. Empowering employees
Frontline staff need more than just scripts; they require empathy, problem-solving skills, and the authority to make decisions. Companies are using technology to support staff in these efforts. For instance, Barclays’ “Eagle” AI assistant handles routine inquiries, freeing up staff for more complex issues. ASOS’s Instant Returns streamline processes while maintaining human support for customers who need it.
L&D can play a key role by delivering ‘Customer First’ training programmes that cover active listening, emotional intelligence, real-time problem resolution, and strategies for handling difficult customers with empathy. These require top-ups for new starters and as refreshers for existing staff. Scenario-based learning can keep issues current: use real-life customer service scenarios to help employees handle today’s challenging situations effectively.
It helps the whole organisation to support the growth of a continuous learning culture. Encourage ongoing development through workshops, e-learning modules, and certifications.
3. Fostering cross-functional collaboration
Customer service is not confined to a single department; it’s a shared responsibility across the organisation. Often, service breaks down when front-line customer service staff do not receive support from other departments.
Creating a Customer Excellence Team with representatives from HR, Operations, and IT can help align processes and break down silos.
4. Rewarding and reinforcing excellence
Employee engagement and motivation is a key issue. HR can support the regular updating of recognition programmes that reward employees who excel in customer service, and this can motivate others. Recognising and rewarding excellent service fosters a positive culture and improves employee engagement and retention.
Introducing a monthly “Service Star” award tied to customer feedback can further incentivise desired behaviours. Such incentives will only work if they are seen as valuable and the whole process inspires interest and engagement – something that needs creativity and good communication.
5. Use technology wisely
AI and automation can improve efficiency, but must enhance, not replace, human interaction. Tesco and Revolut combine bots with human agents, while Octopus Energy uses tech to improve, not depersonalise, service.
The goal: automation for speed, people for empathy.
6. Be open to feedback
If issues are raised internally and externally, act upon them and welcome more. It’s easy to send the wrong message here, that suggestions and problems are not welcome, so that ideas dry up and people get discouraged from putting them forward.
Be prepared to develop targeted local initiatives based on feedback to address specific service gaps.
Where to start? Action plan for strengthening service
A structured action plan can help drive meaningful change by getting buy-in for explicit steps, for example:
- Month 1: Secure leadership buy-in, with responsibilities and timescales and define key performance indicators (KPIs)
- Month 2: Conduct a service audit and establish a Customer Excellence Team
- Month 3: Prepare and then implement a refreshed ‘Customer First’ development programme and launch recognition initiatives
- Month 4: Upgrade service processes and tools, and embed feedback loops
- Ongoing: Sustain a customer-centric culture through regular reviews, training, and leadership engagement
A strategic choice that pays off
HR and L&D leaders are central to restoring service excellence. When service becomes part of the business strategy, it strengthens loyalty, revenue, and resilience. Now is the time to move from reactive problem-solving to proactive loyalty-building. The organisations that act decisively will be the ones that thrive.
Steve Macaulay is an Associate of Cranfield Executive Development
Sarah Cook is Managing Director of The Stairway Consultancy
