Why is Customer Service ownership important to focus on?

In a large organization,  where customer service reports may impact the level of service provided to the customer.  The objective of the customer service organization is to help customers with their problems and hopefully satisfy them in a timely fashion. Choosing where customer service reports will impact the strength of some of the processes that surround the customer service offerings.

a. Skill of the Front Line staff on the use of the Customer Service software

b. Quality of the product or service

c. Ease of determining what the cause of the problem is the customer may be calling about

d. The features the product or service offers

e. The expectation set with the customer as to nature of the product or service the customer purchased.

What are the alternatives?

1. Report to IT.

Generally customer service has an application that handles service requests, then the service organization might report to the IT organization, in case there are issues with the service application.  Often the customer service organization is treated as a cost center but the staff are well trained on the customer service software application.

2. Report to Product Development

If the service organization for a product reports to the product development organization, there cost of the customer service organization is included in the budget of the product development organization. There is an incentive for the developers to ensure a high quality product or service is produced and if the offering is an actual product, development will also build in problem determination tools to help isolate problems quickly when they do occur.  Produce a poor quality product and development pays for it in the service costs.

Another benefit of a close link between customer service and development is that customers often leave requirements for new product and services with the people they talk to in customer service. If an organization captures these customer suggestions, and feeds them to development, they know what to work on next.

At IBM, the customer service organization in the US reported to the development division that produced it and the costs were allocated back to development.

3. Report to Country / Geography Management

Sometimes though, the situation gets more complex. If your product division is in the US and your customers are worldwide and want to be serviced in their language, then it might be beneficial to set up customer service organizations in other locations around the world where bilingual staff can support the customer in the local language and be able to communicate with the development division in their language.

In those cases, there might be a centralized customer service organization per country or for several countries with the same language, reporting to the marketing organization, who is motivated to ensure the customers are satisfied.

At IBM, for many years, each non US country had its own customer service organization, often reporting to a customer service executive in the senior management ranks which covered all the products sold by IBM in that country.

There are other options such as creating a ‘follow the sun’ approach to reduce or eliminate overtime and have product specialists in centers with local language capabilities that can service customers 24/7 and electronically switching from one center to another so there is always someone working day time shifts.

4. Report to Marketing and Sales

There is a school of thought that Marketing and Sales should control the customer service organization. The rationale is that Marketing should not be making unreasonable promises or setting expectations to high for the products they sell to customers. If the marketing or sales organizations set too optimistic expectations with customers, eventually clients will call the service organization wondering why they are not getting the value they expected. If the customer service organization is charged back to marketing, then there is less likelihood that overselling will take place, as the costs of service will be reflected in the marketing and sales budgets.

Another benefit of having customer service report to Marketing and Sales deals with product requirements. When customers provide feedback the service organization that they would like additional features or functions or services, there is a need to prioritize which of those new capabilities to build into the product. A close alignment between customer service and sales, allows for the sales team assigned to an account to provide feedback on what volume of sales might be attributed to a new feature or function. When development has to chose between what new features, functions or services to add, the input of the sales organization, who is closest to the customer can really bring rationality to which make it into the next release or version of the product and which features do not.


In my opinion, there is no ‘right’ answer for where customer service should report. With creative accounting, it is possible that all the benefits of paying attention to product development, marketing and staff training can be achieved, despite where customer service actually reports.

What is your opinion? Are there other places Customer Service could report?



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Adele Berenstein

Adele Berenstein is an Experienced Customer Satisfaction Executive, recently retired from a Large Global IT Organization after a long productive management career including Sales, Marketing, Services, teaching and education center management and most recently, 19 years in customer satisfaction management. She turned around divisions with customer satisfaction problems, implemented measurable improvements and management systems, and implemented programs to prevent problems from ever affecting customers.

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