Feature
The Gist
- Service is no longer a cost line — it’s a growth engine. Leaders now measure customer service by its impact on loyalty, retention, and lifetime value, not handle time or ticket volume.
- AI + humans unlock proactive, relationship-driven support. Automation removes friction while human expertise strengthens trust, creating the foundation for revenue-driving experiences.
- Outcomes matter more than speed. Brands that shift from efficiency metrics to loyalty- and value-based KPIs see measurable gains in renewal rates, advocacy, and long-term profitability.
The business case for investing in customer service today is stronger than ever. Far from being just a cost to control, exceptional service now plays a pivotal role in shaping loyalty, driving revenue and setting brands apart.
As Max Walter, director for consumer & retail in North America at Simon-Kucher & Partners, tells CMSWire, “When it’s done right [customer service] builds trust, which translates directly into growth. The trick is to stop seeing service as something you have to fund and start seeing it as an investment to differentiate your brand, which is going to pay back over time."
Cost Center vs. Value Center: How Service Operations Are Evolving
How leading organizations are shifting their service models from expense control to long-term value creation.
| Dimension | Traditional Cost Center | Modern Value Center |
|---|---|---|
| Primary goal | Minimize expenses, resolve tickets quickly | Drive loyalty, revenue and brand differentiation |
| Metrics and KPIs | Cost per ticket, average handle time | NPS, retention, CLV, upsell/cross-sell rates |
| Technology focus | Basic ticketing, call centers | AI, omnichannel, journey analytics, automation |
| Agent role | Issue resolver, limited empowerment | Customer advocate, relationship builder |
| Leadership view | Expense to minimize | Strategic driver of growth |
Table of Contents
- Service as a Growth Engine
- Video Discussing Contact Centers as Value Centers
- From Reactive to Proactive: Strategic Shifts
- Technology as an Enabler
- Measuring Value: Metrics and KPIs
- Overcoming Barriers to Change
- Zappos and Ritz-Carlton Case Studies: Leading the Way
- Practical Steps for Businesses
- Roadmap: How to Start the Transition
- Quick Wins vs. Long-Term Transformation
- Stakeholder Alignment
- Defining the Next Era of Customer Service
Service as a Growth Engine
Walter suggested that the most successful brands stop measuring service by speed and start measuring its contribution to relationships and loyalty. This mindset shift sets the stage for using customer service as a growth engine, not just a cost line.
Customers who feel heard and supported are more likely to stay, spend more and recommend a brand to others. According to the XM Institute, “Happy customers are more than 5 times as likely to repurchase” in retail settings. In subscription and SaaS businesses, higher service satisfaction correlates with stronger renewal and retention outcomes.
In a world where products and prices are easy to copy, the quality of service experience has become a defining competitive edge. An exceptional customer support experience can transform a detractor into a dedicated promoter, while a single negative experience can undo years of brand-building. According to Salesforce’s State of the Connected Customer report, 86% of customers say the experience a business provides is as important as its products or services. Modern service teams aren’t just solving problems; they’re shaping perceptions and building lasting brand equity.
Mindset Shifts That Redefine Customer Service
Transitioning customer service from a cost center to a true value driver requires more than a simple rebranding—it calls for a fundamental redesign of how service operates and delivers value to the business. Michael Hutchison, head of customer operations at eClerx, told CMSWire that you don’t turn service into a value driver by rebranding it, you do it by redesigning it. "The transition starts with a crucial mindset change: customer service isn't the end of the journey, but rather it’s often the moment that determines lifetime value and loyalty.”
Hutchison defined three customer service points that matter most today:
- Proactive resolution: Identify friction before the customer feels it and work proactively to fix it upstream.
- Intelligent automation + human expertise: Automate the predictable, routine tasks so agents can focus on revenue-impacting moments.
- Experience tied to outcomes: Treat every interaction as a learning opportunity.
Doron Pryluk, chief operating officer at Quack AI, argued that businesses should stop thinking about service as a line item and instead see it as an engine for retention and product improvement. "Most companies still invest in ‘deflection,’ which is the wrong mindset. You don’t want to deflect your users, you want to resolve their issues,” he said. “When AI is used not to replace people but to understand, predict, and resolve issues before they happen, support becomes a profit center."
Similarly, Hutchison emphasized that genuine transformation comes from seeing service as the heartbeat of loyalty and business value. He suggested that businesses should redesign service around preemptive resolution, a blend of intelligent automation and human expertise, and treat every customer touchpoint as a driver of continuous improvement.
"World-class service businesses go beyond simply responding to customers’ challenges, but rather they anticipate their needs, remove friction points, and strengthen customer loyalty in the process," said Hutchison. "The future isn’t AI vs. humans. It’s AI + humans, working together to deliver effortless experiences."
The next generation of service will be built on AI-enabled, emotionally intelligent agents, anticipatory support, and a blend of human and machine, raising the bar for loyalty and customer experience.
Video Discussing Contact Centers as Value Centers
In this episode of CMSWire TV's Beyond the Call, Dom Nicastro, editor in chief of CMSWire, dives into the ongoing transformation of contact centers and business process outsourcing (BPO) operations with marketing leader David Levy, chief marketing officer of Foundever. The discussion explores how AI tools and customer data strategies are enabling contact centers to deliver personalized interactions, improve operational efficiency and strengthen customer relationships.
From Reactive to Proactive: Strategic Shifts
The old model of customer service was built on reacting to problems: answering questions, fixing errors and closing tickets as quickly as possible. While rapid resolution remains important, leading businesses in 2025 are making a paradigm shift: from a reactive support mindset to proactive relationship-building at every touchpoint.
Modern service leaders have learned that excellence comes from anticipation rather than reaction.
Fabio Sattolo, chief people & technology officer at Covisian, told CMSWire, "Brands who have the best customer service anticipate their customer’s needs, reach out proactively, and offer items of value that enhance satisfaction and loyalty.” Sattolo explained that "world-class’ service today means showing that you value the customer’s time, connecting with customers on their preferred channels, making every interaction pain-free and efficient, and taking advantage of technology when appropriate after a human connection has been established.
Personalization has become the new standard. By using customer data, journey analytics, and feedback, businesses can tailor every interaction to reflect a customer’s preferences, history, and behavior. Journey mapping enables teams to spot friction points before they cause churn, while AI-driven insights help predict what each customer will need next, enabling support that feels timely, relevant, and uniquely human.
Modern customers expect consistent, pain-free support across all channels—phone, web, chat, email, social media, and even emerging platforms such as messaging apps and voice assistants. Omnichannel engagement isn’t just about being everywhere at once; it’s about ensuring context, continuity, and quality no matter how (or where) customers reach out. By connecting interactions across channels and empowering agents with unified customer histories, businesses can deliver frictionless experiences and build relationships that go far beyond problem-solving.
Related Article: The Complete Guide to Customer Journey Mapping
Technology as an Enabler
As customer expectations rise, technology has become the engine driving the shift to proactive support. Advanced tools now enable smarter, more personalized experiences, helping agents focus on what matters most: empathy and problem-solving.
AI-driven assistants and automation handle routine questions, triage requests, and detect sentiment, ensuring customers get help instantly while freeing agents for higher-value interactions. Claudio Rodrigues, chief product officer at Omilia, told CMSWire that emotional intelligence is now part of AI’s core design. "We’ve reached a level of sophistication where emotional intelligence is built into the AI. [We now have] systems that listen as well as they respond, that know when to hand off to a human, and that maintain context across channels. That’s when self-service stops being a wall between the brand and the customer and starts becoming a bridge."
Rodrigues added that freeing agents from repetitive work allows them to focus on empathy, loyalty and retention.
David Fischer, chief sales officer at Luware, noted that AI is reshaping customer service, giving forward-thinking businesses a measurable advantage. “A recent study from Gitnux found that 85% of customer service interactions are now powered in part by AI and automation. To harness those advantages, enterprises must balance the benefits of automation with the power of the human touch, using AI in ways that empower agents.”
Hutchison emphasized the importance of the human element, stating that “Digital and AI shouldn’t replace the human experience; they should elevate it.”
Measuring Value: Metrics and KPIs
Modern leaders are moving beyond efficiency metrics to focus on outcomes that connect service directly to loyalty, profit, and long-term customer value. Hutchison told CMSWire that executives now prioritize metrics that demonstrate service-driven profit. “Today, the C-suite isn’t looking for handle-time wins alone,” he said. “They’re looking for metrics that prove better experiences drive better profit.”
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Key performance indicators (KPIs) include cost-to-serve reduction, retention and CLV growth, digital containment with satisfaction (not abandonment), first-contact resolution (FCR), and AI-enabled productivity. Hutchison broke the formula down to basics:
Efficiency + Loyalty + Revenue Moments = Real CX ROI
Rodrigues agreed, and said that ROI is best captured through two pillars: efficiency and experience. “The clearest ROI indicators appear when customers resolve issues with less effort, and service becomes faster, more accurate, and more dependable,” he told CMSWire.
Overcoming Barriers to Change
Turning customer service into a true value center demands a shift in culture, mindset, and structure. Many businesses underestimate how deeply ingrained habits and silos can block progress.
Often, the biggest obstacles aren’t technological but rather, are cultural. “You can’t build a value-driven service organization with a cost-control mindset,” Hutchison said. Overcoming those barriers requires transparent leadership, KPIs tied to business outcomes, and clear communication about AI as an enabler, not a threat.
Another common hurdle is what Hutchison called the “illusion of insight.” Businesses often drown in dashboards but starve for understanding. True progress comes when everyone—from agents to executives—works from a shared source of truth, replacing vanity metrics with actionable intelligence.
Rodrigues explained that agentic AI can bridge that gap by connecting what customers say, how AI responds, and what outcomes those moments produce. “Agentic AI introduces a new layer of visibility that connects conversations, responses, and results,” he explained.
Transformation also hinges on empowering people. Old habits and fear of change can stall even the best strategies. Building cross-functional bridges, upskilling agents in empathy and data literacy, and celebrating early wins can turn resistance into momentum.
Zappos and Ritz-Carlton Case Studies: Leading the Way
Two of the clearest examples of customer service evolving from cost center to value driver come from Zappos and Ritz-Carlton—brands that built their reputations on treating service as the core of their business strategy, not a back-office function.
At Zappos, customer care isn’t a department—it’s the brand itself. The company empowers its agents to build genuine connections with customers, without scripts, call limits, or upselling pressure. The result is service that feels human and memorable—like the well-known 10-hour call that became part of Zappos folklore. This freedom to prioritize empathy over efficiency pays measurable dividends: about 75% of Zappos purchases come from repeat customers, turning service interactions into one of the company’s strongest drivers of retention and revenue.
At Ritz-Carlton, the same principle takes shape in a luxury setting. Every employee, regardless of role, is empowered to spend up to $2,000 per guest, per incident to resolve an issue on the spot—no managerial approval required. This autonomy allows employees to deliver immediate, personalized resolutions that reinforce brand trust and loyalty. The policy exemplifies how empowering front-line staff can transform service from cost containment to customer advocacy, driving lifetime value far beyond the initial stay.
Both examples prove that when brands trust their people, measure outcomes by relationships instead of transactions, and align service with long-term value, customer experience becomes a profit engine, not a line-item expense.
Practical Steps for Businesses
Transforming customer service into a strategic growth engine takes time and persistence, but with clear goals, early proof points, and cross-functional alignment, meaningful progress is within reach.
Key Strategies for Transforming Customer Service Into a Value Center
Core operational shifts that help service teams drive loyalty, retention and long-term revenue impact.
| Strategy | How It Adds Value | Example Outcome |
|---|---|---|
| Proactive support and personalization | Anticipates needs and builds stronger relationships | Higher retention and increased NPS |
| Unified omnichannel engagement | Delivers a seamless experience across all channels | Faster resolutions and improved CSAT |
| AI and automation | Frees agents for high-value interactions | Lower costs and higher productivity |
| Agent empowerment and upskilling | Creates customer advocates and improves morale | Increased cross-sell and better customer outcomes |
| Measurement tied to business outcomes | Aligns service KPIs with revenue and loyalty | Stronger business case for investment |
Here’s how businesses can turn that vision into action:
Roadmap: How to Start the Transition
Begin by assessing your current state: map customer journeys, gather feedback from customers and front-line agents, and audit the technologies and metrics you’re using today. Use these insights to define clear goals for service transformation, such as improving retention, reducing resolution times, or increasing cross-sell rates. Appoint a cross-functional task force to guide the project and ensure company-wide commitment.
Quick Wins vs. Long-Term Transformation
Look for opportunities to deliver immediate improvements, such as deploying a chatbot for common queries, unifying customer profiles, or eliminating or minimizing the impact of a high-friction touchpoint. These quick wins build momentum, demonstrate value, and encourage buy-in across teams. At the same time, invest in foundational changes: breaking down silos, upgrading technology, and upskilling your service team. Balance early success with a long-term commitment to continuous improvement.
Stakeholder Alignment
Sustained transformation requires everyone to pull in the same direction. Involve leaders from IT, marketing, sales, and operations early, and ensure KPIs reflect shared business goals and objectives. Communicate progress frequently, celebrate milestones, and create feedback loops that keep all stakeholders engaged and invested.
By breaking the journey into manageable steps, starting with quick wins and building toward lasting cultural change, businesses can reimagine customer service as a driver of growth and loyalty, rather than just a cost to contain.
Defining the Next Era of Customer Service
The shift from cost center to value center is no longer just aspirational—it’s already underway. Businesses that treat service as a strategic differentiator are turning every interaction into a chance to build loyalty, drive revenue, and elevate their brand. The question is no longer whether customer service can drive growth, but whether businesses are ready to treat it that way. Those that align strategy, technology, and culture around that principle are already seeing measurable returns.
