I’m repeating myself when I say that good customer service can give small businesses an edge. But a new twist has been added to customer service: It’s a way to cut costs.

A new McKinsey Report, The human factor in service design, shows how putting the focus on the customer can save money.

In essence, figure out what customers really care about and what employees can actually deliver. While based on behavioral science, it’s really common sense. McKinsey puts forth three questions to ask yourself:

How human is our service? You know how you feel when put into a voice-mail loop. You know how you feel when the customer service rep, whether on the phone or face-to-face, doesn’t have the authority or the knowledge to help you with your problem. By putting yourself in the customer’s place; you may spot weaknesses, redundancies, and completely unnecessary wastes of time. An example in the McKinsey report simply involved reorganizing the sequence of questions in a customer service call.

Talk to your customers, ask them about the little things that bother them. In the case of one car rental company, customers were worried about finding “their” rental car on the huge lot. The company instituted a “take any car” policy that saved its own staff time and made customers happy.

How economic is our service? That same car company found that customers didn’t really mind driving an older car as long as it was clean and well-maintained. Imagine how much that saved in new car purchases! Are you assuming that customers expect or need something that they really don’t? Ask them!

Can our people scale it up? Customer service starts with your staff. It isn’t just a policy; it’s training for those who actually deliver service. And it’s listening to them. The front-line staff know what cranky customers are cranky about. They know what people are asking for and where the bottlenecks in service delivery are. Once you’ve devised new services or procedures, make sure your staff is well-trained.

The golden nugget of the report is in the postscript: Form teams across departments and roles — from sales people to marketing managers — to review service on a regular basis. It’s that team thing again: Diverse perspectives come up with better ideas.

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