Customer service experience more important than low prices and quality.

Source: RightNow Customer Experience Report 2007

“Today, the success of every business depends on translating knowledge about customers into the reality of the customer experience. If you can’t make it easy and satisfying for people to do business with you, you’ll lose them to someone who does— and quickly.” Greg Gianforte, CEO of RightNow Technologies

Compared to last year, consumers are even more demanding of excellent customer experiences. In addition to the jump from 68% to 80% of consumers refusing to return to a company or organization after a negative experience, the number of consumers who will register a complaint or tell others of a bad experience jumped from 67% in 2006 to 74% in 2007.

Bad customer experiences comes at a high price

When contacting a company or organization, consumers are most frustrated when they cannot reach a live human being (68%). Also, 56% find waiting on hold, listening to bad music or repetitive messages frustrating. Unanswered emails and phone messages frustrates 33% of consumers. Once frustrated, consumer’s behavior can become aggressive, and they can even feel sick.

After a negative experience with a company or organization:

• 80% of US adults decided never go back to that company;


• 74% registered a complaint or told others;


• 47% swore and/or shouted;


• 13% posted a negative online review or blog entry;


• 29% have gotten a headache, felt their chest tighten and/or cried.

In addition, after a negative customer experience, 34% have fantasized about emailing friends, family or coworkers asking them to boycott the company or organization. 12% have dreamed of picketing and/or defacing a company/ organization’s headquarters.

Positive customer experiences have their rewards

Happy, loyal customers are created one exceptional experience at a time. Keeping these customers also requires outstanding performance in several areas, including:

• Self-service: Customers want be able to help themselves quickly and efficiently – 46% of those online find it gratifying to be able to quickly and easily find the information they need online.
  
• Call center: Arming call center agents is more important than ever because 60% of consumers prefer speaking with a live agent. Amazingly, 38% claim they have not had a phone-based customer service experience that exceeded their expectations within the past year.


• Feedback: 9% of consumers continue to do business with a company because it cares about customer feedback and takes action to improve service based on customer feedback.


• Responsive: 36% of consumers online said they find it gratifying when email messages are answered quickly.

While making and keeping customers happy may not be easy, it is well worth the effort:

• 51% of US adults cite “outstanding service” as the number one reason they continue to do business with a company;


• An additional 60% said the top reason they would recommend a company is “outstanding service.

Connecting with customers across multiple touch points

To understand consumers, companies must first understand how to connect and communicate with them.

• 60% of consumers cite speaking with a live agent via the telephone as the number one way they want to interact with a company;26% said they prefer email.


• When online, 68% engage with an organization because they need information on a product, service or company. Interestingly,
  more than half (51%) of those online want the ability to “chat” live via the Web with a customer service representative.

Managing the Customer Journey

"Since preferences vary, companies should to be prepared to engage with customers and deliver service across every possible channel: phone, email, web, chat and in person."

I would add here my own two pennies worth by stressing that if the customer experiences during interactions with your organization (Customer Journey) are consistent and positive, and expectations are exceeded, then value is created. I have written an article titled "Improving Your Customer's Experience Through Journey Mapping" which you can find here.

What say you? Comments? Ideas?


Eric Fraterman
eric@customerfocusconsult.com
www.customerfocusconsult.com

Key Questions for Measuring if Your Customer Service Measures Up

Bob Poser, author of "Kiss Theory Goodbye" posted a blog which is absolutely spot-on and therefore I like to share here also.

In light of all the recent news around companies not serving their customers in terms of providing the support and service customers should expect, I thought I’d post seven key questions you can use to measure how your customer service is on track.

Do we:
1. Consistently underpromise and overdeliver?
2. Resolve customer problems quickly?
3. Take all customer feedback seriously?
4. Have a process in place to reduce problem recurrence?
5. Consistently measure customer loyalty and improve results?
6. Know what each person at the company must do to maintain a loyal customer base?
7. Continually explain ongoing value to existing customers?


If you’ve answered no to any of the above questions, then you have some work to do.


Here are eight pro-active steps you can take to ensure your customer service success.

1. Test your customer service and support process often.
2. Link key customers with senior executives to deepen relationships.
3. Be proud of your service and charge accordingly.
4. Communicate effectively and fulfill comments.
5. Keep in touch.
6. Strive to have 100 percent of your customers referenceable.
7. Over communicate in times of trouble
8. Don’t become a bank for your customers. Collect outstanding receivables aggressively.

And remember at least once yearly take time to conduct a formal survey of all your customers and truly listen to the feedback you receive.


What say you? Comments? Ideas?


Eric Fraterman
eric@customerfocusconsult.com
www.customerfocusconsult.com

Great customer service requires sharp customer focus (2)

John Hagel of Edge Perspectives wrote an article which is right up my alley. Here are some highlights.

Most companies claim to be customer-focused, yet few are. In a world where customers (both end consumers and intermediate customers) are becoming increasingly powerful, all companies declare that they are “customer-focused”. At one level this is a truism – all companies must have some degree of customer focus just to survive in increasingly competitive markets.

But, let's move beyond this generic level and apply some real tests of customer focus. We'll find that the practice rarely matches the rhetoric. I apply three questions to determine whether companies are truly customer focused. These three questions zero in on the most fundamental elements of a firm – decision-making power, performance metrics and brand promise. It is surprising how few companies meet these tests.

• Who in the organization holds real decision-making power? Is it the organization that manages relationships with the customer or is it some other group?
• What are the primary measures of performance for the firm?
• What is the primary focus of the brand promise of the company?

You can read the full article here.

If you would like to spend some ten minutes assessing how customer focused your company is, then I have a solution for you - and it is free. On my website you will find an insightful customer focus self assessment, covering seven dimensions and comprising 40 questions. You can compare yourself against the benchmark of the average of some 1,500 entries prior to yours. Upon request I could share with you the numbers for the top quartile

What say you? Comments? Ideas?

Eric Fraterman
eric@customerfocusconsult.com
www.customerfocusconsult.com

Just because you have good customer service people doesn't make you a customer-centric company.

Paul Greenberg of The 56 Group wrote an article for customerTHINK of which I am quoting parts, because I wholeheartedly agree.

Around the clock, in just about any venue in the world, in almost every industry imaginable, company executives are deluding themselves into thinking they are highly focused on their customers because they have a few shining stars in their customer service department.

I run across this problem continually with clients and in conversation with executives who want to prove to me that they are the epitome of customer service. Their discussions are peppered with the phrases, "customer-centrism," "customer retention," "customer satisfaction" and pretty much anything using "customer" as a preceding adjective.

But typically, they don't see the returns, especially when it comes to identifying advocates from their customer base or increased purchasing through up-selling and cross-selling—or even lower churn rates—that justify a self-designation of customer-centrism.

What these people don't understand is that, in an era when the customer has control, the customer is expecting to participate in the decision-making around his or her future. A sufficient level of transparency is necessary for those customers to make intelligent decisions around something related to their future.

For a company to provide that transparency takes a lot more than just a friendly smile and some bits of useful knowledge from top-flight customer service people. It takes knowledge of the customer, gathered through analytics and data mining and by listening directly to the customer, aka the voice of the customer. It takes sales and marketing programs that are attuned to the conditions of the era, one dominated by an empowered customer who, as an individual, not only has unprecedented choice when picking where he or she is going to acquire products and services but also has unprecedented range in affecting what others think—both positively and negatively—about the companies providing those products and services. Customers as a class (if you can call them that) have the tools and reach to affect what any company does or says. And this will be increasingly powerful as the 21st century progresses.


What say you? Comments? Ideas?


Eric Fraterman
eric@customerfocusconsult.com
www.customerfocusconsult.com

Sub-optimal Customer Service... Who pays for the Cost of Quality?

The COQ or Cost of Quality (or non-conformance in ISO terminology) is the cost associated with not Doing It Right The First Time (DIRTF) or not (entirely) doing what the customer was expecting. [Did I throw enough acronyms at you?]

OK, let's start with two real-life service failures and remember that memorable customer service experiences are a balanced combination of the What (transactional – rational) and the How (feeling – emotional).

Service Failure One
I walked into the Subaru dealership that has serviced my car for twelve years. I am into my third Subaru. Consistency and relationship is important, right? Well, I have enjoyed the service of the same service consultant for al those years. So, Ken greeted me by name and chatted briefly before he handed me over to the parts person to buy a new halogen headlight bulb. That is of course always a nice experience, to be welcomed and recognized. The transaction cost was $16 and change. Having arrived home I proceeded to change the bulb and could not do it because it was totally the wrong one. So, this was not doing it right and I had to drive back: two times 15 minutes of my time wasted plus the time of trying to make work what could not. The value of my time is the Cost of Quality. I charge out at a consulting rate commensurate with my 20 years experience, so you can do some math here…. Now, here comes the 'recovery'. When I came back, Ken was immediately concerned and asked what was wrong. Over to the parts person again who immediately recognized his mistake, gave me the right bulb and told me that of course I would not have to pay for the $2.90 price differential because of "all the hassle I have caused you".

Of course it is not hard to figure out that I was 'out of pocket' here. However, accidents do happen and there was no reason to keep feeling grouchy about this, because at every turn it was handled well, against a background of an acknowledged relationship.

Service Failure Two
Over now to the opposite experience. I used the Avion points of my Royal Bank VISA card to purchase a ticket on WestJet – partially points and partially cash on my card. Lo and behold on my statement I see a charge for the total ticket price. First call to the credit card call center, who told me I had to call the airline. Then a call to the airline who told me the Avion person had used my credit card number to make the purchase. Third call: again to Avion. They looked into it and concluded their person had made a mistake and used my credit card instead of the Bank's to make the purchase. They apologized and promised to make the correction; this happened.


A day later I got upset. I had wasted well over an hour of my time and had received no attempt to make good for me!!! This started to bother me; I bit the bullet and phoned Avion and aired my disappointment, telling them why. They 'got it' fortunately and offered me 6,000 points (15% of the points I used). I accepted this and thanked them.


The Lesson Learned
Of course the good thing was that the CSR at Avion was empowered and reacted promptly to my request. Yet, they only mollified me and the memory still sticks; who likes to spend an hour-plus on the phone with call centres???

When the ball is dropped always offer to make good. Had Avion done this right and apologized for my hassle like the parts person, quite frankly I would have accepted half the amount of points.

Most organizations have no appreciation of the Cost of Quality caused by their service failures. This COQ does not only impact the customer, but of course also their own operations cost. So, if you are not careful both side lose. Unless of course if the provider manages to turn this into a memorable experience…


What say you? Comments? Ideas?


Eric Fraterman
eric@customerfocusconsult.com
www.customerfocusconsult.com

CEOs say: The quality of customer service often the only differentiator.

NEW YORK (Reuters) - Chief executive officers of companies listed on the New York Stock Exchange believe that meeting and exceeding customer expectations will help drive sustainable growth in the future, according to a new report.

More than half of the executives surveyed, from 240 leading companies across 24 countries and 20 industries, told the NYSE CEO Report 2008 they would budget more for customer relationship management in 2008.

Many executives also said retaining customers has become tougher than in the past. With companies increasingly selling similar products, CEOs said the quality of customer service was often the only differentiator.

The report, which is the third such annual survey of CEOs brought out by trans-Atlantic exchange operator NYSE Euronext , also found that executives of companies based outside the United States find it harder to attract and retain customers.

My two pennies worth...

Half of all CEOs is an interesting number. 50% of CEOs get it. What in the world are the other half thinking? What are they doing to earn their keep? It reminds me of the old joke about 50% of the doctors graduated in the top half of their med school class. Hopefully, that includes your doctor. And hopefully your CEO is one of those that understand the absolutely critical nature of customer service and of delivering a unique, valued and consistent customer experience.


What say you? Comments? Ideas?


Eric Fraterman
eric@customerfocusconsult.com
www.customerfocusconsult.com

'Wow' Customer service begins and ends with People!

Companies who decide to run from their customers and are not easy (or close to impossible) to deal with eventually do this at their own peril. You only have to read the blogs and the numerous customer complaint websites, newspaper articles etc. to get a flavor of this.

If the cost effective self-service options are not working or not attractive, sooner or later the customer needs to able to easily access a real person. Any person dealing with your customers MUST be able to relate to a customer, understand him or her, be able to provide solutions readily and especially seem to care.

I am not preaching anything new here. Yet, I am continually blown away by the fact that so many companies have lofty mission statements, strategies and all that good stuff and then, look what they do in practice. How many company leaders are daydreaming in technicolor, I sometimes wonder. If I asked them: Would You Do Business With You?, how many would say Yes, after they had a real customer experience with their own company.

What happens to all the satisfaction and loyalty surveys? What happens with the Key Performance Indicators? Do leaders really listen? Apparently not enough; witness the revealing American Customer Satisfaction Index scores and reports over the years.

So far my rant.

I decided to write this blog entry because I came across a blog inviting people to share their Wow experiences as material for a book. The author noted how few stories he had come across and was receiving on his blog.

I would like to share a story of a service encounter of the superior kind that occurred five years ago. Yes, five years! That demonstrates the Power of Wow. I have told this story many times and now I do it again.

In Toronto we have a sport store that sells everything under the sun related to sports and is upscale in its positioning. SportingLife staff are really in tune with their audience. I went in to find a pair of New Balance shoes in extra width and I was also looking for a sale. Since this is a superstore with a wide array of brands they did not carry special widths. We tried a few solutions and then the patient and understanding sales associate asked me to sit down for a few moments because she 'wanted to try something'. Five minutes later she came back and told me that she had phoned around several of New Balance's own stores, found what I was looking for and asked me if I was interested in the shoes and sale price she had found. I was delighted, of course and said Yes. She then phoned the store in question and arranged for the shoes to be held for me.

Did she sell anything to me? No. Did she bring profits to SportingLife? The answer is yours…

So, why cannot more corporations (B2B or B2C) hire and enable people like this associate and create Wow experiences for their customers??? That is the question.

What say you? Comments? Ideas? Would you do business with you?


Eric Fraterman
eric@customerfocusconsult.com
www.customerfocusconsult.com

Poll Confirms Customer Service Is Key Differentiator... I am jaded...

Below I am commenting on and replicating a widely published summary of a recent poll.


Results confirmed that consumers overwhelmingly prefer good customer service over the hottest, most innovative product offerings and that most consumers tell others about their customer experiences, bad or good.


I want to share that I have grown jaded. This is the umpteenth voice in the wilderness making "the case". Yet, in practice and in my almost twenty years of customer service and customer focus consulting I have learned that the real key to success is not for a CEO to read this and delegate his/her organization to go this path. Essentials for successful customer management are at minimum: Leadership, Customer Measures and People Management. Leading from the heart and with passion and introducing 'soft measures' are and remain a perennial challenge and barrier to success in the typical North American business climate. Wall Street's 'quarteritis' impedes often adoption of longer term goals and investments in attaining them. Often one sees that privately held companies are much better at developing a long term vision, and sticking to it.


In a nutshell, this is my critical remark in the margin of what otherwise must be a positive contribution to helping more companies decide to focus on creating an inimitable Customer Experience.


Verint Systems Inc., announced the findings of a recent customer service survey conducted by Harris Interactive on its behalf . The results revealed that of those surveyed…

• 88 percent reported they find a company with good customer service more enticing than one with the hottest, most innovative product offerings. Only 12 percent preferred a company with the hot, innovative product.
• 90 percent report that, on average, they tell at least one person about a bad customer service experience, and 85 percent tell multiple people.
• 88 percent of customers tell at least one person - and 81 percent tell multiple people - about a good customer service experience.

“These survey results underscore the need for today’s businesses to more effectively manage customer relationships and place the customer at the center of the overall business process, shifting away from the traditional product-centric approach,” says Michael Lowenstein, vice president of customer loyalty management at Harris Interactive. “The consumers’ voice is loud and clear; in an increasingly competitive market, the overall customer experience is the key differentiator in driving brand loyalty. Companies need to understand customer needs and make them priorities in order to consistently meet and exceed expectations.”
“Recognizing the need to deliver a superior customer experience, today’s forward-thinking organizations are investing in customer-centric management strategies and solutions, which enable them to enhance business processes to more effectively address customers’ wants and needs,” adds Nancy Treaster, senior vice president and general manager, Verint Witness Actionable Solutions. “The results of this survey clearly demonstrate the need for actionable intelligence generated across traditional customer interaction points - including contact centers, branches and back-office operations - as highly critical for consumer-facing businesses.”