Customer Focus in a Slow Economy: Who wants to lose customers?

My strategic partner Ray Miller wrote this article and kindly gave his permission to publish it here.


I wanted to call this article “Sharpen Your Customer Focus or You Will Lose Customers!” but a few of my colleagues thought this was a bit too blunt. Absolutely true mind you, but blunt.

Then I thought why not make the headline a question: “How Many Customers Are You Willing To Lose Today Because of a Lack of Customer Focus?” Again, true but too direct. So in the end I went with what you see above.

So here we are again. The economy is getting tough and for many, life is stressful and difficult. For business, this is not new. We’ve all been here before. Hopefully we’ve learned from the last time the economy slowed … But then again, have we?

Nobody wants to lose customers but you know as well as I that when the economy gets tough, many organizations go into reactive mode. Their focus shifts to cost control and the acquisition of new customers. History has taught us that every time this happens, relationships with existing customers can be put at risk. Financial responsibility is important, as is getting new business, but not if it is at the expense of your existing customers.

Allow me to explain.

During an economic downturn most customers will be looking to increase value for their money. They will try to make their hard earned cash go further and you can be sure that they will be more critical when making buying decisions.

With less disposable income, customers will be less forgiving of a mediocre or poor service experience. And don’t forget that when it comes to service, the vast majority, 90 to 96%, will not complain and most will simply go elsewhere. You can bet that they will want to deal with organizations that demonstrate that they want and appreciate their business.

You can also be guaranteed that your customers will be strongly influenced by the commentary of their friends, acquaintances, family and colleagues when it comes to recommendations for products or services and providers.

As I mentioned earlier, when economic conditions become more demanding, far too many organizations focus on cost cutting and acquiring new customers which invariably puts the relationships with their existing customers at risk.

Quite often training budgets are the first to get cut. This includes all important training on things like Customer Service and Leadership.

Process improvement plans get put on hold often including process improvements that were intended to enhance the customer experience.

Even though it is five times more expensive to get new customers than it is to keep existing already profitable customers, many organizations bolster their marketing efforts trying to pull more customers in the front door, at the same time virtually ignoring their existing customers who simply walk out the backdoor looking for someone who wants and appreciates their business and proves it through their actions.

The retention of existing customers is all the more important during difficult economic conditions. Research proves that existing customers are more profitable and improvements in your operating expenses and resulting bottom line can be achieved through maintaining a high level of customer focus. Just to remind you, don’t forget a five percent increase in customer loyalty can contribute from 25% to 125% directly to your bottom line.

Remember that your customers always have the choice of buying from you or your competition. When times are tough, that choice becomes even more important.

Implementing a customer focus strategy will create valuable and long-lasting relationships with your customers that will provide a secure and growing revenue stream.

Focusing on getting the customer experience right is critical. Making sure that your customers choose you over your competition is essential. If you get it right when times are tough you will certainly reap the benefits and rewards of unleashing the power of customer focus as conditions improve.

So this time, why not dare to be different. Why not unleash the potential of customer focus, while everyone else has their eye off the ball.




Ray Miller is the Author of That’s Customer Focus! and The Customer Focus Companion. He is also Managing Partner of The Training Bank, a full service training and development firm which specializes in fully customizable Leadership, Customer Focus, Service Excellence, Management and Supervisory Development training.
www.thatscustomerfocus.com
www.thetrainingbank.com

Customer Service in Tough Times – The Alligators Get In The Way…

…Decreased liquidity, need to reduce staff, pressures of increased raw materials and energy costs, just to name a few.

In these tough times the (B2B) customers are under as much pressure as you are and really rely on great customer service that will keep them coming back and for which they will remember you when times get better. You want to make sure that the last transaction was not the final one.

So, this would be an excellent time to take stock of how your customer service and experience are performing, and engage for this the expertise of a seasoned Customer Focus Consultant like myself. My fees are a small investment in an “ounce of prevention” and are easily earned back in multiples. [Yes, this is a commercial for my services]

I have three pertinent questions for you:

1) Do you agree that in a recession your customer service needs to be better than ever before?
After all, you don’t want to compete on price, right?

2) How would you like to quickly find numerous small and big opportunities for improving your customer service?
The result will be that customers become more loyal and therefore your profits go up.

3) Can you help me do that?
Yes, that can be done, I assure you. My widely proven one day Customer Experience Workshop will do this for you. I have delivered it dozens of times for my clients in the United States and Canada and always to high client satisfaction. You will be surprised how effective it is, how fast it can be turned around and yes, how affordable. It is simply my best-value service offering I devised in over more than 20 years in this business.

Did I pique your interest? Then why not call me for a no obligation phone consultation at 416-465-0800 (EDT), or use this link? You will get more details, and you can also request a service brochure. http://www.customerfocusconsult.com/request.asp

And please do remember: A Sharper Customer Focus Gives You A Sharper Competitive Edge.

A customer complaint is like a bitter lemon - but you can make lemonade of it

Columinist Lynn Hunsacker, clearAction, wrote recently on CustomerThink:

Love Those Lemons: When They Complain, Make Lemonade

Negative customer feedback is a lot like biting into a lemon — the bitterness is hard to love — unless you give the lemon a good squeeze and some sugar, and transform it into refreshing and healthy lemonade. You’re only as strong as your weakest link, so those lemons — complaints and low survey ratings — are indeed essential ingredients to improving customer experiences.

To squeeze your voice of the customer lemons into useful juice, you’ll want to:

• Make it easy for customers to give you early warnings of their dissatisfaction,
• Strive to see the whole picture of the customers’ experience,
• Analyze root causes.

To add sugar, you’ll want to put a positive spin on your your new-found knowledge of dissatisfiers and their root causes. After all, what better warnings could you have for ways to manage and nurture your weakest links? Working on the root causes of dissatisfiers is the best way of:

• Migrating ambivalent and at-risk customers into a reliable source of profit,
• Preventing your brand fans from stumbling upon your weak areas and becoming disillusioned,
• Building brand equity by delivering company-wide on your brand promise.
  

The average American company loses half its customers within five years. How can your company achieve sustained growth with image-building alone? By addressing the customer group giving you “lemon feedback” you can turn negative word-of-mouth trends to sustainable competitive advantages with a ripple effect on your entire customer base. This

internal branding effort aligns what’s going on inside the company with what’s being promised to customers.It adds customer experience substance to your value proposition.

On a hot day, a cool drink of lemonade is just the thing to re-energize. Similarly, in the heat of competition, lemonade is just what the doctor ordered to provide a compelling customer experience with your brand.

I have a great Customer Complaint Management White Paper and Assessment framework.

If interested, follow this link and contact me?

http://www.customerfocusconsult.com/complaint-management.htm

Canadians say they wait too long for service:: 86 per cent admit to leaving a store because of it

Maritz Survey also says 67 per cent tell others about their frustrating experiences.


Canadian consumers are abandoning their shoppingcarts, delaying purchases and leaving stores, public transit stops andrestaurants in significant numbers according to a Maritz Research survey oncustomer wait times.

A whopping 86 per cent of participantspolled admitted to walking out of a store frustrated with having waited too long for service. The research showed that customer expectations and opinions on wait times were strongly influenced by the retailer's attitude towards client care. The poll also reveals the ripple effect of unsatisfied consumers, impacting their future spending and potentially additional loss of sales through negative word-of-mouth messages.

According to the survey conducted by Maritz Research that polled over 1,300 Canadians between the ages of 18 - 64 from Atlantic Canada, Quebec, Ontario, Manitoba, Saskatchewan, Alberta and British Columbia the following percentages of customers walked out of the store due to long wait times:

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86 PER CENT HAVE LEFT BECAUSE OF LONG WAIT TIMES
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Department Store 78%
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Public Transit 64%
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Quick Service Restaurant 58%
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Convenience Store 54%
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Banking Institution 54%
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Medical Institution 50%
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Grocery Store 40%
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With today's slowing economy retailers can't underestimate the influence of the in-store experience on their bottom line. There is a strong relationship between the frustration experienced during long wait times, the likelihood of leaving the store and the chance that the customer will not return to make the intended purchase or again for future purchases. "Competition for most retailers is plentiful. Customers who are leaving stores due to long wait time have other options," said Rob Daniel, President - Managing Director Maritz Research, Canada. "Enhancing the customer experience is the best way for most retailers to set themselves apart and retain customers."

Even in grocery stores, where consumers are investing a significant amount of time selecting products, results show that 40 per cent of customers admitted to leaving without making a purchase. Survey participants indicated that eight minutes is a reasonable wait time in grocery stores and after 15 minutes they would consider leaving.

News travels fast, bad news faster than ever before
Close to 70 per cent of customers surveyed told others about their negative experience and half of those polled noted that they had at some point posted a negative experience online. In a time where shopping research takes place online and people are engaged in social networks to share and collect ideas, retailers are at risk of losing customers before they set foot in the store.

Customer Experience
Customers responded in high volumes to customer service actions that would increase the time they were willing to wait. 82 per cent of those polled would increase their wait time if they felt compassion or apologies were offered for the wait and 67 per cent would wait longer if they were updated on their status. In some cases all that is required is a friendly employee, with 74 per cent of those polled agreeing they would increase their wait time if greeted with a smile. The poll indicates that businesses that introduce extended customer service tactics like offering refreshments, music or reading materials may encourage customers to stay long enough to complete their purchase.

"With 53 per cent saying that leaving a store had an impact on their decision to return, retailers could stand to lose over half of these customers permanently," said Daniel. "What's clear from our results is that businesses can do more to keep customers in the stores and enhance their in-store experience."

Public Sector Wait Times
This survey also investigated wait time experience with the two of the most frequently used public sector services - medical institutions and public transit. Customers indicated a higher tolerance for longer wait times saying they would stay up to 81 minutes before considering leaving a medical institution and up to 22 minutes before considering leaving public transit.

"Wait times is the first indicator of customer experience across multiple sectors and a primary driver of consumer satisfaction whether we are talking about groceries or health care," Daniel added. "It should be top of mind for business when assessing how the needs of customers could be better addressed."

This online Maritz Poll, which was conducted in August 2008, featured responses from 1,306 Canadians randomly selected to participate in this study online. To ensure the data was representative of the Canadian population, data was weighted to Statistics Canada data for several demographic categories including gender, province and age.

Creating a customer focus culture - Easier said than done

Words on the wall and as an outcome of an executive retreat come easy. Taking such words from the wall into the hall is an entirely diferent matter. Many companies have no real idea of the prevailing culture and how this might affect achieving a shift towards the desired culture.

I agree with Rich Mclafferty who wrote in his cusotmer experience blog that there are two cultures that will destroy a customer focus strategy. The first is the culture of fear, and the second is the culture of mediocrity.

"In a culture of mediocrity people show up for work each day but there is a dead look about them. They have no inspiration, no creativity, and no expression — everything looks and feels grey.

Then there is the most destructive and evil culture — fear. People move very slow and quiet. There is little if any talking, mostly whispers. No laughing, no fun. Little if any trust, and eyes constantly darting around to see who’s lurking in the halls. Office doors are always closed, and when the doors open people duck down in their cubes — it’s not good to be seen or heard in a culture of fear."

Like Rich, I have too often seen organizations with these two cultures attempt to implement customer improvement programs without much success. "They say: 'we are all about the customer' but allow these negative cultures to remain in their organization. It sends an incongruent message the employees who in the end don’t care, or are paralyzed by fear to do anything different.

It’s easy to tell when your dealing with people from these two cultures. People that follow rules to the letter, don’t take any risks, and see everything as black and white come from a culture of fear. This usually makes a customer feel frustrated, uptight, and angry.

The experience from a culture of mediocrity leaves you feeling just blah. It’s not good, it’s not bad, it’s not memorable. It leaves a customer feeling a bit drained and uninspired. Let’s not forget, as customers we pay to get to feel this way — it’s not free!

An organization’s culture is the most important factor in the success or failure of a customer experience strategy. To inspire customers you have to have inspired employees, and that inspiration comes from people-centric leadership, and a customer-centric culture.

Think about how many organizations that are known for their people-centric cultures — you can probably count them on one hand. To me that’s pathetic, but it also shows there’s an opportunity for an organization to differentiate themselves from the competition just by changing their culture.

So flip that org chart! Create a culture that cares about people and customers. The result will be more satisfied and loyal customers, and a more vibrant and successful organization."

Study Shows Customer Experience is Path to Profit

ST. PAUL, Minn., Jul 14, 2008 (BUSINESS WIRE)

Companies that have a definition for customer experience and use this definition in everyday decision-making are more likely to exceed profit and revenue goals than those that don't, according to a new study.

"Finding the Performance Payoff in Customer Experience" surveyed 644 business leaders at all levels of leadership, organizational areas and across industries, from health care to manufacturing. The research was designed and conducted by Aveus, a St. Paul-based global strategy and operational change consultancy.

Definitions of customer experience vary widely. The study breaks new ground by surveying business leaders about how their organizations define customer experience and which definitions yield the biggest performance payoff.

"Perception still hasn't caught up to reality," says Linda Ireland, Aveus partner. "When asked if their focus on customer experience is costing the company money, many business leaders still say 'yes.' But our findings show a clear difference between those who have an organization-wide definition of it and those who haven't. Customer experience is a path to improved profitability, not a trade off from it."

The survey showed that 26 percent of companies with a definition of customer experience report exceeding profit targets, while only 14 percent of those without definitions can report the same.

Furthermore, the survey showed that organizations with the strongest use of customer experience in daily decision-making report the strongest operating results. "Of these elite organizations, 67 percent report meeting or exceeding revenue targets; 65 percent meet or exceed profit targets," says Ireland. "Simply put, these organizations use customer experience as a strategy for achieving performance. And it's working."

Aveus released a first round of customer experience research in 2006. Both rounds consisted of online surveys for leaders at management level and above. Functional quotas were set so the sample was not over-represented by sales and marketing professionals. With more than 1,000 respondents combined, these two unique studies establish a baseline for the payoff from customer experience use in the United States.

"We believe that by examining the use of customer experience and its link to financial and customer performance, business leaders will be able to make the operating decisions that hold the strongest potential for performance payoff in their organization," Ireland says.

Managers essential to excellent customer service and experience management

Reference is often made to the People – Service – Profit chain, to point out that success in achieving excellence in customer service and customer experience management begins and ends with People management.

Middle managers are an essential organization ingredient to make this happen. Yet, so many companies, especially the (often technology based) fast growing ones frequently promote relatively young people based on technical competence. The balance between the competence to "managing things" and "lead people" is often uneven.

Leadership expert Jim Clemmer in a recent Leadership Letter (worth subscribing to) points out these key challenges facing newly appointed managers:

Knowing Thyself - It's natural for new managers' egos to become a bit inflated. After all, it's a big deal to get promoted. But it's important after coming down from that "high" to ask yourself "is this what I really want and does it fit my strengths and passions?" Too many managers accept a promotion because there may be more money, or they covet more power. Taking a hard look in the managerial mirror would result in many more happy offices.

Servant Leadership - Highly effective managers serve and support the people on their team. Too many new managers see their role as command and control.

Navigating Change - It's easy to be pulled "below the line" and feel victimized by major changes in an organization. Strong leaders make people hopeful. They help their teams navigate through tough times. It is the leader's mood that most impacts the team.

Coaching and Developing - I agree with Peter Drucker; the central role of a manager is developing people. This is where a new manager may have a real challenge because his or her natural strengths may be to do work and handle problems. Making the transition from solving problems to making sure people have the skills to solve problems is a big change.

Tame the E-mail Beast - Technical tools are great for informing, staying in touch, and operational management. But we don't lead through e-mail. Most people are overwhelmed with data, analysis, and the sheer volume of daily e-mails. New managers must counterbalance IT tools with verbal communications.

Deal with the Moose-on-the-Table - It's often easier to avoid tough conversations or touchy topics. That's like ignoring a moose standing in the middle of the meeting room table. Everyone knows it's there and is annoyed by it. It takes courageous leadership to initiate those difficult conversations or to hear the team point out that leadership behaviors are doing more harm than good.

Upward Leadership - Many new managers think their main role is leading people on their team and perhaps influencing peers. But strong managers also work hard to lead their own boss or influence the bigger organization. They refuse to be victims of weak direction from above.

More complaints leads to better customer service

Yes, it’s true and it’s quite possibly one of the best kept secrets of those companies with superior profits and good reputations. In fact, what may surprise you is that those companies with consistently high levels of customer complaints also have even higher levels of customer loyalty.

More Complaints = Better Business

How does that work? These companies actively pursue customer feedback and see each complaint as a gift rather than a nuisance. They make it easy for customers to let them know what they think and what they experience with their products or services. Only 14% of customers leave for product reasons, 68% leave because of poor treatment when complaining or asking questions. These companies recognize that trust and listening are the foundations for customer interactions. Also, better interactions translate into happier customers and more business.

In my more than two decades of working with companies looking to improve their relationships with customers, I’ve discovered that your most unhappy customers are your greatest source of learning and if you make it easy for them to complain, they offer themselves for free! The customer that does not complain and does not come back is the one that hurts your business most of all! Ninety percent of them won’t come back to you.

Not surprisingly, I found resonance in a recent article in the newsletter of the Toronto Chapter of ICSA (Int. Customer Service Association) by Gail Levitt who provided these critical steps and checkpoints for developing an effective complaint management system:

1. Create and Implement a Complaint Management System Policy Statement

• Communicate standards for conduct, policies, procedures, and resolution in writing so it is clear to all customers and staff;
• Ensure that the policy statement reflects the needs of customers based on value and legality;
• Make it accessible to customers and staff through a variety of media.
  

2. Publicize a Location for Receiving Complaints

• Make it visible and accessible to customers;
• Encourage customers to voice their dissatisfaction;
• Communicate the positive intentions of the company.
  

3. Develop an Efficient System for Record-Keeping

• Design a flexible and efficient system with quick identification of and responses to complaints;
• Enable staff to respond immediately to complaints that must be reported to other departments or distribution networks or legal enforcement or regulatory agencies;
• Monitor the efficiency and effectiveness of the system and make improvements with minimal bureaucracy.

4. Process and Record Complaints Consistently

• Log in the complaint and any relevant data;
• Categorize the complaint for the appropriate resolution and record-keeping;
• Assign the complaint to one person for handling;
• Forward the complaint to additional levels of authority, as appropriate.
  

5. Acknowledge Customer Complaints Promptly

• Establish and enforce response times;
• Personalize the message;
• Talk to the customer if possible by phone or in person;
• Avoid using impersonal form letters or emails;
• Ensure customers with special needs are handled appropriately.

I would like to share with readers that I offer an innovative and very systematic complaint handling diagnostic service. Interested?

A Best Practices Driven New Customer Bill Of Rights

Organizations striving for excellence in customer satisfaction and loyalty now have a template to follow with today’s announcement by Omega Management Group Corp. of a groundbreaking new Customer Bill of Rights -- the first benchmark standard for the global services industry. Omega is a recognized expert in customer experience management strategies.

The new Customer Bill of Rights comprises 10 articles that define best practices for organizations to use when interacting with customers and employees:

1. Deliver Quality Products and Services
2. Provide a Supportive Workplace Environment
3. Reward Employees for Customer Service Excellence
4. Appoint a Senior Customer Advocate
5. Measure Levels of Customer Satisfaction & Loyalty
6. Report on Customer Satisfaction & Loyalty
7. Take Corrective Action where Needed
8. Benchmark Performance within the Industry
9. Seek Independent Audit of Customer Service Processes
10. Conduct Annual Review of Customer Service Processes

The Customer Bill of Rights is the result of research and analysis of global best practices in business-to-business (B2B) customer service and support operations conducted this year through a web survey of members of Omega’s new View from the Top (VFT-500) Research Panel-500SM program. Announced in October 2007, the VFT-500 program consists of VP-level executives in customer-facing positions and/or chief customer advocates at 500 leading global companies, and is devoted to the continuous improvement of the global customer service industry.

Omega’s Center for Loyalty Research conducted the survey -- the first ever based on customer responses exclusively -- and analyzed and reported the results. The survey examined best practices in virtually all customer-facing operations and methods of customer interaction. Companies sponsoring the initial VFT-500 research are Customer Relationship Management Institute; Anthony & Alexander Group, LLC; GoldMine TeleServices Group and ProSearch Services Group. Sponsorship includes contributing to the research process and/or providing other services to the VFT-500 program.

8.75 Ways to improve the Customer Experience

I just read one of those blogs that made me think: I fully agree and I could not have said it better. This blog hits a lot of nails on the respective heads. So, I would like to relay it and mention that this post was by Pierre Hulsebus of the EHTC Technology Solutions CRM Team.(CRM Rocks)

These are the 8.75 Key Recommendations:

1. Build a Diverse Team: Customer experience initiatives teams are often comprised of people who are responsible for customers across the organization. We suggest a diverse group from sales, marketing, customer care, administration, and management.

2. Design Processes from the Customer’s Viewpoint: Mapping the customer experience requires your team to walk in the customer's shoes for a while. The exercise will reveal the difficulties that customers have working with you. Build a touchpoint map that lists the touchpoint, customer importance rating, and customer satisfaction rating for each one.

3. Actually Listen to the Customer: Feedback is a better indication of faulty processes and procedures than surveys. The challenge is not how to solicit feedback, but actually listening and taking action on the suggestions. Confronting internal process managers with raw customer feedback can be very painful. However, when the changes are deployed as the customer suggests, this needs to be communicated to employees and the customers who offered the feedback. Customer communication is a two-way street. They need to hear back from you that you heard them and that you worked to improve their experience.

4. Get Up Close and Personal: Personalization is complex, and complexity can mean increased costs for the company. But increasingly, customers are expecting an Amazon.com experience. Organizations mastering offerings and services tailored to customers' expectations are beating their competition by almost every measure. Reward customer loyalty with personal attention and friendly, helpful, and caring employees.

5. Build Institutional Memory: Ensure that information gleaned from a customer at one interaction is not forgotten later on. Customers hate repeating their stories. From their perspective, they think we all work together and know everything about them because they just told the last person at our company the same information. So they get irritated when the next touchpoint in their journey does not know what happened before.

6. No Sacred Cows Allowed: Extending hours, or giving web access to order history are typical first steps, but organizational improvements often take courage, innovation, and risk. The team should be transparent and clear, open-minded and inclusive. Basically, everything should be on the table and nothing should be so sacred that it can not afford to be changed. This is where a committee structure can often be detrimental to success, as a committee will often skip over process improvements that are too hard, even though the reward may be very high. Failure needs to be allowed, and risk need to be taken.

7. Get An Attitude Adjustment: I have stated often that the lowest paid employees in a company have the highest effect on a customer’s perception of value. Training employees to how to behave with customers on the phone, in person, or in writing will make a good experience better. It is personal “one on one” interaction that defines the core customer experience.

8. Eat The Whole Enchilada: Taking charge of the experience from end to end is not an easy task. Expect resistance and barriers from people. Many of the managers that are stake holders in their specific processes fail to realize that their process, although important to company policy, may be negatively affecting the customer. You will find these the most difficult issues to deal with.

8.5 Pull Up A Chair You Are Going To Be Here A While: You may want to change team members every six months but this process will never be complete; it is a journey not a destination. The process is a continuous quality improvement, unless you never expect your customer’s needs or wants to change. This process of improving the experience will keep going moving as long as customers needs and wants change.

8.75 Embrace The Ambiguous: Solutions to effective customer improvements are locked up in the heart of your customers. What improvement is going have the good ROI, or please customers enough to stay longer, or spend more money with you is often a mix of common sense, innovation, and failures. There are a lot of “Best Practices” that consultants are can bring to the table. The ones that work best vary from project to project.

Remember that most of your customers like working with you. Let their wishes, feedback, and direction be your guide.

Achieving Customer Satisfaction: Manage Customer Service Quality at Every Level of Your Organization

Steve Aranoff & Robert FitzPatrick wrote this article on DigitalOutput.com after Steve was in my audience during a workshop I held for the Specialty Graphics Industry Association. We are totally aligned. I am grateful for their permission to carry it on this blog.


Some time has passed since we discussed the value of customer service and support—more specifically, the impact a customer-centric company has on the bottom line. From a supplier perspective, we recently discussed this topic with a new partner starting up in the print arena. The partner chose to standardize their new business based on excellent customer service, not technology or price.

At a recent SGIA SPIRE Meeting, we had the opportunity to listen to Eric Fraterman of Customer Focus Consulting of Toronto, Canada. Fraterman’s motto is "sharper customer focus for a sharper competitive edge."
Fraterman believes every action should be shaped by a relentless commitment to meeting and exceeding customer expectations regarding product and service quality.

We agree! However, the whole organization must be aligned toward customer satisfaction or this approach can never work. It requires an upside down view of business—viewing the organization through the eyes of the customer, rather than through the eyes of an investor. Interestingly enough, the investor’s goals are not lost in this process. Increasing customer satisfaction markedly increases market value and profitability.

As a contrast to this customer-centric approach that enhances investor equity, we recall a classic illustration of the reverse—company centric. A major plate manufacturer faced declining revenues and sales volume due largely to new digital technology but also from increased competition. At a national meeting, the sales force was sternly told to pump up volume. The assembled salespeople were informed that their primary job was to feed the factory. They were told if production levels dipped, costs would increase dramatically. Consequently, profits would fall.

The salespeople muttered amongst themselves that they thought their primary job was to serve their customers, not the factory. Many built their careers around customer service. When they succeeded at that, factory production followed. Now, they were told to focus on the factory, not the customer. Many felt the message was wrong-headed. Some understood the feed-the-factory philosophy as a signal to change companies or even careers.
Fraterman’s belief is similar to those employed at the factory. He wants to determine how to make it easier to do business with customers in an organization. Take for example something as simple as having a customer ask valid questions about an invoice. It slows down the organization and creates concerns in the eyes of the customer. How many times does your organization get questions that could have been solved before it became an issue?

A Lot at Stake
A one-point increase in customer satisfaction translates into a three percent increase in market value. With that statistic, the question is, "Why would any company want to have less than great customer satisfaction?" Besides in-creased market value, some other benefits are included in the following points.

Reducing customer defection by five percent can increase profitability by 25 to 80 percent. This varies with the cost of acquisition of a new customer.
High customer satisfaction allows a company to increase market share an average of six percent whereby low rated businesses lose two percent market share each year.

A company with loyal customers has a price-to-earnings ratio that is 11 percent higher than those in the average category of customer satisfaction.
Part of this profitability is achieved due to price support. High rated businesses can generally charge nine percent more for their goods than low rated businesses.

None of the above has anything to do with the added possibilities of a superior product—instead these companies benefit when they maintain the business relationship with the customer base. To achieve high levels of customer satisfaction the process needs to be initiated from the top. Many times you’ve heard the phrase, "the company takes on the personality of the CEO." Here, more than anywhere else, this is abundantly true. If the CEO glosses over customer satisfaction by not giving an organization the tools necessary to achieve it, failure is assured.

How does a company achieve customer satisfaction? Doing it right the first time—every time—must be the goal. This is called the Outside-In game plan. There are three parts to this plan—organizational alignment, increased employee commitment, and a customer focused operating environment and culture.

It is abundantly clear that for an organization to succeed, intensely managing service quality at every level of the organization is essential. It is only through such commitment that the organization becomes focused toward a single, shared vision of customer focus and customer value. A vision that energizes people and the organization to accomplish extraordinary things is key. With this in place, be assured that current and future customers feel comfortable—and invited—to navigate through your organization.

You Need to Change If …
You continually manage rather than oversee, develop, and implement a service brand strategy. If this is the case, business must move from reactive customer service management to creating enduring customer loyalty.
When there is an insufficient alignment between customer service improvement goals and the strategy, people, processes, and rewards implementing it, you also have a problem. In this instance you must instead provide the organization with documented, sequential steps, measurements, and accountability—exhibiting your sincerity about the need for customer alignment.

Another concern is when employees are unable to see the connection between your current customer improvement initiatives and programs and the normal mode of operation. They have a hard time shifting between the two. Through daily performance, the management must emphasize and embrace the business goal of customer commitment very clearly.

Generating Results
The numbers speak for themselves. Ignoring the concept of customer alignment has obvious and harmful consequences for any company or organization that wants to succeed. Too many organizations realized this only through costly omissions or ignorance. Ignoring your greatest asset, the customer, has a lasting negative result. You make a conscious decision to link the customer and your results through empowering your organization.
Linking the customer to business results leads to observable, measurable improvement of what matters to the customer—their own satisfaction. Results are managed with relevant methods and metrics.

Leadership is the Core of Success …
Empowering an organization leads to a customer-centric practice. It takes a sustainable commitment that is both personal and financial.

Consistently reinforce the big picture. Demonstrate the why, what, how, and who of each project. Ensure that there is a full understanding of where the initiatives fit into the big picture. Actions speak louder than words.

Customer relationship management is a business process and bad processes hinder good business practices. Create new processes that leverage what customers want. Customers characterize providers based on perceptions of behavior— perception is reality. Also, changing each employee’s job to an understanding of how their actions limit—or enhance—the company’s reputation in the eyes of the customer is critical.

When focused on the customer aspect of business, the bottom line becomes promising.

About Leadership Commitment and Customer Service Excellence

On a previous occasion I stated that no organization can expect to rise above the level of commitment of its senior leadership.

A recent blog entry by Bruce Temkin of Forrester reinforced this. He made the point that successfully managing customer service and experience really is a competence and not a function of a (delegated) program.

Bruce writes: "To achieve this principle, companies need to infuse customer-centric DNA into their culture. But this level of change requires a high degree of commitment from the senior executive team. I think this quote from Mario Andretti explains why: Desire is the key to motivation, but it’s determination and commitment to an unrelenting pursuit of your goal - a commitment to excellence - that will enable you to attain the success you seek.

In a previous post I discussed how companies with customer experience leaders are progressing faster than other firms. The creation of that type of role can be a sign of commitment, but the president or CEO and all of her/his direct reports must demonstrates an ongoing commitment in order to change the culture.

My sense is that senior executives are intrigued with customer experience, but most are not yet fully committed to it.

8 Signs Of Executive Commitment
If a senior executive team is fully committed to customer-centricity, then it can answer yes to all of the following questions:

1. Do senior executive staff meetings have a recurring agenda item on customer experience? (this does not include dealing with customer emergencies)
2. Do internal communications from the CEO/President regularly include discussions of customer experience?
3. Do external communications from the CEO/President regularly include discussions of customer experience?
4. Is customer experience explicitly discussed (in some form) within the company’s strategic plan(s)?
5. Does the executive team have a clear set of customer experience objectives?
6. Do most of the executive team members have goals based on customer experience objectives?
7. Is the compensation of executive team members tied to customer experience objectives?
8. Does the organization believe that the CEO/President would trade-off some short-term financial results for longer-term customer experience gains?
   

The bottom line: Senior execs with less than full commitment need to be committed."

Thanks, Bruce...

You want customer service excellence? Create a culture of trust...

Every organization has a culture. It is often loosely defined as "how things are done around here," and it is passed on largely by imitation. The habits and patterns that build up over time into a "culture" will have far more impact on a company's overall actions than will even the most detailed written procedures.

Culture is hard to define, harder to manage, and even harder to change. Here are a few pointers to influence an organization's cultural DNA:

• You get what you pay for. People do what they are rewarded to do, so give employees incentives for practicing trust-based activities.
• Actions speak louder than words. If you're a senior person at your firm, your employees will imitate what you do, not what you say. Senior management across the organization should set a good example.
• Find the influencers in your organization. Networks of employees form spontaneously, and the key influencers of other employees' behaviors and attitudes are probably not the most senior people in your organization. Identify those employees other employees turn to most when asking questions or solving problems.
• Focus on a single, simple, unifying mission. You can rally people around an idea if the idea is universally appealing but specific and tangible enough to offer guidance.
• Celebrate small victories. Find examples of the right cultural values being put into practice, and socialize them within your firm. Let people know how things are really done around your firm.
  

Going back to Customer Service fundamentals - INTREGRITY

Dennis AuBuchon published this very pertinent article on the American Chronicle website. It goes back to basic fundamentals and touches on his area of expertise: Integrity.

Customer service is a term that we have come to recognize as a part of the process of doing business or purchasing products or services from a company. This article is about what constitutes integrity in customer service and what does not. Many of us have our own concept of what customer service means to us as individuals. The detail of customer service changes based on the detail and complexity of the product or service we are purchasing. Integrity in customer service is something we as consumers should demand as we have a right to expect it. As a business person customer service is something that has an impact on either retaining customers or losing them. This article will identify some characteristics that are or should be a part of customer service activity for any business. In balancing this article some characteristics which turn off customers will also be identified.

The definition of customer service as defined by www.dictionary.com is assistance and other resources that a company provides to the people who buy or use its products or services. This definition says it all. Customer service involves not only people who buy a company´s products or services but also who use them. True customer service will have a positive impact on retaining customers while bad customer service will in all likelihood cause a company to lose customers. While the definition cited in this paragraph identifies the characteristics of customer service I am going to take it one step further.

Customer service also involves helping people find the products or services they want or need. When a customer walks through the doors of a business they should be met with employees who will ask them if they can help them find what they are looking for. Many times I have walked into businesses and this does not happen. This is not good customer service. While some people may not want to be met by someone as you walk in the door of a business it makes good business sense to do so. People can defer the help if they do not want or need it. Other times while looking for a product and you have a question it is hard to find someone to help. This may not always be the case but when a customer has questions there should be people readily available to help them.

Another aspect of customer service is having the people who know the products in the department they are working. This can make the difference between making a sale and leaving without a purchase. Many companies train their employees well in their products so they can answer customer questions. Another part of this aspect is the integrity factor. Those answering questions should be truthful in the statements they make as it will reflect on the company to have individuals make false statements. The statements may not be recognized to be bad ones until after the sale when customers become dissatisfied with the product or service they have purchased. I have purchased products in the past and have asked questions about different brands and was not given an honest answer. The individual either did not know the right answer or he was trying to sell a specific brand. This has caused me to discontinue being a customer for this company.

Another example of poor customer service is when you ask to speak to a store or department manager about an issue and they do not have the courtesy to respond to you in person. They delegate the action to a subordinate. Some stores have the motto customer service comes first but sometimes this motto is ignored at the highest level in a company or department store. A company must pay attention to their customers and adhere to the concept that customer service comes first. Companies must remember that they would not exist without their customers. If they have poor customer service their customers will not stay long and they will communicate their experiences to their family and friends. This is the kind of publicity a company does not wish to have.

There is a different side to customer service that many may not realize. Customer service does not have to be a face to face encounter. Many more avenues are now available to us than before. Customer service in the past was limited to face to face or on the telephone. Today there is the Internet. Both these avenues will be discussed in the next couple of paragraphs including the good and the bad characteristics of each method.

Many companies now have toll free numbers to contact them with questions. This information can be found on many products that we now buy. When I make a telephone call to a company I expect to talk to an individual not a recording with press this button for this or press this button for that. People like to talk to individuals not recordings. A good characteristic of customer service is having individuals answer the telephone or at least have the option to talk to someone about your problem or question.

There are examples where the choices put you in contact with specific departments and this is great. There are also examples where you do not have this option and this would be poor customer service.

If you have a particular problem you want to talk to an individual not a recording. Many stores also now have web sites and options to contact them. These options are great to get in contact with the main site for a company. It gets information directly to personnel without going through a local store. The key for this option is to voice your opinion about the service you received or the lack of it. The response you receive should address your issue and what action, if any, will be taken. A proper response from company officials would include such items but if the response tends to ignore your complaints then it would be considered bad customer service. Sometimes customers have issues with products that they cannot get an appropriate response from local stores. When a customer receives a product that they have ordered which is damaged an appropriate response from a store should not be to refund part of the purchase price. Customers should demand the quality product for which they paid. It is also inappropriate to offer another higher priced product to replace the damaged one and expect the customer to pay the difference. Both of these actions are inappropriate and are prime examples of poor customer service. If a customer wanted a higher priced product they would have purchased it. Companies who offer higher priced products are trying to avoid their responsibilities to assure that the customer receive a quality product for which they paid.

The above examples that have been identified in this article represent what customer service is all about. Customers who order or purchase products or services have a right to expect a quality product or service. The true test of the customer service a company has is in the service after the sale. When customers are not satisfied with a product or service they should voice their opinions loudly and those in management at the corporate or local level should be willing to listen. Management at a local facility of a company should be available to talk to customers who have complaints. Ignoring these customers and delegating to lower subordinates turns off customers and leaves a bad taste in their mouths. This kind of experience is how companies loose customers.

Many companies have mottos or policies posted prominently such as customer service comes first. When companies do not follow through with their posted policies it not only projects an image that their word cannot be trusted but that they lack the integrity that is so needed in today´s economy.

Poll Finds That Customer Service and Recognition Trump Privacy, Pricing

Consumers to Providers: Do You Know Who I Am?

I was interviewed last week by Advertising Age about the influence of technology on customer service. Here is the AdAge.com article published on their website on March 10, 2008.

Privacy concerns? Not so much. A Harris Interactive poll finds that a whopping 95% of people believe it is at least somewhat important that companies know "who I am, my buying history, past problems or complaints, preferences and billing record." Some 37% said knowledge of personal history is important, and more than a quarter -- 27% -- called it "very important."

But you can't just know your consumers; you have to love them to keep them. "There's a whole generation of people coming up that will vote with their feet," said Frank Florence, VP-chief marketing officer of Chordiant Software, which commissioned the poll.

• Some 62% of people surveyed said they would not hesitate to cancel or switch services if they had a negative experience, and 60% said they had already done it at least once.
• Of the 28% of people who had never switched service providers, 78% said they would change if they received poor customer service. Enduring bad rapYounger consumers, in particular, are more likely to be less understanding of bumbled customer service, Harris' survey found.

That only makes sense when you consider what this publication has said again and again: This is the age of the tech-empowered consumer, where customer-service rants don't begin and end in a call center but live on in vitriolic e-mails, blogs, broadcast blasts and web videos. One bad customer-service episode doesn't fade quickly; it is revisited, repeated and replayed in perpetuity. And that, of course, puts a new spin on the old customer-service adage that says if people like your product, they'll tell one person, but if they hate it, they'll tell 10 people. Now, thanks to technology, those 10 people are more likely to be 100, 1,000 or even 1 million. "The technology age has really made consumers develop a real-time mentality," said Eric Fraterman, principal of Customer Focus Consulting.

More interactionMarketing executives who think negative chatter doesn't do real damage to their brands should rethink their mind-sets, said analysts and customer-service-industry insiders. "Your brand is impacted by all of your customer interactions," said Forrester Research analyst Bruce Temkin. "Today there are many more opportunities for the customer to interact with your brand -- and there are many more opportunities for people to discuss the interaction they had." The good news is that technology cuts both ways. Companies can use it to better address consumers' comments, needs and complaints. For example, companies such as Chordiant have developed sophisticated call-center software that can predict customer behavior and offer solutions in real time. Say a credit-card customer is upset with a monthly service charge incurred while stuck in an airplane with no internet access. The software can evaluate the customer's payment history and other behavior on file, analyze the problem and offer a set of solutions. In one case, an agent may be given authority to give the consumer a credit of up to $300 (rather than a standard $100) based on the software's conclusion that the solution has a 70% chance of satisfying the customer.

Of course, technology works best when mixed with quality people. "It's tremendously seductive to think we can use technology to solve all our problems. But customers, as tech-savvy as they are, just want to be helped," Mr. Fraterman said.

There is no better way to measure the customer service strength of a company than by the quality of the choices its employees make every day.

Several of my blog entries have echoed the chorus of people who emphasize that great service and an endearing experience is all about people. My first blog entry on this topic was bluntly called: It's about people, stupid...

No surprise then that I felt compelled to quote below a section of an eloquent article by the excellent and insightful author Lior Arussy, published on MyCustomer.com . The emphasis is on the numerous interactions taking place with customers and front line employees such as call center reps, tellers, (inside) sales people, order desk people, etc. Each Moment of Truth provides an opportunity for influencing the perception of the company or the brand. Each interaction will require the front line person to make choices and it is in the final analysis the quality of choices made by employees that matters in winning from the competition.

Quoting Arussy: "Daily choices take place in front of external and internal customers every day. They are dominant in interactions with other people, including staff meetings, email exchanges, phone conversations and in any situation where an individual is in a position to help someone else. Any time there is a recipient on the other end of the action, there’s a daily choice involved.

The real power of organisations is their ability to create excellence, to differentiate themselves and, as a result, to build strong customer loyalty, earn repeat business, and charge a premium for their goods and services.

This power (or lack of it) is directly linked to the quality of millions of daily choices made by employees. The bottom line is that a company’s overall excellence is equal to the sum of the total excellence-seeking daily choices delivered by its people.

There is no better way to measure the strength of a company than by the quality of the choices its employees make every day.

The more excellence delivered, the stronger the customer’s commitment and the greater the amount of business and profits generated. The weaker its employees’ commitment to excellence, the weaker its overall performance.

This is a new way to view the power and strength of organisations, and it requires a different way of leading and motivating people in order to generate daily choices for excellence and exceeding customer expectations.

This bottom-up organisational definition runs contrary to the way most organisations define themselves today. A top-down organisation views its power, strength and brand as an abstract entity, loosely connected to its people. The employees are subservient to the larger organisational definition. According to this line of thinking, even if all the employees leave the organisation, the brand will remain strong; the brand makes the people and not the other way around. In a bottom-up organisation, the organisation is defined by the character and performance of its employees.

The people in the company make the organisation what it is. They are the one creating the assets of the organisation. Although some management and marketing theories claim to have an organisation based on assets other than employees such as brand strength and reputation, those assets are dependent on employees and their choices for excellence. Missing one excellence-oriented employee will make the company weaker. Poor performance by just one employee will make the company weaker. The company does not exist without the people who, through their daily choices, breathe life into the company’s mission statement, values, objectives, strategy and overall definition.

One employee at a time, one daily choice at a time, a company’s strength is actually created. This company’s definition is not an event or a milestone that, once achieved, always remains valid. It is, rather, an ongoing process that can reach new heights (or lows) depending on the daily choices made by employees. The company’s success is not measured by some annual study of corporate brand strength, but by the daily performances of the individuals who are the company. Most companies declare their total commitment to their employees and tout their initiatives to promote employee welfare on the pages of their glossy annual report, while relatively few companies truly understand what it means to treat employees as your most important asset."

Creating "Wow" Customer Service Experiences

On AmericanChronicle.com I read this article by Robert Moment: "Six Keys to Creating "Wow" Customer Service Experiences". In my book it is right on the mark and i would therefore like to share it with my readers.

Customers of every kind of business imaginable these days bemoan the state of customer service. While the global economy and the Internet have given businesses the opportunity to serve more clients than ever before, the trend has also given way to impersonal, lackluster customer service.

It´s unfortunate that most businesses today don´t realize that they are regularly losing valuable customers if they don´t focus on providing an exceptional customer service experience. In most businesses, once a customer begins dealing with the customer service department, he or she is already in a negative mindset. The best customer service representatives aren´t those that simply neutralize the problem. Outstanding customer service representatives take a negative and turn it into a positive that ensures the customer is not only happy, but is convinced he or she has had an outstanding experience – the Wow Factor – that he would not have gotten with any other company.

The key ingredients of the Wow experience are:

1. Seamless Service
2. Trustworthy Service
3. Attentiveness
4. Resourcefulness
5. Courtesy
6. Pro-active Service

Seamless Service means providing everything the customer needs, not just what is required to meet the minimum standards. It´s about making sure that they don´t have to wait and wonder. Customers will appreciate a smooth, seamless process for addressing their needs. If there are several steps needed to take care of their concerns, keep them in the loop – update them by email or with a quick phone call so that they know you are working on the situation and progress is being made. By keeping them abreast of what is going on, you are letting them know you haven´t forgotten about them and that you understand their concerns – reassurance and communication are powerful customer service tools.

Trustworthy Service is essential to retaining customers. Promising a customer anything and delivering nothing is the surest way to not only lose a customer, but get the kind of "word of mouth" bad press that can ruin you. Under promise and over deliver – If you promise a satisfactory solution and then go the extra mile to not only satisfy the customer, but gain their appreciation and "Wow" them, you will get word of mouth that will bring new customers to you.

Attentive Service means paying attention during and after the initial contact. How many times have you contacted customer service and been subjected to an obviously scripted response from the customer service representative? Does it give you the feeling they aren´t really listening, but just trying to get to the end of their canned presentation? Attentiveness should run through every customer service experience, from listening carefully to the customer´s concerns to following up after the exchange is over to make sure their needs have been met. Listening isn´t just about hearing – it is about understanding what is really being said. The words are just the beginning –what about the customer´s tone of voice? Her mood? Is she disappointed, angry or frustrated? Keying in to the customer´s mood and responding appropriately is essential, and it means not following a script.

Resourcefulness means finding solutions when there appear to be none. Many companies have iron-clad policies that must be followed whenever a problem arises; however, sometimes a customer won´t be satisfied by the "company line" approach. Resourceful customer service representatives know that there is always a way to move beyond the standard procedures in order to make a customer happy. Resourcefulness involves finding a solution when a solution isn´t apparent. This may mean moving up the chain of command before the customer demands to talk to your superior. Companies with excellent customer service also give their representatives some leeway so that they can come up with creative solutions on their own. When a customer senses that you are going beyond the norm to help them, they will feel valued and respected.

Courtesy is a commodity that is becoming rarer every day. It takes so little to be polite but it is becoming a lost art. Say please when you ask a customer a question, thank them for their information and take your time talking to them. Nothing makes a customer feel more devalued than being treated like a number. Use the person´s name, make requests rather than demands and know when to apologize. When something goes wrong for a customer, they want to hear that you understand their frustration and that you are genuinely sorry that they are being inconvenienced. It takes nothing to say, "I´m so sorry you aren´t satisfied and I hope we can do something to correct this."

Pro-Active Service means not waiting for the customer to come up with a solution that you simply follow through on. A pro-active customer service representative anticipates the needs of the customer and follows through. Don´t wait for the customer to ask you what you are willing to do – anticipate the question and answer it before they can ask. If they call and say they aren´t satisfied, apologize and immediately suggest some solutions. Customers want you to take the lead – acknowledge their unhappiness, offer a solution or solutions and explain to them how you are going to follow through. Pro-Active service means taking the lead, which will reassure your customers that you know what you are doing and that you will follow through.

If you keep these six keys in mind – seamless service, trustworthiness, attentiveness, resourcefulness ,courtesy and pro-active service – you will be able to offer every customer the Wow Customer Service Experience that inspires loyalty and keeps customers coming back for more.

A poem on customer service...

Here is a poem Ithat Edgar A. Guest in 1942 wrote about the subject of
good service called "Good Business".


If I possessed a shop or store,I'd drive the grouches off my floor!
I'd never let a gloomy guyoffend the folks who come into buy
I'd never keep a boy or clerkwith a mental toothache at his work,
Nor let a man who draws my paydrive customers of mine away.

I'd treat the man who takes my timeand spends a nickel or a dime,
with courtesy and make him feelthat I was pleased to close the deal
because tomorrow, who can tell?He may want stuff I have to sell,
and in that case, then he will beglad to spend all his dollars with me.

The reason people pass one door to patronize another store,
it is not because the business placehas better silk, or gloves, or lace
or cheaper prices, but it lies in pleasant words and smiling eyes;
The only difference, I believe, is in the treatment folks receive.


What say you? Any thoughts, comments?

Eric Fraterman

Engaging employees makes sense for customers and the bottom line!

I just read an interesting blog entry by Forrester's Bruce Temkin. It’s a story about how Joie de Vivre hospitality improved the performance of its hotels by focusing on employees.

After Joie de Vivre Hospitality Inc. took over operations in 2003, the new manager of the Hotel Carlton in San Francisco reduced employee turnover to 25% to 30% annually, about half of the industry average.

Here are some mind blowing statistics. Market Metrix estimates that each departure costs a midrange hotel about $5,000 in lost productivity, and recruiting and training a replacement Joie de Vivre has 2,500 employees. About 90% are hourly workers who take reservations, clean toilets and perform other low-status jobs.

So lets do some math with those numbers. Reducing the turnover from 50% to 25% for its 2,250 hourly workers means that the hotel chain has 562 fewer employees leaving each year. That saves the company more than $2.8 million each year. And that doesn’t even include any revenue from the likely uptick in loyalty and positive word-of-mouth.

Wow! How did they do it?
Former management at the Hotel Carlton in San Francisco didn’t like to replace aging vacuums, despite staff complaints. The new management bought a vacuum for each of the 15 housekeepers — and replaces them every year. This was just one example of how Hervé Blondel, the Hotel Carlton general manager, said he tried to treat workers as partners rather than employees. In addition, he did things like sitting in for front-desk workers on their lunch breaks and heeding staff suggestions to eliminate minibars, which generated little revenue at the midprice hotel.

The founder and CEO of the firm, Chip Conley, definitely seems to understand the strong link between employee satisfaction and good customer experience. The article talks about a number of things that he does to engage employees like sponsoring parties and awards, arranging paid annual retreats for employees, hosting regular dinners with those who want to chat, and offering free classes on subjects from Microsoft Excel to English as a second language.

It looks like Joie de Vivre Hospitality is a great example of a key principle of Experience-Based Differentiation: “Treat customer experience as a competence, not a function.”

What say you? Any thoughts, comments?

Eric Fraterman