7 Keys To Customer Experience

Despite the economic difficulties, there has been a significant uptick in real customer experience efforts. What does real mean? Efforts which address systemic issues like poorly designed interactions, broken processes, outdated business rules, insufficient customer insight and cultures that are far from customer-centric.

Here is some advice by Forrester’s Bruce Temkin for keeping your customer experience efforts on track:

1. Drop the executive commitment facade. It’s very easy for executives to say "customer experience is important." But it’s much more difficult for them to dedicate the time and energy required to make it a real priority. So, executives should either get actively involved in customer experience transformation or drop it from their agendas.

Start here: Develop a customer experience dashboard and manage the results with the same energy that you manage financial results.

2. Acknowledge that you don’t know your customers. When market research teams require long lead times and expensive projects to answer questions about customers, too many organizations go without this insight. But the path to customer experience success requires significantly deeper customer insight. So, companies need to develop voice of the customer programs that provide ongoing and continuous access to customer insights.

Start here: Create a voice-of-the-customer program with a cross-functional team that focuses on four "LIRM" components: listening to customers, interpreting the feedback, reacting to the insights and monitoring results from actions over time.

3. Keep from getting too distracted by social media. Twitter, Facebook and other social media sites may seem sexy, but they aren’t the only channels for customer feedback. Other channels like comments on surveys and calls into the call center can often provide even richer insight. So, companies need to learn from social media feedback, but not overreact to it.

Start here: Treat social media as one of many listening posts in a comprehensive voice-of-the-customer program that examines both structured and unstructured feedback.

4. Stop squeezing the life out of customer service. Forrester's research shows that consumers care more about good customer service than they do low prices. It also turns out that many customer service interactions are critical "moments of truth" that drive customer loyalty. But companies often treat customer service as an unwanted stepchild, focusing almost exclusively on aggressive cost-cutting. So, companies need to start viewing customer service as a strategic asset.

Start here: Measure customer service organizations based on how effectively they help customers instead of efficiency metrics like average handle times.

5. Restore the purpose in your brand. True brands are more than just color palettes, logos and marketing slogans, they’re the fabric that aligns all employees with customers in the pursuit of a common cause. They represent a firm’s raison d’être. Unfortunately, many companies have lost this sense of purpose in their brands. So, companies need to redefine their brand and embed it in the hearts and minds of all employees.

Start here: Translate your brand into promises you will make (and keep) with customers across every key touch point.

6. Don’t assume employees will get on board. Employees are often the most critical element of any customer experience effort. But firms can’t just hope that everyone will participate in these change initiatives. So, companies need to actively focus on engaging employees at every level across the organization in their customer experience efforts.

Start here: Communicate (a lot) about "why" customer experience is important and allow employees to participate in defining "how" to make improvements.

7. Translate customer experience into business terms. Research by Forrester uncovered a strong correlation between customer experience and loyalty. An average $10 billion company can generate $284 million of additional revenues from customer experience improvements. But most companies don’t fully understand the link between customer experience and business results. So, companies need to identify how customer experience impacts their financial results.

Start here: Engage the CFO to develop a model which shows the impact that customer experience has on customer loyalty.

How to scare off your customers - 10 tips

I love these ten tongue-in-cheek tips that will most certainly help a company lose its customers. There is great learning in this.



Top 10 Best Ways To Scare Off Your Customers

1. Pass the customer around.
Whatever you do, make it virtually impossible for the customer to get what they want when they call you. Voice jail is great. Callers love that. Or, if you have a live person answering the phone, be sure to make your callers repeat themselves to multiple people. Add that extra bit of oomph by accidentally cutting off the call when you make a transfer.

2. Buy a system, and then fit your strategy around it.
Find a complicated system that your own people cannot understand or utilize, so there's no possible way they can use it to improve customer relations. Feel good that you've purchased the best possible system, and just hope your staffers appreciate the investment.

3. Rely on completely automated phone technology.
Forget the people and buy the best automated technology, then put it in front of your customer service operation. It's best to make it really difficult for customers so that they get confused. If they fail to select an option, route them to a really poor-quality answering machine. Why spend a minute of staff time with callers who don't even know which option to choose?

4. Forget about training.
Just do what so many companies do today and put staff on the telephone without an iota of training. Better still, make sure they can't be easily understood and are good at arguing with customers. If customers know they won't get satisfactory service when they call, maybe they just won't bother wasting your time. (continued...)

5. Do not reward loyalty.
Forget about all those loyal customers who have been with you for years. Instead, go out of your way to attract new customers with better deals, and tell your existing ones they cannot have the same special offer, despite how long they have been with your company and how much they have spent. Why bother retaining customers when you can just find new ones? (Wireless phone service providers... can you hear us now?)

6. Ignore the millions of people with speech or hearing difficulties.
If you operate predominantly in the consumer sector, then ignore all those who may not be able to communicate effectively with you. After all, who wants another million or so potential customers?

7. Ignore customer feedback.
Why don't you develop your services and ignore what your customers want? Don't ask for input. That never helps and it just delays the roll-out of new products and services that you know your customers want.

8. Forget about third parties that work with your company.
We're talking about all those companies that work for you and communicate with your existing and prospective customers. Don't bother investing time to work with them. After all, if they cannot help a customer, then who cares? Or if they give the wrong advice and you get sued for misinformation, so what?

9. Forget cultural differences.
Make everyone do things your way, even if they cannot speak your language or have different ways of saying things.

10. Forget about service -- just sell, sell and sell.
Don't get distracted by nasty diversions such as customer care and outstanding service. Customers don't really expect it, so why bother? Just give them a low price and rotten service, and they will come back in droves.


Yes, that should just about do it! Simply follow these 10 steps, and your company will be well on its way toward losing those pesky customers.


From Jonathan Farrington's article on CRMDaily.com.

The cost of bad customer service

There are two types of costs that can be attributed to ‘BAD SERVICE’:

VISIBLE costs; for example:

• cost of complaints handling
• ombudsman issues and compensation
• re-work
• cost of incorrect invoicing
• commission paid to sales people for services later cancelled or compensated
• absenteeism and staff attrition
• Poor ‘word of mouth’ requiring increased defensive advertising resulting in higher customer acquisition costs etc…
  

And, INVISIBLE costs, for example:

• multiple contacts and hand-offs to deal with a single issue or complaint driving increased Customer Service FTE
• hidden Activities to deal with poor service problems
• lost sales due to lack of confidence in company service standards and ability to meet requirements
• lost revenue based the lifetime value of the customer when ‘churn’ is caused by service issues,etc…

The saying is: Quality is Free. Investing in Service Quality makes good business sen$e.

Becoming customer-centric requires courageous leadership

If you fully recognise that customer experience is not a nice to have but rather a must have, and if you understand that the time has to be now because your competitors are already working on their strategy, then there is really only one answer left. That answer is the root cause of the entire issue: lack of courage.

During his many engagements with clients, Lior Arussy of the Strativity Group identified one distinguishing factor among successful leaders. They were courageous.

Says Arussy: "Those leaders who successfully transformed their organizations to become customer centric were courageous in many ways:

• They had the courage to admit that their current value proposition was not good enough to differentiate them from their competition.
• They were courageous enough to recognise that the days of product centricity were over and that they needed to start collaborating with their customers.
• They were courageous enough and humble enough to listen to their customers.
• They had the courage to break down silos and fight against private internal agendas.
• They had the courage to align measurements with customer action outcomes.
• They had the courage to stand up to the naysayers and say "This is the new direction! You can join us or you can leave us."
• They had the courage to face change and overcome their fear of the unknown.
• They had the courage not to hide behind complacency.
• They had the courage to allocate sufficient funding to make customer centricity a real success.
• And most of all they had the courage to lead the charge! They were there front and center and lead by example. "
  

Arussy furthermore states: "The question of how to design and deliver exceptional customer experiences is not a marginal one. It goes to the core of your value proposition and ability to differentiate. Your customer experience is the reason you exist! Becoming customer-centric is not something you delegate – it is the strategy you lead!

As you plan for 2010, the first and only item on your agenda should be 'what are we doing for customers in the coming year.' Customers must be at the core of everything that happens in your organisation. From innovation to leadership up to and including employee engagement, it is time to take this question seriously. The time is now to be courageous and lead the charge."

Hear hear! I would like to add my two pennies worth: No organization rises above the level of commitment of its leadership...

Customer Service Moves Back Into The Spotlight

Forrester's William Band (my former mentor and leader at then Coopers & Lybrand Consulting) just published his Top Eight Customer Management Trends For 2010. I was pleased to read trend #5: Customer Service Moves Back Into The Spotlight.

Band observes: "We see a rising number of inquiries from clients about how to improve their customer service capabilities. How does customer service affects the bottom line? Forrester asked customers to rate their interaction experiences (the Customer Experience Index) based on whether they were:
1) useful — could they get what they needed to do done;
2) easy — or did they run into all kinds of hassles in the interaction process; or
3) enjoyable — or did they feel frustrated and disappointed in the interaction.

The results show that the higher the customer experience index, regardless of the industry, the more customers buy and the more loyal they are.

Contact center customer support needs to evolve to better serve customers who no longer rely on one venue for receiving information but instead engage multiple sources. In addition to checking a company's Web site and its brochures, many customers research information on products and services from social networking sources, such as blogs, and online user ratings. With customers now requiring more real-time support, it's essential to keep pace with their expectations and to respond to them in new ways."

10 Suggestions for sharpening Customer Focus

Here are ten suggestions from authors and consultants for how to create a culture of extreme customer focus in your organization:

1. Create a customer service vision. Much like creating a vision statement to direct the organization, you should also create a clear and compelling “customer service vision” that describes the level of service your organization aspires to deliver.
2. Exceed customer expectations. Show a relentless commitment to exceeding, not just meeting, expectations. Customers can’t tell you how to exceed their expectations, but they know it when they see it, they remember, and they tell their friends.
3. Continuous customer service innovation. Many companies have an ongoing product innovation focus, but rarely think about customer service innovations. Define specific innovation objectives and rewards for improving the customer experience.
4. Create superior customer value. Focus on creating superior value for your customers, and they will love you. This means know your competitors, technologies, and alternatives available. Match your offerings to your target customers better than anyone else.
5. Own the “voice of the customer”. The only critic whose opinion counts is the customer. Create strong, trusting relationships with your customers. Solicit feedback, communicate that feedback to the entire organization, and then be sure to take action on the feedback.
6. Be the expert on delivering superior customer service. Find out everything you can about how to deliver great customer service. Steal the best ideas, benchmark against the top performers, and make improving customer service a core competency.
7. Train every employee to be a customer service champion. Empower employees with the tools, training, equipment and support they must have to deliver excellent service consistently. Reward and praise those who deliver, and deal quickly with any employee who does not embrace the service values.
8. Destroy barriers to delivering superior service. Look at all systems, policies, procedures, reports and rules. Wipe out anything that creates roadblocks or frustrations in the effort to delight and amaze the customer. Stupid rules that make it hard for employees to serve superbly can kill your business.
9. Measure, measure, and communicate. Create a clear, specific, well-thought-out and over-communicated program for systematically collecting and communicating the most important customer service delivery measurements to the people who can then act on them. Make it easy for your people to win.
10. Walk the talk. Every level of the organization, starting at the very top, must be a living example of your service strategy. If you do not deliver excellent service to your internal customers—promptly returning phone calls, showing up on time for meetings, and acting professionally—there is no hope that your front-line people will deliver great service.

Customer Experience Management leads to Loyalty

How the best-in-class achieve 91% customer retention


According to TheWiseMarketer.com, a customer-centric shift in the market is forcing organisations to rethink customer engagement.Best-in-class companies are already outperforming the competition when it comes to using customer experience management (CEM) to boost customer retention and satisfaction, according to a study by Aberdeen Group and Cincom Systems.

The research report, entitled 'Customer experience management: Engaging loyal customers to evangelise your brand', reports that, while technology provides critical enablers for CEM initiatives, successful CEM also requires a shift in the way the entire organisation interacts with its customers - whether that's in the call centre, sales calls, or marketing messages.

According to Ian Michiels, author of the study and practice director for Aberdeen's Customer Management Technology Group, "Every customer experience is an opportunity to influence customer acquisition, customer retention, customer loyalty, and of course advocacy. That's why it's critical for organisations to start thinking about CEM from a structured and methodical standpoint."

Among its key findings, the study found that:

• Best-in-class companies achieved 91% customer retention on an annual basis, compared to 59% for all other organisations;
• Best-in-class companies achieved 88% current customer satisfaction rates, compared to 69% for all other organisations;
• 75% of best-in-class companies increased customer loyalty as a result of CEM initiatives, compared to only 53% of average industry organisations;
• While 95% of survey respondents said they saw value in formalising a CEM strategy, only 48% currently have a formal program in place to identify and encourage customer advocacy.
  

The report goes on to outline the strategies commonly employed by best-in-class companies, and examines the processes, organisation, technologies and other enablers that such businesses generally use to keep their competitive advantage.

It’s not what you do - it’s the way that you do it…

I concur wholeheartedky with UK based consultant Neil Woodcock who blogs: "Customer experience - It’s not what you do - it’s the way that you do it…and that’s what get results!”

He continues: "The moment you have attracted new interest from a potential customer, their journey with you has begun. Have you thought carefully enough about what you would like customers to feel and do at each stage of their journey with you? For instance, what have you, and other functions, got to do and what way do you have to do it to impress customers enough for them to come back to you time and time again? Did you know that satisfying a customer’s functional and emotional needs can increase sales by up to 40% (*Research International).

Many companies have researched customer satisfaction, have internal service measures and have analyzed customer transactions and sales. But few have proactively combined this knowledge to build a successful customer journey which appeals to the customers both functionally and emotionally.

The way customers think and feel about large organisations has subtly changed over the last 18 months with trust becoming a much more important element of what customers value. In addition, your internal cost cutting may have inadvertently altered the customer experience."

Now is a good time to re-design customer journeys to improve how customers think and feel and increase customer retention, share of wallet and sales. You can do this rapidly and successfully using CJM or customer journey mapping as an effective tool. I will be glad to help.

Customer cynicism about handling complaints

A study done by RightNow & YouGov Plc in 2007 of 2,800 British consumers found that 69% of the respondents had actively complained between one and five times to a company.

The results were amazing. 60% of the respondents expected the problem to be fixed to their satisfaction. Only 27% claimed the problem was fixed to their satisfaction while 34% said no action was taken at all.

What makes this remarkable is not the 34% no action or 27% fixed, but that there were fully 40% of the respondents who called not expecting the problem to be fixed.

What kind of model do you need to reduce this incredible lack of trust and restore some measure of faith in the company’s customer service? This is pretty deep cynicism.

Small businesses must focus on existing customers to survive

Most small businesses are still neglecting much needed good customer service while times are hard - but it could be an even more costly mistake, according to Rosie Beasley (business correspondent at simplybusiness.co.uk), who gives tips on restoring the balance.


It costs more to gain a new customer than it does to retain an existing customer. Most businesses know this and yet many small firms are failing to place any importance on customer retention.

A recent study, Who Cares?, found that although three quarters (78%) of small businesses are experiencing customer demand for greater levels of service for the same or less cost, only 17% plan to put a higher priority on offering good customer service during the recession.

It’s likely that most businesses feel that they already offer a good level of customer service and, therefore, can concentrate their time and energy on new business generating activities. However, satisfying the needs of customers isn’t just about being polite to them on the telephone or getting back to them promptly. A business needs to go the extra mile and exceed customer expectations in order to be competitive. Customers are much less loyal during an economic downturn as they look for the best deals around. A small firm can no longer rely on loyalty as a customer retention tactic.

Favouring new business opportunities

It makes sense to focus a decent proportion of time towards gaining new business right now, as customers are more willing to try new companies and services than ever before.

The Who Cares? study showed that 38% of small businesses have lost customers as a result of the recession and almost half are worried about losing more. This suggests that businesses need to find a balance between new business activities and spending more time looking after existing customers – not just with time but also with funding. Only a fifth of small businesses (20%) have increased spend on customer retention from last year.

Increasing new business is of course very important in order for a business to grow. Yet it will only grow if the customers it already has stick around. Without this core stability, it would be like trying to plug a hole in a bucket with sand.

Creating a balance between new and existing business

Fortunately, it is easy to develop a customer retention programme and it can take only a small amount of time to implement. Each business is different and the customers have varying needs and priorities. Here are some ideas to get a customer retention programme off the ground:

1. Put in place a dedicated way for customers to get in touch. It’s important for your customers to know how to contact you if they have a question or a problem, so create several avenues for this purpose and monitor them regularly. A dedicated phone number (or extension) and a dedicated email address should be your key contact methods and then you can try out new things like Twitter or on-line forums to go that extra mile.
2. Implement a company-wide mandate for dealing with customer enquiries. This simply means that all employees should follow the same procedure when dealing with customers. For example, make it compulsory that all customer enquiries should be dealt with in less than 48 hours.
3. Communicate with your customers regularly. Even if the nature of your business means that your customers buy from you just once a year, it doesn’t mean they should feel forgotten or neglected. Regular communications – whether letters, emails or phone calls – can make a world of difference. If you’ve got a specific reason to get in touch, such as a competition, special offers, or new content on your website, they will have a reason to re-connect with your business between purchases.
4. Rewards for recommending new customers. This is one of the best ways to maintain customer loyalty and bring in new business at the same time. Customers tend to recommend products and services to their friends and colleagues, so if you give them a reward for recommending your business you are giving them an added benefit plus you gain cheap new sales leads.
5. Personalise. Customers want to feel valued and treated as real people, not just as numbers on a spreadsheet. You can do this by personalising your communications with them and even just by remembering their name if they come into your shop or business premises. Keeping a good database with full details of your customers is the key to giving the personal touch.
6. Special offers and competitions just for customers. Often new customers get the best deals and the most special offers, but it’s a good idea to offer exclusive deals and benefits to existing customers. Make sure they know that these offers are for existing customers only. Doing so will reassure them that they are valued and not forgotten about.

Customer retention is is a profit strategy! It is not expensive compared with generating new business so it makes sense to spend time on both areas. Forward thinking such as this will help carry a business through the recession and towards successful growth in the future.

Is customer loyalty dead?

I respect the work and publications of Lior Arussy's Strativity Group. They recently conducted a study among 1,994 consumers in the US and Canada. The purpose of the study was to discover if customer loyalty is dead due to the challenging economic conditions that most consumers currently face.

• Their report revealed that customers are paying careful attention to the experiences they receive from companies with whom they conduct business, and are rewarding or penalising those companies accordingly. Some pertinent findings include the following:
• Share of wallet: More than 70% of consumers surveyed indicate that they are willing to spend 10% or more with businesses if those businesses exceed their expectations.
• Customer retention: Loyal customers are almost three times as likely to expect to continue doing business with companies for another decade or more than dissatisfied customers. Dissatisfied customers are 10 times more likely to expect to attrite during the next 12 months than their loyal counterparts.
• Premium pricing: 40% of loyal customers said they are willing to pay 10% or more to continue purchasing from companies delivering great experiences, in contrast with 9% of dissatisfied customers. Meanwhile, 52% of dissatisfied customers expect discounts of 5% or more to continue doing business with a company. Loyal customers do not expect discounts.
  

Although challenging economic conditions and a reduction in purchasing power have increased price sensitivities among consumers, many continue to demonstrate loyalty to those vendors that continue to provide exceptional customer experiences.

In the survey, customers were asked to rank their most important aspects of the experience. We then correlated these responses with their likelihood to purchase additional products and services from vendors. The aspects and touch points of the customer experience that are most likely to generate additional sales of products and services from consumers include the following:

• Quick and effective issue resolution
• Common sense and discretion
• Employees who exceed expectations
• Retail stores
• Call centers
  

Interestingly, the factor that did not make the aforementioned list is the self-service channel. While customers are willing to demonstrate loyalty to those companies that treat them well, they do not perceive the self-service channel as being a prominent factor in the overall customer experience.

Customer Focus in a Slow Economy

For the last ten years I have worked in strategic partnership with Ray Miller. Ray wrote a great article which I am happy to endorse. Here goes...

I wanted to call this article “Sharpen Your Customer Focus or You Will Lose Customers!” but a few of my colleagues (including Eric) 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 has been getting tough and for many, life is now 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 and Managing Partner of The Training Bank

The Training Bank is a full service training and development firm which specializes in fully customizable Leadership, Customer Focus, Service Excellence, Management and Supervisory Development training.

Visit his websites at http://www.thatscustomerfocus.com/ and http://www.thetrainingbank.com/ or call him at 416-698-8230. Please tell him Eric Fraterman sent you? He will be pleased to be of service.

Consumers Are Willing to Pay For Exceptional Customer Experiences Even In Tough Economic Times

A Strativity Group Customer Experience Study revealed:
"In contrast to the popular perception that consumers focus on price only, our study demonstrates that consumers are paying attention to customer experience they receive and are willing to reward exceptional experiences with larger purchases, longer relationships and premium price."

Key Findings:

• Share of Wallet
  More than 70% of consumers surveyed indicate that they are willing to spend 10% or more with businesses if those businesses exceed their expectations.
• Customer Retention
  Loyal customers are almost three times as likely to expect to continue doing business with companies for another ten years or more than dissatisfied customers.
  Dissatisfied customers are ten times more likely to expect to attrite in the next twelve months than their loyal counterparts.
• Premium Pricing
  40% of loyal customers said that they are willing to pay 10% or more to continue purchasing from companies delivering great experiences, in contrast with 9% of dissatisfied customers.
  52% of dissatisfied customers expect discounts of 5% or more to continue doing business with a company while no loyal customers expect discounts.
  

Consumers are very clear about what they are seeking from the experiences companies deliver:

• Quick and effective issue resolution
• Common Sense and Discretion
• Employees who Exceed Expectations
• Ease and simplicity
  

Study Overview
1994 consumers from North America
The study was done in collaboration with Customer Service Experts Inc.
Study was web-based questionnaire following the customer strategy phases
The survey was conducted from April 13, 2009 through May 4, 2009.

Legendary customer service comes from Company DNA and not from a program

Matt Heinz posted a blog entry which is spot-on in my view.


Going the extra mile for customers is a hallmark of great brands worldwide. The Ritz Carlton has become famous for it. More recently, so has Zappos.com.

Last week, Hyatt Hotels announced they'd really like to be known for doing extraordinary things for their customers as well. CEO Mark Hoplamazian announced a program called "random acts of generosity", in which the hotel chain will randomly pick up the tab for various amenities and services during your stay.

The concept is good, but Hyatt's trying a bit too hard. And it probably won't work.

Why is the Ritz Carlton known worldwide for exceptional, above-and-beyond service? Because it's core to their brand DNA, it's something they practice daily with every single employee, and it's something they've been doing for years.

Zappos.com has less of a history, but is equally committed to an organization-wide customer focus. Read anything from their CEO (or even their employees) and it's clear this is not a random or new initiative. It's just how they do business.

These are enviable positions, but they didn't come easy. They were earned.

Hyatt's not there. This program, ironically, could work the opposite of how they intended. Say you're sitting at a Hyatt bar, and the guy next to you has his tab picked up by the hotel as part of the program. You, however, are still paying. How does that make you feel? What are you going to tell your friends?

Even the guy who had his tab picked up can't guarantee his friends the same service when they next visit a Hyatt.

Stay at the Ritz, or buy shoes from Zappos, and the same high bar for customer service applies to everyone.

Source: Matt on Marketing

Customer service that delights starts with employee engagement

Employees: The Direct Route to Customers' Hearts
If you want your workers to delight customers, employee engagement is only the beginning .




We have all heard the advice. Companies that want to thrive in the recession and emerge stronger at its conclusion need to devote leadership time and resources to developing and implementing a growth plan. New products, sharper execution, better marketing and skills development are a must, but forgetting how much of an influence frontline staff has on customer satisfaction and retention is a key piece of the puzzle.

The link between employee engagement and business outcomes has been well established: employees that are more engaged in their work and with their companies are more likely to stay, more likely to recommend the company and its products, and more likely to go the extra mile to get the job done. But employees can also be a window to customers, and more importantly, a barometer for their satisfaction with your company's products and services.

Research involving more than 30,000 customer service employees conducted earlier this year by the Corporate Executive Board indicates that there is a close connection between employees' work experience and customer opinions. Departments where employees reported they had the authority to take actions to meet customer needs, make decisions on their own to improve quality, and respond to problems without waiting for approval had the highest levels of customer satisfaction.

The study also discovered that even a small change in employees' ability to get the job done for customers can yield big dividends. Improving the percentage of employees who reported they had the ability to easily correct customers' problems by just 5 percentage points yielded a 10% increase in customer satisfaction. Satisfied customers buy more of your products and services and recommend your organization to others. In fact, the relationships between employee and customer viewpoints were so strong that employee opinions about their ability to serve customers could be used as a bellwether for client concerns.

There is no substitute for direct feedback from customers, but it is clearly worth listening to what employees have to say about the customer experience. Using employee inputs to revamp processes, tools, and decision and authority rights can greatly enhance the customer experience, and thus better positioning your company for growth and long-term success.


Source: Blog entry by Corporate Executive Board —What the Best Companies Do™

Use the Customer Experience to Create "Soft" Customer Value

Customers today are more likely to be willing to leave to get better value elsewhere; don't give them a reason to take their business to a competitor.

• They are likely to be more edgy and anxious in the sense that they will leave for reasons that might not have been serious enough to have caused them to leave just a year or more ago.
• They are less forgiving today simply because they have less money to waste.
• They want better value and we have to deliver it if we are to persuade them to stay.

Everyone in the organization has the potential to cause customers to leave. The people who we put in front of them, the design of telephone and web systems, the time we leave them waiting on hold, the stupid rules that cause them to solve their own problems—all contribute to creating an experience that might just turn a customer into a former customer.

On the other hand, of course, turning these customer interactions into positive experiences will go a long way to creating a softer form of value that customers will notice and that will impress them in a climate where many of your competitors are cutting back.

Four Softer Forms of Value

Canadian author and consultant Jim Barnes suggests that companies should look at how well they are delivering four types of experiential value:

1. Make it easier for customers to deal with us. Reduce the effort that customers have to expend; get rid of rules that make them jump through hoops; reduce wait times; reduce the work they have to do. Customers don't need any more frustration in their lives at the moment. Their collective fuse is shorter and they'll leave at the drop of a hat if we put them through complex processes. So, answer the call more quickly, avoid handing them off to colleagues who will have them tell their story all over again, don't make them answer 15 questions when five will do.
2. Treat them better than ever before. Put your best foot forward, impress them with service. Now is the time for impressive service to occupy its rightful place in the value proposition. I see far too many companies cutting back on service to reduce costs. Despite widespread advice to the contrary, they opt for a short-term solution that serves to reduce the level of service at precisely the time when it is most needed.
3. Help them get things done. Offer good advice; impress them with new ideas; deliver "I'll-look-after-that-for-you" moments. This will require that we make a greater effort to identify what the customer is trying to accomplish, what he or she needs to get done, and then looking for ways to make it happen. Anything you can do to facilitate that will be appreciated. Create that "one-less-thing-I-have-to-worry-about" response.
4. Surprise them occasionally. Now is the time to offer more, not less. But, this does not necessarily mean offering more product or giving away things that the customer may not even appreciate. Instead, think about the analogy of a retailer who offers to carry things to the car, drops that item off at your house so you don't have to make a trip down here, or sews the hole in the pocket when the pants are in for dry cleaning. These may be viewed as little things, but they have the potential to make a big impression, especially when competitors aren't offering them.

What can you do to provide softer value?

Call Center Customer Satisfation - Let the CSR be a Judge!

It is SQM's *) viewpoint that CSRs should be a judge of whether or not your call centers' people, processes and technology are working to provide high levels of First Call Resolution (FCR) and Customer Satisfaction (Csat).

SQM's employee FCR survey is substantially different from the typical organizational employee survey because it focuses on FCR and Csat from a CSR's point of view. One of the best places to start improving Employee Satisfaction (Esat) and Csat, or to ensure that Csat is taking place, is to actually use CSR feedback.

Top performing Esat and Csat call centers use employee feedback at all levels as one of their primary tools to ensure Csat is taking place and to make Esat and Csat improvements. CSRs are in an excellent position to judge whether the people, processes and technology are working properly to provide quality service.

As previously mentioned, it is SQM's viewpoint that customers should be the judge for determining their level of satisfaction with the way the call was handled and if their call was resolved. Therefore in order to make meaningful people, process and technology improvements and to make the call center experience better for the customers who call and for the CSRs who handle the calls you must also let your CSR be a judge!


*) Source: SQM Group, Call Center Quality Assurance Specialists

Call Center Customer Satisfation - Let the Customer be the Judge

Letting the customer be the judge is a best practice for a customer focused call center. However, this practice is seldom used in the call center industry.

Of the more than 400 North American call centers benchmarked in 2008 by call center quality assurance specialists SGM group, only 5% of those call centers are performing at the world class level (defined as 80% of their customers that called were very satisfied (top box response) with their experience). That means 95% of call centers do not provide world class Customer Satisfaction (Csat).

It is SQM's opinion that one of the main reasons that 95% of call centers do not provide world class Csat is because call center management is the primary judge of customer service versus the customer who called the call center.

Call center managers tend to use service level, AHT and call monitoring metrics as proxies for Csat. What is fundamentally wrong with this practice is that these internal metrics are being used to judge the customer's call center experience.

The real issue with the use of these internal metrics is that it is management's interpretation of customer satisfaction versus letting the customer be the judge of their own call center experience. Therefore in order for your call center to be a truly customer focused call center, you must let your customer be the judge!


Source: SQM Group, Call Center Quality Assurance Specialists

10 Tips for Improving Customer Service

From the about.com website

Good customer service is an integral part of almost any business - and one that can have a significant impact on your bottom line. It can help turn a one-time customer into a repeat customer. It can inspire customers to tell their friends about your product or service, and in turn, those customers tell their friends. Here are 10 things that your business can do to ensure good customer service:

1. Answer the phone. When a consumer or potential consumer calls your business, he or she needs to be able to get through to a live person or, at the very least, an answering service that ensures that calls will be returned promptly.
2. Listen to your customers. When your customer talks, you should listen attentively. Ask your consumers what you can do to better their experience, and listen to what they tell you. The key to giving customers what they want is to understand what they want - so listen when they talk.
3. Focus on the positive. Don't begin to address a complaint or start a conversation with the negative. Try to focus the conversation on what you can do for the customer, not what you can't.
4. Handle customer complaints effectively. Although it is tempting to ignore many customer complaints, almost all of them should be addressed. At the very least, let the customer know you are looking into the situation, and if you are working on resolving the complaint, let them know that as well. Diffuse their anger with a soothing tone of voice or by reassuring them that you are trying to handle the situation.
5. Keep your promises. If you make a promise to a customer, honor it. If you know you can't keep a promise, don't make the promise to begin with.
6. Be helpful and kind, even when there is not an immediate profit in it. When people pop into your establishment to ask directions, when they lose something at your business, when they need help, you should step in when you can - even if there is not an immediate profit in doing so. This kindness and helpfulness will build goodwill with the person, and may inspire them to return to your business.
7. Let customers know you appreciate them. Tell them "thank you" for the business, give them something extra - anything that signals to the customer that you care about them coming back.
8. Go the extra mile. If someone asks where an item is, don't just tell him or her, take him or her there. If they buy something from your store, throw in a little freebie. If they had a complaint that you resolved, follow up with them later to make sure they are still satisfied. When you go the extra mile, customers usually notice and are more likely to come back.
9. Ask if there is anything else you can do. Not only does this open the lines of communication and give you insight into your consumers' needs and wants, it makes customers feel appreciated.
10. Train your staff*. All of the above customer-service points should be communicated to your staff via a thorough training session. Every single member of your business should practice good customer service at all times.

*) Ask about our proven customer service and service leadership training programs: Customers Forever. We will be happy to send you an overview.

Maintaining Customer Service and Loyalty During Cut Backs

By Darrell Zahorsky: About.com Guide to Small Business


The mantra of business this past year has been to reduce spending, cut staff and save money. One area to easily neglect during crisis management of during a recession is customer retention and loyalty. Yet, customer loyalty can ultimately save your business. With reduced staff and a greater focus on the bottom line, how can you build greater customer loyalty? Consider the following:

Find Touch Points:
Your business has a range of touch points during the entire sales process and customer service cycle. Determine the vital points of contact for your customer. Find what is most important to your target market through conversations and surveys. Is it after sales support or product selection help? Understanding your touch points can help increase loyalty.

Focus on Your Top Customers:
Not all customers are created equal. Sure, everybody is looking for a good deal during an economic slowdown but your most important customers will spend more, provide better profitability and have a greater propensity for loyalty. Put more of your customer service dollars into your best clients.

Re-invent the Customer Experience:
The ways you are servicing your customers may be costly and outdated. Employ technology to help customers find answers fast and reduce costs. For instance, your customers highly value the setup following the purchase of your product. While you lack the resources to have staff service this touch point, consider alternatives such as building an extensive FAQ section on your website or creating an online forum where your customers can help each other.

Manage your Moments of Truth or be mediocre

In 1981, Jan Carlzon became CEO of the problem-ridden Scandinavian Airlines. By 1994, he had turned the airline around by focusing on what he later called "moments of truth," the various points at which people with the airline came in contact with airline customers.

These days, the term used is Customer Experience Management (CEM), because every hot trend needs a three letter acronym! CEM has filled in some of gaps in conventional CRM thinking, which often is too internally focused on managing customer data and revenue.
Meanwhile, it's the customers' perception of all their interactions with your (company) brand that drives much of the value they receive.


FYI: My proven Customer Experience Workshop helps comapnies take stock of their Moments of Truth and identify improvement opportunies as well as internal barriers to success. Email me for a service brochure.

Customer Service & Experience: "Executives Have No Idea What Customers Want".

This is a recent Forbes blog entry by Andrea J. Ayers, president of customer management at Convergys. The findings are sad but true, in my experience also.


A new study shows a major, dangerous disconnect.

Convergys recently surveyed several thousand U.S. consumers across 10 major industries to find out what they really think about customer service. We also surveyed executives in each of those industries.What we learned is surprising.We learned that we've shifted from a service economy to the experience economy, where customers are in control, unsuccessful brands are commodities and successful brands create consistently superior experiences.

We also learned that company executives are woefully disconnected from their customers when it comes to delivering the customer experience. One result was truly shocking in its implications for consumer-driven businesses: While most company executives say they have a solid understanding of their customers' experience and expectations, consumers vehemently disagree.
In fact, consumers say that companies not only don't know their needs, they also don't care. Where executives would give their companies' customer service "B" grades, consumers give them "D" grades. What's even worse is that executives have no idea how this disconnect is affecting their companies' futures.

Nearly half of consumers (47%) say they don't believe company executives understand their experiences, citing problems such as rude customer service staff or employees who provide the wrong information or never solve the customer's problem. More than one-third (41%) of the customers who take the time to complain don't think companies listen to or act on their feedback.

But that doesn't mean customers are doing nothing. On average, more than half will defect--leaving a company flatly--based on bad customer experiences, without ever telling the company why.

And the problem doesn't end there. Nearly nine out of 10 customers will tell their friends and colleagues about their bad experiences, creating a negative ripple effect in the prospective customer base that has serious implications for a company's future success. Yet the executives we surveyed thought that only 20% of customers shared the news about their bad experiences--a significant mismatch with the customer view.

And the biggest misunderstanding among executives? If customers don't complain to them, it means they don't have a problem and everything is fine. This is the silent but deadly company killer.

This silence is masking broken feedback channels and customer attrition, which can be lethal for certain industries. Across all industries, 17% of interactions result in a customer leaving the company. In the credit card industry in particular, 43% of customers will stop doing business with a company after a bad experience they did not take the time to report. Our research found that hanging on to existing customers is critical, because their lifetime value increases exponentially over time. In the credit card industry, a small retention increase of 5% can have a huge profit impact of 125%.

To compound matters, the "millennials" are here. The arrival of this younger generation has raised the stakes significantly for companies trying to build solid relationships with their customers. These young customers are tech-savvy and prefer to have their customer service needs met through a wider variety of channels--more than just the call center and the Web. Mobile applications, social networks and virtual worlds such as Second Life, to name a few, are their realms.

If executives think they have a handle on what their customers want, they need to try analyzing the customer service experience of a millennial. Unless a company changes its customer management strategy to address them on their turf, millennials will leave quickly and quietly in large numbers and head for the companies that do "get" them, making silent attrition an even bigger challenge than it is today.

Based on Convergys' research, here are the 10 most important things your customers want you to know:

1. The sharp contrast between what executives think they know and what customers say they don't underscores a fundamental management problem: managing inside out for maximum efficiency instead of taking feedback from the outside and using it to improve the customer experience.
2. Customer perspectives and preferences are the formula to feed into internal efficiencies. Execs would do well to scrutinize the information on those feedback forms and satisfaction surveys and put them to work.
3. With no actionable information available, companies are doomed to make the same customer service mistakes over and over, unless executives get serious about their customers. Executives need to understand that negative customer experiences--even those they'll never hear about--have a direct correlation to attrition, so it's important to work on improvements that drive customer satisfaction.
4. The fact that a customer won't tell a company about his or her dissatisfaction but will tell others means that not only has the customer gone, but also that the company has no idea why, and word is spreading throughout a widening circle of potential customers.
5. A satisfied customer isn't necessarily a loyal one. Even a satisfied customer who rates a company's service as exceptional will leave that company for one that provides better value. Customers are satisfied when a company successfully completes transactions and understands their needs; customers are loyal only when they receive value beyond the ordinary parameters of service. The more extraordinary the value, the greater their loyalty, but it differs by customer. The millennial population might see automated, fast interactions as a value that engenders loyalty, for example, while a retiree might attach special significance to personalized instruction.
6. Silent attrition varies by industry, but in general, companies are losing about 12% of their customers this way, with the defectors poisoning the well among potential new customers. Silent attrition, particularly in this economy, can spell the difference between a company's success and its failure.
7. Service is paramount: No fewer than 78% of consumers believe service trumps personalized features, and 86% of customers say service defines the brand. Customers rate brands based on their own experience with a company, and virtually all leading brands can charge a premium by making service their defining characteristic.
8. Skepticism is on the rise, with 86% of customers becoming more distrustful in the last five years. A prime example? When the economic crisis hit full-swing in September 2008, 95% of U.S. customers said they distrusted the financial services industry. Companies must understand that they have to convey trust from the front line. Smart companies in beleaguered industries are committing substantial resources to ensure concerned customers contacting them have superior experiences that boost trust.
9. One size does not fit all. Those consumers preferring automated channels have doubled in the last four years, with 55% of the population preferring automated resolution to waiting to speak with someone on the phone. Companies must balance automated self-service with agent-assisted service and deliver a seamless customer service experience every way they serve their customers.
10. Millennials are 43% more likely to seek assistance through their preferred automated channels. Nowhere is the preference for self-service more notable than among younger customers who have grown up in the Internet era. For millennials, online interaction is ingrained. They see value in social networks, perceive needs through viral communications with colleagues and order and pay through the Web. They want their service needs handled the same way. Actively embracing the value shift to social network-based service and multi-channel automation is mission critical now to ensure the loyalty of a new generation of customers.
    

The ability to deliver an excellent customer experience is a competitive necessity. This experience is not a fixed is critical to building strong relationships with those customers. Skill in managing the customer experience across an array of changing service channels and segments now plays an increasingly important role in a company's success.

Here are the steps companies need to take to reconnect with their customers:

• Cover the Basics First: Help customers when they need it, and present personalized offers only when they make sense. Our data say customers don't want to hear about special offers or add-ons when they need service. Companies should make those offers only at times when and via channels where customers are receptive.
• Ensure "One and Done": Companies need to refocus their customer service on resolution, not speed. Customers want a "one-and-done" experience, and they don't care how they get it as long as their problem is solved quickly. Companies should favor policies that empower employees to resolve issues without needing to transfer to the customer or escalate the issue, even if it means taking a little more time.
• Take and Outside-In Approach: Create multiple options, using multiple channels, whereby customers and employees can provide feedback and incentivize decision makers to act on that feedback. Resolution has to be immediate, or it won't help. It's worth remembering that every successful communication can be a customer saved.
  

In summary, customers want very reliable help packaged as good customer service, yet companies are still struggling with basic customer service. Of the factors that mattered most to customers, personalization--the focus of so many customer-experience initiatives--ranks at the bottom, below knowledgeable, helpful employees who are able to address a customer's needs on first contact.

True personalization doesn't mean that the customer service agent knows a customer's name when he or she contacts them; it means the company has taken the time to know how best to serve every individual customer well. The companies that understand this will succeed.

Customer service is an important component of customer experience

I am among the numerous followers of Forrester's Bruce Temkin who recently blogged with the title: Don’t Confuse Customer Service With Customer Experience.


According to Temkin it comes down to this picture:

"Customer service is an organizational function, like marketing and sales, that manages a subset of interactions with customers. Customer experience, on the other hand, is the connection that companies make with their customers across all functions and touchpoints. Here's a definition for customer experience: "The perception that customers have of their interactions with an organization".

For most companies, customer service deals with some key “moments of truth” for customers. So that function is an important participant in most efforts to improve customer experience. But firms can’t just focus on customer service interactions or offload responsibility for customer experience to the customer service organization. That’s why the 3rd principle of Experience-Based Differentiation is: Treat customer experience as a competence, not a function.

"

The bottom line: Customer service is an important component of customer experience.

Customer satisfaction and loyalty are not the same.

According to author Shaun Smith:

"True loyalty happens when there is an emotional engagement with the organization or product.

This engagement comes from experiencing the brand or organization in unique way that creates true value for the customer."

Continues Smith:

How is loyalty different from satisfaction?
We have seen time and time again in the research that smith+co has conducted in a variety of sectors that 90% of customers who award top scores for satisfaction indicate their intention to be loyal to that organization. That figure drops to around 20% percent for customers who are still satisfied but rate one box lower. The reason is that over the past 10 years, organisations have become increasingly aware of the need for customer focus and customer satisfaction - so much so, that it is now the norm and the entry price for any organization wishing to be successful.

As a result, differentiation on the basis of basic customer service has declined, price sensitivity has increased and it now takes a unique customer experience which goes beyond satisfaction and creates a real bond with the customer in order to regain the competitive edge.

So, loyalty is not one and the same as satisfaction, neither is it the same thing as repeat purchase. Until First Direct came along in the UK and made it attractive and easy to switch banks, few customers would entertain the inconvenience of closing their account and applying for one elsewhere, yet the retail financial segment has generally low levels of satisfaction among consumers. What kept customers coming back was not loyalty, but 'stickiness' due to the hassle factor in changing accounts. Not any longer.
Loyalty is a misused term. Most organizations think that it is about customers being loyal to them when it should be the other way round - the brand should be loyal to its best customers by offering value that is not generally available to the mass market.

True loyalty happens when there is an emotional engagement with the organisation or product. This engagement comes from experiencing the brand or organization in unique way that creates true value for the customer. And this emotional engagement matters.

As the leading global advertaising agency Ogilvy found in its annual BrandZ survey: "Companies that were successful in creating both functional and emotional bonding had higher retention ratios (84% vs 30%) and cross/up sell ratios (82% vs 16%) compared with those that did not".

And of course when you get very high levels of emotional engagement with a brand than something rather wonderful begins to happen.

Beyond loyalty -> Advocacy
For those organizations wishing to increase margins by driving down sales costs while driving up revenues, advocacy is the answer. This requires you to know who your most profitable customers are and to consistently deliver a customer experience and thus create a high degree of trust in your brand. Then these loyal and highly profitable customers are prepared to recommend your organization to others.

It's therefore no accident that First Direct in the UK claims to win a new customer every eight seconds and is the UK's most trusted bank, according to Research International, or that 36% of its new customers join as a result of a personal referral. First Direct's customers have become the bank's biggest advocates, reducing its costs of sale and increasing its share of these customers' spend.

This is the way to win in a recession.

Great customer service requires 'human service'

There are many components that go into providing exceptional customer service. However, there will never be an element of customer service more important than the human element.

In these days of texting, Facebook, email, etc. the art of human contact is a fleeting one. All of the tools just listed are exceptional ones; however, many individuals and organizations hide behind these communication methods, as well as policies and procedures, to keep them from providing ‘human service’.

Customer Experience is the big buzz term in Customer Service. The definition of experience includes words such as emotion, perception, humankind, and participation. All words that would lead one to believe that in order for a Customer Experience to be exceptional, a human emotional chord must be struck.

Even if ‘touchy- feely’ is not your forte, look at supporting this type of behavior from a business standpoint. Studies show it costs a minimum of 5 times what it would cost to keep an existing customer happy than to acquire a new one.

Times are tough. No man is an island. And everyone likes to feel visible. If you see people as people, you will also see their money –even during these tough times.



This is an extract from the blog of the Customer Service Institute which I thought was very pertinent.

The cusomer service opportunity in this recession

This economy gives us an opportunity. Now, more than ever customer service to both customers and employees (internal customers) is paramount to the success of any company.

With customers tightening their spending, this is the chance for vendors to prove to their customers that they value their business in good times and bad - and that the relationship is more important than the sale.

The same goes for employees. The potential for apathy - even anger - from an employee is high, as morale potentially slips due to layoffs, wage cuts etc.

Management must create an environment that fosters loyalty, both inside and outside of the company, in spite of the tough decisions they have to make.


What is your view? My experience has been that many organizations miss this way of thinking.

No wonder customer service is not getting better....

Companies fail to measure and act on customer feedback, study finds

Despite overwhelming agreement on the importance of the customer experience and subsequent word of mouth, senior marketers admit their companies are failing to take decisive, companywide action to integrate feedback from customers and their experiences into key business and marketing processes, a new study by the Chief Marketing Officer Council says.

The study, “Giving Customer Voice More Volume,” reveals that 58% of the 480 executives in various industries surveyed say their companies do not compensate any employees or executives based on customer loyalty or satisfaction improvements.

38% say their companies have no programs in place to track or propagate positive word of mouth among customers.

And only 29% rate highly their ability to handle and resolve customer problems or complaints.

The study was conducted by the council with Satmetrix, a customer experience and word of mouth consulting and technology company.
“Customer experience is one of the most critical determinants of brand strength and business growth. Yet most organizations and senior marketers suffer from major blind spots and gaps in the way they interact, handle and respond to customer issues or problems,” says council executive director Donovan Neale-May. “CMOs must assume ownership for the customer experience and establish enterprisewide measures and disciplines to ensure continuous improvement. We are missing a major opportunity to turn customer pain into competitive gain at every touch-point through better use of web and contact center technologies and processes.”

Nearly two-thirds of companies do not have a formal program in place to monitor and measure the voice of the customer, the study finds. Only 13% have deployed real-time systems to collect, analyze and distribute customer feedback. While 74% receive customer feedback via e-mail, only 23% track and measure the volume and nature of these messages. And while the voice of customers is spreading online through social media, only 14.5% of companies track word of mouth on the Internet.

“Companies must become more sophisticated and committed to both leveraging customer experience as a key business metric and instituting companywide processes that drive improvement,” says Laura Brooks, vice president of research at Satmetrix. “Measurement is not an end in itself. Companies need to commit themselves to understanding the key determinants of their score and continuously strive to improve their customer experience competitiveness.”

Recession is ‘boosting customer service levels’

Finally a silver lining to the cloud!

The UK Customer Satisfaction Index (UKCSI) asked more than 24,000 people to rate how well or how badly companies and organisations performed in 12 key public and private sectors. Overall satisfaction levels continue to increase to a UKCSI of 72 out of 100, compared to a score of 71 when the previous index was published in July 2008. The survey reveals 72 per cent of consumers expect organisations to improve further in the coming months.

With consumers seeking value-for-money products and services, companies are making greater efforts to impress their customers, keep them happy and prevent them slipping into the clutches of competitors.

The first signs of real service improvement appear in a major new survey from the Institute of Customer Service (ICS) - the most wide-reaching measure of customer satisfaction throughout the UK. Despite concerns over the economy, more customers say they are pleased with the way they are treated.

"With satisfied customers much more likely to return and remain loyal, good customer service is vital to survive the recession," says ICS executive director Robert Crawford.

"This rise in customer satisfaction shows that companies are getting serious about service - as they must be - and are taking steps to improve. Offering excellent customer service is the only differentiator left today. Consumers are increasingly looking for better value-for-money, so providing great service is the best way to ensure they choose a business ahead of its competitors."

Customer Focus is more than Customer Service

On my website I have for years had an orgazational performance oriented Customer Focus Self Assessment. From the database I have built up, I have compared the top quartile and the other levels of self assessed organizational performance.

It is clear that the Say-Do gap between intentions/aspirations towards customer focus (Say) and various aspects of implementation (Do) is considerably wider for those organizations below the top quartile level.

What Is Customer Focus?
It is an organizational competence: Customer-Focus is an aligned whole-organization approach to customer satisfaction and service in which Leadership, Processes and People are all customer-aligned.

In broad stokes, this means that:

• Every action is shaped by a relentless commitment to meeting and exceeding its' customers expectations regarding product and service quality;
• Internal processes are constantly evaluated and improved to meet or exceed those expectations;
• Employees are aware of their role in maintaining a valued relationship with their customers.
  

Three External Performance Levels
I found an article by executive recruitment firm Egon Zehnder that identified these three externally focused performance levels of Customer Focus with which I agree.

• At low levels, one is willing to help customers by providing them with what you know you have. Gathering information about the external customer and listening to feedback represents a low level.
• At moderate levels, the perspective moves from "what does the customer need today" to "what will the customer need next." You know the customer from the inside, which means you can predict how s/he might respond to a given offering and you can anticipate future needs that one may address.
• At higher levels, one becomes proactive in shaping the customer value proposition well beyond the transactional relationship - a trusted advisor who is intertwined with the customer's decision-making processes.

High performers build complex relationships with customers and, based on their deep knowledge of the customer and marketplace in which they compete, they provide services that customers do not yet know they need. High performers' insights about customers become a source of competitive advantage for both their own company and their customer's business.

Perhaps you can identify with any of these three externally focused levels? And, if you want to really know how you stack up as an entire organization, why not take the 10 minute self assessment on my website? www.customerfocusconsult.com

What say you? Any comments or insights?

Lacking Customer Focus can get your company in trouble... in at at least nine ways.

I came across this information from Douglas Morse, Managing Principal of the Services Transformation and Innovation Group LLC . I think he is so 'spot on' that I would like to share it with you. Way to go!

9. You focus on product sales and not on customer value.
If you just measure and reward around how much product that you sold last quarter or last year and you don’t maximize the value of those products for your customer, you won’t have a lot of repeat business. The scorecard for your company must focus on things like Time to Value, Customer Loyalty etc.

8. Services profits are used to fund product R&D but you have no Services R&D function.
Innovation is important to product companies. If the products need to be innovative why aren’t the services that surround them? If close to half of your revenue and profit comes from after sales or value added services, how can you not leverage investments in innovation to include Service?

7. You still have a department or separate organization called "service" or "support".
Not only do you have a standalone silo within your enterprise but you make the customers painfully aware of the separation. Quite likely the service organizations are operating with differing and often conflicting metrics than the rest of the enterprise. Driving customer value and customer experience requires that an enterprise works holistically and seamlessly for the benefit of the customer.

6. Your CEO says, and believes, that the services revenue and profit would not exist without the products.
Don’t bother to memorize the CEO’s name; I am sure that his replacement will be much better. There are famous CEOs who actually believe that service would not exist without innovative products. The SONY walkman was a very innovative product but people are buying IPODs today by the millions. WHY? Product innovation alone does not deliver value. This is another example of Darwin being right…

5. Service Innovation, to you, means disintermediation of tasks (like self service ) or by cutting heads and moving them to Timbuktu.
Labor arbitrage is not innovation. Labor arbitrage is a management technique to hide problems through “cost” reductions. No one creates innovation by moving the same old work to new and cheaper labor markets. Transferring tasks that you used to perform to customers as a way for you to save money is also not innovation. Replacing bank tellers with ATMs and forcing the customers to use them to avoid long lines did not add value. Providing access to banking services 24x7 did.

4. Only the services or customer facing groups are measured by "customer satisfaction".
Many companies survey their customers but only a few employees are held accountable. How a customer feels about your product or company and their desire to continue doing business with you is a result of the sum total of all experiences that they have with you. Everyone from the CEO to the Janitor must be held accountable for customer delight. Everyone has a role. If a role in your company does not contribute to customer delight, get rid of it as it adds no value. Once people start to understand their role in delighting customers, you would be surprised with the turnaround of a company.

3. There is no organization in your company that has the title of ‘Customer Experience’.
Go read a book called the “Chief Customer Officer” by Jeanne Bliss. While point number 4 says everyone contributes to customer experience, who do you have that helps to design, create or innovate around customer experience? Customer experience is a complex set of issues and should involve a number of specific disciplines. You might have the best products in the world, you might have top notch services supporting the product and perhaps adding great value, but experience is an emotional state created over time. One bad event erases all the positive ones. This needs to be a core competence in your company.

2. You are expected to deliver improved margins on services even though the product quality is not being forced to improve.
The product group believes that time to market is the number one goal but the service manager is expected to reduce costs as the volume service problems go up. This never happens, right? Alignment of the enterprise is key. Organizations cannot survive with competing objectives. No soccer (football) team ever won a game by having everyone on the field focused offensively on scoring a goal and leaving the goalie as the only person on defense. Winning the game means the right balance of offense and defense is used. Why would it be different in a corporate environment?

1. You have never invited your customer to participate in your strategic planning sessions.
If your goal is to deliver customer value, how can you plan without customers participating? If service is about value co-creation, as it is often defined, how do you do it without the customer as a major player? While I do not mean this in the literal sense of having customer dictate how you operate your business, how do you know that what you are planning to do is going to deliver expected value? Companies that are well plugged into their customer’s value chains are leading in their markets.