82% Of U.S. Consumers Bail On Brands After Bad Customer Service

Read on TechCrunch:

The spotlight — or maybe the flood light — shines on bad customer service online. Companies should worry about public complaints and reports of their brand failures more than ever, suggests a new report from RightNow and Harris Interactive. Contrarily, they stand to make more money if they can deliver a superior experience, the report says.

The Customer Experience Impact 2010 report reveals that 82% of consumers in the U.S. said they’ve stopped doing business with a company due to a poor customer service experience. Of these, 73% cited rude staff as the primary pain point, and 55% said a company’s failure to resolve their problems in a timely manner drove them away.

Almost everybody surveyed, a full 95%, said after a bad customer experience they would “take action.” 79% of U.S. consumers said they blabbed about their negative customer experiences in public and amongst friends. Of consumers who took to social media sites including Facebook and Twitter to publicly air a complaint, 58% expected a response from the company, 42% expected a response from a company within a day, but only 22% said they’d actually gotten a response as a result of griping there.


In 2007, 60% of U.S. consumers said when they had a negative customer experience, they wanted to speak to a live agent about it. At that time, 26% preferred email, 5% chat, but Facebook and Twitter weren’t used by corporations to handle complaints and resolve problems. This year, 83% of U.S. consumers said they wanted to speak to a live agent, 66% preferred email, 12% chat, and 7% choose social networking sites when trying to resolve a problem.

The more digital communication options that consumers have, the more they crave human interaction in real time, apparently.

Customer Experience Management is Doing the Right Thing

I have a great respect for author and consultant Lynn Hunsaker. She recently published this in her blog and it bears repeating here:

Customer experience management must have these 9 qualities in order to consistently win your heart and a share of wallet:

Perspective: customer experience is defined entirely by the customer, not the solution provider.

Preventive: customer experience gravitates toward the easiest and nicest methods to get and use solutions that address customers’ needs.

Duration: customer experience encompasses the point from which customers become aware they have a need until they say that need is extinct.

Dynamic: customer experience evolves with the customers’ context – the purpose and circumstances of their need, and overall experience reference points.

Choice: customer experience is built on trust and mutual respect for variety; share of budget is more important than loyalty.

Multi-faceted: customer experience is measured by functional and emotional (social and personal) judgments related to the customers’ expectations.

Operational: customer experience is shaped by all the contributors to an organization’s processes, policies and culture, in addition to the physical product or service associated with the customer’s need.

Integrative: customer experience is impacted by the degree of alignment among departments, technologies, channels, etc.

Anticipatory: customer experience is ongoing, where the present and future are equally or more important than the past.

Improving Customer Service: Avoid These Common Pitfalls and Traps to Communication

Jim Clemmer is author of Firing on All Cylinders. In a recent blog entry he reinforced what I always emphasize: Communication is a key catalyst to achieving customer service excellence.

In any game plan for improvement the objective must be to make Communication into a forethought rather than the habitual afterthought.


"If you’re leading efforts to improve your team’s internal or external service/quality levels, here are seven common pitfalls and traps to your vital education and communication efforts:

Mixed Messages – internal and external marketing must be tied together. Frontline staff need to hear the same message your customers are hearing. Too often servers are the last to hear about the wonderful service/quality they’re being committed to provide.

Not Walking Your Talk – you and your management team must behave in a manner consistent with the messages being broadcast to everyone. You do the strongest internal marketing (or blocking) of the true value and priority of service/quality with your tiny, seemingly insignificant daily actions. Nothing else will convince (or turn off) today’s younger generations of workers than perceived hypocrisy.

Stale and Stalling – managers trying to build higher service/quality cultures are often frustrated with how long it takes to get the message through to those who make or break the effort. Too often – just as managers are getting tired of repeating the same messages – people on the front line are beginning to think, “Just maybe, quite possibly, they might be serious this time.” The watchwords are consistency and repetition, repetition, repetition …

Educated but Unskilled – you can give people plenty of education, information, inspiration, and awareness but if servers and support staff don’t have the skills to improve service/quality they will become frustrated and disengaged. Awareness and empowerment are useless without enablement. Everyone needs to know how to make improvements.

Bypassing Team Leaders – you can get frontline teams excited and committed to improving service/quality but their enthusiasm will be short-lived if their supervisor or team leader isn’t first brought on board and given the skills to introduce, support, coach and lead the team’s efforts. Very few service errors come from lack of motivation. Most of them are a result of the system, process, structure, or practices. These are controlled by management.

Once (or Maybe Twice) is Enough – you can’t repeat your core service/quality messages too often or in too many ways. As one manager put it, “I’ve learned that just because you think it, write it, or say it doesn’t mean employees hear it or believe it.” A CEO adds her experience; “I vastly underestimated the job. On the first go-round, all I got were glassy-eyed stares, open mouths, and sometimes passionate disagreement…establishing our new brand took a year, and even then it was not a lasting vaccination. It required booster shots.” Just like continuous improvement, education and communication is never finished. "

Top 10 Customer Service Turn Offs

It takes only a few moments to damage a customer relationship that took several years to build. The best way to retain your existing customers is by being diligent in your everyday dealings. Given below are the top 10 customer service turn offs and ways to turn things around to reinforce and strengthen your customer relationships.

In today’s tech-oriented, increasingly incongruous business world, businesses can win the hearts and loyalty of customers by avoiding these 10 customer service turn offs posted by contributor Lee Kennedy on Customer Management IQ. Spot-on, Lee...

Amateur Staff:
Nothing irritates a customer more than a customer service representative with half-baked knowledge. Even if you have a small team of customer service agents, it helps to train them adequately so that they can represent your company appropriately. It helps to understand that, each and every customer service agent is the face of your company for the customers, and hence should be knowledgeable enough to give correct information and provide suitable solutions.

Trying to Win an Argument:
You can certainly win an argument by defending your company and reacting to your customer’s complains, but you cannot win his loyalty by doing that. You can only win his allegiance and loyalty by empathizing and apologizing (and that even holds true when it’s not your mistake).

Rigid Policies:
Sticking to stringent policies can be the fastest way to lose customers. Depending on the strength of the customer relationship, you should be willing to bend policies, or at least try to identify ways of doing so to strengthen customer relationships.

Futile Commitments and Promises:
Only promise when you are 100 percent confident that you will be able to deliver within the committed time. If you realize you cannot deliver when originally promised, have the courtesy to call your customer and inform him of the reason and the changed date of delivery.

Diffidence:
Customers like doing business with accessible companies. If you have not kept your customer informed about the point of contact during an hour of emergency, then it is more than a probability that your client will soon shift to another company. If you want a customer’s loyalty, provide them with accessibility and warmth.

Poor Acknowledgements:
Failing to provide your customers with appropriate acknowledgements will result in the customer feeling neglected, which will inadvertently lead to loss of business. If a customer is unhappy about a personal or professional loss, expressing concern, commenting suitably and acknowledging the issue will ensure satisfaction.

Poor Records:
The same goes for titles. It may sound petty, but referring to Mrs. Thomas as Mr. Thomas, or Mr. Jackson and Mr. Johnson is only going to worsen your bond with the customer. Constantly misspelled names and inappropriate titles discourage a customer’s loyalty.

Ignoring the Basics of Customer Service:
Simple acknowledgements such as “Thank You” and “Sorry” still mean a lot to the majority of customers. If you ignore these basic phrases, you can count on losing clientele.

Call shuffling:
This is the worst and the most common customer service turn off. If a customer’s call is being transferred from department to department, and if no one is ready to take the responsibility, it could turn off even the most patient customer. On the contrary, if you’re able to provide your customer with ‘First Contact Resolution’, you can count on customer satisfaction.

Apathy and Failure to Listen:
Apathy and failure to listen are two of the most unforgivable customer service mistakes, and are often taken seriously by customers. You can often make your customer’s day by listening to them attentively.

Should Customer Feedback Scores Drive Compensation?

Alignment of people management processes is a key success factor in making an organization customer focused. This is much easier said than done in my experience, and sometimes overly simplified approaches are doomed to fail. I was very pleased to read this posting by customer experience pundit Bruce Temkin.

"A lot of industry pundits suggest that tying compensation to customer feedback is a good thing. But is it really?!?

My take: I’ve seen situations where tying compensation to feedback scores has helped a lot and I’ve seen situations where it has failed miserably. So the correct answer is much more nuanced than a simple you should or you shouldn’t tie compensation to customer feedback.

Before I give my advice, here are three key underlying principles:

1. If there is significant compensation tied to any metric (including customer feedback), then people will look for ways to manipulate the measurement.
2. If people don’t understand a metric, then tying compensation to it will have little impact on their behavior and any downside in compensation will create a very negative response.
3. If people don’t understand how they personally can affect a metric, then tying compensation to it will have little impact on their behavior and any downside in compensation will create a very negative response.

One of the bad situations that I’ve seen is when a CEO falls in love with a metric like Net Promoter Score (NPS) and insists on immediately tying large chunks of compensation to it. Executives often don’t understand how they impact the measurement, can’t explain some of the movement, and therefore become resentful of the overall NPS program.

Does that mean that I am against tying compensation to customer feedback scores? No! Since customer perceptions determine loyalty, feedback is an important barometer of the future health of the business. So it makes sense for it to be part of a compensation package.

Alas, here are my recommendations:

• Create a metric (it can be made up of one or several customer feedback measurements) that is easy to understand and make sure that you educate the organization about what it is, why it’s important, and what they can do to affect it. Allow at least 2 quarters for educating the organization.
• Provide reporting that shows how the company and each organization is doing in terms of the metric. Make sure that you can provide an analysis of internal activities along two dimensions 1) how correlated is the activity to the metric?; 2) how well is the company performing in those areas (based on customer feedback)?
• Develop specific customer feedback goals for the entire executive team. Start by using shadow goals (without any compensation impact) for at least two quarters so the execs can understand how they can affect the measurement.
• After the executive goals are in place, use a company-wide or division-wide metric to raise awareness of the importance of customer feedback. Incorporate it into the overall profit sharing or bonus structure in the firm.
• If your metric has some slight unexplainable variance (which many do), tie compensation to bands of performance instead of to a single number. This focuses people on moving in the right direction and away from obsessing about a single number.
• Consider starting with a compensation plan that is biased towards upside. In other words, you may want to introduce the plan where there is little negative impact on compensation if the group doesn’t hit a goal, but there is positive impact of they exceed it. This can help eliminate some of the negative perceptions early in a program.
  

The bottom line: Companies should tie compensation to customer feedback scores… slowly."

Five steps to thriving in an experience economy

According to customer experience expert Shaun Smith these are the the five steps that are crucial for you to get in place if you are going to turn your customers into fans.

One of the most important trends that has been identified by experts is the shift from a product economy to service economy to experience economy, says Smith: "If you go to the early stages of any market, you can be pretty successful if you have a good product. If you can bring a product to market at the right price, at the right place, with the right functionality, it can be successful," he says. "What we know though is that it isn’t very long before you get competitors, with substitutes and alternatives coming into the market. All of a sudden, having a great product is no longer enough. And what happens then is that the default becomes service. The customer starts expecting not just a product but service on top of the product."

However, that is now no longer enough. With the web you can now buy whatever you want, whenever you want, wherever you want. There are so many organisations out there offering very similar products, with value added services, meeting all the basic requirements, that actually the only thing that makes you a market leader is if you create a great experience.

Research from IBM found that companies that are successful in creating both an emotional and functional bond have much higher levels of retention and also cross sells. It found that retention rates were 84% compared to only 30% for those organisations that didn’t create a functional and emotional bond, and it found that cross-sell success was 82% compared to 16%.

As such, here are five steps that are crucial for you to get in place if you are going to turn your customers into fans.

1. Customer insight

The three things you want to know are:

Who are your profitable customers – you may serve many types of customers and can’t afford to just focus on a few profitable ones, but when you are designing how you are going to serve your customers, what channels you are going to use, and where you are going to invest your money, you absolutely need to know which are your most profitable ones because they are the ones you have to love to death, they are your potential fans.

What do they value – to make them fans you need to have level of insight around what your most profitable customers value so that you can make a proposition to meet their needs.

How are their needs changing – make sure you are ahead of the curve by knowing how their needs are changing.


2. Brand promise

Once you are clear about who your profitable customers are and what they value and what you can do differently, then you need to be really clear about what your stand for, what your propositions are and what your promise is. What does your brand stand for, what can you promise and how will this differentiate you?


3. Design the customer experience

You then have to deliver the promise. So how do you deliver the promise and where do you over-index? During the recessionary period executives all around the world were having the same conversation: "Revenues are down and sales are down so we need to cut costs, so let’s take 10% out of everybody’s budget." When execs say that, it demonstrates that they have no conception about where value is created for their customers, says Smith.

"The fact is there are certain touchpoints where you deliver maximum value to your customers, where they really derive value from you. And there are others where they don’t care. And you need to over-index to protect those areas that create the value and take away from those that don’t. "


4. Drive organizational behavior

Having identified the proposition, the promise, and having designed the experience, we then need to drive it through the organization. And that is the hard bit.

Getting your people and your processes and your technology to support and enable the experience is very difficult because all of these things just tend to get in the way and what we need to do is make them enablers. From Convergys research we know that when you call into the contact centre for instance that having knowledgeable and responsive employees is in the top three things that customers value. Your people are your brand.

The majority of contact centres are still run as cost centres instead of strategic business units. Traditionally call centres were cost-focused and providing customer support at low price points. For those organizations that are price leaders and are competing primarily on the basis of a low price model, having contact centres like that is fine because you need to strip the costs out of your business. But if your business model and the way you’re trying to compete is not on the basis of low price then this is a dumb way to run a contact centre because all you are doing is creating an experience which is more cost-driven and not customer-driven.


5. External communications

Customers are increasingly looking for us to interact over various channels. Recent Convergys research, for instance, demonstrates that text is emerging, with the millennials being very likely to use text – 55% would use it if it is reliable. There are also apps, and with the iPad this is an area that is really going to grow as apps become more important.

The younger generation are more likely to want to use channels such as text, SMS and apps so we are going to see that growth increasingly rising in subsequent years.

But the important thing to remember is that it is horses for courses, says Smith. "There are times when I want to be able to speak to someone in the call centres because she can help me. There are times when I want my bank balance and when all I want to do it text and get it right away. There are times when I want money and so I’ll go to the ATM machine. So the experience we have depends on the channel we want to use. So we shouldn’t stereotype and assume that all the boomers want to talk to people and all the millennials want apps. It depends on the purpose that you have. And if you have a problem there is no substitute to talking to a real purpose."

The question of credibility will also become more important than ever before when it comes to communications. What can your organisation claim credibly? “I think we’re going to see a shift from expectation marketing to experiential marketing. Expectation marketing is traditional above-the-line marketing – ‘use us’, ‘buy us’. What is the point of making claims in advertising which are clearly incredible. We are seeing a big backlash against marketing claims. We are seeing movement towards experience marketing.”

Experience marketing is when we believe other consumers - when people go onto TripAdvisor to check out a hotel for instance. Increasingly we pay more attention to what other consumers have to say that what marketers say.

Being a big company or being around a long time is no longer so important to customers. Yet much of traditional marketing still focuses on telling customers that the company is big, has been around a long time and is everywhere. But what the customers really want to know is why they should trust you. According to research by Grey Worldwide, millennials are 31% more likely than baby boomers to rank “is a company or brand I can trust” as a top five customer service attribute. Trust is becoming an increasingly big deal.

You need to be able to deliver on that trust by responding, Smith says. According to Convergys research, 85% of customers that have had a bad experience will tell friendly or colleagues. And when customers choose to use social media the damage can be far greater than simply a verbal conversation – as United Airlines found to its detriment when it damaged Dave Carroll’s guitar.

"Word of mouth is an incredibly powerful weapon – for you and against you. And unless you’re managing it you are going to have problems. That is why we are going to see a shift from traditional expectation marketing to experiential marketing," says Smith.


Ultimately, Smith believes these steps could prove crucial for organizations if they are to respond to the shift to the experience economy - and turn your customers into fans.

"In real terms, this would wipe out any of the impact of the recession, because this kind of shift is way bigger than any decline we’ve seen," he concludes. "Yes the size of the cake is smaller, but your slice of the cake can be a lot bigger, and the reason you get a bigger slice of the cake is by taking it from your competitors - and the way you do that is by creating an emotional bond with your customers."

New American Express Global Customer Service Barometer

Quality customer service is more important to a majority of Americans in today’s economy; in fact, a majority of Americans will spend an average of 9% more with companies that provide excellent service – according to the new American Express Global Customer Service Barometer.

Yet many Americans feel businesses aren’t quite getting the message. A majority of Americans feel companies either haven’t changed their attitude toward customer service or are paying even less attention. Just 37% believe companies have increased their focus on providing quality service in the current economy.

Other surprising findings from the study include:

• Good News Travels Fast(er): Contrary to conventional wisdom, consumers are more inclined to talk up good experiences (75%) than they are to complain about bad ones (59%).

• Online the Rules Change: While a customer’s personal experience with a company is most important, consumers become more skeptical online. They put greater credence in negative reviews on blogs and social networking sites (57%) than in positive ones (48%) – highlighting the power of the Internet to influence opinions.

• Going the Distance? A quarter of Americans (24%) believe companies are going the extra mile to keep their business, but many are looking for more – 21% believe companies take their business for granted. Almost half (48%) say companies are helpful but don’t do anything extra.

American Express also surveyed consumers in 11 other countries around the world and found that, among other things, consumers globally were willing to spend more with companies that offer excellent service – topped by India at 11% and Japan at 10% more.

Below are the highlights from the survey.

Americans Will Spend 9% More With Companies That Provide Excellent Service

-- But Two-Thirds Feel Companies Aren’t Doing Enough to Earn Their Business --

-- Service Is Even More Important in Tough Economic Times --

A majority of Americans report that quality customer service is more important to them in today’s economic environment (61%) and will spend an average of 9% more when they believe a company provides excellent service. However, in a challenging economy where growth is harder to achieve, many businesses are missing out on this opportunity. Although only a little more than a third of Americans (37%) believe that companies have increased their focus on providing quality service:
• 27% feel businesses have not changed their attitude toward customer service.
• 28% say that companies are now paying less attention to good service.

These findings were released in the American Express Global Customer Service Barometer, a survey conducted in the U.S. and eleven other countries exploring attitudes and preferences toward customer service.

“Customers want and expect superior service,” said Jim Bush, Executive Vice President, World Service. “Especially in this tight economic environment, consumers are focused on getting good value for their money. Many consumers say companies haven’t done enough to improve their approach to service in this economy, and yet it’s clear they’re willing to spend more with those that deliver excellent service – suggesting substantial growth opportunities for businesses that get customer service right. It’s important to see customer service as an investment, not a cost.”

Almost All Agree Service is Important, but One in Five Feel They’re Taken for Granted

Not surprisingly, nine in ten Americans (91%) consider the level of customer service important when deciding to do business with a company. But only one-quarter (24%) believe companies value their business and will go the extra mile to keep it. Most feel businesses can do more to retain their loyalty:
• 48% feel companies are helpful but don’t do anything extra to keep their business.
• Worse, 21% believe that companies take their business for granted.

Good News Travels Fast – Until You Go Online

Importantly, customers are spreading the word willingly and widely when they experience good service. In fact, contrary to conventional wisdom, customers are more inclined to talk about a positive experience than complain about a negative one. Three-quarters (75%) are very likely to speak positively about a company after a good service experience in contrast with 59% who are very likely to speak negatively about a company after poor service.

Good service experiences also carry more weight than bad ones when Americans make future spending decisions. Consumers are far more likely to give a company repeat business after a good service experience (81%) than they are to never do business with a company again after a poor experience (52%).

In fact, consumers say the three most influential factors when deciding which companies they do business with include personal experience (98%), a company’s reputation or brand (92%), and recommendations from friends and family (88%).

Nearly half (48%) of consumers report always or often using an online posting or blog to get others’ opinions about a company’s customer service reputation. But when consumers go online they’re looking for “watch outs,” saying they put greater credence in negative reviews on blogs and social networking sites than on positive ones (57% and 48%, respectively).

“The Internet has made service quality more transparent than ever before,” Mr. Bush said. “In the online space, positive recommendations are important, but people often give more weight to the negative. Because consumers can broadcast their views so widely online, each and every service interaction a company has with its customers becomes even more crucial. Developing relationships with customers, listening to them, anticipating their needs, and resolving any issues quickly and courteously can help make the difference.”

Two Strikes and You’re Out. Or Is It One?

A negative service experience is an important factor for most Americans: 81% have decided never to do business with a company again because of poor customer service in the past. When asked how many poor experiences they allow, half of all Americans (50%) reported it takes two poor service experiences before they stop doing business with a company.

Importantly, consumers are far more forgiving if a company has earned their trust over time. Almost nine-in-ten consumers (86%) report they’re willing to give a company a second chance after a bad experience if they’ve historically experienced great customer service with that company.

But companies who get it wrong should realize it’s at a cost.
• Half of consumers (52%) expect something in return after a poor customer service experience, beyond resolving the problem.
• Most consumers (70%) want an apology or some form of reimbursement.

Service Leaders Recognize the Value

Companies with reputations for great customer service take different approaches, however they share the common understanding that investing in service truly pays off.

"While customers appreciate the plush surroundings of our five-star hotels, we know that luxurious touches don't matter to guests unless the service surpasses the setting," said Simon Cooper, president, The Ritz-Carlton Hotel Company LLC. "Trends may change, but a focus on service excellence is timeless."

"What many people refer to as ‘great service’, we call hospitality,” says Susan Reilly Salgado, managing director of Danny Meyer's learning business, Hospitality Quotient. “Service is all about the technical delivery of the product, while hospitality is about how guests feel during that transaction. Hospitality happens when guests believe you are on their side. For people to rave about their experience and become repeat customers, you need to have both - but what surprises customers and makes them feel genuinely cared for is the hospitality. And that’s the reason people love to talk about those fantastic experiences – because they surpass expectations."

“By focusing on our company culture, we've been fortunate to hire great people where providing great service is in their DNA. We always have been and continue to grow through word of mouth. If you treat the customer how they should be treated and form personal connections with them, they'll want to tell others about it,” said Aaron Magness, senior director, brand marketing and business development, Zappos.com.

Service is Valued Everywhere, but Views Vary Globally

In most countries where the highest percentage of consumers feel that service is more important today, there is a corresponding belief that companies have increased their focus on providing good customer service:

• 65% of Indian, 49% of Japanese and 47% of Mexican consumers agree with this statement.

However, some consumers are not feeling the love. In Australia (71%), Germany (66%), and Canada and Italy (65% each), consumers say they feel companies haven’t increased their focus on service or are paying less attention to it.

This can spell trouble and lost opportunity for companies, given that consumers around the world consistently express a willingness to spend more with companies that provide excellent service:



About the American Express Global Customer Service Barometer
The American Express Global Customer Service Barometer research was completed online among a random sample of 1,000 U.S. consumers aged 18+. Interviewing was conducted by Echo Research between April 13 and April 20, 2010. Overall, the results have a margin of error of +/- 3.1% at the 95 percent level of confidence. The same survey methodology was used in Canada, Mexico, France, Germany, Italy, the U.K., Spain, the Netherlands, Australia, India and Japan.

10 Steps to Superior Profitability Through Customer Service

Most companies are really good at formulating customer service strategies, but implement them poorly. Effective communications is generally at the heart of the problem.

To deliver superior Customer Service on a sustained basis, companies need to adopt a strategic and holistic approach that is embedded in its culture, systems and processes and which aligns the company with each of its served markets (segments).

Only by practicingsimultaneously all ten steps outline below, can you create an environment in which staff attitudes and behaviour will reflect a true customer orientation, that results in customers perceiving service quality that is superior to your competitors.

By following this approach consistently, you will create a consistuency of loyal customers who will promote your business to others by talking about their positive service experiences.

Maximizing customer retention and conversion will deliver improved profitability that can readily be sustained.


Customer Service is about maximizing customer retention and conversion over the long term. You will be unable to retain existing customers and win new customers unless you deliver superior perceived market quality.

Superior perceived market quality can only be delivered over the long term, if you consistently deliver customer service that really counts.

So, how can companies improve customer retention, loyalty and profitability and sustain it, through Customer Service?

1. Break down the service barriers — the leadership challenge

It is not uncommon for top management to go on a weekend strategic retreat and decide that "from Monday we will be a customer focused company". Customer focus is not a fad, something that you can switch on or off at the touch of a button. It goes to the very essence or core of the company. It is part of the culture, the company's being.

An external customer orientation is acquired over time. It is reflected in the attitude and behavior of the company's leadership, and their commitment to service excellence. In many of the companies that I have worked with and consulted to, the culture dictates that you "play by the rules". The exercise of initiative is discouraged. Yet, management expects staff to do extraordinary things for its customers. It is the leadership that sets the example that the rest of the company will ultimately emulate.

2. It is imperative that you understand how your customers' make decisions.

Understanding the dynamics that motivate purchase is fundamental to achieving customer service that really counts.

Before a customer buys from you, you can generally expect that the customer has already shopped around and is well informed, through advertising, word of mouth etc. Each customer's perceptions are also shaped by the product market strategies of your competitors, as well as other environmental factors such as legislation, interest rates etc.

An in-depth understanding of these dynamics is therefore fundamental to designing and delivering customer service that really counts.

3. Establish which aspects of service your customers' value.

A customer's decision making processes may well result in hundreds of factors which influence his/her buying behavior. Not all factors are important to all customers. In fact, some customers may value particular aspects of the service delivery experience that other customers' feel may be relatively unimportant. It is therefore vital to establish which factors are valued by customers and how these factors are ranked in order of importance for each market segment. A market segment is a group of customers that display homogeniety relative to other groups. Markets can be segmented in relation to customer needs, products, geography, industries etc.

4. Recognise that customer service provides many opportunities to win or lose customers.

Every interaction with a customer represents a 'moment of truth'and an opportunity to create value - real or perceived. Whatever the customer thinks and believes is their reality.

By understanding this "value chain" and linking your people and processes so that they add value that the customer recognizes, you will align your company's products and services with its market(s).

5. Know how you are doing relative to your competitors.

You cannot measure your performance in a vacuum. Companies who record improved customer satisfaction scores yet continue to lose market position, are either measuring irrelevant factors, or competitors' customer satisfaction scores are improving at a faster rate. The importance of measuring the competitive context cannot be over-emphasized as this sets the benchmark, against which performance can be measured relative to the market.

6. Set service standards that create "stretch".

If you want to improve your game of tennis quickly, you need to play against stronger athletes. The same principle applies to customer service. Set standards against the "best in class" for each activity.

7. Under-promise and over-deliver.

Providing unexpected service or surprising customers' with service that they had not expected, is the best way to create loyal customers - to 'delight customers'.

My mother-in-law was once mugged in a supermarket whilst doing her monthly grocery shopping. Seeing her distress, store employees reacted quickly and led her quiretly to a back office where they gave her sugar water; sealing off all exit points; assisting her to deal with the risk of financial loss by cancelling her credit cards and, as a goodwill gesture, they gave her the grocercies for free. She has never forgotten this service and speaks about the supermarket chain at every opportunity. Companies cannot pay for this sort of free advertising.

8. Outstanding Customer Service includes the unexpected.

Staff need to be empowered to capitalize on service opportunities as they present themselves.

A little old lady once called her bank just before closing time and asked the clerk how long it would take for her to make her way across town. After establishing that she did not know how to use an electronic teller machine (ATM), the clerk enquired as to the amount she wanted to cash. "One hundred dollars" the old lady replied. The clerk, on his own initiative suggested that he would stop by on his way home and deliver the cash personally. The little old lady was so impressed that she transferred her whole account of millions of dollars from another leading bank to this small bank, all because of unexpected customer service. This incident created an opportunity for a relatively junior member of staff to create a customer for life.

9. Monitor changing expectations.

The only constant in our environment is change. In an effort to remain relevant to your target market, you must periodically monitor how customer needs and expectations are changing.

This will guide and inform new product development and assist to continuously renew and transform your company to meet new customer service challenges.

10. Communicate, communicate, communicate.

Communicate your service expectations to both customers and staff. There is no greater sin than a company communicating its service intentions through advertising, PR and promotions, before it has communicated its intent to its staff and trained them accordingly.

Author: Ivan Nurick of thestrategyworkshop.com.

Published in Atricle Directory Online

Is customer service truly part of your culture?

As a starting point, ask the following questions:

• Does your corporate mission statement include providing excellence in customer care and service?
• Is providing excellent customer care included in your long-term vision statement?- Are customer service objectives well articulated within your company?
• Is measuring customer satisfaction embedded in your process for all customer-facing activities?
• Do you have ongoing customer satisfaction improvement processes?-
• Are employee performance metrics (including promotions, bonus, etc) – including senior positions – aligned with customer satisfaction?
  

If you answer "No" to any of these questions, you have likely identified an organizational weakness and an opportunity for improvement that will help you meet customers' high expectations.

Improving customer service while reducing costs-to-serve

Jack Springman of the UK firm Business & Decision outlines the key steps for firms seeking to increase customer satisfaction while reducing costs - with the end result that the costs-to-serve is optimised.

Reducing costs and growing revenue are seen as alternatives a business must choose between, perhaps not mutually exclusive but certainly opposing forces. In reality they are two sides of the same coin – businesses rarely have the funds to invest and grow if they have not sharply prioritised expenditure and cut to the bone that which adds little value to either the business or customers. Also initiatives which reduce cost can simultaneously improve customers’ experience, the business ability to generate revenue or both. Businesses looking to optimise their costs to serve should consider enacting the following, if they have not already.

The first potential action is transfer customers from field sales account managers to telephone account managers. This offers a number of savings - typically an office-based sales manager can handle three times as many customer accounts as someone in the field through not having to travel. Secondly, salary levels are typically lower. And thirdly, there is no need for a company car or other travel costs.

In addition this transfer can improve the customer’s experience – smaller customers who might have only been visited twice a year will get a regular monthly call. There is no need for any contact to last an hour just because the salesman has travelled an hour to get there. Equally office-based account managers are easier for customers to contact due to their not spending time in lengthy face-to-face meetings or driving. From the customers’ point of view, service is both more timely and time spent in conversations is more productive.

From the business point of view there are benefits arising from more direct supervision. Pricing corridors can be more strictly enforced, as can process adherence (such as making sure all interactions are captured in the CRM system, transforming information that would otherwise rest in salesmen’s heads into corporate assets). Also there is greater opportunity to identify reasons for below average performance then deliver the necessary coaching.

Not all customers can be transferred to office-based account managers. Larger customers may demand a regular field sales manager visit; and when customers’ needs are complex or there are multiple buying points, regular visits make sense for the business as well. Even in such circumstances there are typically opportunities to transfer sales support activities currently performed by field sales managers to office-based staff. For example, running reports to prepare for meetings, preparing proposals or quotes, dealing with administration tasks, ensuring queries are addressed by the customer service team in the first instance rather than sales managers. When analysed, the amount of time spent by sales managers doing the job they are supposed to – selling to new customers, growing existing accounts – can be scarily low. Relieving them of ancillary tasks, both ensures they serve their customers better and generate more revenue for the company.

Scope for win-wins?

If transferring customers and activities to office-based staff is the first stage, the second is the transfer of activities performed by office-based staff to self-service. Providing an additional channel increases choice for customers. They can perform routine activities – place repeat orders, submit requests – unconstrained by suppliers’ working hours (particularly relevant for owner-managed businesses where much administration is done during evenings or at weekends), in a time-efficient manner, without fear of being sold to. Self-service works particularly well with smaller customers where the opportunity for cross-selling is limited – size of customer and interaction complexity being the key determinants of what is transferred to the web channel. For the business it means information is directly entered into its systems by customers, so fewer people are required.

In addition to direct system entry, queries can be answered by staff in lower cost locations via email. And the next stage is the transfer of activities to lower cost locations – whether that be onshore (e.g. in development areas where staff costs are lower and grants are available), near-shore (Eastern Europe, North Africa) or traditional offshore locations such as India. Customer satisfaction ratings typically dip when activities are first transferred but rise again once the transition period is over, frequently surpassing previous levels. While accent and culture can cause communication issues, there are a number of positives. Those performing service roles are often better educated than those they have replaced. Secondly, they see customer service as a career. A number of Eastern European cities have specialised in customer service delivery, developing thriving service centre industries as a result and now see themselves as having surpassed traditional onshore locations in service centre management expertise.

Sitting across all these opportunities is process efficiency. Typically a distinction is made between increased efficiency (reducing costs) and increased effectiveness (improving service). But rectifying service breakdowns – typically when the service representative fielding a customer call needs to make internal calls (sales, supply chain and logistics) to resolve the query – improves both. The customer’s query is resolved quicker – ideally at first contact – and the employee costs incurred in resolution (both for customer service and other staff) are also reduced. Activities which consume a lot of time offer greatest scope for such win-wins.

Any business seeking to improve service effectiveness should start by looking at opportunities for improving service efficiency. Getting the basics right will not deliver a differentiated customer experience – there is asymmetry in what satisfies and what delights – but it does provide opportunities to increase customer satisfaction while reducing costs. And focusing on both together will help optimise costs-to-serve.

Key Differentiating Characteristics of Customer Focused Companies

Kohli, Jaworski & Kumar created and validated a scale of market orientation called MARKOR consisting of approximately 20 questions covering their three dimensions of market orientation. This scale has been used in scores of articles since its creation, which indicates strong reliability. Scales like this help us better understand important concepts because each question is a validated observable attribute of an otherwise unobservable, latent concept.

So here are a few of the 20 indicators that measure market orientation in the MARKOR scale:


Intelligence Generation

1. Meeting with customers to determine current/future needs.
2. An in-house market research department.
3. Ability to detect changes in customers' product preferences.
4. At least annual surveys of customer perceptions.

Intelligence Dissemination

1. Regular interdepartmental meetings on market trends and developments.
2. Important events in the market or with key customers are shared quickly with all affected departments.
3. Regular dissemination of customer satisfaction data at all levels of the company.

Responsiveness

1. Recognition of changes in customers' product or service needs.
2. Alignment of product development efforts with customer needs.
3. Regular, interdepartmental planning to respond to changes in the business environment.
4. Responsiveness to customer complaints.
5. Making concerted efforts to modify products or services to fit customer needs.

Are these all the elements of a customer centric organization? Of course not. But, according to Walker Research, these are some of the key differentiating characteristics of customer focused companies - the characteristics most likely to produce the beneficial company performance associated with high levels of market orientation. In other words, research has shown that companies with the above characteristics have significantly better long-term performance.

A Customer Focus Culture leads to Higher Financial Performance

The Seattle based Institute for Corporate Productivity (i4cp) published a study: A Customer-Focused Workforce Leads to Higher Business Performance that reveals the power of a market-oriented culture.

What's the key to creating a customer-focused organization? Here's one of the answers from the trenches of a high-performance company: "A culture of accountability makes a good organization great and a great organization unstoppable."

That nugget of wisdom is part of i4cp's new major study on customer focus, conducted in partnership with the American Management Association. They found that accountability that starts at the top is critical to customer focus.

67% of respondents from high- market-performing companies that are good at focusing on customers say their organizations hold at least one corporate officer responsible for the customer experience. By contrast, a tiny 3% of lower-market-performing firms that are poor in this area hold an officer accountable.

Companies that excel in overall performance do something else about customer focus differently, too. They make sure that a commitment to customer service doesn't stop with senior leaders - or even with customer-facing employees. Leaders of top-notch firms create customer-focused cultures that suffuse their organizations, reaching from sales professionals with daily customer contact to production-line employees who may never have a conversation with a consumer but whose efforts are just as vital to company success. Nearly seven out of 10 high-performing organizations say they work to build such a power culture. Lower performers? Fewer than half.

"Alignment of the corporate mission, vision and goals with customer satisfaction" is viewed as a critical practice, according to one study participant from a high-performing company. "Bringing these concepts to the employee level and creating secondary visions that align their actions with the overall vision has increased [our] focus on exceeding customer expectations.

"Four out of five respondents from high-performing companies say that financial growth is the key driving force behind their focus on customers. Certainly, i4cp research has shown that market focus - which revolves around a focus on customers - is one of the five core attributes of high market performance. So it makes sense that a corporate culture centered on customers is likely to yield positive bottom-line results. But how does an organization seeking better performance bring about that kind of culture shift?

Along with accountability, communication and training are among the most vital components in culture-building approaches, the study found. "We are more actively sharing competitive data with lower levels of the organization," one business leader revealed. In addition, the company is "instilling a culture of innovation and customer obsession to drive behavior focused on the customer.

"Multiple respondents from high-performing companies described their firms' educational efforts. Customer-focused training "is part of our onboarding and new employee orientation," said one. Another cited "continuous training on customer care practices" and a third explained, "We run training on a different customer service topic every month."Companies that achieve high levels of performance in today's volatile marketplace demonstrate not only a dedication to customer service but also a commitment to anticipating customer needs and being proactive in meeting those needs. This type of forward-thinking mindset is one of the hallmarks of a culture that is truly customer focused.

i4cp's 4-Part Recommendation:

1. Include accountability for customer service and satisfaction in performance reviews for managers and employees alike. 40% of i4cp respondents say they hold their entire executive teams responsible for customer focus. Reinforce accountability by aligning rewards and recognition with customer-focus goals.
2. Build a powerful corporate culture that supports an organization-wide commitment to customer service. One study participant explains how: "We developed a new, customer-focused mission statement and had a bottom-up planning session to gain buy-in and establish critical success factors and SMART objectives. We will align our HR, organizational, management and communication practices to align with these objectives."
3. Retool internal communications to ensure support for a customer-focused culture. Share customer stories, feedback and insights with all employees. Involve senior leaders in modeling customer-focused behavior and in communicating the company's customer-centric values and mission.
4. Make customer-service training an ongoing commitment. Begin during employee onboarding and follow through with more training on a continuing basis. One company participating in the study demonstrates how to make the process enjoyable by offering a "Lunch'n Learn Customer Appreciation Program."
   
   

Customer Insight – understanding what customers are thinking and feeling, not just what they are saying.
Understanding the Customer Journey – documenting how a customer interacts with an organisation exposes existing and new opportunities to impress and also areas where the customer is unhappy and which need to be addressed, which means truly bringing in the voice of the customer into the organisation.
Market Positioning – this looks at the competitive positioning of an organisation against others in its market and identifies areas in which to invest in order to increase competitive differentiation. This is based on extensive Capgemini research.
Identifying Opportunities – identification of a prioritised list of opportunities for improvement using the Capgemini prioritisation tool that measures Customer impact as well as financial. We will identify activities that should be stopped as they add no value as well as new opportunity to deliver to the customers the things that will drive their Customer Satisfaction.
Measurement – identifying the correct measurements to use to gauge the operational efficiency as well as ensuring the measures that are important to the customer are obtained and given the right level of profile.
Governance – identifying and implement procedures and processes to embed the Customer at the heart of an organisation on an ongoing basis and ensuring accountability.
Employee Commitment – it is critical that the culture of the organisation is customer orientated, we review what needs to be done for the employees to make this happen.

Plain Talk About the State of Customer Service and Why the Voice of the Customer is Key

I read this interview on ContactCenterWorld.com with Sue Warner, Call Center Manager at Southampton Solent University. It is about the state of customer service in this day and age and who provides good and bad service in the different industry sectors. I liked it because here is one professional who expressess the state of the nation in a nicely succint fashion and touches on What Matters.


In your opinion, do you believe the customer service you get today from other companies is better or worse than it was say 5 years ago?
About the same and very variable. Some companies and organisations have realised the importance of Voice of The Customer and using customer focused measures such as First Time Resolution and SPOC, whilst others seem focused on cost savings and practices and applications which drive inflexibility and failure demand.

Do you believe there is a correlation between the service you receive as a consumer and your loyalty to the supplier?
Yes. Absolutely. If I feel that a business is focussed on my needs and is trying to improve I will stick with it, whereas those who pay lip service to customer focus and are driven purely by internal measures which compromise my experience will soon be ex-suppliers to me.

In your opinion, which industry sectors provide great service and which ones are poor?
Please do not name individual companies just sectors.I believe service is highly variable across most sectors and it is this variation which reflects most people's experiences.

Talking about bad experiences, where do companies go wrong with the service they provide?
There are too many reasons given to "justify" why call centre operatives can't deal with a particular query. Lack of interest in my needs is displayed in favour of internal "operational" considerations. Lack of customer focus. Inefficient transactions. Long transaction times, delays and inflexibility. In short, focussing on the WRONG things.

Have you noticed any differences in service from people from different cultures?
Indian call centre agents are extremely polite (sometimes phrases used are positively arcane). They do seem to want to do the right things even if this isnt always possible. Very deferential though.

If you had to give just 1 tip regarding the use of technology in relation to improving customer service, what would your tip be?
Build the technology around customer needs (current and anticipated) VOC comes BEFORE technological solutions. (Why should a customer care about technology unless it is delivering better service?)

If you had to give just 1 tip regarding staff in relation to improving customer service, what would your tip be?
People are generally more capable than managers give them credit for and enjoy being involved in solutions. Treat them as you would wish them to treat your customers and involve them in improvement. They usually know what needs fixing and just need the tools and methodologies to help them.

If you had to give just 1 tip regarding business processes in relation to improving customer service, what would your tip be?
People are only 4% of the solution. Before focusing on monitoring, training etc, do the real work of finding out "how the work works" Focus first on failure demand and the causes of it, then move on from there. Fixing highly inefficient service processes can be relatively simple and fun if approached in the right way.

In your opinion, how should contact centers measure the level of service they give?
Voice of the Customer is key. Identify those things which are CRITICAL TO QUALITY for your customers and build a "vital few" KPIs around those. Measures such as first time resolution and single point of contact may well be far more important than "Average Talk Time" etc. Align process performance to meet with key organisational goals and build rewards and recognition systems around these.

Fast Guide to Fundamental Facts & Figures on Customer Focus and Service

My strategic partner for customer service training, Ray Miller, is the author of the book That's Customer Focus (You can order it via my website). Ray recently prepared this summary of the headlines of much of the Customer Focus, Service Excellence and Customer Experience Research. I wanted to share this, to make sure you have our fingers on the pulse of what customers and business leaders are saying and thinking. It’s not listed in any order as it is all important!

80% of companies believe they deliver a superior Customer Experience; however, only 8% of their customers agree.
This represents a significant difference in perception and since it is the customers’ perception that drives their buying behavior, this is pretty scary.

Beyond price and product quality, your customers value how they are treated. Only 12 -14% of customers leave for product reasons while 68% leave because of poor treatment by employees.
To make matters worse, most of your customers do not complain about poor service because they don’t think it will do any good.

Only 4% of unhappy customers ever complain; 90% do not bother to complain and simply go elsewhere.
Your customers are looking for maximum value when spending their hard-earned cash, particularly in this economy.

Depending on the report you look at, from 85% to 95% of senior business leaders believe that the next competitive differentiator is Customer Experience.
The customer experience requires the active participation of everyone in your organization. Creating and implementing a comprehensive Customer Focus strategy will differentiate your business.

In this market, Companies are losing at least half of their “satisfied” customers.
“Satisfy” means providing nothing more or less than the customer expects. Customers want to deal with those who demonstrate that their business is valued. Creating a Customer-Focused Culture is a proven strategy for both short-term success and long-term growth.

The average value of customers is 8 to 10 times their initial purchase depending on the research we have reviewed. The cost to attract a new customer is 5 to 6 times more than your cost to save an existing customer.
Keeping your existing customers is cheaper and more profitable than getting new ones. Yet most companies are focusing their marketing efforts on obtaining new business, sometimes at the expense of their existing customers.

The cost of poor service ranges between 25% to 35% of your operating expenses.
Aligning internal processes and ensuring every employee understands how he or she contributes to the customer experience will reduce the cost of poor service. Why not move the total of these expenses from your expense journal to your operating profit.

Low customer focus companies average a 1% Return on Sales and lose 2% market share a year. High customer focus companies average a 10 -12% Return on Sales and grow 5 – 6% a year.
Customer Focus is a profit strategy.

A 5% increase in customer loyalty will contribute between 25% and 125% directly to your bottom line.
I’m repeating myself but Customer Focus is a profit strategy.

Fast Guide to Creating a Customer Focused Culture

One unfortunate side-effect of a busy company is that sometimes employees are so focused on the tasks at hand that they lost their focus on the customer. If you want to be truly successful you need to sharpen your focus on how to create a customer focused culture within your company.

These six areas will help you get the customer back where they belong within your organization.

Model What You Expect
If you want to change or redirect the culture in your company you need to make sure that it is emphasized from the top of the chain of command all the way down to the entry level clerk that was just hired. Your employees need to know that you are as focused on the customer as you expect them to be. If they see you modeling the behavior, they are much more likely to buy into your philosophy.

Make Knowing Your Customer a Priority
If you want to really serve your customers you need to know what they need. That means that you must get to know them. You should make an effort to know how large they are, who their customers are, how they prefer to do business, etc. The more you know about them, the better you will be able to understand their needs and customize what you are offering them to best meet those needs.

Listen to Your Customers
One way to really get to know your customer is to really listen to what they are telling you. Do not go to them with preconceived notions of what they need without first listening to what they are telling you they need. Many conflicts can be avoided, and complaints resolved, if you only take the time to listen.

Hire and Train Good People
Hiring the right people can be a time consuming process, but it is one that is necessary to be successful. The wrong person dealing with your customers can destroy everything that your company is doing that is right.
By training your employees about the proper procedures and policies you can better assure that those employees will respond appropriately with your customers.

Empower Your People
Many times there are easy solutions that are available that would handle a customers concerns. You companies relationship with your customers will improve if issues are resolved quickly. The quickest way for that to happen is for your employees to have the power to make decisions regarding how issues are resolved.
When your employees have to put a customer on hold while your employees track down a supervisor to make a decision, it is wasting your customer's time. They will have a better experience if everything is resolved as quickly as possible with few inconveniences.

Respond Immediately
In this era of instant communication there is no excuse for a customer to have to wait several days before having your company respond to them. This is especially true when dealing with complaints. Do not give the impression that you are avoiding the issue. Respond to your customer as quickly as possible.
It may be that you do not have an answer when you respond. It is appropriate to respond and let the customer know that you are working on their problem. Once you have a resolution, you can contact them again to let them know how you plan on addressing their issue.

Knowing how to create a customer focused culture is basically adopting an attitude where the customer is the most important asset your business has. You should do everything within your power to protect that asset. Without your customers, you have no business.

Customer Focus Drives Organizational Strategy

I would like to applaud Dale Wolf of The Cx Institute for observing that "your customer needs set up your corporate strategy. Your corporate strategy sets up your customer expectations.

For example, if the customers you are targeting want “everyday low price” then they will expect you to use specific strategies and processes to deliver this position consistently.

Growth Companies must deliver the best, most effective products, speed to market, innovation and market leadership driven by people who are entrepreneurial and who are rewarded for increasing revenue.

Low-Cost Companies must deliver low price with products that have exactly the benefits that customers want without unwanted frills by standardizing processes, eliminating waste and rewarding efficiency.

Relationship Companies must be intensely customer-centric and provide intense service, multiple touchpoints and consistent quality to build loyalty and reward improvements in customer lifetime value.

Risk Averse Companies must imitate and let leaders go first and then improve with quality control and tight contracts and reward for compliance.

Use customer focus to eliminate strategies and processes that confuse direction; focus right where you want to be and re-define your processes so that they simply deliver the expected value at a profit level you find acceptable."

And the winners for customer experience driven loyalty are....

Satmetrix Releases 2010 Annual Net Promoter Benchmarks for Customer Loyalty

Reports Highlight Customer Experience Rankings in Insurance, Financial Services, Airlines, Telecommunications, Technology, Retail and Online Services


Mar 17, 2010 -- Satmetrix, the Net Promoter(R) company and leader in customer experience programs, today released its 2010 Net Promoter Industry Benchmarks for the insurance, financial services, airlines, telecommunications, technology, retail and online services industries.

Leaders included well-known brands such as USAA, Charles Schwab, JetBlue, Verizon Wireless, Apple, Trader Joe's, Costco and Amazon.com.

The rankings are based on survey responses from more than 19,500 U.S. consumers nationwide who had purchased products or services from each company within the previous 12 months.

A company's Net Promoter Score, or NPS(R), is based on customers' likelihood to recommend the company's product or service. NPS is calculated as the percentage of customers who are Promoters, rating the company 9 or 10 on a zero-to-ten point scale, minus the percentage who are Detractors, rating 6 or lower. Consumers also rated each company on various aspects of customer experience including product or service features, customer service and overall value, allowing Satmetrix to analyze drivers of loyalty and performance gaps for each company.

"A company's ability to deliver a superior customer experience relative to its industry peers is a critical indicator of customer retention and new customer acquisition through positive word of mouth," said John Abraham, general manager of Net Promoter programs at Satmetrix. "These benchmarks allow companies to see how consumers rate them relative to their competitors when it comes to customer loyalty."

The study encompassed 17 specific competitive sectors across seven industries. Highlights for each industry include:
Insurance: A significant contrast appeared between property and casualty insurers and companies offering life and health insurance. Scores in life and health were lower, particularly in the health insurance sector. Blue Cross Blue Shield of Illinois was the only health insurance company profiled with a positive NPS, scoring 5% in a sector with an average of negative 13%. CIGNA ranked last among major health insurers with an NPS of negative 28%. State Farm led the life insurance category with an NPS of 34%, more than 22 points higher than runner up New York Life, while USAA dominated the auto insurance sector at 78%, more than 37 points ahead of runner-up GEICO. In homeowners insurance, USAA scored 69%, well above Travelers, which came up last at 3%.

Financial Services: Brokerage and investment institutions saw a significant increase in NPS over the previous year, signaling a recovery in customer trust since the 2008 market crisis. Overall, the sector achieved an average NPS of 29%, up more than 20 points since last year. Charles Schwab held its ground as the sector leader with an NPS of 46%. Although the credit card sector fared poorly overall, American Express and Discover maintained their strong performance year on year, outperforming sector laggard Bank of America by more than 36 points. USAA, a non-traditional player in the banking sector, stood out as the leader with an NPS of 81%, placing it 40 points ahead of runner-up BB&T. Citigroup was the only bank profiled with more Detractors than Promoters, earning an NPS of negative 9%.

Airlines: JetBlue and Southwest were clear frontrunners in the airline industry, scoring more than 40 points above the industry average. JetBlue Promoters referenced the in-flight experience, extra legroom, quality snacks and television, while Southwest Promoters praised the airline for its friendly service and for not charging baggage fees. U.S. Airways trailed the segment at negative 16%.

Telecommunications: Verizon Wireless led the cellular phone service sector again this year with a score of 41%, while AT&T dropped to the bottom of the sector with a score of 9%, in a statistical dead heat with last year's laggard, Sprint (10%). Time Warner Cable's Road Runner High Speed Online led the Internet service provider category with a score of 21% in an industry whose average NPS was a mere 4%. DIRECTV led in the satellite and cable TV category with an NPS of 27%.

Technology: Apple, with an NPS of 78%, continues to be the top performer in the computer hardware sector. In the consumer software sector, Adobe Systems (37%), Intuit (36%), and Symantec (36%) were the frontrunners, with security software provider Symantec recording the most significant increase between 2007 and 2009.

Retail: The grocery/supermarket retail sector achieved the second highest average NPS of all industries examined in the reports, with Trader Joe's and Wegmans leading the way at 69% and 67%, respectively. Big box membership clubs Costco (66%) and Sam's Club (61%) led the department/ wholesale/specialty sector, followed by Target and Lowe's.

Online Services: Amazon.com and eBay led the online shopping sector with NPS of 71% and 65%, respectively, followed by Barnes & Noble's bn.com at 59%. In the online search and information category, Facebook scored 65%, moving into a leading position alongside Google at 63%.

"We continue to see the impact that the customer experience has on loyalty and business growth," said Deborah Eastman, CMO at Satmetrix. "Best-in-class companies are those that put in the processes to continuously listen to, learn from, and take immediate action on what their customers tell them about their performance."

"Customer Service is the New Marketing!"

"Customer Service is the New Marketing!" , says Zappos' marketing chief Aaron Magness in an interview with Fast Company.

I liked his answer to the question What is marketing all about?:

"There are five principles that I try to focus on in everything that has to do with marketing:

1. Customer service is the new marketing. The days of dictating your brand to the public are long gone. There is so much access to information; the customer is actually dictating your brand to you.


2. Communicate with your customers, don’t market at them. Customers get bombarded with marketing messages every day (practically every second). Find ways to interact with them. Discussions drive loyalty, not one way messaging.


3. Don’t try to be interesting, be interested. I first heard this phrase from our CEO, Tony Hsieh, and thought it was great. It is really spot on. A lot of companies try to launch a really creative campaign, but lack the follow up to the brand promise. Your campaign should highlight what your brand promise is, not try to invent one.


4. Try to WOW at every interaction. This goes for working with employees, vendors and customers. Personal relationships and interactions drive everything. You need to capitalize on them. This is obviously something that is very true and important at Zappos. I don’t think I every put it into words until I worked here, but the importance and implications are great.


5. Your culture will dictate your success. This goes back to building your team. Hire great people, treat them like adults and let them do great work. The rest should come naturally on its own. "

A quick guide to customer journey mapping, to improve customer service

Arne van Oosterom of the Dutch organization DesignThinkers wrote a concise overview which I really like for its clarity.

• To stay competitive and survive the changes organisations are presently facing, they need to reassess the way they are structured, function and build relationships with customers.
• Closing the "reality gap" between organisations and people (employees and customers alike) should be the number one priority.
• And for this we need a new set of skills, methods and tools.
• People-centred approaches have emerged because it provides us with useful methods and tools to bridge the gap.
  

One of the tools is customer journey mapping.

This allows us to step into the customer shoes. It shows us the customer’s perceptions and the larger context in which we play a part. It lets us be emerged in their world, their reality. Get a deeper insight into customer needs, perception, experience and motivation. It will answer questions like: What are people really trying to achieve? How are they trying to achieve this? What do they use and in what order? Why do they make a choice? What are they experiencing, feeling, while trying to reach the desired outcome?

A customer journey map is built up layer by layer. We start 'above water', with the customer and slowly dive deeper and deeper into the organisational structures and context. The tool can be used with customers or management, employees and other stakeholder or, even better, in a mix.

A customer journey map (e.g. used by front-office employees) in its simplest form will contain the following:

1. Context or stakeholder map. We list all stakeholders and we order the hierarchy in circles of influences around the centre, where you are. When working with customers you’ll have the customer in the centre. Describe all relationships on the map by answering the question: what do we do for them; what do they do for us? This map shows you the landscape or force field you are dealing with. And you can discuss how this influences the quality of your work and how a customer benefits or suffers from it.
2. Persona. We need a rich customer profile or persona. Describe his/her personal and business situation now (present situation) and in the future (ambitions).
3. Outcomes. A description of his/ her desired outcome - what is he/she trying to achieve?
4. Customer journey. We list all actions (as far as possible) the customer has to take to reach the outcome (placed in a horizontal line). Don’t start listing actions when the customer uses your service the first time. Start before the moment he/she decided to use your product or service. This way we visualise behavioural patterns.
5. Touchpoints. Underneath every action we list all channels and touchpoints services the customer encounter. Not just yours! This way you’ll discover the landscape you are in form the customer’s perception.
6. Moments of Truth. Then we identify the moments the customer encounters your touchpoints and channels. We start focus on those (you can move them down a bit). Identify the most important 'moments of truth'.
7. Service delivery. Underneath every touch point, we write down who delivers the service. Who is directly responsible for it (e.g. front office personal)?
8. Emotional journey. Then give every vertical line a grade for the experience (Actions -> touch point -> who delivers the service -> grade). Don't grade the functionality, grade the work. For the emotion, how do you think the customer felt at that moment? Use a scale from 0 to 10. The higher the number, the better the experience. This can be visualised (e.g. by a line going up and down), and is very effective as a conversation starter. It can often be a real eye-opener.
9. Blueprint. Now, to make a long story a bit shorter, we can go on listing the organisation underneath, writing down who supports the people delivering the service (back office), and in turn who influences the back office (we link back to the stakeholders map), until we have a complete organisational blueprint, a complete picture of the working of an organisation and emotional journey, from the outside in.
10. Improve and innovate. Use creative, brainstorming and any other ideation techniques for the service opportunities you identified (low grades) and/or design complete new and ideal journeys or services. This usually is the moment people have the most fun. I have been surprised many times by the talent and eagerness of people to engage in this creative process. People are usual a lot more creative than you think. We just need to put them in the right situation and mood.

Don’t wait until the end to collect ideas. Write down all ideas and insights during the building of the customer journeys. These insights will be a rich source for improvements and innovative ideas. And all you need to start are some large sheets of paper, markers and a lot of sticky-notes.

Great job Arne van Oosterom! I am with you all the way...

Ten Compelling Reasons to Deliver an Amazing Customer Service Experience

This list was published by expert and author Shep Hyken.

1. Amazing customer service builds credibility, trust and confidence, which can lead to customer loyalty.
2. It can help the marketing and sales budget. It costs less to keep existing customers than it does to create new ones.
3. Delivering amazing service creates a buzz, word-of-mouth marketing and referrals, again helping the marketing budget.
4. Delivering amazing customer service can lead to existing customers buying more.
5. Customer service saves money. When you do it right the first time, you don’t have to fix it the next time.
6. Customer service can give your company an advantage over competitors.
7. Amazing customer service can make price less relevant.
8. Customer service focused companies are usually employee focused companies, thereby creating a better place to work.
   That means lower turnover, which could mean savings in hiring, training and more.
9. Customer service superstar companies are usually more profitable than the ones that aren’t.
10. Customer service helps get and keep customers… because without customers, you don’t have a business.

It takes a while to get out of shape and you should not expect a quick solution to get back into shape

I just joined a new Customer Focus group on LinkeIn and was asked by the group facilitator to contribute some content about my neck of the woods, which is Toronto, ON, Canada.

First of all, I do a lot of my consulting work internationally. However, at the moment there is an interesting local issue in the form of major customer discontent with the customer service provided by Toronto Transit Commission.

After some statements by the chair who is an elected politician that things were not up to snuff and some YouTube footage of bad service incidents, the General manager weighed in and now has issued a stern memo to all employees that things are not acceptable and that people need to be held accountable.

Problem is of course that the TTC is heavily unionized and that some union members have started their own social media action and are creating buzz of a work to rule action. The learning is that often an organization is like a person who gained weight over time and then expects to get back into shape swiftly by simply going on a diet and joining a fitness club. What takes along time to do takes an even longer time to undo.

I find that often organizational leaders get an Aha moment that customer focus actually matters and makes a difference. Now that they have discovered another new religion they then expect miracles from a program they initiate. They fail to recognize that this is a journey (yes, this is a tired but true notion) and furthermore they don’t understand that it all begins and ends with them.

I learned a long time ago that no organization shall rise above the actions and commitment of its leaders. Trouble with the TTC is not only its unionization but that they have created a culture of an almost paramilitary organization with emphasis on operations. Someone will have to counsel patience and gradual change and manage the public kerfuffle that is just erupting in the social media space. I am sure that this will prove interesting to watch and that there will be many lessons to be learned.

Each Moment of Truth Counts: A negative call center experience turns off 68% of customers!

A single negative experience with a customer call center would likely cause 68 percent of the respondents to take their business elsewhere, according to a recent survey released by Teleperformance, an outsourced contact center vendor.

The results of the customer care survey, Teleperformance officials said, show that the quality of experience with a company's customer contact center determines consumer sentiment and brand loyalty.

Survey results also revealed consumers expect excellent service in return for brand loyalty, finding that 87 percent of people felt they had a right to a better contact center experience if they regularly spend money with a company or stay loyal to a brand.

Almost exactly half of people said the main reason for their dissatisfaction with a company is poor customer service or a bad contact center experience.

The survey was commissioned by Teleperformance and conducted by YouGov. Over 1,000 U.S. adult consumers completed the survey recently.

8 Tips for Providing a Superior Customer Experience

How do you give your customer a superior customer experience?
On MysteryShoppingLive.com I found an article with these eight simple tips that you can follow that are based on the best known principles:

1. Try to put yourself in your customer’s shoes.

Understand how your customers’ expectations are rising over time. Accept the fact that, what was probably ‘good enough’ last year may not be any good now. Use different form of customer surveys, interviews and focus groups to understand what your customers really want from you, what they value and what they believe they are getting (or not getting) from your business.

2. Always use your strengths to differentiate your business from your competition.

Usually your quality of service is an area whether you can really strengthen your business over time. Your price and products may be reasonable and up-to-date – but don’t forget that your competitors’ are pretty darn good too. So in order to differentiate your business from your competitors, you will need to provide your customers an exceptional service that makes your customer loyal to your brand and not others. So even when your competitor offers some seasonal discounts or price cuts, your customers are likely to stick with you as they value the ‘exceptional service’ that you provide. You can also make a more lasting difference by providing personalized, responsive and extra-mile service that stands out in a unique way your customers will appreciate – and remember.

3. Learn to manage your customers’ expectations.

It is impossible to make every customer happy as you can’t always give them everything their hearts desire. However you can always help them by bringing their expectations into line with what you know you can deliver. The best way to do this is by first building a reputation for making and keeping clear promises. Once you have established a solid base of trust and good reputation within the community and among your customers, you only need to ask your customers for their patience in your difficult times when you cannot meet their first requests. Nine out of ten times they will extend the understanding and cut you some slack.

Another tricky way to manage customers’ expectations is to ‘under promise, then over deliver’. Here’s an example: you know your customer wants something done really fast. You know it will take an hour to complete. Don’t tell your customer that it will take an hour. Instead, let them know you will try to do it as fast as you can, but promise a 90-minute timeframe. Then, when you actually finish in just one hour (as you knew you would all along), your customer will be delighted to find that you finished the job ’so quickly’. That’s ‘under promise, then over deliver’.

4. Try to bounce back with effective service recovery during the time of a media/public disaster.

Sometimes things can go wrong. It’s very natural especially in a retail industry where your staffs interact with the masses. When your customer is unhappy for whatever reasons, try to do everything in your power to make things right again. Fix the problem and always show sincere concern for any discomfort, frustration or inconvenience that your business may have caused. Then do a little bit more by giving your customer something positive to remember – a token of goodwill, a gift of appreciation, a discount on future orders, an upgrade to a higher class of product and so on. Certainly this is not the time to play the ‘blame game’ to find the actual faulty person or to calculate the costs of repair. Your business goodwill and positive word-of-mouth is worth lot more than that.

5. Always try to set and achieve high service standards.

You can go beyond basic and expected levels of service to provide your customers with desired and even surprising service interactions. Try to make your business the determinant of the standard for service in your industry, and then make a way to always go beyond it. Give more choice than ‘the usual’ that your competitors, be more flexible than ‘normal’, be faster than ‘the average’, and extend a better warranty than all the others. Your customers will notice your higher standards. But eventually those standards will be copied by your competitors, too. So don’t slow down. Keep stepping up!

6. Sometimes you need to appreciate the negative comments that you receive from your customers.

Customers with complaints can be your best allies in building and improving your business. Constrictive comments are the key to improve your service, thus your business will get the best feedback If you work with a experienced Mystery Shopping provider that understands your requirements and trains their shoppers to mystery shop your business to point out what problems they are facing and what and where you are doing thing wrong. Mystery Shoppers can show where your products or services are below expectations and point out areas where your competitors are getting ahead or where your staff is falling behind.

7. Take personal responsibility for everything that happens in your business.

In many organizations, people are quick to blame others for problems or difficulties at work: managers blame staff, staff blame managers, Engineering blames Sales, Sales blames marketing and everyone blames Finance. This does not really help anybody and certainly not your business! Blaming yourself doesn’t work, either. No matter how many mistakes you may have made, tomorrow is another chance to do better. You need high self-esteem to give good service. Feeling ashamed doesn’t help. It doesn’t make sense to make excuses and blame the computers, the system or the budget, either. This kind of justification only prolongs the pain before the necessary changes can take place.
The most reliable way to bring about constructive change in your organization is to take personal responsibility and help make good things happen. When you see something that needs to be done, do it. If you see something that needs to be done in another department, recommend it. Be the person who makes suggestions, proposes new ideas and volunteers to help on problem solving teams, projects and solutions.

8. Try to see the world from each customer’s point of view.

We often get so caught up in our own world that we lose sight of what our customers actually experience. Make time to stand on the other side of the counter or listen on the other end of the phone. You can even trying becoming a ‘mystery shopper’ at your own place of business. Or become a customer of your best competition. What you notice when you look from the ‘other side’ is what your customers experience every day.