Customer Service Tips & Perspectives

Six New Voice of the Customer Trends

2011-12-16T15:50:00.004-05:00

Source: The Vovici blog "The Listening Post".

Andrew McInnes, Analyst with Forrester Research Inc., presented six new trends and framed them by discussing the value of customer experience and Voice of the Customer programs.

He is reminding us to evaluate these practices in light of their firm’s customer experience ecosystem. Not all companies will benefit by implementing every item on this list. Rather, when evaluating a new activity, make sure it links to an important customer interaction or moment of truth. Also consider how employees can be empowered and influenced with data and communication.

Why does customer experience matter?

Sam Walton, Founder of Wal-Mart, said “There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.” Clearly, a company cannot succeed without customers.

Why is the Voice of the Customer important?

If the customer is your boss, the voice of the customer is your performance review. Neglect what he or she says and you are likely to be replaced – by your competition.

Why are VoC Programs important?

Focused VoC programs improve the customer experience by acting on feedback and making systemic improvements across the company. These programs help change company culture via the sharing of customer stories, providing recognition, and offering rewards around customer-centric behavior. Finally, successful VoC programs deliver business results by increasing loyalty and retention, lowering service costs, and increasing sales.

Andrew observed that many trends first seen in 2010 continued throughout 2011. In addition, following are six (6) new trends demonstrated by the finalists and winners of Forrester’s 2011 VoC Awards:

Tailoring VoC activities for specific customer segments. In 2011, many programs included the powerful element of tailored customer communication and activities. Activities were customized for frequency, content, and level of personalization. For example, a B2B company may identify their customer segments as Executives, Managers, and End-users. Executives may require more one-to-one communication (phone calls, site visits) at a lower frequency. In contrast, the end-user may receive more frequent communication requiring less personalization (surveys, newsletters).

Adobe Systems invites customers to share product ideas via an online portal; product suggestions are then demoted and promoted by the votes of other customers. Feedback from the Adobe product teams is provided through the portal so customers know the status of their idea submissions.
Measuring the value of an improved customer experience in general. Good VoC programs regularly measure the overall value of customer experience efforts, most often linking customer feedback scores to loyalty and revenue. This measurement proves that customer experience and VoC are important – and relevant.

Adobe Systems brought together customer feedback with customer lifetime value data to statistically demonstrate that the most loyal customers were also at the higher end of customer lifetime value.
Proving the value of the VoC program specifically. By linking interventions with cost, retention, and/or revenue, a VoC program proves that it directly drives value. Value can also be driven indirectly by linking the outcomes of VoC-initiated projects to business results.
Bringing the VoC to life for back office employees. It takes an entire company to serve customers well. In addition to front-line employees, back office teams – such as billing, legal, finance, IT, and marketing – make decisions that directly impact customer experience. VoC leaders can align employee behavior around VoC through a number of ways, including variable compensation and performance evaluations.

Programs must bring VoC to life for all employees by creating a motivational, emotional connection to the VoC program. Intel gives every employee in the company two days off if they reach their “customer delight” goals. Adobe Systems built a customer listening post room; employees can visit and immerse themselves in customer feedback. Twitter comments, survey feedback, and call center data displays – in real-time – on television screens in what is, essentially, a customer NOC. Talk about being dedicated to the customer cause!
Building networks of VoC champions. VoC programs need four levels of ownership: Executive Sponsors, VoC teams, VoC Champions, and everyone else! As an example, Forrester’s award winners were very active in building VoC Champion teams in 2011. While the role and definition of “VoC Champions” varies from one company to the next, they are typically delegates from each business area who understand the operations of their team—and know what the VoC team is doing. They are able to articulate the importance of customer-centric behavior to other team members while bringing the voice of the customer into all business process improvement activities.
Aligning key functions around VoC insight and action. In 2011, VoC leaders engaged other business functions in VoC activities. They aligned closely with Business process (for organizational and procedure improvements), Market Insights (for survey design and analysis), and Customer Intelligence (for mining customer databases combining operational and behavioral data with feedback). This alignment demonstrates increased sophistication of VoC programs as they drive strategic initiatives and increase value for the organization.

Expert Witness for Customer Service

2011-12-16T15:41:00.002-05:00

Defense attorneys in the U.S. and Canada can now avail themselves of my Expert Witness services in areas concerning customer service.

In today’s climate of robust consumer protection and bourgeoning internet business, government bodies such as the Federal Trade Commission, Competition Bureau, and Auditors General are increasingly vigilant.

If you are an attorney in the U.S. or Canada who is defending a case that involves the rights and treatment of consumers, you will find that often issues related to customer service come into play.

If your defense will benefit from the assistance of a pragmatic and seasoned expert witness for customer service, you should contact me. I am available for a no-obligation telephone consult, often on short notice.

What I can do for you as expert witness in the customer service arena

Considering my wide and deep customer service consulting expertise and experience you can expect me to assist you in matters related to topics such as:

Customer service strategies and policies;

Customer service processes and procedures;

Customer satisfaction research evaluation;

Customer service implementation issues, related to complaints, refunds and customer contact (center) practices;

Customer service best practices and assessing your client’s practices against them.I will access the necessary research data and specific experts as required.

My qualifications as expert witness for customer service

Specialized customer service consultant with wide and deep experience of 25 years, in a large variety of industries: Helping clients capture and act on the voice of the customer and make required alignments to close customer service/loyalty gaps.

Clients in some twenty industries and six countries (predominantly U.S. and Canada);

Eight years of working with a “Big Six” consulting firm (Coopers & Lybrand Consulting – Center for Excellence in Customer Satisfaction);

Access to an extensive network of specific subject matter specialists;

27 Recommendations on my consulting LinkedIn profile.

For more information about my background and experience qualifying me as expert witness for customer service visit my consulting website.

“Eric brought a wealth of essential knowledge and practical experience to the table.

He was also easy to work with and prompt in his own customer service.”

Moments of Truth for Customer Experience Management

2011-11-02T10:54:00.004-04:00

Despite spending significant sums on studying and improving customer experience, many companies are simply not seeing the customer loyalty they want.

By Eleanor Bloxham, CEO of The Value Alliance and Corporate Governance Alliance. Published on the Fortune blog.

FORTUNE -- What company doesn't want customers to have a positive reaction when they think about doing business with it?

But despite spending significant sums on studying and improving customer experience, many companies are simply not seeing results, according to a recent survey of 8,000 customer experience professionals in 2,160 companies globally by consultancy Beyond Philosophy. The findings provide a road map any company can use to court new and repeat customers.

According to Steven Walden, research director at Beyond Philosophy, companies in retail, banking, technology, and telecommunications tend to spend the most on so-called customer experience initiatives. Yet of the top 10 spenders, only one made a top 10 list of successes, according to the survey.

What are companies doing right and, just as importantly, what are they doing wrong?

'Lipstick on a pig'

HP and Dell are two of the top 10 spenders on customer experience – and they do a fair job, but not what you would expect based on the cost and effort, Walden argues. What haven't they figured out?

Both companies provide a standard product that "does what it says on the tin," Walden says. They both have big organizations and spend dollars on thinking about the customer, but this is mainly from the perspective of usability, functionality, and fixing what's broken. From a customer perspective, "there's no wow there," Walden says, it's more about "putting lipstick on a pig."

A case of 'measurementitis'?

Other companies get it wrong by resorting to "measurementitis," says Walden. This often happens when a software vendor comes knocking and convinces a company that the way to improve customer experience is to measure every interaction with its customers. HSBC, another top 10 spender, is guilty of this, Walden says.

The problem with this approach is that companies will measure loyalty but then won't act on their findings. Why would they do this? Measurement instead of real action can be a draw for managers who want to create fiefdoms, Walden says. You can build a sizable team under you just by measuring things, but "you can't make a pig thin by weighing it," he says.

Customer surveys – or employee surveys, for that matter -- that result in no action are much worse than having no survey at all. It just fuels anger to ask people to state their complaints and take no action based on the results.

Turning a new leaf

By contrast, American Express (AXP), another top spender, is on its way up largely because they are concentrating their efforts on providing a "good feel" when customers call. The company has begun to stem its loss of customers, says Walden.

The Gap, another top spender, has even put the term "customer experience" into the titles of its in-store workers, but that has yet to improve the company's image.

Vodafone is the only top spender that also made the most admired ranking in Beyond Philosophy's survey. How did they do it? According to Walden, they maintain a great brand image through their sponsorship of the Formula 1 auto racing events.

"Customer experience is at the heart of everything they do; it's in the culture and DNA of the organization. It comes from the top down. Like HP, Vodafone may not be massively innovative, but they operate from this clear statement of intent -- in contrast to HP, where customer experience is a program," Walden says.

Using emotion well

Who does it really well without spending a ton? Tesco makes it because of "the strength of the relationship they create with the customer, as if you are part of their family," Walden says.

This contrasts with Wal-Mart , which is currently having trouble defining itself to customers and the marketplace. Even Family Dollar Stores, Walden says, recognizes that price alone won't draw all the customers a retailer needs. How customers feel about the company matters.

Which brings us to the top three most admired companies: Apple, Amazon, and Zappos. What do all three have in common? Charismatic leaders with a young feel to the product and delivery, Walden says. They have maverick, cutting edge approaches -- and don't just listen to customers, they lead them. They are creative and don't get bogged down in analytics, he says. Customers love these companies because of the personal feel and emotional connection they provide, Walden says, and emotions not only connect you to the company, it makes you want to buy from them as well.

For Apple, the most admired in the survey, the question will be whether they can replicate the explicit attention to detail the late CEO Steve Jobs instilled.

Clearly, it's easier to create personal feel and emotional connection in a small company rather than a large one but, Walden says, Apple in the 1990s would not have made the most admired list. Jobs set out to change that – and CEOs can. They just need to know how – and maintain that focus, gaining support for their vision and holding everyone associated with the company accountable.

Customer Service Through Social Media: The game has changed

2011-10-21T13:58:00.003-04:00

States Harry Rollason of Useful Social Media: The rise of social media has changed customer service beyond recognition.

In today’s competitive landscape, customer service is more important than ever. A company’s reputation for satisfying their customers has never been so valuable.

It’s worth pointing out that it takes three times as much internal resources to acquire a new customer as it does to retain one. In these lean times it puts an awful lot of pressure on companies to ensure retention rates are as high as possible. And good customer service is a great tool to do this.

But are companies getting it? Does it look like big corporates are responding to this change in the landscape?

The short answer is no:

Over 58% of tweeters who have tweeted about a bad experience have never received a response from the offending company
55% of consumers expect a response the same day to an online complaint – yet only 29% receive one
43% of consumers say that companies should use social media to solve customers’ problems

These statistics lay out clearly how the game has changed. Customers will no longer be happy with ‘old style’ customer service. To satisfy your customers, it’s essential to have a responsive social media presence.

To be fair, things are changing. By the end of the year, 75% of US-based companies expect to use social media for customer service. It’s a reaction to the changing game. Gone are the days when social media was all about marketing through Twitter and Facebook. It’s now an integral tool to ensure you are responsive not reactive, contactable not aloof and authentic not robotic. And increasingly, it’s about solving customer’s issues in real time through social channels, showing your dedication and transparency to your customers.

B2B Customer Experience Scores Are Low And Excuses Ring Hollow

2011-10-03T14:00:00.003-04:00

Forrester's Paul Hagen posted this blog entry

The customer experience for companies doing business with other companies stinks. Three independent studies that Forrester Research has conducted over the past year indicate that the business-to-business (B2B) experience is perceived as worse than that in the bottom-of-the-barrel consumer industries such as TV service providers and health insurance plans in Forrester’s 2011 Customer Experience Index. This is not surprising for several reasons. Many B2B firms believe that customer experience is something that only consumer-focused firms like Disney, Zappos, and Ritz Carlton need to consider. Moreover, many B2B companies argue that purchasing decisions are made for a complex set of reasons other than customer experience. Finally, they often say that because of the relatively low number of accounts, they already provide a personalized experience through account management teams.

Firms making these rationalizations miss several important points. First, if word of mouth is important to sales, then so is customer experience. Forrester’s consumer research shows that only 23% of individuals trust radio and TV ads — and only 19% trust direct mail — while 73% trust recommendations of friends and family. There is little reason to believe that the numbers are much different for B2B. And while Facebook may not amplify opinions, social media tools used for professional networking in online communities certainly do. Second, firms that have poor experiences with other firms buy less. The experience design company, Walker Information, finds that firms whose customers are trapped spend significantly less, grow more slowly, and have lower gross margins than those that are truly loyal. Forrester’s research suggests similar outcomes, with strong correlations between customer experience ratings and likelihood to purchase again, recommend, and switch. Third, customer experience is not limited to the customer-facing employees, such as account managers and call center representatives, or the contract holders at the client’s company. Rather, the end-to-end experience often includes interactions driven by back-office employees that make life difficult and frustrating for important stakeholders who could drive future business at the client firm.

Improving the B2B customer experience from its dismal state is more than a marketing effort. After all, marketing only owns a small portion of all of the interactions with customers. Companies such as John Deere, Maersk Lines, Fidelity, Philips Electronics, and Intuit understand this and as a result have significant B2B customer experience efforts under way. While in some respects the B2B experience is more complex than the business-to-consumer (B2C) environment (e.g., diverse stakeholders within a client), other issues with partners, resellers, agents, and other intermediaries that impact or even deliver the experience are very similar. In fact, the best practices that the best B2C firms use apply to B2B firms. Best practices include:

Defining the intended experience for the target customer. As experience design firm Beyond Philosophy puts it: “To improve customer experience implies you are somewhere today and you are heading somewhere else. The strategic question is ‘where?'” To get started, firms need to define who exactly they mean by the customer . . . something all the more important for B2B companies, which have many stakeholders inside of a client. One manufacturer found that it had 26 personas across departments just to describe those maintaining purchased equipment within client firms. Some were upward of 10 years old, and all were at varying stages of development. By rationalizing these down to just a handful of well-developed personas based on behavior rather than departmental role, those redesigning the experience — a cross-functional team that included employees as diverse as engineers, contact center staff, and account managers — created a common vocabulary and target to work on. Another B2B firm, in trying to decide for which stakeholder within its client base it should prioritize, realized that concentrating on improving the experience for lower-level logistics clerks would swing much more business its way than improving the customer experience for higher-level contract managers.

Understanding the customer perspective. The most challenging aspect to improving the customer experience is for firms to shift to outside-in thinking in which employees put themselves in customers’ shoes, rather than today’s inside-out mindset that focuses primarily on narrowly defined internal metrics. Common experience design practices, such as behavioral personas, customer journey maps, and voice of the customer (VoC) programs, can help turn this around. Export Development Canada’s customer journey map for its insurance group found more than 35 internal handoffs between departments across 14 customer touchpoints with little consistency in total time to completion. The group used journey (value stream) maps to focus project teams and Lean methodologies for aligning internal business, processes, people, and systems. The result was a 60% reduction in processing time with improved predictability, a 24% increase in Net Promoter Score (NPS), and reduced waste.

Aiming to change the culture. Firms serious about improving the experience realize that a cultural transformation needs to take place. Key practices such as recruitment and hiring, onboarding and training, internal communications and storytelling, performance metrics, and rewards and recognition systems aimed at changing the beliefs and behavioral norms of internal employees can similarly be applied to partners, resellers, agents, and other third parties that affect the B2B customer experience.

The widely divergent range of customer experience scores that B2B firms achieve in Forrester’s studies today suggest there is a lot of room to differentiate based on customer experience. And that could translate into big dollars. In the B2C space, Forrester estimates that a 10-point increase in its Customer Experience Index score can amount to up to $1.5 billion. But changing culture isn’t easy. Those that get the jump will create something that takes time and is hard to replicate.

Grow your Share of Wallet in multiple-supplier B2B accounts and boost profits

2011-09-23T13:51:00.003-04:00

B2B Sales & Marketing Executives:

GROW YOUR SHARE OF WALLET IN MULTIPLE-SUPPLIER ACCOUNTS AND BOOST PROFITS

The case for growing Share of Wallet

In many of today’s stagnant or shrinking B2B markets growing through new customer acquisition may not be an option. It may at best be a
long-term option, with a high sales and marketing investment attached.

You need a profit growth option that is realistic, can be achieved at much lower cost than new customer acquisition, and in much shorter
time: Increasing Share of Wallet in existing multiple supplier accounts.

I have extensive experience in helping B2B companies systematically review key customer relationships in a multiple-supplier setting. Over the years I have been surprised by the frequently lacking knowledge of the Share of Wallet within an account, and if this share has
remained stable, increased or decreased.

While sales volumes might seem satisfactory, there is thus a real risk that a competitor is “eating the cheese off your sandwich”, without you knowing it.

Customer Satisfaction is a key driver of B2B Share of Wallet

The predictable myth that needs debunking is that Share of Wallet success in B2B is driven by price.

However, empirical research identifies four key drivers of Share of Wallet, with Customer Satisfaction at the top:

Customer Satisfaction
Trading Terms
Length of Relationship
Supplier Capability

The impact of Customer Satisfaction on Share of Wallet in B2B is three times as strong as the other drivers which have virtual equal impact.

Trading Terms is a strong driver of Customer Satisfaction and is undoubtedly also of high relevance.

How I can help you increase Share of Wallet in B2B accounts

As a seasoned customer service consultant with more than 25 years experience in some twenty industries I know my way around the critical issue to increasing Share of Wallet: Customer Satisfaction.

I developed and widely applied a process and methodology for reviewing key customer relationships with the purpose of turning them into High Value Relationships. In the process I conducted more than 400 executive interviews, mostly in person and also via telephone.

This is a “Fresh Eyes relationship X-ray process” that helps you see hidden flaws:

Determine strengths and weaknesses and develop competitive benchmarks, with a focus on customer satisfaction.
Bolster your relationship with key customers and increase Share of Wallet.
Prevent unnecessarily losing a key customers (what would the cost be?).
Demonstrate how you value this customer.
Design a strategic account management plan.

Is this an expense or an investment?

If you consider this as an investment and you pilot this process, you are advised to ask yourself:

“What is the dollar value of this account? If I invest X amount of dollars (typically less than $10,000) in an in-depth review process, what are my chances that I will not be able to increase enough Share of Wallet to break even?”

My experience has been that without exception this process always provides a positive experience and my clients had no problems acting on the information and recouping their investment.

Most important is to know or discover how easy it is to pilot this process and if it works for you!

The upwards potential is significant, while the investment is low.

Visit my website for more information about me or contact me for a no-obligation phone conversation or request a service brochure with details.

Can you improve customer service and profitability by Exorcising Demon Customers?

2011-09-16T08:17:00.006-04:00

During the many customer service improvement workshops I have conducted I have often heard participating front employees observe the difficulties and dilemmas of dealing with those difficult customers that always require extra attention and firefighting and who never seem to have their own act together. The squeeky wheels get the grease, but these customers take up time and resources that could much better be spent on building the relationships with "good" customers. The question is often asked: Can't we fire customers?
I think so!

You have to keep a special eye on those customers you want to wean from your business. Deal with the bottom-feeders first to immediately free up additional resources to help support your more profitable customers.

And then there are the customers that on the surface seem important customers. But are they???

I like this [abbreviated] blog posting by Bruce Hunter of Lighthouse 360 who puts a great perspective on this issue. He also introduces the notion that using Activity Based Costing to establish the Cost To Serve is an enlightening practice to help make those difficult decisions about exorcising customers.

An Evil Myth

The unfortunate reality is that most demon customers, on the surface, seem like everyone else. In fact, they may themselves be unaware of their true nature. But take it from me: demon customers exist, you've probably got 'em, and even as we speak they may be sucking the lifeblood out of your company. The sooner you are able identify and exorcise them, the sooner your business will benefit.

Easier said than done, right? A while back, I stared across a conference table at a group of radio executives and wondered how to tell them that the last national account they had scored was a loser. These were hard-knock sales folks who knew their industry and knew how to chase down leads and convert them into time blocks sold. For years, their philosophy had been "any customer is a good customer." It was my unenviable task to educate them that this old truism was not, in fact, true.

Their situation wasn't unique. Years before, I had assumed the leadership of another business organization that had developed along similar lines. Culturally, the group had bought into the notion that the bigger the customer, the better. Not only did they bring in money, they also provided a certain cache simply by being a customer - that would, reasoned the groupthink, surely bring in even more big customers.

That organization had succumbed to an evil myth. Not only is bigger not necessarily better, in most cases we discovered that these mega-customers were actually bad for business. (I know. It didn't make sense to them, either - at first.) To prove it, I conducted a customer profitability study that forced us to take an inventory of all of our customer-related costs and where they were being applied.

I have often had the occasion to cast my eyes upward and give thanks for the folks from the finance department. This was one of those times. They performed a bottom-up exercise called "activity-based costing" that aligned the right costs to the right customers. Before that, costs had been averaged out across the customer base in the belief that it provided a decent view of the costs associated with each customer. As it turns out, that was a fundamentally flawed belief.

What emerged from this financial exercise was a very different view of the customer base. To widespread surprise, we saw that some of our largest customers were actually our "worst" profit performers. They sucked vital resources in terms of the people dedicated to the business, they were the most demanding in terms of price concessions, and they were quite low on business sustainability. They regularly required us to bid on projects, which resulted in more time and resources spent preparing the bid as well as the inevitable price concessions. (Think about it: when was the last time you were able to increase price and build margin through an RFP process?)

The People > Service> Profit Chain

2011-09-07T15:35:00.005-04:00

I was asked to write a blog entry for DrakePulse which connects the HR community with Drake International. Here is what was published.

The companies with the sharpest customer focus and who have made this into a market differentiator typically enjoy an above average profitability. This is not anecdotal but supported by ample hard data. In other words: Sharper customer focus leads to a sharper competitive edge.

Their brand of customer service is however ingrained in everything these companies do and don’t do, in terms of: Processes, IT deployment, customer management and measurement, organizational leadership and people management. In other words, it is part of their “organizational DNA”.

In this context we often speak of the People>Service>Profit Chain. Tom Peters used to say that it takes turned on people to give turned on service. In the excellent organization everybody has a customer and is focused on partnering with customers, be it internally or externally.

All of this to say that it is requisite to success that everybody – and I mean everybody – in the organization has a high customer service aptitude. Skills can be trained but a person has the right “customer stuff” between the ears or not.

Hence my recommendation to any organization that is intent on (further) sharpening their customer focus, to the extent that it becomes a sustainable competitive advantage, needs to conduct pre-interview customer service aptitude testing and use passing this a first hurdle in the hiring process. Thus, eventually, the entire organization will be infused with people who all have an above average and pre-determined service aptitude and ethos.

There are tools for this measuring this. I have experience with a particular one that is soundly pedigreed and proven. In the U.S. this is at times deemed legally risky, but I have repeatedly been assured that this practice is do-able and it is being done. This has consistently been a success factor for South West Airlines.

If you want to make this profit chain work, my advice is: Do the right thing and do first things first in hiring.

Expert Witness for Customer Service and Customer Satisfaction

2011-08-31T17:48:00.006-04:00

I am pleased to announce that I also provide services as an Expert Witness in customer service and customer satisfaction related issues in legal defense cases, such as consumer protection cases brought by the Federal Trade Commission and similar agencies, in the U.S. and Canada.

My website is http://www.expertwitness4customerservice.com

Advice From Effective Voice of the Customer Leaders

2011-08-22T18:44:00.003-04:00

Every year the Voice of the Customer (VoC) Awards process gives Forrester's Andrew McInnes and his fellow judges the opportunity to explore the inner workings of the day's best VoC programs.

Here are the pieces of advice that this year's nominees provided for other organizations to learn from, grouped into common themes. Straight from the horses' mouths...

1. Do pursue executive sponsorship:

When the leader of the organization is paying attention to the customer and taking time to be educated by the customer, the rest of the company notices and emulates that behavior. --Midsize B2C software maker

We believe involvement at the top executive level has been a main driver of our success so far. --Large retailer

Don't wait for executive sponsorship to get started:

Don't wait for executive sponsorship to begin your VoC measurement and insight program. Much of your program's success will be driven by bringing tangible proof points to the table that serve to accelerate executives' appetite for more. --Midsize business services firm
Start small, and create advocates to help excite others throughout the organization. --Large retailer

2. Do engage employees at all levels of the organization:

Involvement across the board, from executives, to sales management, to account managers, will drive your success and maintain interest and excitement for the program. --Large B2B/B2C software maker

It is critical that the "voice of the employee" is also considered when defining the VoC program. --Midsize B2B software maker

Don't waste time chasing after resistors:

Don't waste your time on employees who resist you and challenge the data gathering methods - go towards the "yes" people. --Midsize B2B technology and services firm

Start small, and create advocates to help excite others throughout the organization. --Large retailer

3. Do communicate broadly about the program:

Giving the program a name/brand/identity brings the initiative to life. --Large B2B technology and services firm

One third of your program team's job is communication about the program and results. --Large B2B/B2C software maker

Don't forget to tell employees what's in it for them:

Any VoC program has to be in employees' language and enable them to see the results and ROI in order to get engaged. --Large B2B/B2C software maker

Understand how leaders across product and services make decisions, and ensure the metrics and reporting help leaders make those decisions wisely and efficiently. --Large airline

4. Do hold employees accountable:

By linking compensation to customer experience performance, you will make it clear that this initiative should be treated as a priority at all levels. --Large retailer

Build regular stakeholder review sessions into the process. --Large health plan

Don't just focus on problems:

Do not use guest feedback as a means to embarrass or penalize local management. Create the notion among employees that we want guest feedback. Don't fear it, embrace it. --Casual dining chain

Without proper attention, feedback can quickly become a succession of small, daily fires. Give at least an equal amount of time scaling successes as you do solving problems. --Quick-serve restaurant chain

5. Do use all of the insights at your disposal:

Embrace analytics and data patterns from information collected outside traditional VoC survey questions. --Large airline

A multifaceted voice of the customer effort must consist of a variety of formal and informal efforts, leveraging the latest communication tools to meet customers where they live and play. --Large B2B technology and services firm

Don't lose sight of the path to action:

Before moving forward with a specific VOC survey question, ask yourself, "Who owns this question? Who is accountable for the data?" --Quick-serve restaurant

Maintaining line of sight to the insights that your organization values and understanding the data that provides this insight can limit data scope creep and deliver business impact faster. --Large B2C financial services firm

6. Do quantify customer feedback:

It's extremely important to put in place some kind of measurement capability in order to separate hearsay from important opinion. --Large B2B technology and services firm

Do the analytical work to show how customer satisfaction has economic impact. --Large B2B/B2C technology and services firm

Don't remove the human element:

Listen to the customer's actual experience. If you see that a customer has noted they waited on hold for 15 minutes while an employee was assisting them - find the call and listen to it. --Midsize business services firm

Utilize customer journey mapping to make your customers' experiences real to the people in your organization not directly familiar with what customers actually experience. --Large B2B/B2C software maker

7. Do create consistency across business areas:

It is essential for an organization to have a single metric/approach, such as loyalty, that summarizes the health of the company's relationships and is proven to link with business success. --Large B2B technology and services firm

Unify the capability by bringing together all of the individuals capturing voice of customer data. --Large retailer

Don't sacrifice relevance with a one-size-fits-all approach:

Make certain to create a balance between consistent feedback touchpoints and regional customization to meet the needs of a diverse organization. --Large B2B manufacturer

Rather than make customer experience initiatives and activities a separate program or another item on the to-do list, try to seamlessly integrate it into the tools, systems, process and activities people follow every day. --Large B2B manufacturer

8. Do embrace technology to scale up:

Find a partner that has the same goals as you and can empower you with the information and tools necessary to be successful. --Large B2C services firm

Implement a VoC reporting application that is easy to use and helps with decision making. --Large airline

Don't let available tools stifle innovation:

Don't fall into traps where you don't experiment because "it won't scale." It's how to get ahead of the curve--technology will catch up! --Midsize B2C software maker

Customer Service Moments of Truth - A reminder of the basics

2011-08-22T12:30:00.003-04:00

A lot has been written about customer service over the years and most of it is true. We have all read and, most importantly, learned the significance of customer service excellence from our own experiences. It really does make a difference in the performance of businesses. The Distributor Board reminded us in a recent posting of these tried and true basics, worth sharing.

Important Truths

We have used this over and over again: "You never get a 2nd chance to make a good 1st impression." In any business, that first impression starts with the first phone call, the first visit to your web site, the booth at the trade show, your Linked-In company profile, your magazine ads, drive into your parking lot, or any other place where you, as a company, are visible and active. For everything you need to ask the question, how is this informing or helping my customer or potential customer? How am I providing a service in whatever I am presenting or doing? What value is my organization providing during that first impression?

It was once said that, "Every time a service organization performs for a particular customer, the customer makes an assessment of the quality of the service, even if unconsciously. The sum total of the repeated assessments by the customer and the collective assessments by all customers establish in their minds the organization's image in terms of the service quality."

The worst thing that can happen to a distributor is not a failure, but rather how the distributor reacts to a failure. It is clear that a customer service problem that is resolved quickly and to the complete satisfaction of the customer will solidify the relationship with the customer. But this is not an area where repetition is good. Reducing the number of customer service problems should be the goal. According to Karl Albrecht and Ron Zemke in Service America, written many years ago, but still valid today:

"Of the customers who register a complaint, between 54% and 70% will do business again with the organization if their complaint is resolved. That figure goes up to a staggering 95% if the customer feels that the complaint was resolved quickly"

If the customer is not satisfied, research finds that, "The average customer who has had a problem with an organization tells 9 to 10 people about it. 13% of people who have a problem with an organization recount the incident to more than 20 people." These numbers can be exponentially higher with today's multiplicity of interactive communication options.

Changed Environment

According to a Business Week article, "It's never been easier for customers to find the opinions of others to validate their product and service choices." Today's buyers have the entire Internet, filled with evaluations, assessments, and commentary that provides others with the ability to find out about you and your products. Distributors today cannot hide. If your service to customers is not 100% all the time, someone, someplace will be talking and/or writing about it for the entire world to know. That's scary!

In a recent Citrix white paper entitled, Improving Customer Retention and Satisfaction by Delivering Exceptional Customer Support, they stated:

"In today's connected world, a bad opinion about service can be amplified quickly. In fact, customers are likely to share a bad experience with many others via word of mouth and virally, through social networks and service evaluation sites. Research conducted by Northwestern University's Kellogg School of Management on the influence of social media found there is a measurable connection between what is being said about a product in online posts and real time customer behavior and sales."

Many may discount this as "consumer environment," however, don't. The emerging, continually connected consumer today is the same person that works for your customer. The knowledge tools, Facebook, Google, LinkedIn, etc., they use personally are often the same they will use to evaluate your products and service.

How to Fail

In the book, The Service Advantage, Albrecht and Bradford talk about:

"A moment of truth ... that precise instant when the customer comes into contact with any aspect of your business and, on the basis of that contact, forms an opinion about the quality of your service and potentially, the quality of your product."

You make promises every day with your customers and potential customers. Fulfilling those promises are the "moments of truth" for your customers. It's OK to be out of stock, but don't sell something and then call later and tell the customer you are out-of-stock or, worse yet, don't decide to not call at all and fail to deliver. This is where failure happens. Your key to success is making certain this never happens by focusing your entire organization on making sure every promise is kept all the time.

Empowering People

We heard the other day these ten, two-letter words that I believe says it all, "If it is to be, it is up to me." If your organization has this service attitude, magic can happen. To have this attitude they must be empowered to act and be trained to act to the benefit of the customer and in turn your organization. Training is critical. It is a process, not an event and therefore needs to be on-going.

Karl Albrecht and Ron Zemke, Service America said,

"If a company that is supposed to be operating in a service industry has a department called 'The Customer Service Department,' what are all the other departments supposed to be doing? Might it be that having a customer service department signals to the other people in the company that the customer is being properly looked after, and that they need not concern themselves with the matter? Shouldn't the entire organization be one large customer service department, at least figuratively speaking?"

How to make it Happen

In this ever changing environment, the Owner, President, or CEO is the key to customer service success. Troops take direction from the leader. If customer service is a top down imperative, if keeping the promises you make at all levels of the organization is mandatory, outstanding customer service will occur. The CEO must focus on infusing this culture across the organization.

Beyond the strategy, there are 3 key tactics for success: people, processes and technology. Perhaps Glenn Dobson of Citrix said it best,

"Companies with the most effective, loyalty-inducing customer service equip their representatives with the tools and skills to resolve problems."

The skills come from training and experience. The tools are the vast array of technology that can be deployed. The goal is to have a "consistent" experience across the many points of entry to your company. Some of the customer service tools that need to be consistent and that all distributors should either be using or considering include:

Live Chat
Push to Talk
Video Product Demonstrations
Live On-line Demonstrations
Phone Conferencing
Video Phone Calls and Conferencing
Email Communications
Customer Relationship Management Solutions (CRM)
Knowledge Sharing Systems
Web Site and eCommerce

The keys to customer satisfaction success are: to utilize technology that will help you know your customer; technology that lets the customer know you; interactive communication systems; and adaptability to change rapidly as new systems and processes evolve, because they will!

In a recent Customer Relationship Management magazine article titled, The Next 15 Years of CRM, they stated that,

"Advances in people, process and technology over the past 15 years have helped make customer relationships deeper and more meaningful. But the next 15 years will deliver innovation at a much faster pace and organizations will only survive by embracing meaningful two-way dialogue with increasingly mobile customers."

Conclusion

In one of the Customer Service classics, by Carl Sewell & Paul B. Brown, Customers for Life, they say,

"If you're good to your customers, they'll keep coming back because they like you. If they like you, they'll spend more money. If they spend more money, you want to treat them better. And, if you treat them better, they keep coming back and the circle starts again."

Yesterday, today and tomorrow's successful distributor exists because of their focus on the service they perform for their customers. The difference then, now and tomorrow are the tools and the application of those tools to the company's processes. You should be assessing your technology to determine how well it helps your people in developing deeper and more meaningful relationships with your customers. Rest assured, your best competitors are looking at ways to improve their relationships with customers. Some of those customers might be yours!

One final quote comes from an ad that Bill Marriott ran many years ago and is ever more meaningful today. This lends itself to most any business and certainly to any distributor.

More than flashy architecture

More than razzle-dazzle décor

More than culinary fireworks

More than triple sheeted beds

A business traveler needs one simple thing

Service, the ultimate luxury

It begins the moment you call

Six common reasons why ‘customer centricity’ initiatives fail

2011-08-19T09:34:00.002-04:00

Richard Whitely is the author of The Customer-Driven Company, Customer-Centered Growth, Love the Work You’re With and, most recently, The Corporate Shaman. He is a co-founder of The Forum Corporation. Richard is a long-time consultant and advisor of UP! Your Service, on whose blog he published this insightful entry.

Over the many years of working with organizations to help them become ‘customer centered’, I have witnessed a number of successes as well as failures. By understanding why these well-intentioned initiatives fail and looking for common causes we are able to address them early in the planning process for future initiatives and thus increase the odds of success.

The six most common reasons for failure I have seen throughout my career are these:

1. Past Success

“Nothing fails like success.” In a moderately successful organization, when things are running “well enough”, senior managers do not want to risk their careers by championing a new way of being. They realize that changing the culture of an organization is like changing its DNA and they simply don’t want to take that on.

Lou Gerstner, reflecting on his turnaround at IBM said, “Organizations don’t change because people don’t want to change,” and all too often those “people” are the ones at the top.

In the absence of enlightened leadership that sees new opportunities, a burning platform is needed to create the motivation to set out in a new direction. There has to be a compelling and widely understood reason for change without which people will give significant lip service backed up by woefully little real action as they just go through the motions phantom change.

2. Uncommitted Leaders

I have never met a senior executive who says “Customers? Who needs them!?” Every leader knows how important it is to clearly identify customer segments, understands their needs and deliver solutions consistently and reliably.

Most leaders, however, do not demonstrate the level of commitment required. They are not the role models we need to see. Successful leaders, on the other hand, dive into the details and take full responsibility for creating an engaging environment where every individual is willing and able to fulfill the vision and mission of the organization.

3. No Voice of the Customer

In this case the organization is not “hardwired” to its customers and prospects. Important service and product decisions are based on assumptions and 2nd or 3rd hand information. The few powerful metrics that have the greatest impact on the successful execution of the organization’s strategy are all too often either not measured or, if measured, not shared with all employees.

4. Organizational Silos

In the increasingly complex environments in which we work today, no single job, department or function can succeed without significant levels of collaboration.

“Lateral listening,” and working closely with internal service partners are vital to making and keeping marketplace promises. This is the foundation of building a successful ‘customer-centered’ service culture and yet all too often inappropriate incentives drive us to withhold information and compete internally.

5. Inadequate Education

Senior executives often get all pumped up and excited by the allure of being customer centered. They then announce to all employees that the game is now about making customers happy and that everyone should do a better job in this area.

The big mistake these executives make is to believe that improving customer service is simply a matter of announcing that there is a new game and after that it is merely an employee attitude and motivation issue.

What they fail to realize is that while mindset matters, great service needs great skillsets, too. The new service behaviors required for success definitely require thoughtful, targeted education. In most cases they are not innate or natural. Management can provide generous incentives or onerous threats to shape employee behavior but without proper training such actions will not move the customer delight needle one bit. In effect they are incentivizing people to do things they are not yet able to do. Proper training is required.

6. “It’s not my job”

Executives and employees alike often believe that just because the organization has a customer satisfaction department or a marketing team that gathers customer data, “customer service” is taken care of and they don’t have to worry about it.

Successful organizations realize that delighting customers is every employee’s job. And when one embraces the concept of the internal customer, it is clear that everyone in the organization has at least one “real” customer who relies on him/her to provide a product or service that is vital to delighting an external customer somewhere down the line.

Which of these common reasons for failure might be lurking inside your organization? The first step to preempt them from derailing your efforts to become a customer centered organization is to recognize and admit that they might exist. The second step is to audit each of the six common reasons and determine the extent to which each of them might be an inhibiting factor for your organization. This might best be done in a group using a 5 point scale (0=not a problem, 5=major issue) to determine the degree each of the six will need corrective action. And, of course, the last step is to identify and take the corrective action.

Customer Focus: How to Make It Happen

2011-08-15T16:02:00.004-04:00

Graham Clark sees it my way. He is a senior lecturer at the Cranfield School of Management in the UK [Note that this post is in British English]

It seems such a simple equation; good customer service equals good business. And yet this patently isn’t played out in practice, as all of us have experienced. So what does it take to be a customer focused organisation?

For many years I have examined successful customer focused organisations, as well as those organisations that have tried and failed. Although we may have an ambition to be customer focused, putting the customer at the centre of all we do, we tend to concentrate on our own activity rather than customer requirements. There is a tendency to drive for outputs rather than outcomes. In other words, it is common to focus on what we do as an organisation rather than what it means for our customers. The result is that even though our intentions are sound, somehow our practice does not turn out as intended. Another common challenge for customer focus is an emphasis on efficiency or cost reduction. In the process of striving for efficiency it is all too easy to lose the essence of what the customer really wants, rather than what we do for them.

In a restaurant, everyone may get fed, but have they had the desired service experience? So how do we put matters right and give customers what they really want?

A lot of customer success is down to consistently hard work; we live in a world that is always looking for the quick fix, the simple panacea that will make it alright for the moment. What we need to do is to go back to basics, defining very clearly what customers really are looking for and what are they buying from us.

Sometimes I describe organisations looking through their inside out lens, versus the outside in lens. We are very good at the inside out: "this is what we do, please love us"; rather than the outside in: "this is what you want from us in terms of outcomes, benefits and across-the-total experience". In the process of cost cutting, organisations often lose sight of the essential customer experience component.

However, not every organisation is losing their focus on the customer; so what is it that makes the difference in giving consistently great customer service? Southwest Airlines Is an excellent example. They know that service is all about relationships; successful organisations are removing the barriers to forming strong and enduring relationships throughout their organisation. They work hard all the way through their network of relationships – not just at the end point of contact with customers and those moments of truth. Emphasis needs to be placed all down the chain, making sure that the relationships are working and working well.

My key message is not to rely on one or two service heroes to provide great service-though we need those heroes, people who love the customer to bits and really go the extra mile for them. Great service is service which is delivered consistently through the network of relationships which starts right at the very beginning and all the way to the end.

I recommend that organisations map at every point what is happening with the relationships. We used to refer to internal customers in the past, but I believe we should now emphasise relationships throughout the organisation– what do I give, what do I get back, how can we make it better? In this way you will re-evaluate what is working and what is not working, so that you can continue to improve the experience of the customer.

It’s good to talk, not just to your customers, but throughout your whole organisation. In this way you are much more likely to retain that valuable and essential component, customer focus.

An App That Makes Customer Service Hold for You

2011-08-11T14:24:00.002-04:00

Have you ever wondered, while you wait on hold for a customer service representative, if there was a way to get your problems resolved without spending your time listening to Muzak?

FastCustomer, an app for use on both iPhones and Android phones, aims to provide the answer. While it clearly has some bugs to be ironed out (particularly the Android version, which is in beta and will be upgraded later this month), it seems to be a promising tool.

Aaron Dragushan, FastCustomer’s co-founder and a self-described “computer science dropout turned entrepreneur,” says he got the idea while waiting on hold for customer service at Comcast. “After 20 minutes, I thought, ‘We live in an age of technological innovation, and yet we sit on hold!’”

Why, he wondered, couldn’t a company’s computers “hold hands” with another computer, and put the live people in touch when they were both ready?

Thus was born FastCustomer. Here’s how it’s supposed to work: You download the app onto your phone. When you click on it, a menu of companies appears (there’s more than 2,500 currently listed, including all of the Fortune 500, he says). When you select one, the app tells you to go about your business while it calls the company for you.

When FastCustomer’s automated phone call reaches a customer service representative, Mr. Dragushan said, it tells them, “Please press 1 for your next customer.” Then, assuming the representative presses the button, the app calls you back and links you to the representative.

Sometimes, he admitted, because the service is new, or the representative doesn’t want to wait even briefly, he or she hangs up. But in the vast majority of calls, he said, the representative presses 1, and your call proceeds. (Plus, if one representative hangs up, he says, the app calls back until it gets one who will play ball.)

It happens that I’ve been meaning to call two companies: Netflix, and Cox Cable. A bad electrical storm knocked out our Internet service a while back, and I hadn’t gotten around to resetting the wireless link with our Wii terminal, which allows us to watch Netflix shows on our television. I’d been dragging my feet in part because I wasn’t sure which company to call first for advice. Plus, I couldn’t seem to find the time to locate the proper customer service numbers. So, FastCustomer seemed well worth a try.

The app downloaded quickly onto my Android phone, and the service worked smoothly after I selected Cox from the list. Within three minutes, my phone rang; it was a live Cox representative, asking (somewhat suspiciously, I thought) if I had called. (Why, yes, I did!) I described my problem. She suggested a solution that I agreed to try. Pretty painless.

The Netflix call didn’t go as well. It started out the same way. I got a quick call back. But the voice on the phone was automated. The recorded voice asked me if I was satisfied with Netflix’s service, and directed me to press 1 if I was. I thought that it wasn’t Netflix’s fault that lightning zapped our router, so I pressed 1. Big mistake. “Thank you for your feedback,” the voice said. “Goodbye.” Then it hung up.

Mr. Dragushan said he was not sure what the problem is with Netflix, but he took the company off the app’s menu while he investigates the situation. In some cases, he said, as with Comcast, for instance, the company’s computers block calls from FastCustomer. He said he didn’t believe it was because the company didn’t want to take calls from FastCustomer. It is more likely because the computers see hundreds of calls from a single, toll-free phone number, and register them as some sort of nuisance attack. The company plans to switch to a non-800 telephone number, he said, which should help things go more smoothly on the receiving end.

E-mail inquiries to Comcast and Netflix weren’t answered.

So far, the app has been downloaded about 20,000 times. Ultimately, Mr. Dragushan said, he thinks companies will welcome FastCustomer’s service. “We’re providing such a clear benefit— handing them a caller who isn’t furious for waiting on hold.”

FastCustomer aims to earn revenue by eventually selling premium services for a fee, or by selling analytical data to the companies it calls, so they can better evaluate their customer service.

You can try out FastCustomer with a test call (which features a message from Mr. Dragushan’s 4 year old, urging you to “Never wait on hold again!”), or with a real company, as I did. If you do, let us know how it goes.

Source: New York Times blog

9 Customer Service Principles Essential for Any Business

2011-08-09T07:21:00.004-04:00

How do you apply your customer service principles in practice? Did you even list your principles?

Customer service is paramount for every business, whether it´s online or offline. That´s why customer service principles are so important.

Being a member of an online service provider (Karma CRM), Sarika Periwal knows what it means to apply them.

I agree with his Principles, but if had written them I would have called the first one Leadership and embedded commitment in it. This is the most critical one: No organization rises above the level of its Leaders.

—–

The customer is king for a company and to keep him happy and satisfied is the main aim of any solvent business. So how do you organize your company customer care services in such a manner that this all important goal is met?

You follow a set of essential customer service principles which allows you to keep your customer satisfied with the minimal of fuss.

1. Commitment – is required to serve the customer well at all levels. You need top management, middle management and supervisors to be just as committed as the actual individuals who come in touch with the client.

2. Credibility – a man’s word can make or break his personality. If the man delivers on his promises consistently his credibility increases over a period of time and so does his reputation. With a company it is no different. The credibility needs to be built by building trust with the customers.

3. Culture – the customer service ethos needs to be a built-in part of the company culture. The fact is that no company can survive without their customers and it needs to be driven into the heads of all employees of the company. Without any customers the company and their means of employment will not exist.

4. Competency – of the staff play an important role in keeping a good customer service ethos. The staff that is chosen during recruitment should fit in with the company’s vision. They should then be trained in the way the company does business and be assessed doing the job at frequent intervals. That way the staff of the company stays competent.

5. Responsibility – is the key. There must be one consistent authority within the company who is responsible for all customer service issues. There needs to be a clear head to approach within the company who is entitled to take decisions instantly in given customer issues.

6. Resources – are vital. No one can work without the right tools. Imagine sewing a button on a shirt without a needle. It can’t be done. So what the company needs to ensure is that there are always adequate resources available for the policies to be followed effectively.

7. Quality – as long as your product and service provides the customer with consistent quality there is little to fear. However a constant effort must be made to give the customers relevant inputs and review their reactions to hone your company systems.

8. Feedback – while the feedback from customers is important there is one aspect of feedback most companies tend to neglect. That is the collection of feedback from the employees who are dealing with the customers. There is so much your own staff can tell you if you would just care to listen.

9. Continual Improvement – is required to meet and exceed the expectations of the customer. The identification and management of all customer service issues is what helps the company to grow not just its customer base but also its reputation and profits.

Great service does not always lead to customer loyalty

2011-06-14T07:01:00.002-04:00

From the blog of consultant Mitchell Osak.

Conventional wisdom says that consistently providing service excellence will deliver high levels of retention. According to new research from the Harvard Business School, this is not always the case. Companies that offer high levels of customer satisfaction may still experience loyalty problems if competition offers even better service. In fact, the research suggests that the customers you think are your most loyal are likely to be the first to jump ship when a challenger to your service superiority enters the market.

The researchers, Harvard Professors Dennis Campbell, Frances Frei and doctoral student Ryan Buell explored the link between service levels, customer loyalty, and competitive strategy in the U.S.banking sector. The 2002 to 2006 study analyzed data collected from a large U.S.domestic bank that competed in more than 20 states.

The study’s findings confirmed some earlier research on the impact of corporate and service strategy on retention. In a nutshell, companies who generate high customer satisfaction scores remain at risk when competition raises the service stakes. Conversely, the research indicates that firms rated low in service quality are relatively immune to premium competitive service offerings.

The reasons for these counter-intuitive findings have a lot to do with the customer expectations established in part by the incumbent provider. The longer a firm has held a service advantage in a local market, the more sensitive are its customers to it service levels relative to those of competitors. Given their higher expectations, service-driven customers are more willing to try other firms and products that trumpet and deliver service excellence.

Despite these conclusions, managers should be mindful of throwing out the service baby with the bath water when setting strategy. The study found that even though high-end customers can be fickle, a company can still attract and retain customers in a variety of markets with a superior customer experience. There are a number of ways to do this:

Avoid complacency

Firms can avoid resting on its service laurels by staying abreast of customer needs, focusing on continuous improvement initiatives and proactively investing to significantly enhance their customer service experience.

Consider each product category separately

Customers will trade off price and service depending on the product they are seeking and the importance they attach to it. In general, customers – in the long run – purchase the goods that represent their ideal combination of price and service. As such, delivering more service than is needed (or is willing to be paid for) would be sub-optimal.

Understand that service sensitivity varies by market…

According to the researchers, there are considerable differences in the type of customers you attract and retain between markets. This variance suggests that managers should tailor their service and marketing strategies depending on local market conditions, competitive threats and customer needs.

…But be wary of too much customization

Local market service strategies come with considerable costs in terms of operational complexity and brand dilution. Firms need to carefully weigh the pro and cons of service customization for each market.

Make it difficult to leave

If high service levels by itself won’t ensure loyalty maybe raising a customer’s switching cost or providing loyalty-based incentives would do the job. For example, managers could offer discounts for long term contracts, extend warranty periods or launch high-value loyalty programs.

How serious is your CEO about Customer Focus?

2011-06-03T10:51:00.003-04:00

After 25 years in this business as a consultant I can only agree with all colleagues that leadership is at the heart of sustainable success. No organization shall rise above its leadership... I keep repeating this over and over again. I saw it confirmed in my own practice when for the first time in a long period I recently felt I had to resign a client relationship because the CEO just was not getting it, and thus most of his management team (not leadership team).

I read a post from author and consultant Jeanne Bliss (who I greatly admire) and realized how pertinent her detailed view on this issues is. Hence I decided to quote it below.

"I’ve never seen a CEO who wouldn’t sign up for customer loyalty, customer focus and just plain improving things for their customers. It’s getting them to drive the company to do something about it that’s the challenge. A number of telltale signs determine pretty quickly whether a company is serious about the job or not – beginning with the CEO and leadership and cascades all the way through the ranks of the company. Specific leadership actions occur in companies that have taken the commitment past lip service. Understanding customer issues and what drives customer loyalty become the stuff of everyday conversations. The issues are trended and understood and talked about. Building customer experiences and relationships is considered the true work of the organization – not something layered on the “real” work of achieving quarterly sales goals.

CEO’s that drive this work understand that it’s the inspiration, leadership and organizational change that are the sticking points in making progress.

CEO Has Personal Ownership

A CEO leader on a customer mission takes responsibility for driving value for customers and improving the customer experience. This is not something jobbed out to someone else to do. Although they will need a lieutenant to help drive the work (because they have an entire company to run after all), the CEO is an engaged and active participant.

Commitment Questions 1 and 2:

1. Does your CEO clearly articulate what he/she wants the company to become for customers and constantly reinforce and drive the company in that direction?

2. Is there a commitment for organizational transformation, not some one-off tactics and silver bullets?

The CEO Makes the Customer Champion an Officer of the Company

Because these leaders recognize that this is organizational transformation, they grasp completely that it will not happen with a public proclamation and a great kick-off memo (sad, but true, how many of us have received those?). It’s understood that they need an executive level partner to bring the transformation about.

The point about making the customer champion an officer is not an insignificant one. When the customer effort is considered a strategic priority, the work simply needs to reside at that elevated level. An officer level caliber leader is needed to drive the action and the company will take their cue about the work’s importance from the title in the organization box.

Commitment Questions 3 and 4:

3. Has the CEO layered this work onto someone’s already over-full plate, or is there recognition that this is a critical job for the organization that requires an immense time commitment?

4. Has the CEO ensured that the customer champion is an officer of the company with the full support and engagement of the CEO, leaders and the organization?

There is Clear and Regular Accountability for Customers

This is a huge sticking point for the work. CEO’s who get this demand regular accountability for the sole purpose of identifying and tracking progress with the customer agenda. The metrics and performance requirements are clear. Regular accountability means, for example; trending and tracking customer complaints by category and setting metrics for improvement. Regular accountability means that customer losses are understood and accounted for and explained. Regular accountability takes the key customer interaction points down to operational metrics which the CEO tracks as fervently as the number of products sold – because in those moments experiences are made or broken.

Commitment Questions 5 and 6:

5. Does your CEO actively hold people accountable for customer performance? Is there clarity in what’s expected and does the organization practice discipline around identifying what should be measured and managed?

6. Are forums for accountability regularly scheduled and enforced as a key strategic meeting for the success of the company?

They Provide Political Air Cover

Committed CEO’s provide the necessary political air cover to drive the work ahead. They bring around the non-believers of the customer effort. Because this work traverses across the organization, the CEO steps in when necessary to course-correct and drives the action when it stalls. These CEO’s don’t sweep the naturally competing silo priorities under the rug. They are acknowledged and the gnarly work is done to determine where the agreements must be made, where the compromises must be set, and where the new lines of accountability must be established.

Commitment Questions 7 and 8:

Does your CEO commit time and resources to be a solid partnership with the customer leader?
Does your CEO play an active role in understanding and participating in the rigor of aligning the company when necessary?

There is Corporate Patience for the Work to Take Hold

This work is not for the mild-hearted or the quarterly inclined. Everyone needs to understand that becoming a ‘customer’ company is a multiyear endeavor. They can’t bail in the first year because the results don’t come as simply and cleanly as seeing response rates on a marketing campaign, tracking sales goals or the number of hits on your website. The CEO must personally have the belief and commitment that this is the right course.

Commitment Questions 9 and 10:

Is your CEO committed to the timeline required (in the neighborhood of five years) and are they willing to suspend the usual short-term expectations of immediate results to have patience for the customer work to take hold and yield results?
Will they sustain the patience inside the corporation and with the board to stay the course so that results can be achieved?

They Demystify the Roadmap and Suspend the Disbelief

The corporate ‘Nay-Sayers’ will be quick to voice that this work has been tried before and failed. But committed CEOs have grasped all that and factored it in. And since it’s all been considered, there is a clear plan, an achievable plan that is laid out before the organization. A reality-based roadmap is established, funded, followed and followed up on.

Commitment Questions 11 and 12:

Are the stages, expectations and processes to drive the work identified realistically and planned so people understand the roadmap, where it is leading and why it is set forth?
Have the resources been applied so that the roadmap is grounded in the reality of what the company can achieve and fund?"

The 85/15 Rule: Get at the Root Causes of Poor Customer Service

2011-06-01T12:12:00.003-04:00

I am a fervent fan and former associate of author, speaker and consultant Jim Clemmer. He is insightful, pragmatic and accasionally coins some new expression such as "snoopervisor". He is about as pragmatic as I am.... here's what he wrote:

Last month I was approached by a misguided manager looking for training and motivation programs to “fix” their frontline service staff. This is a fairly wide spread and common problem showing a lack of understanding about basic customer service cause and effect. And it’s focused on treating symptoms rather than the underlying disease.

How reasonable would it be to hold a shipping dock worker responsible for the quality of the goods in the boxes he or she is shipping? Not only would that be unfair, it would be bad management. A good manager would argue, quite rightly, that the manufacturing process should be traced back to find the ultimate source of the defects.

So, how reasonable is it to hold the frontline server responsible for the quality of the products or services he or she is delivering? Sometimes poor service is their fault. Some servers are rude, sloppy, or uncaring. But most often the person on the front serving line is a symptom carrier, not the source of the problem. While he or she may be contributing to low service delivery, blaming him or her is also not only unfair but looking for answers in all the wrong places.

Even if poor service did originate with the service deliverer, who hires, trains, rewards, coaches, and measures that person? Like so much about culture, performance, and leadership it really is common sense; if you put a good person into a bad system, the system will win most of the time. This obvious observation has been proven so many times that it has become a truism called “The 85/15 Rule.” The 85/15 Rule shows that if you trace service breakdowns back to the root cause, about 85% of the time the fault lays in the system, processes, structure, or practices of the organization. Only about 15% of the service breakdowns can be traced back to someone who didn’t care or wasn’t conscientious enough.

But the last person to touch the process, pass the product, or deliver the service may be burned out by ceaseless service problems, overwhelmed with the volume of work or complaints, turned off by a “snoopervising” manager, out of touch with who his or her team’s customers are and what they value, unrewarded and unrecognized for their efforts, given shoddy materials, tools, or information, not given effective coaching and feedback, measured (and rewarded or punished) by results conflicting with his or her immediate customer’s needs, unsure of how to resolve issues and jointly fix a process with other functions, trying to protect themselves or their team from searches for the guilty, or not knowing where to go for help. All this lies within the system, processes, structure, or practices of the organization. And all this is a leadership, management, and culture issue.

Many of the manifestations of the “our staff are the problem” assumption stem from the all too common, but badly misguided, inclination to go on “seek and destroy missions” by asking “who” rather than “what” went wrong. Symptom carriers of the organization’s system and process problems are hunted down and hung by the neck on lampposts. The result is a culture of fixing the blame rather than the problem. This creates a culture of fear, cover your backside, and finger pointing. That’s clearly not a culture that creates higher customer service.

Treating symptoms can provide quick relief and make us feel like we’re fixing the problem. But until a management team is prepared to treat the underlying leadership and organizational root causes by applying The 85/15 Rule, they will be locked in a repeating loop of mediocre or poor customer service.

Customer Focus comes also from the inside out.

2011-05-26T12:09:00.005-04:00

The immediate assumption when we talk about “improving customer service” is that we refer to the activities of customer-facing team members who directly “serve” our external customers, clients, buyers, suppliers, guests, users, attendees, diners, students, patients, etc.

And in fairness, most service education is indeed intended for those who “face” customers – improving the quality of service for those who pay for our services.

UPservice specialist and guru Ron Kaufman recently published this blog entry which I fully endorse. Also, my strategic partner for customer service training, Ray Miller of www.thetrainingbank.com takes a similar stance in his best selling book That is Customer Focus which I recommend. (See also the ads for this on my website)

"But seeing service improvement as mostly a frontline, customer-facing issue will not foster the development of an uplifting service culture where all employees embrace the goal of constantly adding value for others. It is by creating this value – inside and outside the company – that firms compete and grow. Thus a key component of building service culture is working closely with those on the inside – all the internal service partners who work and interact with each other to provide an organization’s products and services.

When someone serves a customer, there is a necessary chain of people behind them that support what they do and how they do it. Any weak link could cause the service provided to break down. The folks in IT, HR, Finance, or Legal. Those on the plant floor, in Facilities or Operations. Even temporaries hired for projects or to fill-in for absent workers.

If the quality of their service on the inside is lacking, how can their colleagues facing customers and clients be expected to provide highest quality service? If Sales needs a custom order in a hurry, it cannot happen if Production has no motivation to serve. How can a new team member be motivated to exceed if HR does not onboard or orient them with an exceptional service experience? Why should retail clerks go out of their way to help if managers don’t go out of their way to help them?

If you seek to change the quality of perception of your organization’s customer service, focus on the inside, too.

If you manage an internal department, here is an exercise to pose to your team. Imagine the work of your group has been spun off – outsourced – and you have formed your own firm to provide the same services: HR, Finance, Legal, IT, Facilities, etc. All of a sudden, those who you were serving on the inside are now on the outside. Given the service you were providing, would they hire you back? Should they? What would you change about your service you were providing to be sure you got the job?

Does your work look different to you now? How is the quality of your service when perceived objectively – or competitively – from the outside? What level of service are you providing? What level have you been receiving? How can it be improved? Are there processes that are broken, or don’t yet exist, that would ensure you provide better service? Are your leaders encouraging internal service excellence? Are you and your colleagues delivering it?

And what about all the other departments that also provide internal service? Remember, as you improve your service to others, you will earn the trust and respect of your colleagues. You will inspire them, and you can ask for the same quality of service in return."

The Customer Experience-Loyalty Connection

2011-05-19T16:11:00.002-04:00

Known key facts from previous Foster research are:

While 56% of managers think they are customer-centric, only 12% of their customers agree.
81% of companies with strong capabilities and competencies for delivering customer experience excellence are outperforming their competition.

Now a new research report published by the Temkin Group, The Customer Experience-Loyalty Connection, finds a strong connection between improved customer experience and increased consumer loyalty-- leading to increased company revenue.

Based on a survey of 6,000 US consumers, Temkin Group found that consumers who have a good customer experience are more loyal to companies across all 12 industries included in the study: airlines, banks, credit card issuers, health plans, hotel chains, Internet service providers, insurance companies, investment firms, personal computer makers, retailers, TV service providers, and wireless carriers.

According to Bruce Temkin, author of the report and Managing Partner of Temkin Group, “Great customer experience isn’t just a nice thing to provide for customers; it’s a critical component for improving the bottom line by increasing customer loyalty.”

Key findings in the report include:

A modest improvement in customer experience can generate a three-year revenue boost between $308 million for retailers and $179 million for health plans for every $1 billion in revenues. The study identifies the revenue levels for all 12 industries.
Customer experience leaders have 10.8 percentage points more customers who are likely to recommend them compared to customer experience laggards.
Customer experience leaders have 12.7 percentage points more customers willing to buy from them compared to customer experience laggards.
Customer experience leaders have 14.1 percentage points fewer customers looking to switch away from them compared to customer experience laggards.

This report can be accessed from the Temkin Group website (www.temkingroup.com) or from a new Website called Temkin Ratings (www.temkinratings.com) where companies can download the detailed data from this research.

So you want to create a customer service culture... recruit for attitude first!

2011-05-18T12:03:00.002-04:00

I often recommend to my clients that they only interview (and recruit) people who have "the right stuff between their ears". By that I mean that candidates will not even be interviewed if they do not first pass a hurdle that indicates they have an above average level of customer service aptitude and attitude.

In the realm of pre-employment testing there are proven and easy to administer tests available that will assist in this.

Not surprisingly I was delighted to read and in full support of this entry on the blog of UPlifting customer service guru, author and consultant Ron Kaufman.

Recruitment advertisements often emphasize the skills and experience required to apply for a job. This is understandable, but is also a mistake. Organizations should place more emphasis on recruiting the right attitudes during the hiring process. When you want to build an uplifting service culture, attitudes can be even more important than skills.

A great attitude accelerates an employee’s ability to contribute valuable results. A great attitude also has a multiplier effect, uplifting the moods and attitudes of every other member on your team.

One key component in a great attitude is “willingness”. Willingness means being pro-active and resourceful, finding ways to excel in different circumstances.

The three important elements include:

1. Willingness to Adapt

No organization operates in a static environment. The willingness to be flexible and adapt can be a strong impetus to achieving tangible and valuable results. When a person is highly skilled – but insists on doing things “the usual way” – using only those skills he is already comfortable using, this itself can become an obstacle.

The willingness to adapt is essential to meet continuous changes in technology competition, and customer expectations.

2. Willingness to Make Improvements

One part of good employee performance is the ability to make improvements over time. In a changing world, if an employee feels there is no need to make improvements in any aspect of his work, poor performance evaluations are sure to follow.

The willingness to make improvements also requires seeking feedback from colleagues and customers, asking for opportunities to do even better in the future. Asking “Is there anything I can do next time to make it even better for you?” is a powerful way to gain insight and ideas that lead to higher value performance and results.

3. Willingness to Listen

Candidates in an interview are often gauged on their ability to communicate, and their articulation is carefully evaluated when they speak. But listening skills are equally important – and for many service roles an even more important critera!

The best articulators may not necessarily be the best listeners. The willingness to actively listen to the concerns of customers and colleagues is crucial to deliver more valuable service. Only by listening carefully to what is being said – and unsaid – can a service provider appreciate the subtleties of each person’s preferences and priorities, customizing their service to deliver maximum value.

This value can be measured in tangible results including rankings and reputation, pricing and profitability, customer loyalty and employee satisfaction.

Attitude Contributes to Culture

When building an Uplifting Service Culture, recruitment for attitude is more important than prior existing skills. Skills can be taught, coached, developed and improved. Attitudes can change, too, but it takes a lot more effort.

It’s true that an Uplifting Service Culture can lift the spirit of everyone at work. But who do you want to hire next? Someone technically skilled who brings the mood down, or someone naturally up who makes your culture stronger?

The choice is yours. We recommend hiring for attitude first.

So you want a positive customer experience...

2011-05-18T09:07:00.004-04:00

Positive customer experience doesn’t just happen after one transaction, sale, or service, but an initial bad customer experience will send a customer straight to your competition; never to look back at the wake. Therefore, we should be mindful that the total positive customer experience a customer appreciates is the result of an organization’s total structure, of all departments working together like a finely tuned machine.

When we think of a positive customer experience, we see it as a reflection of the very core values a company has and how that very same organization communicates those values – either through its quality of products or services. However, the experience begins with the senior executive and works its way through every department.

Remember that no organization rises above the level of its leadership.

Seven Signs of a Customer-Focused CEO

2011-05-11T17:56:00.000-04:00

This was a very pertinent guest post on the Forbes blog from James Slavet of venture firm Greylock Partners. I remind readers that Leadership is a key driver of success and that no organization shall rise above the level of commitment of its leadership.

“A man without a smiling face must not open a shop.” – Chinese proverb

The next generation of great companies will be led by CEOs who are serious about great customer service. The quality of a company’s customer service matters as much as the quality of its code. Algorithms can fail, patents can expire, but a reputation for great service endures.

The fundamental trait of the ideal Silicon Valley start up has long been scalability. A ten-person team can build and deliver a product to ten million people, and that’s a beautiful thing. But there are times in business when you need to do things that do not scale—times when good, old-fashioned human touch is essential to address customers’ needs.

I see hundreds of new consumer Internet business presentations each year. A growing percentage of entrepreneurs are now adding “World Class Customer Service” as a bullet point in their investor presentations. It’s a buzzword of the times, perhaps inspired by the success stories of recently acquired companies such as Zappos and Diapers.com—strong businesses built on foundations of top-tier customer service. I’m hopeful that we will experience a generation of entrepreneurs who make customer service a priority. But great customer service requires more than a bullet point on a slide. It has to start with a deep understanding and commitment by the CEO.

The impact of customer service has been amplified in today’s environment. Businesses compete intensely for talent and customers, and positive and negative sentiment spread faster than ever before. Great customer service builds employee morale. Everyone wants to be proud of where they work and people are more engaged and productive if they work for a company that is committed to doing whatever it takes to consistently deliver an awesome experience for customers. Great customer service is critical for attracting repeat customers and building positive word of mouth and a respected brand.

When customer service is mishandled, the results can be tragic. Dave Carroll is a Canadian musician who decided to chronicle a real life experience of how his guitar was broken during a trip on United Airlines, and the subsequent reaction from the airline. United failed to accept responsibility and refused to pay for the damage to Carroll’s guitar.

Carroll’s resulting tribute song, “United Breaks Guitars,” became an instant hit on Youtube, and was viewed more than 10 million times. The reaction was so strong that Carroll ended up writing not one but two sequels. Trust me when I say you never, ever want your company to be named in the hook of one of this guy’s songs.

“You broke it and should fix it, you might as well admit it, I should have flown with someone else or gone by car, ‘cause United breaks guitars.”

Business Insider recently published a list of 20 companies with the best customer service (yes Zappos was #1). I’ve reflected on the common practices the CEOs of these companies share, as well as my own experiences working directly with CEOs in Greylock-backed companies, to develop this list of the seven signs.

Sign #1: You don’t need an advanced degree to get in touch with customer service

Most consumer Internet sites make it nearly impossible to get in touch with a live person to address a problem. The help section is buried many links deep if you can find it at all. The customer has to fill out a form or an email and he or she is given no sense of whether or when a response may be coming.

Customer service-focused companies make the path to help more accessible, and they give the customer a choice of how to interact and get help, whether by phone, Skype, chat or email.

Go ahead and type Diapers.com into your browser. You’ll find their phone number is listed clearly on the top right section of their home page and persistently throughout the site. Even better is the page below – they actually like receiving phone calls?

There’s a reason to like customer calls. As Tony Hsieh, founder of Zappos, wrote in his autobiographical book Delivering Happiness, only 5% of Zappos sales happen over the phone, but Zappos views each customer service contact as an opportunity to create a lasting positive memory with the customer.

“There have been few successful men who weren’t good at details. Don’t ignore details. Lick them.” William B. Given Jr.

Sign #2: An economically irrational obsession with details of the customer experience

Question: “What details of the customer experience are you most proud of?”

Companies that deliver a memorable customer experience usually have leaders who have an economically irrational obsession with the many composite details that make up the whole. Whenever you un-box a new Apple product, you can feel the way Steve Jobs must have personally obsessed about every beautiful detail, instead of trying to find the cheapest way to get it made. Customer-focused CEOs talk in intimate and loving detail about the specific product and experience choices that were made, and they will absolutely lose it when the details of the customer experience go awry.

“Economically irrational” decisions can turn out to be investments, when the company has the long term view in mind. I recently discussed this obsession with the customer experience with Bob Paquin, former SVP of Operations/IT at LL Bean and former COO at Blue Nile. Paquin told me about the time LL Bean was late on a canoe delivery and one of his team members strapped the canoe on the top of his car and travelled from company headquarters in Freeport, Me. to New Jersey to make a personal delivery to the customer, who was about to take off on a trip down the Delaware river.

From a business perspective “no questions asked” returns and “go the extra mile” service may seem costly and irrational. However it turns out not to be a prohibitive cost because very few customers take LL Bean up on their offers of never-ending product returns or employee-expedited delivery. Customers are just happy to know that if they wanted to, they could.

An obsession with small details extends beyond getting the basics right. The personality of the CEO, and the company, should come through in small but important touches. In a world of service level agreements, how can a company do something unexpected, quirky and memorable to make the customer smile? Whether it be a handwritten note to the company’s most loyal customers, or a gift to say thanks to a customer for a referral. The gift will have a more profound impact on the customer if it’s delivered as a thoughtful surprise thank you later, rather than as a “referral incentive” up front.

Sign #3: A personal groove with customers

Question: “How do you personally connect with your customers?”

Have you ever seen the show “Undercover Boss” on CBS? It captures the essence of what’s wrong with most of corporate America. Many CEOs are disconnected from the realities of the front line, where their employees interact with customers every day.

CEOs who are out on the front lines tend to have an special emotional connection with their customers –it’s a kinship, a bond, a love. It just feels different than a sterile company-to-customer interaction. Customer service-focused CEOs find lots of ways to interact directly with their customers and to nurture the relationship. They communicate and listen by blogging and tweeting, but they also find more direct ways to stay in touch.

Tim Westergren, the founder of Pandora, has built a deep groove with Pandora’s customers over the course of a decade. He personally answered all customer emails in the early years of the company. Now that Pandora has almost 50 million users, Tim can’t personally handle all of the customer email any more, but his customer-focused instincts ensure that Pandora still responds to every email that comes into the company with a personal response from a real live human. Tim also gets out from behind his keyboard by regularly organizing meet-ups where he travels to towns across the country to meet and directly connect with avid Pandora fans. Connecting directly and in-person with customers arms you with concrete stories that you can take back to your team to work on solving real problems.

Sign #4: The CEO channels the voice of the customer

Question: “Can you forward me a few of your recent all-company email updates?”

Many CEOs send out a regular email update to the whole company, perhaps once a month, as a way to share what’s on their mind and how things are going. It’s interesting to see what different CEOs choose to communicate in these emails. Some focus on the company’s strategy, creative marketing campaigns or financial performance. Customer-focused CEOs mostly write about the customer. They do this naturally—it’s what they really care about, and it’s also where they want their team to focus.

Redfin is an online real estate brokerage. Its CEO, Glenn Kelman, copies me and the rest of the company’s board of directors on his all-company email updates. Glenn is very focused on catching people doing good things and highlighting it when they do. His recent email included links to online videos of Redfin customer focus groups, followed by a quantitative report tracking Redfin’s Net Promoter Score (which captures the likelihood of Redfin’s customers to recommend the service to a friend). The next section of his email highlights quotes from customers sharing their experiences with Redfin’s agents.

Customer service-focused CEOs create a virtuous cycle by celebrating great stories from customers. Doing so inspires everyone in the company to do right by the customer. Glenn always seems to find quotes that are specific, interesting and energizing. A few recent gems:

“Sue is fantastic…I followed her on my scooter and didn’t feel judged at all!”

“It’s magnificent! I want to have sex with this Web site but I’m married!”

Of course, it feels good to be Sue or a member of the product team. Not only do you know that the customer deeply appreciates your work, but the CEO has broadcasted it to every one of your coworkers.

Sign #5: A “Moneyball” approach to service

Question: “How much do you invest each year in marketing? How much do you invest in customer service? Why?”

Marketing has been transformed over the past decade through the rise of the “Moneyball CMO”. It’s time that more companies took a Moneyball approach to customer service. Marketing investments aren’t made on faith today, but most customer service investments are, and that’s part of the problem. Marketing gets funded because there is an entire economy around measuring marketing’s impact on revenues. What if more companies did the same with customer service’s impact on revenues?

Contrary to popular belief, customer service is not a cost center like payroll processing or other non-strategic business functions. In those areas, the less spent, the better. Customer service should more properly be regarded as a strategic investment. If you’re building your business for the long term, you need to make the necessary investments to make your customer service great. Zappos CEO Tony Hsieh is quite eloquent on this topic. He says that companies should look at their customer service team as a form of marketing investment. Each customer contact is an opportunity to retain a customer, create positive word of mouth, and build the brand.

Most companies don’t give real consideration to the trade-offs of an incremental dollar spent on paid customer acquisition versus that same dollar spent on customer service. By not calculating this trade off, many are dramatically under-investing in customer service. Some internet companies would be better off cutting back on their lowest performing marketing programs and staffing up more fully on customer service. As Bob Paquin, the former COO of Blue Nile said to me “leaders who don’t invest in customer service are dealing in a false economy.”

A customer service-focused CEO challenges his marketing and customer service leaders to see who can produce the best ROI. Let’s consider the following scenario. Say the fully loaded cost of a customer service rep is $50,000 per year. So ten reps would cost $500,000. What are ten high-performing customer service reps worth as a marketing and brand building investment? If the average rep can positively impact 25 customers per day, that would be over 60,000 positive customer interactions generated by this ten-person team over the course of a year. If each positively impacted customer spread the word to just two friends, then that would be 180,000 positively impacted customers, at an average cost of less than $3 per customer. Is that a worthwhile investment, relative to what $500,000 in paid marketing might generate? I’d guess in many situations that answer would be yes.

It’s rare to see a CEO who includes customer service metrics prominently in his core operating performance dashboard, alongside revenue, margin and customer counts. What is the success rate of resolving customer issues on the first in-bound call? What is the average response time to incoming emails? How long is the average phone customer put on hold? The average call hold time for U.S. businesses in 9.5 minutes. Ouch. Many other interesting stats can be found at the Get Satisfaction blog.

Sign #6: More focused on measures of customer quality versus customer quantity

Question: “How do you measure customer engagement?”

Some companies focus more on pumping up top-line stats as opposed to solidifying the experience for their core existing customers. It’s very tempting for the CEO to focus his attention on user growth metrics. It feels good to talk about the biggest numbers possible.

Customer-focused leaders are inclined to focus their attention on metrics that capture customer quality, and that ultimately drive more enduring value for the business. They know that it costs six-to-seven times as much to acquire a new customer as it does to keep an existing one.

When I first met with CEO Doug Mack to discuss the One King’s Lane business, I noticed that he was far more focused on the number of transacting customers and repeat transacting customers than he was the aggregate number of email subscribers.

Sign #7: Customer satisfaction drives team pay, starting with the CEO

Question: “How is customer satisfaction factored into your team’s compensation?”

An increasing number of companies are now capturing the net promoter score of their customers as an indication of satisfaction and likelihood to recommend. That’s a good thing.

But it’s rare to see a company that actually makes customer satisfaction measures a core part of how employees get paid. Real estate agents who work for Redfin are paid a bonus for each home purchase or sale that they facilitate. However the dollar amount of this bonus is paid on a sliding scale that goes up or down based upon the customer’s net promoter score. Agents are not paid at all if the customer is unhappy—even if a transaction closes. This compensation structure gives Redfin’s agents more incentive to stay focused on what’s best for the customer. This contrasts with traditional real estate brokerages who pay on a pure commission basis; the more you pay for the home the more your broker gets paid, whether he did a great job or not. Redfin also tracks the aggregate net promoter score of their customers, and this score ranks alongside revenue and profitability as a core factor in annual compensation from the CEO on down.

We should all strive to build hyper-scalable businesses, but not at the expense of ensuring a great experience for the customer. It is exciting to see more CEOs promoting world class customer service as a point of differentiation for their businesses. Those CEOs who back up their claim through their daily practices as leaders will have the best chance of building the next generation of great and enduring companies.

*Disclosure: Greylock Partners is an investor in Pandora, Redfin and One Kings Lane, and James Slavet represents Greylock on the boards of Redfin and One Kings Lane.

Blocks to Customer Focus

2011-05-04T10:21:00.001-04:00

I am a fan of my former associate, author, thought leader and consultant Jim Clemmer, who wrote this:

Despite all the proclamations, catchy advertising slogans, and customer service publicity, service levels have improved only marginally in the last few years. As Harvard Business School professor, Rosabeth Moss Kanter, puts it "Despite the recent media coronation of King Customer, many customers will remain commoners... most businesses today say that they serve customers. In reality, they serve themselves."

The problem is that most organizations only talk about customer service improvement. Many executives don't understand what outstanding customer service really looks like, aren't ready to turn their organization inside out to provide it, are trying to paint happy smiles on their frontline service providers, or are bolting a customer service program on the side of their organization rather than making it a part of their core strategy.

Here's some of the biggest reasons that so few organizations successfully turn their customer service rhetoric into reality:

Little or no segmentation of markets and customer groups. The organization is trying to be everything to everybody. Customers are lumped into one indistinguishable mass and their expectations (if they've been gathered at all) aren't weighted, ranked, and segmented.
Little or no customer data. When it is collected (such as an occasional survey) positive feedback is acknowledged. But negative data is denied (usually by challenging the survey methodology). Budget priorities are set, cost containment initiated, and resources allocated with little, if any, systematic connection to customer priorities and expectations. Improvement activities are focused on what the organization or management considers important.
The organization is managed from the inside out. New products and services are pushed out to the market through sales and marketing. Customers aren't involved as active partners in research and development activities. A senior executive in a leading computer company once said, "If customers don't like our solutions, they have the wrong problems".
Employees are treated as the source of service breakdowns. Training and motivational campaigns (such as recognition programs) aim to "fix the frontline". Management pays little attention to all the research that proves "The 85/15 Rule" -- 85% of service breakdowns originate in organizational systems, processes, or structures.
Internal customer tyranny runs rampant. Departments who are served by other departments use the concept of "internal customer-supplier relationships" to get their own needs met whether or not it improves external customer service.
Blurry line of sight to external customers -- many organizational members (other then those on the front serving lines) have little interaction with external customers and often don't understand (and have little reason to care about) customers' expectations and how their work ultimately helps or hinders meeting those expectations.
One customer group dominates. For example, the focus is on retailers, agents, or distributors with scant attention paid to the ultimate consumer. Little effort is made to understand and balance the needs of both groups while pulling products and services through the distribution or service chain.
Focus is on customer acquisition rather than retention. Investments in sales and marketing to bring in new customers are much higher then efforts to retain or expand business with current customers.
Customers aren't people. Thinking of someone as a customer implies providing service, partnership, or some form of equality. However, when customers become "policyholders", "consumers", "patients", "passengers", "taxpayers", "accounts", or "advertisers", they often become less human.

Help Employees Understand – and Care About – Your Metrics, Scores and Targets

2011-04-21T11:55:00.004-04:00

According to consultant, trainer and author Ron Kaufman, to help your employees understand and care about quantitative measures, consider and then take these five steps:

Step One: Identify and quantify the changes you want to achieve

“We want our employees to be more proactive, efficient and value-adding” is a common statement by leaders worldwide. It is also vague to employees who live in the world of daily tasks and procedures.

Leaders and managers must talk about metrics in language that makes sense to their employees.

“We need your help to find and fix the source of these ten complaints before our next survey” is a clear request to Client Services. “Let’s find a way to shorten the time to process claims by at least 10% while maintaining accuracy” makes sense to the people who work in Finance. “Let’s work with our suppliers to reduce the number of steps required to place our orders” may sound like a good idea to the folks in Procurement.

The good news is that leaders don’t have to figure everything out. As new practice become standard practice, employees will see the possibilities of positive change and will help identify more areas for quantifiable improvement.

Step Two: Design and deliver effective communications

Leaders can achieve effective communication by using these five fundamental components:

1) The Declaration: What is your intended outcome? What indexes are you trying to improve? What is your target for this quarter/year? Why?

2) The Assessment: What is the impact of current practices for your employees, organization and customers?

3) The Promise: What will be the benefit of proposed new practices? What new possibilities will be created for your employees, organization and customers?

4) The Offer: What incentives will be provided (financial reward, social recognition, etc) to these employees demonstrating the new behaviors? (‘None’ is also a valid answer, but this needs to be communicated clearly.)

5) The Request: What exactly do you want your employees to do? What are the conditions of satisfaction? How will you evaluate their performance?

These five components cannot be communicated in a single memo to the entire organization. They must be customized and conveyed to each employee, or to groups of employees in language that reflects the concerns of their functions, roles and departments.

Leaders and managers must genuinely listen to employees and appreciate what they care about – their goals, concerns, preferences. Only then can leaders understand the full impact of their proposed changes, take full responsibility and effectively communicate their vision to others.

Most leaders communicate only “The Request” to their employees. And many never even ask the other questions. In his paper,My Problem with Design, friend and adviser, Chauncey Bell, asks change designers to consider this:

Who do we think we are to mess around with others’ lives? By what kind of audacity do we set ourselves up in that kind of position in the world? If we puncture the pretense of being involved only in the design of artifacts and the arrangement of activities, and we open ourselves to a fuller recognition of the implications of our designs, then we must ask where to stand to be confident in our judgments about what will be better, or right, for those on whose behalf we design.

Step Three: Measure intent first, not outcomes

We’ve all heard stories where an enthusiastic employee goes overboard trying to do something extra for a customer (higher discount, extra attention, etc.) and gets reprimanded by the manager.

This not only demotivates the well-meaning employee, but instils a fear of trying something new in others across the organization.

The manager didn’t do anything ‘wrong’. He was merely focusing on the unintended outcome – probably increased costs of service or decrease in average response times to customers.

When your employees try new things to achieve new outcomes, they will make mistakes. Internalize mistakes into your service improvement process, instead of treating them as anomalies.

Some metrics that work well for measuring intent: Number of unsolicited ideas, Number of unrequested (or unauthorized) actions that generated positive responses from customers/colleagues, Number of constructive complaints by employees about business processes.

The desired outcomes will be achieved when employees who care are provided with effective service education.

Sidebar: You can pontificate till the cows come home about how empowerment is important, but empowerment is useless if your employees don’t care enough to take new actions.

Step Four: Design effective systems and processes for support

Existing business processes and systems may need to be re-engineered to support new initiatives and revitalized employees. New systems may also be needed to support specific improvement initiatives such as: measuring intent, tracking behaviors and outcomes, reinforcing the leadership visions, building transparency into operations across the organization, re-invigorating values, improving reporting structures and SOPs to empower employees, etc.

This redesign is typically ‘easier’ to do when there is high involvement of employees who care. In an uplifting service culture, employees are constantly looking to add and create more value in all areas!

Do these four steps above sound like a lot of work? They are.
But here’s a bonus step that will help:

Step Five: Realize your managers are more important than you.

Managers generally understand frontline employees’ worlds much better than senior leaders. Emotional buy-in and involvement of mid-level managers is absolutely critical to Get Employees to Care. They can make or break your service culture.

1) In Step One – Managers’ input is essential for leaders to translate ‘index improvements’ into specific employee behaviors.

2) In Step Two – The five components of change communication must be reinforced by managers every day.

3) In Step Three – Managers need to appreciate employees’ good intentions and make it really OK for them to make mistakes, and help build a culture of Service Recovery.

4) In Step Four – Process improvement projects need to be driven by managers collaborating cross-functionally to ensure alignment and effectiveness.

When these five steps are taken frequently and constructively in your organization, then your entire team will be stepping up to new levels of service, caring, and results every day.

Three Levels of Customer Focus Performance

2011-03-29T16:54:00.000-04:00

On my website I have for years had an organizational 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?

Would You Do Business With You?

2011-03-23T20:28:00.002-04:00

If more company presidents and their senior managers asked themselves this question, taking the view of their customers, many would answer "probably not." The reason? Customer Service!

Much has been said, done, and written about customer service during the last three decades. Millions of dollars have been spent on programs, training, surveys and systems. However, the results have been disproportionate and often outright disappointing.

In an issue of Fast Company magazine many years ago the cover story declared "Betrayed! The biggest lie in business is 'the customer is in charge'… How could an idea so right go so wrong?" But surely, you may say, every company wants to delight its customers? That may be true, but although bold promises have been made, bad results remain a frequent and astonishing reality. The issue is not that service is poor. The real issue is that the promised and necessary great service is harder to deliver than ever!

Here are some relevant numbers about the stagnant state of Customer Service and the importance of service to success:

The American Customer Satisfaction Index (University of Michigan Business School) stood at 75 in 1995, 73 from 1998 to 2002, and has only slowly recovered to 76 in 2010, with several dips in between.
The Accenture Global Customer Research study revealed that in 2010 two thirds of consumers switched service providers due to customer service. From 2009 to 2010 customer satisfaction declined for each of 11 customer service characteristics.
Also, more than 54% of consumers are not willing to compromise on levels of customer service, product options, product quality and frequency of communications with companies in exchange for lower prices.
According to a report by Bain & Company 80% of companies believe they deliver a superior customer experience. Only 8% of their customers agree.
Only one in three customers who have a problem and contact the organization for help are satisfied with the response they get. Customers who contact an organization for help and are dissatisfied with the response are 30 to 40% less loyal. Only 14% of customers leave for product reasons; 68% leave because of poor treatment by employees.
A study by Michael Hepworth & Associates indicated that the average North American company has 11% of its revenue at risk as a result of customer problems and the way they are handled.
$1 spent on advertising yields less than $5 in incremental revenue, but that same $1 spent on improving customer service can yield over $60 in incremental revenue.

So what are companies doing to resolve this issue? Today too many company leaders spend their time and resources looking for magical technology solutions. Call it “the Great Systems Seduction” if you will. Since we live in an age of "real time" and "1-to-1 marketing," the Customer Relationship Management (CRM) Systems business has been burgeoning. However, a good system does not equal good service. The European Centre for Customer Strategy predicts that future CRM effectiveness will be assessed less through hard measures and more through the stories people tell about a company and the softer and more emotional experience provided. This means companies must give the customer distinctive service experiences so they will become advocates, telling stories to their friends and colleagues and provide a convincing recommendation. Only if your people are 'turned on' will you generate such legends!

The disappointing reality in all of this is that the human element is frequently overlooked at the expense of the systems challenges. Enduring and real customer service success requires a passion for people–both employees and customers.

Author Jim Clemmer observes that "Too many managers treat 'their people' as assets with skin wrapped around them." The flip side, as once expressed by Debra Fields, President of the highly successful Mrs. Fields Cookies, is that "Customer service does not come from a manual or a system. It comes from the heart. When it comes to taking care of the customer, you can never do too much and… there is no wrong way if it comes from the heart!" Much touted case histories of customer service and experience winners such as USAA and Zappos reinforce this.

In other words, we need a balance between managing things from the head, and leading people from the heart. While rational strategy is essential, emotional intelligence accounts for as much as 70% of the personal and organizational success factor.

One financial services company president in Toronto used to say that he was “pathological” about the importance of customer service. He practiced what he preached with his head and his heart and went in four years from a number 10 to 2 market position.

Unfortunately there are too few leaders like that. For many, the distance between head and heart is far greater than the typical 16 inches… and therein lies the root cause of customers' continuing disappointment with the service they receive.

But, if the customer is king, why are so many companies why are so many companies simply not getting it? The reason is there is often misalignment between the people and the systems in place to manage them. The challenge for today's business leaders is to put their people front and center; to pursue short-term results while continuously aligning technology, work processes, and structure around the people to enable them to become customer-focused in all aspects of operation. After all, a sharper customer focus means a sharper competitive edge.

There are two lessons in this:

1) More organizations need to think more frequently and harder about the people factor in customer service, and

2) They must also pay fanatical attention to managing each customer touch-point ('Moment of Truth') to provide winning and endearing customer experience.

This is serious and hard work, and demands passion from leaders. They must be prepared to walk the talk, be patient, pay attention to customer detail, and constantly work on people and customer-focused alignments. Only then, will business leaders truly be able to say "Yes, I want to do business with me."

The seven deadly sins of Voice of the Customer (VOC) research

2011-03-21T15:55:00.004-04:00

From an excerpt from Faster, Cheaper, Better (Hammer and Hershman, 2010) on the "seven (deadly) sins of corporate measurement", with examples of how they have undercut VOC programs by Howard Lax.

Vanity
Picking metrics that are easy to hit and which make managers look good.
Not happy with the percentage of top scores they receive, often companies treat any non-negative rating as a positive indication of loyalty or use scales that make anything short of the most egregious service failure look like success. This may make the dashboard results look better, but the illusion of excellence isn't excellence.

Provincialism
Asking customers questions along organizational lines or using internal jargon that has no meaning to them.
Operational definitions may seem mundane, but they make more sense to readers than expecting them to appreciate nuanced differences between service management vs. service delivery or tellers vs. platform personnel.

Narcissism
Measure from the company's perspective, rather than from the customer's.
Often companies insist that customers were wrong about timing measures. The underlying issue is often different staring points. The firm would track the time to resolve a problem from the point when a service tech contacted the customer or opened a service order. OK, but customers begin marking time when they first call or log the issue (or even from the first moment they experience a problem). Of course, perceived time - even if inaccurate - is ultimately what matters to customers anyway (hence the Disney "magic" of turning wait time into part of the experience).

Laziness
Assuming that the company knows what matters to customers better than customers do.
Example: a major mortgage investment player that insisted on evaluating its performance on those criteria it "knew" should matter most to customers. The company postulated a corporate advantage number that did not reflect what was most important to customers. Not surprisingly, the advantage number had little to do with customer loyalty or satisfaction with the firm.

Pettiness
Taking too narrow a scope of a larger issue.
Asking customers about the geographic footprint of their cell service, for example, scarcely captures their sense of the quality and reliability of the service.

Inanity
Losing sight of the consequences of measurement.
If you measure and highlight the number of rooms housekeeping cleans in an hour or the call center turns in a shift, don't be surprised if the numbers you are tracking improve but the guest or customer experience deteriorates.

Frivolity
Failure to take measurement seriously.
This category is where many concerns arise about mis-measurement and poorly-designed VOC research, including social media and text analysis. The who (sample or population), what (content), when (timing), how (mode of data collection) and why (type of analysis) of measurement need to be clearly understood and driven by business objectives. (Note: "We need to do a survey" is not a business objective.) These aren't simply technical issues for the data wonks; these are the critical parameters that determine the application and utility of the results. In other words, these are the issues that guard against the garbage-in part of the GIGO problem.

Who is not an existential question. Rather, it is the practical issue of the people (or households, or companies, etc.) that are included in the data and the underlying key question: What larger population is the data representative of or projectable to? Is it representative of all customers? Online users only? Those who post comments online only? Customers who came into the store and who made a purchase and paid with a store-branded credit card? Or (gulp), do you have no idea how the who is defined?

Content may seem easy but how you ask what you ask is anything but. Are respondents answering the questions you intended to ask in a consistent, reliable manner? Do you have the right breadth and depth of inquiry? The what

When often is ignored but time of day, week, month or year can have significant impact on the customer experience, as well as the response rate. This becomes particularly important when it comes to trending.

While you might not have that many options with regards to the how of data collection, there is a mode effect (i.e., how you collect the data will affect the data). The mode of data collection also will affect how much you can ask, what you can ask and how you should ask. Issues often bump up against practical concerns about survey real estate and the need to limit the length of the questionnaire.

Ultimately, the why is all about application. How do you plan to analyze and use the data? This is where the research meets the business objectives. In a well-conceptualized engagement, the why is specified up front and determines many of the who, what, when and how issues.

Doom the results

Failure to properly attend to these five measurement parameters will doom the results to the domain of the frivolous, in Hammer and Hershman's terms. In other words, lack of attention to these factors will lead to mismeasurement of VOC and mismanagement of your efforts to improve customer loyalty and the customer experience.

What the C Suite Should Know about Turning Customers into Assets

2011-03-18T14:34:00.000-04:00

Jeanne Bliss,the founder of CustomerBLISS, wrote this blog entry which is oh so pertinent.

Despite a new understanding of the power and reach of customers, customer service continues to be a challenge for companies—even those who consider it their primary mission. Sometimes, the solutions seem confusing, bombarding the C-suite with duct-tape style solutions rather than proactive approaches.

The customer service front line can get caught in the middle of this frenzy. At one highly regarded financial services company, for example, an up-sell/cross-sell program was added to the customer service workflow. The program had an incentive to reduce call time; but followed on the heels of another initiative—one that encouraged agents to build personal relationships. The result? Agents trying to splice the two ideas together would try to build rapport and then, as their alloted time ran out, make rapid-fire offers to up-sell and cross-sell, alienating some of their best customers in the process.

Organic Growth Drives Customer Profitability

Since customer growth drives long-term profitability, it should be considered as important as quarterly sales goals. The customer commitment typically falls apart because easily understood and well-defined quarterly sales goals are more visible and immediately tangible. But these metrics don’t always line up with what’s good for customers.

Take the example of the B2B company that counted only the number of customer accounts, but not the quality. The sales team was led by an ex-fighter pilot who sent the sales force on “speed missions” to get as many customers as possible, as quickly as possible. Did they track the customer value? No, customers had become tote board checkmarks, all with equal importance. That year, there were an excess of new accounts, far beyond goals—but profits declined.

Progressive leaders understand the customer landscape and act on that understanding. Caesars Entertainment Corp, the casino and hotel company, has become a model for how to integrate metrics and increase profitability through customer service. They use a consistent set of “guerrilla metrics”—measurements that propel profitability. These include customer segment growth, successful host contacts (people who serve priority customers), first-year return on investment (by property), and overall priority customer (VIP) growth. They know that all customers are not created equal. They know who their VIP customers are and what they need to do to keep them loyal. Unfortunately, this level of enlightenment remains the exception and not the rule.

Customer Focus Questions

These five questions are for CEOs who want to place the customer front and center on the agenda:

1.How many new customers are you attracting—and what is their value? Track the volume and value of incoming customers as closely as sales figures. Understanding the quality of customers is critically important as the pool of profitable customers shrinks.

2.How many customers are you losing, why are you losing them, and what is their value? In addition to knowing which customers left, you need to know why they left, so you can find ways to retain them. Without this information, your team is running blind.

3.Why are your continuing customers loyal to you? Define customer behaviors that constitute a commitment to your brand. Without this metric, you won’t be aware when these reasons change, veer, or begin to erode. Once you have this information you can take a leadership role in demanding focused actions—even temporary point solutions—and create a strategic and focused customer service environment.

4.What is the profitability of each customer group? Understand customer migration from one profitability group to another so you can set a customer agenda. Concentrate on reducing cost and growing profitable segments. Demand accountability. The role of customers in your success justifies the attention.

5.Are your customers becoming evangelists and advocates? Customers can become key (and unpaid) members of your marketing team. Track referrals; gather information on these high-value customers. Once you understand them, you can meet them on their preferred channels and make it easy for them to increase your profitability.

Managing expectations is oh so critical in customer service

2011-01-31T20:51:00.005-05:00

If you phone somebody and the voice mail message says this person "will call you back as soon as possible", do you know what to expect? How do you feel? Confident and assured that you will be looked after all right? Let me guess now…

Reliability is one of the most important drivers of customer satisfaction and as such an underpinning of customer loyalty. A long, long time ago we found out about this when the so called ServQual model was developed by two profs at Texas A&M University.

Doesn't it feel good when you know exactly where you stand and what will happen next? For me a great example is always Amazon.com. At each and every step of their purchase and fulfillment process they communicate with you. This is a prime example of how to do things right. In Canada we have a competitor to Amazon, called Indigo. They recently informed a friend of mine that her books had been shipped two days after she received them! Ouch… bad Moment of Truth… a real 'coffee stain'. If you try to copy the big boys, you better know that you are doing it right all the time. These service anti dotes make great anecdotes and typically get told to ten other people or more.

When I work with my clients during my Customer Experience Workshop to help them manage the dickens out of each and every Moment of Truth, I always impress on them how much better it is to openly face the music. The moment you know that something will not go as planned or expected by the customer, start communicating. The golden theme here is Managing Expectations. You are much better off letting the customer know early of a deviation than to wait until things have gone wrong and the customer starts phoning. People however are naturally hesitant to do this. They must be coached to understand that facing the music early and proactively in the end is less costly and less painful than the opposite.

I don't know about you, but if more people and organizations thought more consciously about Managing Expectations in managing customer relations, customer service delivery and even social interaction life would be more comforting.
A pipe dream?

What say you? Comments? Ideas?

Eric Fraterman

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

2010-10-13T13:35:00.001-04:00

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

2010-10-13T12:11:00.003-04:00

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

2010-09-09T07:29:00.003-04:00

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

2010-09-02T11:38:00.002-04:00

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?

2010-08-09T09:20:00.004-04:00

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:

If there is significant compensation tied to any metric (including customer feedback), then people will look for ways to manipulate the measurement.
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.
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

2010-08-03T10:49:00.002-04:00

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."