Customer Service Reader

Just one thing

Excerpts from Just one thing
Eva Kaplan-Leiserson, T + D

Successful businesses have one thing in common: They treat their customers well. Great customer service can make a company stand out from its competitors, attracting new business and making customers loyal. In fact, it can be a competitive advantage in a tough economy. When companies are struggling to survive, it seems as if the lesson is elementary (not to mention ancient): Do everything you can to make your customers happy.

Companies that get it:

• Look at the customer as a partner
• Try to make solutions that work for both parties - taking the long-term view of keeping the customer
• Admit to, apologize for, and bend to fix errors
• Treat the customer as a valued, even most important, part of the business
• Will do almost anything to make the customer happy

Companies that don’t:

• Look at the customer as an adversary
• Find solutions that work best for the company in the short-term
• Don't admit to, apologize for, or work to fix errors
• Berate the customer, making her feel dumb or valueless
• Are full of people who say "I'm just doing my job"

What customer-centric really means

Excerpts from What customer-centric really means: Seven keys insights
David Stauffer, Harvard Management Update

Simply being customer-responsive or customer-focused is not enough. You've got to go beyond. To get everyone - not just the sales, marketing, and customer-service folks - thinking about customers' needs, and to give them the tools to solve customers' problems.

It goes beyond handling customer calls efficiently. It means addressing all customer issues fully and resolving them completely.

Your people have to be given the tools and incentives they need to push past the presented problem and uncover needs. The customer's immediate problem--the product doesn't work, the invoice is wrong--is often just the tip of the iceberg.

But that's what most reps are trained to respond to. They hear a magic word, such as 'broken,' and interrupt the customer in mid-sentence. When reps are trained to listen carefully and ask follow-up questions, they can push past the presented problem to underlying needs. Result: less frequent callbacks and happier customers.

But reps won't take the time to listen if managers discourage the practice.

It's not just ensuring that your support departments regard frontline workers as their internal customers. It's ensuring that everyone adopts an external focus.

Think less in terms of features (horsepower) and more in terms of its advantages (the reasons why the features are important) and benefits (what the features will do for customers).

It involves more than telling your employees how to treat customers right. You've got to give employees the authority and tools to decide the right way to treat customers.

Your front-line people must be able to decide what to do on the spot.

It's not a matter of steering customers through your Web site or store just the way you envisioned. Customer-centrism means letting customers interact with your locations just the way they want.

There are things customers want to do and things that you'd like customers to do. The customer's needs had better be met, because now customers can switch to your competitors more easily than ever.

It's not just giving customers what they want, it's giving them what they will want.

In the past, a company could compete effectively by assessing consumer preferences through focus groups and test marketing and rolling out a new, improved product the next season. That doesn't work in today's hyper-competitive environment. Today, the imperative is to know what customers will want before they know they want it.

It's not organizing the company to serve customers. It's letting customers determine how you organize.

In the new age of almost limitless customer choice, you're in trouble if your customer-contact people have to say, "That's handled by another department. Please hold while I transfer you." If you really care about customers, you have to reorganize your entire company around customers.

Customer-centrism isn't just about winning new customers from recommendations of current customers. It's about having customers say you should raise your prices.

Policy honks

Policy wonks love policy, and with good reason. First sighted around 1387, when it meant civil administration or government, its "chief living sense", as the Oxford English Dictionary puts it, is "a course of action adopted and pursued as advantageous or expedient". It is also, according to the American Heritage Dictionary, a "guiding principle", as in "Honesty is (generally speaking) the best policy", or "The customer is (almost) always right."

Policy honks also love policy, but their reasons are not so good. They quack "policy! policy!" because it's the easiest thing to do. It's an excuse not to think and act. It saves them from exercising judgment. It's a power tool with which to screw customers, show them who's boss. Or it’s because they’re “just following orders”. Some businesses really do design their policies to make things easy for themselves, not their customers. These same companies distrust their employees, and thus give them no freedom to think.

If you work for such a company, here's a good policy: keep your resume current.

Companies that want to stay in business understand that policies are there to protect them from bad customers. And their people are there to protect good customers from the policies. They give their people the power to do what’s right for both the customer and the business, train them on how to use it, and give them guidelines within which they can safely bend the rules.

With the advent of robotics and radio frequency identification (RFID), it won't be long before stores get rid of people altogether. Until then they may do well to abide by this policy: good companies have good people to exercise good judgment.

Satisfaction vs Delight

Excerpts from Reassessing the Foundations of Customer Delight
Adam Finn, University of Alberta in Journal of Service Research

• There is strong evidence of positive effects of customer satisfaction on repeat purchase, retention, loyalty, and profitability.
• However, the 1990s saw some questioning of the value of treating satisfying customers as a business objective. One explanation is that the rating scales that researchers commonly use to measure satisfaction do not translate linearly into desired managerial outcomes, such as repurchase and loyalty.
• Only when satisfaction scores exceed the upper threshold of a customer’s zone of tolerance does a service experience have a lasting impact by creating customer delight.
• What is really important to intentions and future behavior is not satisfaction itself but the emotional response to the experience.
• Although meeting expectations can satisfy, it is the emotional response to a surprise—whether delight or outrage—that has a real impact on customer loyalty.
• Cross-sectional consumer behavior research found that the cluster of consumers reporting the highest levels of surprise and joy were more satisfied than others.
• Customer delight is conceptualized as an emotional response, which results from surprising and positive levels of performance. As such, it could provide an explanation for the observed variation in the intentions and subsequent loyalty of customers reporting the same level of satisfaction.

LEAP to the customer's side

Anyone can be nice to nice customers. There's almost no skill involved in that. What separates the professionals from the amateurs is the ability to manage "difficult" customers.

Customers can be “difficult” (angry, upset, frustrated) for various reasons. Most of the time it’s because of something someone did, or failed to do. Regardless of whether the anger is justified or not, as customer service professionals we can take the opportunity to turn a bad situation into a good one.

There are customers you will dislike because of their attitudes, complaints, and demands. While the experience may be unpleasant at first, these customers are very valuable to us. In clear language — and for free — they help us think about what we can do better. Constant improvement, as well as outstanding service, is at the root of every great organization.

LISTEN

• Listening is the first and most important step in dealing with anger. It calms the customer down and shows your concern.
• Sometimes what customers really want is for someone to hear them out and see their point of view. We can always give them that.
• Hear them out – do not interrupt, talk over, or hurry them.
• Avoid the tendency to think of your rebuttal while the customer is speaking.
• Remain calm. Don't take the complaint personally. If you did nothing wrong, the customer has no reason to be upset at you personally. You just embody the company in the customer's mind.
• Practice “sorting” - isolate the problem by ignoring sarcasm, exaggeration, and personal attacks.
• Give your undivided attention. Customers know when you’re just pretending to listen - they're on to "listening" tricks.
• Ask questions to get the facts.
• Paraphrase what the customer tells you.
• Take notes, and recap your notes. Ask the customer if you missed anything.

EMPATHIZE

• Empathy is the ability to know how another feels, as if you were in their place.
• Empathy does not necessarily mean that you agree with the customer’s feelings or behavior, but that you do understand them.
• Be considerate of the customer’s feelings.
• Be courteous.
• Show interest and willingness to help.
• People can tell if you are trying to understand, or just pretending to understand.
• Empathy begins with self-awareness and self-control, understanding your own emotions and reactions, and managing them appropriately towards a resolution.

APOLOGIZE

• One customer normally has more than one complaint, some valid, some not. Recognize what we could have done better.
• Apologize for our mistakes.
• Do not blame others or make excuses.
• Take ownership of the problem, even if it's not your fault. To the customer, you are the company.
• Thank the customer for bringing the problem to our attention, and for giving us the opportunity to make good on a mistake.
• If the customer is wrong, it does no good to say so. If demands are unreasonable, and you have no acceptable solution, you may need to get your manager involved.

PROBLEM-SOLVE

• Be the customer’s advocate.
• Take charge. Take responsibility and initiative to do whatever you can to solve the problem as quickly as possible.
• Focus on what you can, not cannot do.
• Look for common ground, work towards a solution together. Discuss a range of solutions, including what the customer thinks is a reasonable resolution.
• Propose a solution and get their support.
• Determine what you plan to do, why, how you plan to do it, who else needs to be involved, when this will happen, next steps.
• Follow up. The customer’s principal expectation is that you will do what you say you are going to do.
• Learn. What did we learn from this? How can we prevent it from recurring?

See also:
LEAP away from stress
Anger triggers
Daniel Goleman on Empathy
John Goodman on Complaints

"Variation is evil"

Taking care of a customer is easy. It’s taking care of all customers all of the time that’s tremendously hard. Most companies can't even take care of most of their customers most of the time. And this is why most companies fail to excel at customer service, and thus fail to use it to their competitive advantage.

In Winning, Jack Welch wrote that “variation is evil”. This Six Sigma mantra is as true of service processes, as it is of manufacturing processes.

The customer’s affection for a company can very quickly turn into enmity at the first encounter with inconsistency. Take just two common situations:

• You’re impressed by a salesperson’s knowledge and empathy. You try to buy what she sells, but fall in line for five minutes as a cashier argues with a customer.
• You had a great experience with Store A, at the branch close to your home. The product breaks and you try to get it exchanged at the branch closer to work, where they treat you like a beggar because "the receipt clearly states that you have 14 days to exchange a product, and you’re one week too late".

Very quickly, you swing from appreciation to disdain. And this is how variation kills us.

See also:
Strategic advantage in retail
Michael Porter's What is strategy?

Gallup's Human Sigma

Excerpts from Manage your Human Sigma
John H. Fleming, Curt Coffman, and James K. Harter, in Harvard Business Review

In sales and service organizations value is created when an employee interacts with a customer. To achieve meaningful operational and financial improvements, the employee-customer encounter must be managed with great care.

Quality improvement methodologies such as Six Sigma are extremely useful in manufacturing contexts, but they’re less useful when it comes to the employee-customer encounter, with its volatile human dimensions. To address this problem of fit, Gallup developed a quality improvement approach that we call Human Sigma. Like Six Sigma, Human Sigma focuses on reducing variability and improving performance. But while Six Sigma applies to processes, systems, and output quality, our approach looks at the quality of the employee-customer encounter, weaving together a consistent method for assessing it and a disciplined process for managing and improving it.

As we developed our thinking about Human Sigma, we arrived at several core principles for measuring and managing interactions between customers and employees:

• Emotions inform both sides’ judgments and behavior even more powerfully than rationality does.
• The employee-customer encounter must be measured and managed locally, because there are enormous variations in quality at the work-group and individual levels.
• It’s possible to arrive at a single measure of effectiveness for the employee-customer encounter; this measure has a high correlation with financial performance.
• To improve the quality of the employee-customer interaction, organizations must conduct both short-term, transactional interventions (such as coaching) and long-term, transformational ones (such as changing the processes for hiring and promotion).
• The company’s organizational structure often must be adjusted so that the employee-customer encounter can be managed holistically.

Human Sigma grew out of a multiyear, research-based initiative designed to map the terrain of the employee-customer encounter. This work was based on direct experience with hundreds of companies and millions of customers and employees. We then tested and cross-validated our findings in 1,979 business units—involved in financial services, professional services, retail, and sales—within ten companies. The results thus far have been extraordinary. The ten companies, all of which have applied the best-practice principles for managing the employee-customer encounter, together outperformed their five largest peers during 2003 by 26% in gross margins and by 85% in sales growth. We can’t guarantee readers comparable results, but we believe that closely monitoring the health of a firm’s employee-customer relationships will result in dramatic performance improvements.

Power to the People

Excerpt from CRM Magazine interview with Robert Spector

CRM magazine: The introduction of the book* starts with what managers can do to create a Nordstrom-style service. What do you mean by that?

Spector: After you boil it down to its essence -

• It's all about thinking like the customer.
• It's empowering your front-line people to give great customer service.
• It's giving the people on the front line the freedom to make decisions, and management supports them in those decisions. That's the key.

I mean, let's be honest, customer service is simple stuff. Every one of us is an expert on customer service. We all know how we expect to be treated; we know what's good service and bad service. We don't need somebody who works in customer service to explain it to us. So why is it so hard for companies to give great customer service? They don't think like the customer, they don't put themselves in the shoes of the customer. They're thinking more about their own organization, processes, and rule book the way it's always been done. Most companies want to make life easier for themselves as opposed to the customer.

* The Nordstrom Way to Customer Service Excellence

See also: Empowerment prerequisite

No takers for fakers

Notes from Is “service with a smile” enough? Authenticity of positive displays during service encounters
in Organizational Behavior and Human Decision Processes 
Alicia A. Grandey, Glenda M. Fisk, Anna S. Mattila, Karen J. Jansen, Lori A. Sideman, Pennsylvania State University

• Previous research (Pugh 2001, Tsai & Huang, 2002) has shown the value of “service with a smile” on customer attitudes and intentions. This present study shows that the effect of positive displays is weakened if the smiles are inauthentic.
• Even in short, one-time service encounters, the authenticity of the service employee’s smile makes a difference to the customer.
• It is counter-productive for companies to require employees to “Smile!” despite their true feelings:
• (a) It causes service workers to behave inauthentically (Ashforth & Tomiuk, 2000). False smiles occur as negative reactions to the monitoring and enforcement of the display (Rafaeli & Sutton, 1987).
• (b) Focusing on meeting display rules may take cognitive resources away from task performance (Richards & Gross, 1999 and Sideman & Grandey, 2003).
• If display rules are to be enforced, rigorous emotional skills training is needed in techniques, for instance, to regulate mood via cognitive reappraisals (Totterdell & Parkinson, 1999).
• Rather than putting the burden on the employee to create an authentic display, management would benefit from inspiring authentic positive emotions in workers through positive leadership (George, 1991) or increased autonomy (Spector & Jex, 1991).
• “Service with a smile” is not a sufficient requirement for service excellence. Provided tasks are performed well, a truly happy worker, or at least a worker who can appear to be truly happy, provides the most satisfying service encounter.

Berry on Retailing

Notes from The Old Pillars of New Retailing
Leonard L. Berry in Harvard Business Review

The best retailers create value for their customers in five interlocking ways. The key is focusing on the total customer experience. You have to offer customers superior solutions to their needs, capitalize on the power of respectfulness, and connect with them on an emotional level. You also have to set prices fairly, and make it easy for people to find what they need, pay for it, and move on. These pillars sound simple on paper, but they are difficult to implement in the real world.

Pillar 1: Solve Your Customer’s Problems

Customers usually shop for a reason: they have a problem — a need — and the retailer hopes to provide the solution. Focusing on solutions means employing salespeople who know how to help customers find what they need or desire, and having people on staff and at the ready to meet special requirements.

Pillar 2: Treat Customers with Respect

Disrespectful retailing is pervasive. 68% of consumers believe that most of the time, the service people that they deal with don't care much about them or their needs. It’s not just about bored, rude, and unmotivated service workers. Cluttered, poorly organized stores, bad signage, and confusing prices all show lack of respect for customers. The best retailers select, prepare, and manage their people to exhibit competence, courtesy, and energy. They institute policies that emphasize fair treatment of customers. They create a physical space, both inside and outside the store, that is carefully designed to value the customer’s time.

Pillar 3: Connect with Your Customer’s Emotions

Great retailers reach beyond the model of the rational consumer and strive to establish feelings of closeness, affection, and trust.

Pillar 4: Set the Fairest (Not the Lowest) Prices

Prices are about more than the actual dollars involved. If customers suspect that the retailer isn't playing fair, prices can also carry a psychological cost. Excellent retailers seek to minimize or eliminate the psychological costs associated with manipulative pricing. An uncomfortable truth for many retailers is that their "lowest price anywhere" positioning is a crutch for the lack of value-adding innovation.

Pillar 5: Save Your Customer’s Time

Many consumers are poor in that they lack time. Retailers add to the problem by wasting consumers' time, from confusing store layouts to inefficient checkout. 83% of women and 91% of men have ceased shopping at a particular store because of long checkout lines.