(Click Here For Printable Version)
          

Customer Service

The Art of Business Relationships

Everyone has customer service nightmare stories. Clark Howard, a nationally known consumer activist, often refers to the "Customer No-Service" department evident in many companies.  The majority of businesses however,  intend to provide good service to their customers.  Most U.S. businesses operate within an ethical framework whereby they don’t intentionally defraud their customers.  This is a basic foundation of American society,  and it is my assertion,  that sans this framework,  widespread prosperity and strong economies are impossible.  That being said, customer service could use some improvement.   First, a little background ...  

Back in the early 80’s,  Jan Carlson wrote a book entitled “Moments of Truth.”  This has been a seminal  book not only in my thinking,  but in many ways proved to be an inspiration for the “quality” movement which followed.  

Carlson,  as a young man,  became the president of SAS airlines,  during a time when the airline was in complete disarray. 

After brainstorming with others within the company, Carlson embraced this idea..    Each and every time a prospect or customer had any contact whatsoever with SAS,  a moment of truth existed. During this moment of truth, the prospect or customer could form an opinion of SAS.  It could either be a poor opinion,  or a good opinion.  Carlson reasoned if they could manage those moments of truth,  they could turn the airline around.  

He began examining the moments of truth.  He reached the conclusion that most of these incidents did not occur at the managerial level, rather it was with lower echelon employees.  From this came the novel (in his day) idea of pushing authority downward,  giving gate agents,  for instance,  the necessary authority to satisfy unhappy customers with upgrades and so forth.  This had a very positive effect on passenger opinions of SAS,  and more importantly,  had a very positive effect on the culture within the SAS organization.

One of his concerns was late departures; he found that SAS often left late,  and that this 'moment of truth' exasperated the business travelers the airline needed so desperately.  His solution was simple but brilliant.  He installed a monitor in his office showing scheduled and actual departure times for all SAS flights.  If a flight left late,  Carlson called up the cockpit and asked the captain to explain why he’d left late.  Amazingly,  once the word got around the airline that the president was calling all late flights,  the percentage of late departures dropped dramatically.  The culture within SAS began to change,  and along with it,  profits and growth returned.

Carlson’s novel idea,  'moments of truth,' is the rationale behind improving customer service.   In modern American business,  holding a product or technical advantage over a competitor is rare,  and even when it exists,  it is usually short lived.   Many businesses have learned that growth and profit comes through the two pronged approach of sales and customer service.

Let’s look at some myths that surround customer service.

1.  Good Intentions result in good customer service.

 Very few people intentionally give poor service.    Some people are more intuitive about customer service than others,  but any organization that trusts exclusively in this intuition is unlikely to offer consistently good customer service.   

You must build the customer service culture and standards in a way that even a non-intuitive person can still provide good service,  simply by following standard procedures.

On the other hand, poorly designed or implemented structures and procedures can make good customer service impossible, despite the best efforts of good employees. That’s part of what Jan Carlson found at SAS.  The gate agents, for instance,  weren’t intentionally making customers angry,  they simply lacked the authority to resolve simple issues. 

2.   Customer service is unrelated to profitability 

The primary goal of any business is profits.  Offering levels of service that are unprofitable simply cannot be sustained.  Here in Atlanta,  I was a customer of a company called WebVan.  WebVan delivered groceries to your home,  and they were delivered at specific times,  by very talented and customer oriented people.  The groceries ordered over the internet from WebVan cost no more than those at a regular supermarket. The service was terrific, and their customers were very satisfied..  but..  Webvan crashed!  Why?  Because  they couldn’t deliver those services at a profit! 

Profit, structure, procedures, and culture has to mesh. I had a good friend, Bob Crammond, who owned a business out in California. I was visiting Bob once while he was engaged in a customer service discussion with a young technician.  Evidently, a repair had been delivered late, and the technician was insisting that the roughly $1000 repair cost be credited.  Bob finally, said, "OK, you've convinced me, here's what we'll do.  I'll credit him $500, and then I'll take an additional $500 out of your paycheck and give it to them."  The young man began stammering, and Bob said, "you just realized that thousand dollars has to come from somebody's pocket didn't you?" 

There may in fact, be times when it's good practice to credit a customer to assuage their dissatisfaction with your performance. But overall, as a policy, the culture has to be clear that the company deserves, and in fact, requires profits. Customer service procedures and policies must reflect that. No profits+ time = no company!

3.   All customers are equal.

This is a dangerous myth,  and  it can put you out of business.  All customers should be treated fairly and respectfully,  and commitments to any customer should be kept.  However,  customers are not all equally valuable to a business.  If  80% of your business comes from 20% of your customers,  you’d better take special care of that 20%,  and usually, you will lack the resources to take equal care of the remaining 80%.

I realize this flies in the face of many of our cherished assumptions, but there can even be times when you should fire a customer. Low profit customers that take inordinate amounts of time and resources, usually demoralizing your employees in the process, should be encouraged to take their business elsewhere. All Customers are NOT equal!

4.  Complaints are a good indicator of customer satisfaction.  

Most customers don’t complain,  they just go away.   Businesses should regularly survey their customer base to ascertain satisfaction levels.  Counting complaints is an unreliable measurement. 

 5.   Customer service is a management only responsibility 

Management must  be intimately involved with  support customer service.  Customer service will fall apart however,  unless the “culture” of customer service is pervasive throughout all levels of the organization. 

 6.      Companies have no control over customer expectations

Many organizations have been able to influence their customers' expectations in a positive way.  Under-promise and Over-deliver has been the philosophy of a number of successful businesses.    

In the early 80’s a survey was done of the customers of computer field service (Back in the 80’s field service on computers was a big business) .  One major company’s customers were rated as very satisfied with the company’s average response time, which was 3 hours.  Another major company’s customers however,  were very dissatisfied with their field service response time.  It averaged – 3 hours!

This was a dilemma for the researchers,  so they investigated  further.  They found that the latter company,  the one with unhappy customers promised 2 hour service,  and averaged 3 hours.   The first company,  promised 4 hour response, and averaged 3.  Same general marketplace,   identical services.   The first company simply managed their customers expectations better. 

While literally no-one makes any money these days on computer field service,  the principles of managed expectations remains valid.  Under promise,  and over deliver! 

Customer Service Standards 

Every business should have published standards of customer service.   Why?  

     1.   Writing the standards forces the business to think of themselves from their customers’ point of view.
2.      Having published standards is often the first step toward building a culture of customer service.
3.      It provides a minimum against which a company can measure their customer service success 

Examples of Minimum Standards 

     1.    All customer inquiries are to be answered within two hours. 
2.      Orders will be shipped on the day they are received. 
3.      All customers with late orders will be called via telephone. 

Examples of Higher Standards

(for top 20 customers)

        1. We will be on a first name basis with the primary decision makers 
2. They will recognize our voices on the phone. 
3. We will call and thank them every month for doing business with us.

Here at EMA, we pride ourselves on customer service, and we have the highest measured customer service approval of anyone in our business. But despite that,   we don't get to rest on our past successes.  The customer service culture requires constant reinforcement and attention.  And at our company, just like yours, it takes a long time for one of our customers to recover from a poor customer service experience.

Eddie Mayfield
edmayfield@emainc.net
EMA DRIVE LINES...  March 2007