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
Visit us at
www.emainc.net