Was It “A Flight Attendant from Hell” or a Customer Who Should Be in Purgatory?

Summary: Are customers always right? A Wall Street Journal article raises the question of whether the customer or the service agent was the disagreeable party.

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An article in the January 7, 2012 edition of the Wall Street Journal provoked a strong reaction among readers, including me. The title, “A Flight Attendant from Hell” was accompanied by a drawing showing a flight attendant with horns. Nothing subtle here. So what prompted this?

The author and novelist, Marisa Acocella Marchetto, was flying back to Rome from New York when her stomach turned into a knot. She acknowledged in her article, “Why did I have that spicy spaghetti dish the night before? More important, why didn’t I have Nexium with me in the first place.” And, she noted, she had had a hiatal hernia.

I can empathize with her to a point. I have an acid stomach that flares up occasionally but severely. When it does, I am in sheer pain. That’s why I am never more than 2 minutes from a Pepcid or equivalent. I keep a cache in my car, in my briefcase, and in my suitcase. I never want to be in Marisa’s position. If I were going on an overseas trip, you bet that I would travel with my prescription medications close at hand.

Ms. Marchetto’s mom and traveling companion called for the soon-to-be-demonized flight attendant, asking for a Nexium. The flight attendant said the only medication they had was aspirin. Now, Nexium is a prescription medication. Who would ever expect to get a prescription drug from a non-medical person operating in an official position?

Ms. Marchetto’s mother asked for a satellite phone so she could call her daughter’s doctor, but the flight attendant, now referred to as Annie Wilkes in “Misery,” said, “I’m calling our doctor,” meaning “the Good Samaritan Hospital… in Phoenix, Arizona.” The ellipsis Ms. Marchetto adds for emphasis indicates that she thinks the physical location of a call center matters. D’oh! Either that or she has a personal disdain for Phoenix.

In fact, the Journal had an article on July 11, 2002 about this very call center, MedAire, noting that the number of diverted flights for medical emergencies had declined. The particular requirements of medical problems in flight led to this entrepreneurial creation of a doctor-staffed call center for airlines. I wonder what Ms. Marchetto would have written had the airlines not established such a medical delivery system. Or does she think every flight should be staffed with a doctor and a complete pharmacy of prescription drugs? Would she be willing to pay the extra costs?

The flight attendant told a pilot from the airline who was dead-heading on the flight that he could not give her a Nexium and then told a nurse who was a passenger and took some vital statistics, “If you give her a Nexium, then you’re responsible if she has a heart attack.”

Ms. Marchetto expressed annoyance at the call center doctor asking basic information — and that they wouldn’t believe her self-diagnosis. The doctor determined from the symptom description that Ms. Marchetto was suffering from a heart attack. We never learn why the misdiagnosis, which apparently it was. Maybe that will come out. But what if it had been a heart attack and Ms Marchetto had been treated based on her requests. Who would she have blamed? Herself? I doubt it.

I fly a lot, and certainly some flight attendants leave a lot to be desired, particularly on US airlines, particularly on international flights. However, I have been on flights with medical emergencies, and the crew has acted in a professional, caring, speedy manner. (In fact, I no longer use my academic title, “Dr.” on flight itineraries to not delay medical care if they searched for a doctor in the flight manifest.)

Perhaps the flight attendant’s manner was improper, but I have a hard time buying the characterization by Ms. Marchetto, given the whiney, self-absorbed nature of the article. Remember how Alec Baldwin portrayed his nemesis flight attendant in the infamous phone-gate episode only to have contrary stories come out.

Ms. Marchetto’s flight was diverted to Shannon, Ireland to get Ms. Marchetto medical attention on the ground. She protested that she was feeling better, and they should continue to Rome. Again, procedures were followed. What if she’d had a recurrence? I suspect the crew enjoyed the trip from Shannon to Rome much more than the first part of the trip.

We live in a litigious society. I don’t like that fact, but it is a fact that we need to deal with. Renters of my Maine house get a House Guide, which includes — up front — information about smoke alarms, CO alarms, fire extinguishers, emergency numbers, hospitals, veterinarians, etc. It is truly well intended, but I also never want to be in the situation where a renter could say, “But we were never told…” My lawyer has taught me well.

Our lease even says tenants will not disable smoke detectors. Why? Common sense isn’t common. I’ve had renters take the batteries out of alarms — why I shudder to ask — and not replace them.

Given the constant fear of litigation, organizations are going to protect themselves, and employees are going to follow the prescribed procedures to protect themselves. Recognize it. Deal with it. And take your own common sense actions to avoid being in a situation where you are at the mercy of what society has done to our economic interactions.

Customers are not always right, and some — think Baldwin — are MTTTW (More Trouble Than They’re Worth). While I am all for good customer service, we in turn need to learn how to be good customers.

Perhaps most astounding is Ms. Marchetto’s belief that the article would elicit sympathy for her position. Apply common sense. Take personal responsibility. If you have a gastric condition, eat properly and keep your meds close by. And don’t try to blame others.

Constant Contact Customer Onboarding Processes

Summary: The most important impressions to a customer are the first impression. One company, Constant Contact, goes beyond the automated messages that lack all sincerity, and really focuses on the onboarding process. This article describes their onboarding process as a critical first step in customer experience management.

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When looking at the whole topic of customer engagement, can there be any more important point in the engagement process than the very first point? Clearly, the initial contacts with a prospective customer and the initial experiences as a customer set the tone for the relationship, for good or ill. Yet, how many companies pay particular focus to the initial customer experience? It seems like common sense, but companies that are in a moderate to high volume business all too often pay little heed to the critical onboarding process for a new customer.

onboardingIt’s not uncommon as a new customer for me to receive nothing more than some automated welcome message. These lack any personal touch and sincerity. And even after I’ve bought the product and put it into use, I typically receive no follow-up except perhaps a “Do you want to buy more?” message. In my first real job after college where I managed Waterbeds East in Brunswick, Maine — no joke — I came up with the novel idea of calling customers the day after we installed their bed to answer any questions about this new sleep system. It seems so obvious in hindsight.

One company that does focus strongly on the client onboarding process is Constant Contact. I can state this personally since I experienced their onboarding process when I relaunched my newsletter, but I had the pleasure of hearing (and moderating) a talk led by Larry Streeter, Vice President of Customer Support for Constant Contact, at a First Wednesday Group meeting.

Constant Contact’s target market is small business — very small businesses. Through a suite of complementary products, they help these businesses stay in contact and market to their customers. The flagship product — and the entry point for cross-sales — is the email newsletter product for which the company is best known. They send millions of emails each month on behalf of their 400,000+ clients.

They have an explicit onboarding process that is co-managed by the Direct Sales and Customer Support departments. Its goal is to get clients to the “wow moment,” which they view as when the client sees recipients of their newsletter clicking on links. The clicks show that the newsletter is creating engagement with the recipient.

The onboarding process starts with having a good engaging website at Constant Contact that draws prospects to a free trial period. Within 24 hours of the start of the trial, the prospect receives a call from a sales associate who helps get them set up and answers any questions. The purpose of the sales team is to create a level of engagement between the customer and Constant Contact that, hopefully, leads to the trial person becoming a paying customer. In fact, the sales associate will not even ask for a credit card number during the initial call.

If the prospect poses questions that are very technical, the prospect will be handed off to tech support. Mind you, at this point the person is still a prospect, not a paying customer. About 10% of tech support calls fall into this pre-sales area. Whether a pre-sales contact or a contact from a paying customer, the goal of tech support is to “leave the customer wanting nothing.” The agents have no talk time goals. The focus is to support the revenue stream by creating highly satisfied customers.

In fact, Constant Contact views customers as being in one of four stages of engagement: At Risk, Vulnerable, Secure, and Advocacy. By default without information to the contrary, they assume a customer is At Risk. An explicit goal of the onboarding process is to move prospects and customers from the At Risk stage into a higher level of engagement.

Tech support is a key player in creating Secure customers and Advocates, especially during the first three months of a subscription when calls to support are most frequent. Support is delivered through internal resources using multiple contact channels, and the support group has a first contact resolution rate of greater than 90%.

I can personally vouch for the nature of the tech support interactions. I did have several questions when I was building my first newsletter, and the techs took considerable time to answer my questions and even made suggestions to enhance the look of my newsletter. I never felt like they were rushing to get off the phone to take the next call in queue. And no, I didn’t tell them I knew Larry, but I did tell them I wanted the tech notes named after me for some bigs I identified for them.

To make sure the positive onboarding process is staying positive, Constant Contact, which has a survey module, conducts both relationship surveys and closed incident surveys.

A challenge that Larry said they are facing is how to engage with long-standing customers. These are customers who have ongoing subscriptions but are not contacting the company with any questions — and may not be using their subscriptions very fully. These are indications of a vulnerable customer.

What if they do lose a customer — and this is a business by whose nature there is some natural churn. The Save Desk folks explicitly ask for feedback about why a customer is leaving, and tech support conducts a lost customer survey. So, in addition to creating positive experiences by design right from the start, Constant Contact is also capturing and applying customer feedback to improve the customer experience.

Onboarding as a critical first step in customer experience management isn’t rocket science. It’s really a common sense approach applied to the entire life cycle of a customer relationship. Places where the company engages the customer are not considered cost centers where costs should be minimized, but rather these engagement points are considered critical to providing an ongoing revenue stream. They are managed for their effectiveness and not just their efficiency.

Customer Experience Design — Do our designs bring out the best or the worst in our customers?

Summary: Good Customer Experience Design requires that we show respect for our customers. Lean Six Sigma systems bring out the best in their employees by applying a sociotechnical systems thinking perspective. When applied to service operations we must remember that customers are part of the production system. Incidents like the encounter between Steven Slater, Jet Blue flight attendant, and the passenger beg the question whether our service systems bring out the best or the worst in our customers.

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The incident with the Steven Slater, the likely soon-to-be-ex Jet Blue flight attendant who blew a gasket and slid to a new life, has brought up the topic of workplace rage, but this time with a twist. Normally, the rage is between an employee and the company or between a customer and the company. The service management literature emphasizes the need to manage the interactions in all three dyads of the Service Management Triangle of company, employee, and customer, along with the critical fourth component of customer-to-customer interactions. Here we see, in dramatic fashion, rage between an employee and a customer. The details certainly aren’t clear yet, but we don’t often see a service employee flip off a customer like that.

While the media will focus on the dramatic, much of the intelligent discussion that flows from this incident will focus on the work design that led a long-term employee to lose his composure — to say the least — but I want to take a different tact. What about the “work design” that led the customer to “lose it?” Don’t we who design service systems have a responsibility to design the systems to bring out the best in our customers — or at least, to not bring out the worst?

“Customer Experience Management” (CEM) is hugely hyped these days, but the emphasis is all wrong in my estimation. It’s putting the cart before the horse. Before we can manage a customer experience, we first must design it. “Customer Experience Design” (CED) should draw primary attention. We can then manage, refine, and fine tune it by capturing feedback from customers. But how much of our CED is done with little consideration of the customer, that is, with an inside-out perspective as opposed to an outside-in perspective?

Let me propose that a good perspective for Customer Experience Design can be found in Lean Six Sigma concepts. Applying Lean Six Sigma systems to service operations is a new rage in the service industry; it’s on every conference docket. Most people think the key objective of lean systems is the elimination of waste, such as inventory buffers or overproduction, which can be achieved by performing the work as close as possible to Just in Time. That’s true, but an equally important lesson from the Toyota Production System (TPS), which is a father of lean systems thinking, is its application of sociotechnical systems thinking.

The sociotechnical school emphasizes that both social and technical factors must be considered in work design. The technical events in a system exist within a social context that affects how employees act. The Toyota Way emphasizes respect for people and developing teamwork. Workers are not just flexible machines who can perform myriad assembly tasks but are also critical contributors to identifying quality problems, correcting them, and designing better production systems. This whole person concept maximizes the productive output of the workforce and a team focus.

Well designed systems reduce muri (overburdening) of employees and mura (inconsistency) in operational flow and output. These results support the reduction of muda (waste). TPS talks about seven types of waste to reduce or eliminate. A key one is the waste of inventories, which are used to buffer against the uncertainties of demand, process times, and quality. The result of a lean system is the need for less inventory.

Now let’s turn to service production systems. Customer interfaces must be designed for efficiency in resource utilization, but we should remember that customers are part of the production system. Their efficiency should matter too. Customers at minimum must provide information to service agents to execute tasks, but customers may also have tangible tasks to perform as part of the service process flow. However, many “advancements” in service delivery design offload work onto the customer and inconvenience the customer all in the name of increasing operational efficiency. But whose efficiency? Certainly not the customer’s.

In services we don’t have inventories of parts to be processed, but rather queues of customers to be processed. Having queues in service operations is viewed as a vital way to increase efficiency by eliminating the waste of having productive resources sitting idle while waiting for customers. But just as inventories are wasteful in manufacturing so are queues wasteful in services — but the waste is encountered by our customers.

As we increase the burdens — muri in TPS lingo — on our customers, is it any wonder that customers get frustrated and angry and take it out on front-line employees? Personally, I like many self-service operations. I prefer to pump my own gas and to select my own groceries. But many times the customer is forced to perform mundane tasks and endure poorly designed systems that show disrespect for the customer to the point of bordering on being inhumane. We treat customers so badly that by the time the customer-employee encounter actually begins, customers are at a fever pitch.

Consider the flying experience. Customers are herded like cattle, searched like criminals, crammed into tight, uncomfortable seats, breathe unhealthy air, and must endure the idiosyncrasies of their neighbors. Customers fight for overhead storage space because a checked bag may get lost or damaged, and the customer will be forced to wait 30 to 60 minutes to claim the bag. I am not excusing loutish behavior by customers. Anyone who travels a lot has encountered inconsiderate, self-centered, brutish morons. But does the systems design ameliorate those effects or amplify them?

Consider mile-deep and mile-wide phone menus that can send you in circles. I basically yelled at a Metropolitan call center agent recently. I was calling about house insurance on a rental home I own in Maine, though I live in Massachusetts. I spent close to a half hour negotiating the multitude of 800 numbers, obtuse phone menus, and frustrating voice recognition systems that simply wasted my time. When I finally got an agent on the phone and said she would connect me to the right queue, I yelled, “Please don’t! Please first tell me the correct number I should be calling!” I then explained to her my issues and apologized for my quick outburst. By the way, every Metropolitan agent I speak with says they know how bad the phone menus are. Why doesn’t management? (Maybe they do and don’t care since it saves them money — at the expense of the customer.)

Last night my wife called Bank of America to cancel a credit card that they sent us unrequested. (Yes, I know that’s against the law, but it happened.) 10 minutes of her time were wasted going through phone menus to be greeted by an agent with, “How may I deliver world class service to you today?” Well, for starters, kill the phone menus. I was thrilled to see that Citi now has a “2” option “to” get connected directly to a service agent.  I may have trouble with the accent, but I’ll take that over time-wasting phone menus.

What other service systems offload work onto you, the customer, in a disrespectful way?

A lean systems design brings out the best in employees. When we apply lean systems thinking to services, we must remember that customers are part of the production system — and part of the team. We must consider all the costs in the system, including those costs incurred by the customer. Further, the sociotechnical analysis would examine the social context of the interaction between employees and customers. I don’t want a customer bill of rights. I want the respect due a valued part — arguably the most valuable part — of the production system.

We should practice Customer Experience Design to bring out the best in our employees and our customers. Does your design do that? Do your systems show respect for your customers? Please tell me if you’ve applied Lean Six Sigma to a service operation treating the customer as part of the system.

Everyone in the Pool! Good for Parties But a Muddied Customer Service Design at United Airlines

Summary: “Everyone in the pool” may make for a good summer party, but it’s a lousy design for customer service organizations. Customer service at companies, such as United Airlines and Comcast, used the pooled approach to answer customer email inquiries. While the approach lends the impression of greater efficiency, this approach leads to more rounds of email exchanges, creating customer dissatisfaction, and wasted effort on the part of the company. The failure to recognize the flaws in the design lies in the performance metrics used to measure the organization.

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In the heat of the summer at a party, someone may yell, “Everyone in the Pool!” This makes for crazy fun, and many customer service organizations practice an analogy of the pooled approach, such as Comcast and United Airlines customer service. When a customer emails an inquiry, the inquiry goes into a queue and the first available support agent will answer it. Fine so far. If the customer responds, not to close the issue but to clarify further, correct a misunderstanding, or requesting a more complete answer, what happens? In the pool approach, that customer follow-up goes into the queue to be responded to by the first available support agent, not the agent who answered the first inquiry.

What’s the result? The second agent doesn’t read the whole email thread, which undoubtedly included a bunch of canned, lengthy template responses. Why won’t the second agent read the thread? Because the agents are measured on the number of emails they handle in a day. Reading the thread would hurt that metric.

What’s the result? The second agent’s email will be ill-informed since he/she doesn’t take the time to understand the full picture. The customer will now be shaking his head because rather than getting clarity, he now needs to educate a second agent on the situation in a third email. Frustration and aggravation ensues. This third email will start getting a bit curt if not rude from the exasperation.

What’s the result? You guessed it. Yet another agent will respond to this third email further muddying the waters.

What’s the result? The customer just gives up or gets so outraged that he writes a letter to the CEO, hoping it gets handed to some intelligent person in the “executive service department” who will work the issue to its conclusion.

You might think I work in customer service organizations. I don’t, though I did work in Digital’s field service organization and I do consult into customer service organizations for customer satisfaction surveys. My knowledge of the pooled service model described above has come from two truly frustrating experiences dealing with Comcast’s customer service and United Airlines customer service. Brief descriptions follow.

United Airlines Customer Service Situation

I bought a ticket on United for a flight to Singapore. The agent informed me of upgrade options on each segment for United’s Economy Plus. I bit — and bought. I got separate email receipts for the ticket and for each upgrade. An hour later I got two more email receipts that turned out to be for upgrades on someone else’s tickets! Clearly, the reservation system (or agent) screwed up and put my credit card number on these upgrade purchases.

I called the reservation line to get an explanation of all this bundle of odd receipts. By questioning me, the agent surmised that these were incorrect charges. Here’s the process I was told to follow. Call your credit card company and challenge the charges. The credit card company would then work with United’s refund department.

Huh? Have you ever encountered a company that couldn’t just issue a refund, but told you to challenge the charges? Why was the work assigned to me to correct their mistake? As a professor of operations management, this goes into my hall of fame of bizarre business processes. I asked for contact information for the refund department so I could contact them, and I was given their email address. I challenged the charges and then forwarded the two incorrect receipts to refund@united.com, including the dispute number given me by Citi.

I was thrown into the pool. The first email I got from refund@united.com declined my refund request! The ticket was bought; no refunds allowed! The agent actually gave me the passenger’s name, which violated that person’s privacy. I responded. The response I got clearly indicated the second agent had not read the thread. I responded. Same thing again. After a week, they say they have honored the first refund request, but I never got any response regarding the second refund request despite repeated requests.  Further, I got another email about my first refund request now saying it would be disallowed!  The disorganization is unfathomable.

In the interim, I wrote to the CEO, Glenn Tilton. As of this writing, it’s one week since my letter arrived at the CEO’s office. If I have to, I’ll contact my Attorney General’s office (though I voted for Scott Brown against Martha Coakley).

Ironically, I was about to switch my primary airline to United since I am now flying to Asia several times a year, which is on United’s route map. Nice re-introduction to the airline!

Addendum, February 19, 2010

It took almost 2 weeks to get a response from a customer relations person. This person told me that I could best be served by one of the “specialists” in the refund department. So, after dealing with incompetent people in the refund department and writing to the CEO to get to someone with a modicum of intelligence — and providing free consulting about their service delivery design — I am shuffled back to the incompetent refund department!

I finally got a communication about the second refund request, but it was via my credit card company. United was challenging my challenge. Essentially, United is accusing me of trying to defraud them, when the problem is entirely a result of a failure in their reservation system. From a customer experience management standpoint, this is the worse interaction I believe I have ever had. From a service recovery standpoint, United has failed on all accounts. I have zero confidence that any future issue will be handled to my satisfaction. They just don’t get it.  United clearly qualifies for the Customer Service Hall of Shame.

Addendum March 9, 2010

I finally got a customer relations who actually read what I wrote. I’ve been told I will get my refund. I even got a call from the refund department apologizing.

Now here’s the ultimate irony. I had to postpone my trip. I asked about the refund for the seat upgrades from the agent. I learned that I never should have been charged for them since I am a Star Alliance Gold member.  So, now… I get to try to get those refunds.

All this for a better seat!

Comcast Customer Service Situation

My wife and I own a Maine oceanfront rental property in the village of Cundy’s Harbor in the quaint coastal town of Harpswell. Thus, we have two Comcast service accounts, one for our primary residence in Massachusetts and the other in Maine. Before Comcast “upgraded” their website in late 2009, I could access both accounts once I logged in. My main page had a drop down box where I could toggle to the second account. That functionality was removed. I had signed up for paperless delivery. So, I am not getting the bills for the Maine house account.

I have used the chat sessions. The analyst just closed out the chat session.

I have called Comcast tech support. I was told there were errors in the website being worked on. Of course, that implies some broken link or coding bug, not a flagrant design and testing error. That explanation would satisfy some people, but not those of us with some knowledge of system design.

I have tried an email inquiry where I went through three frustrating rounds of email exchanges. My last email never was responded to. What choice did I have but to write to Brian Roberts, CEO of Comcast in the hopes that my issue would get worked? I’m still awaiting their answer. As of this writing, it’s over one week since my letter arrived at the CEO’s office. I guess my state’s consumer affairs office is my next stop.

Addendum February 19, 2010

To my pleasant surprise — and in contrast to United — I was called, yes, called,  by a competent person who took responsibility for getting me the information I needed. I wasn’t thrilled with the answer, but I got an answer!

Why would customer service organizations use the pooled service design? It’s simple; the design seems efficient. Having the original service agent handle a customer issue from start to finish could lead to delayed response and could lead to overburdening some agents for a short time while others have lower work load. With a large enough scale of operations, this probably wouldn’t happen. However, it’s a known issue that specialization in queues can lead to under utilization of staff. I will wager that both Comcast and United look at utilization statistics and also the number of inquiries handled per agent per day or week.

What’s the proper set of performance metric? They should look at the total clock time to resolve a unique customer inquiry as well as the number of rounds of exchanges needed. I am certain that the pooled approach leads to more rounds of exchanges. If they did some research, I will wager that they would find that customer dissatisfaction grows with each round of (incompetent) email exchanges. First call resolution (FCR) is the holy grail for tech support organizations since they’ve recognized it leads to both efficiency and effectiveness gains. Why don’t Comcast and United know this?

The above are internal efficiency metrics. How about external customer satisfaction metrics? Yes, I got a request to take a United customer survey — multiple times, and I took it multiple times — but not by Comcast. Were my United’s survey responses, which you might imagine were horrible, connected to the record of my email exchanges by some customer advocate or through some CRM system? Perhaps, but I doubt it. If anyone from United is reading this, please tell me! If anyone from Comcast is reading this, please call me!

What would be a better service deliver model? Of course, the ultimate from a customer viewpoint is a dedicated account manager. Each time you have an issue, you’d be handled by the same person. In a B2B environment with an ongoing relationship from continuous transactions, account managers make eminent sense. But in a B2C environment, it’s not practical since most of the interactions are one time transactions.

However, there’s a middle ground that both Comcast and United should use. When an agent starts to handle an transaction, he/she owns it for life, perhaps even if it’s escalated.  By having the customers’ responses go back to the same agent, the continuity of knowledge will benefit both customer satisfaction and operational efficiency.  In the United situation, I have had multiple agents respond to the same email of mine! Just totally ridiculous and a direct cause of the customer service fiasco that apparently defines United.

The lesson here: Don’t be deluded by the semblance of efficiency that can results from an inadequate set of service performance metrics. Pooled resources lend the impression of high resource utilization. Without the proper set of performance metrics, an organization can really tick off customers AND be inefficient in its resource use.

When Accountants Destroy Customer Loyalty

As a customer service consultant and teacher, it’s always fascinating to experience firsthand the very things we teach and preach, such as the companies that create long-term, loyal customer behavior. Of course, it’s better to experience this on the positive side, but a negative experience can sometimes be equally instructive. I recently had an experience with what Fred Reichheld would call “bad profits” — profits that fatten the bottom line now but destroy long term customer loyalty.

I’ve been delivering my Survey Design Workshops in various cities around the country for almost a decade.  Since I handle my own logistics, once I find a meeting location I like in a city, I stick with it — that is, until the venue drives me away. For a Chicago conference hotel, three times I’ve used the Hilton Indian Lakes Resort in Bloomingdale, Illinois.  It’s a very interesting hotel with nice architectural features, good restaurants, etc. within a half hour of O’Hare that just recently became affiliated with Hilton. I’d been pleased with it. But someone should tell their management there’s a recession hitting us here in late 2008.

Workshops like mine can be the canary in the economic mineshaft. They’re a pretty good leading indicator of companies retrenching. While I normally get a good headcount in my workshops, the Chicago class in October didn’t hit my targets. In fact, I had 2 cancellations in the weeks just prior due to companies putting holds on travel. I still held the class since I hate to disappoint my customers and I had a financial stake as you’ll see.

I had had second thoughts about using Indian Lakes. In the two years since I was last there they had:

  • Raised the meeting room rental price by 28%.
  • Nearly tripled the cost of a projection screen rental. (No joke, they want $95 per day to rent a screen. You can buy the same size projection screen at Staples for $120. I borrowed one from a friend. Let me be fair. The $95 includes use of power cords. Now there’s a value proposition!)
  • Most importantly, doubled the Food and Beverage (F&B) minimum purchase.

Clearly, when times were good in 2006 and 2007, they figured they could raise prices. Hello, Indian Lakes! Times aren’t good anymore!

What shocked me was that, despite my repeated use of the facility, Indian Lakes catering folks weren’t willing to work with me to reduce my financial exposure.

  • Could I apply the unused F&B amount to another event? Yes, as long as I held it before the end of 2008. Big help there! You don’t hold the same class twice in the same city in two months. That showed how much they understood my business.
  • Could I carry a credit forward to next year? No way!
  • Would they move my event into one of the hotel’s hospitality suites to cut meeting room expense? No way! That’s money in the wrong pocket of the same pants.

Were they losing money since they could have rented my space to someone else with a bigger crowd? No, the meeting rooms were mostly empty. They should have been thrilled to have me there.

To be fair, they would let any food I bought in the resort’s restaurants be applied to my F&B minimum. But that appears to be their standard practice. I wound up drinking some expensive scotch and eating some expensive dinners.  But I still would up with almost $300 in “attrition” — that is, unused F&B charges.

I recognize fully they had the legal right to the charges; I did sign a contract. But there’s a world of difference between legal rights and good business practice whose goal is to create long-term, profitable customer relationships. Here’s the explanation I got:

I am sorry we were not able to do more for you but from our side with you signing a contract for $XXX. This is revenue we have reported on receiving for the month of October. We were only able to offer that credit for this year so it would stay in this years (sic) revenues. As a business we have budgets and goals to meet (sic) we need to stick to the dollar amounts that was agreed upon and contracted.

Let me phrase that differently. As a business, they have a short-term profit focus. Promises to the accountants are more important that long-term customer relationships and long-term profitability. Ya just gotta love those accountants and savvy business managers focused on quarterly profit performance!

Would I ever use Indian Lakes again for an event? Given the concern they showed for me as a customer and for the success of my business, of course not! Actually, I have to backtrack a bit. I would use the conference suites the hotel provides — they’re wonderful and the hotel personnel seem most accommodating — but I will never darken the door of the catering office again. Indian Lakes catering called the unused F&B “attrition”, and that is the right word since it led to the attrition of their customer base.

To add insult to injury, I didn’t even get Hilton Points for holding my meeting there — and I am a loyal Hilton customer. Then again, maybe I’m not any longer…

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Two other interesting points…

  1. Two weeks after my event, I got their survey — remember, I do survey consulting for my living — which included a pitch for future events at Indian Lakes! It was the same very poorly designed survey I’d seen in the past (and I had given them gratis feedback on it in the past). The survey did not contain a question that really addressed the area that has destroyed my loyalty to the hotel. It had one general question for satisfaction with Management, but that was it. Just another good example of a survey designed with internal blinders. Management thinks customers can only get upset about the food or the catering service. They don’t measure their own service. Is that ignorance or arrogance?I did not get a survey about my hotel stay from Hilton corporate, which surprised me as I have some knowledge of their surveying practices.
  2. My catering manager — a sales person — could not find time in the 3 days I was on-site conducting my workshop to walk a few feet and say hello. Amazingly, this is the third time this year I’ve had this experience in conference centers. Usually the sales person goes to the customer. In this case the customer traveled 1000 miles to the sales person.

This really makes me appreciate the fine, personalized service I have received at the Network Meeting Center in Santa Clara, Calif., Hilton Garden Inn in Scottsdale, Ariz., and at the Forefront Meeting Center in Waltham, Mass. They get it. And will continue to get my business.

Genuine Customer Appreciation

Customer appreciation is one of those terms that is bandied about so much that it has lost its meaning. Car dealers, furniture stores, banks all hold “customer appreciation days.” (Google the term and see what all pops up.) I’m just waiting for the Internal Revenue Service (or the US Congress) to hold a customer appreciation day!

So many “thank you” statements have become mechanical. Even vending machine flash “Have a nice day” on its screen after you make a purchase. We’ve become numb to these statements of “appreciation.”

As a consultant in customer service and customer feedback management, I’m pretty cynical about these attempts at such marketing hype, so imagine my pleasant surprise when I actually felt appreciated as a customer, not from some major retailer with a fancy promotion or some high tech firm who had hired marketing wizards, but from my local restaurant.

horseshoe-pub-hudsonMy wife and I have been regulars at the Horseshoe Pub & Restaurant in Hudson, Mass. for many years. 80 beers on tap will quench my palate, and in addition to pub grub they have several daily dinner specials that are quite fine. Most important is the atmosphere. It’s a friendly place with a very mixed crowd. The bar will have people in their 20s sitting next to people in their 70s. (As people in our 50s we like walking into a place and not raising the average age of the patronage.)

People from the local high tech firms mix with firefighters from the nearby Massachusetts fire fighting training center. In this regard it has the feel of a British neighborhood pub. Horseshoe’s motto is “Enter as strangers. Leave as friends.” We can honestly say that has happened. We’ve shared tables at the bar area with total strangers — and found new friends.

One Friday night when we were there, the owner, Nick Pizzimento, stopped by our table to tell us about his vacation plans and to discuss Red Sox spring training. (His father, Al, who opened the bar, is a New Yorker and a Yankees fan, but Al had the good grace to let his son see the light and be part of Red Sox Nation. I actually think Al takes some hidden pleasure in making money off of Red Sox fans.) Nick handed us a card for a customer appreciation night that coming Sunday, February 15.

We had dinner plans for a belated Valentines Day dinner, but we stopped by on our way home. We should have cancelled our dinner. While the pub normally closes at 8 on Sundays, this night they had a private party for their favorite customers starting at 7. We were given 2 drink coupons and treated to a buffet dinner, including a carving station with prime rib. It proved to be a wonderful evening because all the patrons had one thing in common: We appreciated being appreciated.

Did the Pizzimentos need to do this? Clearly, the pub lost money that night, forgoing paying customers and the expense of the private party. (True, they did make some money on the drinks they sold after the tickets were gone.) But these folks look at the long run. They know how to create loyal customers by doing what they enjoy — serving customers, who are destined to become friends. What’s their secret sauce? They’re genuine. Your challenge: Get your employees to be genuine in their appreciation of your customers. Of course, that starts at the top with you.

Measuring Service Effectiveness

“How are we doing?” It’s a natural question for an individual or an organization. In some cases the answer is easy because the objective criteria for success are simple, obvious, easy to collect, and easy to analyze. For example, a bricklayer is measured on the number of bricks laid in a day and the quality of the workmanship.

How to measure service organizations is not simple, obvious, or easy to evaluate. In good part this is due to a service organization’s multiple objectives — which often are in conflict. Service organizations need to be:

  • Efficient in their use of resources
  • Effective in the eyes of the customer. (And just to complicate matters, many service organizations have multiple customer constituencies, presenting more opportunities for conflicting effectiveness objectives!)

Why are these service measurements in conflict? Typically, to be more effective means having a buffer of resources to deal with unexpected demand. To make a rational trade-off decision requires good measurement of both service efficiency and effectiveness. Yet, efficiency metrics typically win out. Why? Because efficiency is easy to define and measure with the operational systems we have in place to manage the service process.  For example,

  • Efficiency: Calls per day per service agent. Piece of cake to measure
  • Effectiveness: Quality of the service delivered. Hmmm… how do we even define quality?

The Balanced Scorecard concept drives home this need for internal measures of service efficiency balanced with external measures of service effectiveness to keep the service organization aligned with corporate goals. But what are good service measurements? How do we measure service effectiveness? How do we measure how good we are in the eyes of the customer?

Two broad approaches exist, internal and external service measurement techniques. We’ll address each below with their respective approaches.

Internal Service Measurement Techniques. By “internal” measurement techniques, we mean that we don’t involve the customer directly in the measurement process. Rather, employees or contractors put themselves in the shoes of the customer. Two internal measurement techniques can be applied.

  • Call Monitoring. This technique is used in call centers. Someone listens in on the service interactions and judges the quality of the service delivered along a pre-established score sheet. The monitor might do more than listen in; they may also be “shadow monitoring” by watching the agents computer screens remotely.The advantages of the technique are several fold.  First, it is unobtrusive.  We don’t burden the customer, and the service agents do not know when they are being monitored.  Second, evaluation can be done in real time.  Thus, identified process issues can be addressed and remedied quickly before more customers become dissatisfied.  Third, every service agent is measured against established criteria.The technique also has shortcomings.  First, the monitors are applying their own qualitative assessments of the agents’ words and deeds.  Multiple monitors are needed to ensure fairness.  Second, the monitors must be trained and calibrated to be sure they are all measuring the same way.  Most importantly, the criteria on the score sheet must reflect what is truly of concern to the customer.  Some score sheets have arbitrary requirements that may not be important to customers, such as greeting the customer by name at least three times.  Also, the score sheets typically derive an overall score by applying weights to the different sections.  How were these weights derived?  Typically, they are a managerial judgment, perhaps driven by short-term hot buttons, and not derived statistically.This technique, implemented differently, could be done in service settings other than call centers, though it may be more difficult to be unobtrusive and anonymous.  For example, a field technician monitored during a visit to a customer site has obvious shortcomings.
  • Mystery Shopping. Most of us have heard of this technique since it’s used heavily in consumer industries and search engine ads barrage us to “get paid while you shop or eat.” However, the concept is applicable in most any service environment. (I conducted one of these studies for a technology vendor to see how their warranty processes performed in comparison to chief competitors. It was perhaps my most fun project I have ever done.) With mystery shopping a contracted person pretends to be a customer, and tries to “exercise” the various paths possible in a service interaction. The “shopper” has a score sheet similar in concept to call monitoring score sheet.The primary advantage of this measurement approach lies in the ability to explicitly test service scenarios to see how the agents — and the system as a whole — perform. In other measurement techniques, you take what you get. Also, while a shopper does waste a service agent’s time, no real customers are directly affected.The shortcomings start with the cost. Clearly, this process is labor intensive. It would be prohibitively expensive to generate several “shopping” experiences with each service agent. Thus, this technique is not suitable for quality control monitoring. And just as with the call monitors above, the shoppers need to be trained and calibrated, the score sheet needs rigorous development, and summaries must be legitimate.

External Service Measurement Techniques. In contrast to the internal techniques where we simulate being a customer, with external measurement processes we capture feedback directly from the consumers of the service.

  • Unsolicited Comments. Our first external measurement technique is one that just appears. Complaints or compliments where the customer took the initiative to tell us about their feelings. Few customers will take the time to send feedback (except people like me). So, it behooves an organization to make it easy to deliver comments. Toll-free hot lines and survey forms off the company’s internet home page are ways to promote this free research.The key advantage is cost. The book, A Complaint is a Gift, makes the argument that a complaint is free market research. It’s not free if we create systems to encourage comments, but it’s still very inexpensive for the value received. If someone took the time to complain, it probably has a germ of truth to it. They are telling us where our system failed or supported them.  And some people will expound in great detail (like me).The shortcomings are high. Clearly, these comments represent extreme positions. They are not typical and need to be interpreted as such. Many companies post survey forms on their web sites and believe the results can be generalized to all customers. That is wrong.

The remainder of our external measurement techniques are where we actively solicit feedback from our customers.

  • Personal Interviews. A structured interview is perhaps the simplest way to gather information from customers. These could be done through email exchanges, by phone, or preferably in person. Richer contact media allow us to sense feelings beyond just the words. With phone we get intonation. In person, we get body language.The key advantage of interviews is the richness of detail they provide. We learn not just the type of issue – positive or negative — but also the detail behind it. Thus, we can better develop corrective action plans. If we use a purposeful selection process to identify people for interviewing, then we are capturing feedback not just on the extremes, but covering the spectrum of customer feelings. However, the number of interviews will not likely lead to statistically significant findings. That’s not the goal.Interviews have their challenging requirements. Note the term “structured interview.” For the data to have meaning we must collect it in at least a semi-structured approach. This means developed a set of questions to guide the interview. Good interviewing skills are needed and coordination among multiple interviews. Clearly, this is a labor intensive process, especially for in-person interviews.
  • Focus Groups. Also, known as “small group interviews”, focus groups share most of the strengths and weaknesses of personal interviews. Rather than interviewing each person individually, we interview them as a group over the course of an hour or two.The key advantage focus groups provide is the interaction among the participants, making for even richer detailed feedback than with individual interviews. We really get the “why behind the what” of customer issues. We also have some efficiency since we’re gathering feedback from a dozen or so people at once.The key challenges are logistical. Planning and execution are vital. The customers must be clustered geographically, unless you use an online discussion group to serve as a web-based focus group. The moderator’s ability to facilitate a good discussion is absolutely critical.
  • User Group Feedback. User group meetings provide an opportunity for a wealth of information collection. Gathering feedback at user group meetings through interviews or focus groups is just plain common sense. We have a group of people who have a strong commitment to our products. And they are likely to be very willing to tell you what they feel and what they’d like to see.That strength is also the weakness of the approach. They are current customers and will drive product ideas toward improving their own use of the product rather than product ideas that will appeal to an expanded market. These customers may also now feel ownership for product direction and be disappointed if they don’t see what they proposed. Positioning is critical with user groups.
  • Mass Administered Surveys. I suspect that most of you reading this article expected it to focus on customer surveys.  Surveys are great at telling us how our customer base as a whole feels — if done properly. We gather structured data (hopefully) from a sample of our “population” and can then generalize the results from the sample to the population.The key benefit of the survey technique is that it provides an efficient means of generating a broad overview of how our customers feel, identifying strong and weak points in the service system. Incident surveys (also known as event or transactional survey) can flag customers in need of a service recovery. Surveys are not good at generating the detail behind the feelings. (Hold that question…)To generate meaningful data, surveys have strong requirements. The survey questionnaire must avoid introducing bias, the questions must reflect the true issues of concern to customers, and the resulting data must support the desired analysis. The survey administration has to avoid biasing results and we must get enough responses for statistically significant findings. Finally, the survey data analysis has to be executed correctly to give voice to the message buried in the numbers.

Learn how to develop meaningful surveys through our Survey Workshop series.

We’ve covered a lot of ground here. Your question may well be, “So, which measurement process is best?” The answer is: All of them and none of them.

Every research technique has strengths and every research technique has weaknesses. 

Re-read the above descriptions and you’ll see that some techniques (e.g., focus groups and interviews) are good at generating detail-rich findings while others (e.g., surveys) are good at getting summary findings that represent our customer base as a whole. What’s needed is a portfolio approach. Just as your financial portfolio should have a balance of investment instruments, so too should your service measurement approach.

The nearby chart makes this point. Proper interpretation and use of the findings from a research technique means understanding its place in the research spectrum. Rigorous application of a portfolio of complementary service effectiveness measurement techniques helps ensure we truly understand how our customers view us and how to address those issues. In short, our Balanced Scorecard becomes balanced properly.

measuring-service-effectiveness

Customer Experience Management — By Design

Customer Experience Management (CEM) is one of those business terms bandied about, but what is Customer Experience Management? Search the web and you’ll find “the process of strategically managing a customer’s entire experience with a product or a company” (Customer Experience Management, Schmitt, 2003, p. 17). The root of the term probably lies in the 1999 book, The Experience Economy, by Joseph Pine II and James H. Gilmore. (They also wrote a synopsis of their book for a Harvard Business Review article in 1998.)  The concept — and creation of it. Basically, CEM has become the child of a thousand mothers.

Notice the lack of “service” in the first definition, yet the “experiences” one has with a company are heavily derived from the service the company provides, building on the core product — comprising the so-called product-service bundle. These services could include order & fulfillment, installation, customer usage support, remedial or problem-solving services. Another type of service interaction is a “service recovery experience” that is put into effect when the primary experiences fail in the eyes of the customer.

While customer experiences are the result of all interactions, positive customer experiences don’t “just happen.” The nature of the experiences are the direct outcome of the design of the operation. Thus, they are a managerial responsibility. The elements that a CEM focus brings to the operational design process is twofold:

  • Enhance key value drivers to differentiate the customer experience, and
  • Include a systematic response to address the negative experiences.

I can best explain these points with three experiences of my own that represent The Good, The Bad, and The Ugly of CEM – with apologies to the movie by that name.

The Good. Whenever I travel to Washington DC, I try to share a dinner table with a close college friend. Last spring, we dined at Tuscana West, a fine Italian restaurant in the heart of the city. Of course, the downside of much Italian food is that you frequently wear some of the food. My friend got a bit of red sauce on his dress shirt. Seeing this, I made a motion to him by touching my own shirt to indicate where the stain was.

Before my friend could reach for his napkin, the host appeared seemingly out of nowhere and without a word offered to bring a glass of club soda to help get the sauce out. (And, no, he didn’t charge us for the soda.) The host must have been chatting with folks at a nearby table and saw my motion. I did not see him in my peripheral vision.

Wow! Talk about quick reaction to a customer’s unspoken needs! This is a restaurant, and they had managed well all the positive elements of that product-service bundle: attentive wait staff, good menu selection, nice atmosphere, quick seating, very good food, and so on. But the host also recognizes another common, negative element of a restaurant experience, spilling some food. They were tuned into the possibility and knew exactly how to react. We were highly impressed. Calling this example, The Good, is a gross understatement.

The Bad. I brought my Subaru into the local dealership, Village Subaru, to get the alternator replaced. (Of course, my car’s 60,000 mile warranty had just expired 3,000 miles before.) The dealership has an adequate waiting room around the corner from the welcome desk with WiFi and complimentary coffee — though they no longer have that really good coffee in the individual packets. A number of us were seated there reading and working. (Thank goodness the TV was off.)

At some point in the morning, we all hear one of the service desk agents talk loudly to what appeared to be one of the repair mechanics, who responded even more loudly. At first, I thought this was all in jest, but an escalating exchange ensued. Eventually. the service manager intervened. “You guys don’t have to like each other, but you do have to work together. Knock it off!” We customers in the waiting room all heard every word clear as a bell. We looked at each other grimacing a bit uncomfortably. One person broke the ice, “I sure hope he’s not working on my car!” We all giggled in agreement. End of event. The service manager didn’t come into the waiting room to explain or apologize.

While I do judge a repair shop primarily on the quality of the repair service and its price — and I have some reservations about this shop on those points — other factors do come into play in my assessment. Listening to a fight among employees could never be a positive element in our experience, especially since it serves as an indicator of the management of the operation. The fact that no one came to apologize cast a long pale over the experience. Will I return? The shop is very convenient, but the negative experiences do accumulate.

The Ugly. I recently got a letter from a collections agent at Thrifty Rental Car. I was threatened with collection procedures for not paying an administrative fee to Thrifty that resulted from my not paying a toll outside O’Hare airport while driving a Thrifty rental car. Note that Thrifty had not paid the fine and was not coming after me for that money. They were billing me $25 (which is in the contract) for having to process the letter from the highway authority, which supposedly meant sending them my contact information. I have rented frequently from Thrifty, and in fact I had rented half a dozen times from this very facility in the past year. Thrifty in its marketing copy frequently tells me I’m a valued customer. The tone of the letter puts a lie to the marketing copy. That’s not how a valued customer should be treated.

I don’t dispute any of the facts, but this franchise demonstrates a very narrow view of the “customer experience.” Why didn’t I pay the toll? I hate to use this phrase, but the toll is a form of entrapment by the highway authority. The toll booth plaza has no attended booth! You must have exact change — and the toll is 80 cents! Show me a business traveler with 80 cents in change and I’ll show you a traveler who sets off airport metal detectors.

Are there highway signs to this effect? Perhaps, but I didn’t see them, and if there are, what would I have done? I purposely don’t travel with change. (My “solution” now when I’m driving in Illinois is simple: I never take the toll roads. I’ve learned the back roads. Note to State of Illinois: you’ve lost my toll revenue.) When I returned the car to the rental location, I actually asked an employee what happens under this circumstance. I got a shrug.

You might be thinking that Thrifty is innocent here, and you’d be right. I am responsible for the tolls. But here is an opportunity for Thrifty to think about the customer experience and score big points like the host at the restaurant. As I wrote in my letter to them, they could 1) Put a notice in the cars that the toll plaza is not staffed and that 80 cents change is needed. 2) Provide information at the time of rental return about how to pay the toll after the fact. (They could even print up a slip with the car’s plate number to simplify the process.) Imagine how impressed one would be at that level of forethought. What would it cost? (See answer below.) At minimum, their staff should be able to answer that question.

The negative experience I had with Thrifty was not my first. I had a minute chip out of a windshield in the Phoenix franchise. (I’ve never had a car examined upon return this closely. Yet, at the time of rental I was not offered the standard form to indicate existing damage. I had to ask for it. I wonder how many damages have been paid for twice?) I contacted my insurance company upon return to my office. They acted promptly, but would not pay a small amount of the charge for the lost rental day. Within a week, the franchise sent me a dunning notices threatening collection procedures. I did contact Thrifty headquarters, telling them what a good job their franchise owners were doing in alienating customers. The Thrifty Customer Advocate thanked me for my letter. Apparently, the home office had been trying to get the franchisees to be more sensitive to the customer experience. The O’Hare facility is run out of the home office. I guess when the home office does the alienating, it’s okay.

Thrifty views itself as in the car rental business, not a customer service business. Worst of all, my letter about this latest incident to the manager of the franchise, copied to Thrifty’s customer advocate, went unanswered — except for the cashing of my check.

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All you reading this probably have similar experiences, hopefully including positive ones. But what differentiates the Superb Customer Experience Management from the Ugly Customer Experience Lack-of-Management?

  1. Recognition that customer interactions are customer experiences. Pine & Gilmore argue that we’ve transitioned from a service economy to an experience economy. I agree but disagree. The experience is a function of the products and services companies provide to their customers.  That’s been true since people first engaged in trade.Perhaps what is new is the extent to which competitive advantage is gained through a focus on the customer’s experiences, and our focus as customers on the importance of the experience in our buying choices. Products are increasingly commodities, and when all service is also essentially the same, no experience jumps out. But when one company’s service is exemplary, the positive experience shines. We all are so busy in our professional and personal lives that we value more highly those companies that provide us with good experiences.
  2. Designing the process with the customer in the forefront of consideration. Companies with superior CEM practices design their business processes cognizant of the customer, especially in those customer touchpoints which are concentrated in the service functions. These companies put themselves in the customer’s shoes and consider what creates value from the customer’s standpoint, thus making their company stand out. This value focus reduces the price focus in customers’ decision making calculus.
  3. Recognition that variability is the enemy of effectiveness. I teach operations management (OM) courses, and in OM we typically teach that variability is the enemy of efficiency. Six Sigma and other quality management programs aim to reduce variability in products because processing those units with variability out of the norm cause a huge proportion of operating costs. (This is an application of the 80/20 rule.  80% of costs are caused by 20% of the incidents.)Similarly, variation in the service interactions also leads to a loss of effectiveness in the customer’s eyes. Recently, in a one of those horrible travel experiences that lead to multiple calls to the US Airways call center, I encountered competent and caring agents as well as incompetent and uncaring agents. The variability tainted my experience.  The variability creates uncertainty and a lack of confidence in the provider.Do recognize that part of what makes managing services more challenging than managing products is that the customer introduces variation. Robust service operational designs can handle this introduced variability, centered on capable employees, but the factors under the company’s control should not introduce additional variability.
  4. Instilling the customer experience focus into the culture. A key to creating these robust service operational designs is through company culture. Service people make the difference, and if the culture does not support people enhancing the customer experience, it will not happen. Look at my Thrifty experience. I have little doubt what cultural message top management sends through the hierarchy. A focus on the customer experience is clearly not the ethos of the company. Yet, I have little doubt that all members of the staff at Tuscana West would have done what the host did.
  5. Recognition that good CEM design costs little — and may in fact be free. The Wall Street Journal recently published an article, “Selling the Special Touch,” discussing how various companies with generally poor customer service records are turning to training from four-star hotels to enhance the customer experience. Many of the examples they cite cost little to implement, and I am a believer that small, simple gestures can have an out-of-proportion impact.sweat-peaMy wife and I recently said goodbye to a beloved feline friend whose cancer had spread to her lungs.  Our veterinarian at Lancaster Animal Hospital showed true compassion — that culture thing — and after Sweet Pea had passed, he shook our hands and thanked us. (We wanted to thank him.)  His act was genuine.  A card was included with the urn of her ashes with handwritten notes from our vet and two technicians who had cared for her.  We were truly touched.What did that cost?  What kind of value did it deliver?Now, consider my suggestions above to Thrifty. These may seem costly, given that they don’t relate directly to the car rental process, but in fact they are free! I know I am not the only person with this experience since the copy of the letter from the state of Illinois included 2 other similar citations for Thrifty cars on the same day. The cost of implementing my suggestions is pretty negligible, and it would avoid the cost of processing the violation letters. (The conspirator in me believes this is a profit center for Thrifty. That is, the $25 administrative fee more than covers their costs. So, they want these problems.)  More importantly, they would avoid the loss of future revenue from people like me who will only rent from Thrifty ever again — only — if the price is extremely favorable.  They’ve turned me into a pure price shopper.This is an example of Joseph Juran’s Cost of Quality analysis in action. The Prevention Costs are likely overwhelmed by the External Failure Costs of lost customer goodwill — not to mention bad publicity. Conversely, consider the benefits Tuscana West gained from their extended service.
  6. Sensory agents for when the customer experience needs to be rescued. No process is perfect, and even the best designed process needs updating. Eventually that “special touch” discussed in the Wall Street Journal article becomes commonplace. Superior CEM actively captures customer feedback to identify where business processes need updating and to identify those customers with negative experiences in need of a service recovery. Consider the Subaru example above. A feedback survey might have captured this unfortunate incident and brought to management’s attention the impact of employee behavior upon customer experiences. Without that survey, they’re in the dark. Superior Customer Experience Management requires — and even starts with — Superior Customer Feedback Management.

~ ~ ~

Superb Customer Experience Management is not rocket science. It just takes a logical approach to business process design, applying a variation of the Golden Rule our parents taught us. Do unto customers as we would want done unto us as customers.  Good customer experiences don’t “just happen.” They are the result of thoughtful design and solid execution with feedback mechanisms to improve upon the design. To use Branch Rickey’s wonderful quote, “Luck is the residue of design.”

Capturing the Value of Customer Complaints

Who are your best customers? I’ll argue they’re your lost customers. No, the winter cold hasn’t frozen my brain; I left out a key phrase. Who are your best customers — to help you with business process and product improvement?

Every business loses customers. It’s a fact of business life. And the tendency may be, especially for the small businessperson, to shy away from communicating with customers who have walked away. Yet, consider what a treasure chest of information those lost customers hold. There’s a reason those customers aren’t buying from you. The reason may be benign. For example, they’ve moved or their needs have changed. But the reasons may be due to shortcomings in the way you do business or in the product or service they were buying from you. Wouldn’t you like to know? Perhaps a minor correction would regain the customer.  Surprisingly, a lot of companies act as if they couldn’t care less why customers are defecting.

Let me give you a personal example. Almost two years ago I purchased an espresso maker for my wife for Christmas.  Being tight with a buck, I bought a refurbished unit from Overstock.com. That winter, we did a kitchen renovation so certain less critical items got boxed away, including the espresso maker. After resurfacing, we used it for another month, until the pump failed. Technically, it was out of warranty, but I felt it was reasonable to at least ask for special consideration. I wrote to the customer service manager. No response. I wrote to the Director of Customer Satisfaction directly and through the web site “contact us” feature — they would not give me the name of any senior officer. No response. I tried to fax the German headquarters’ customer service operation. The fax number on the web site didn’t work. I posted the letter. No response. (I should add that Overstock.com did respond with a $20 credit although they had no compunction to do so.)

When my wife asked me last month why I hadn’t just thrown out the now dust-covered espresso maker, I opted for one last shot. A reference librarian friend got me the name and address of the company president. I created a succinct “Customer Facing Audit” pretending my experiences were part of an audit to measure how responsive Krups was to customers. (I explained the real situation in the Epilogue.) I printed it as a professional consultant’s report and sent it Priority Mail.

About two weeks later, I received a call from the customer service manager I first tried to contact. She has offered to fix or replace the machine. More interestingly, she thanked me for the feedback. She could not find my original letter and was surprised at the trouble I had just getting some type of response. I intend to pursue those conversations later. Last week we received the repaired machine.

How many of your customers would go this far to voice a complaint? Not many! (I justify this tenacity in the name of research, which has a germ of truth due to my business practice and academic research.) Research has shown that customers are twice as likely to voice a complaint when provided a toll free number, and, of course, customer are most likely to complain if asked if there’s a problem. Most important, customers who have had a complaint resolved effectively are more loyal than customers who have never had a complaint. That’s the reason for creating service recovery programs.

Look at your own business and ask how easy you make it for customers to complain and what you do with complaint data. In other words, pretend you are a customer and do your own “customer-facing audit.” Your company will fall into one of five distinct levels in complaint handling progression.

  1. No response to complaints
  2. Reactive response to complaints
  3. Systematic response to complaints
  4. Proactive complaint solicitation
  5. Feedback to process or product owners for root cause correction

Note that these are cumulative. As you move through the successive stages the customer receives some attempt at recovery, at first reactively and proactively, the company makes it easier to hear about complaints, and finally the full value of the complaint is leveraged through operational improvement.

It’s seems counter intuitive to want to hear more complaints, but we should! We can get more complaints by letting the customer know how to voice them. Toll free numbers and point-of-contact comment cards can work, but they’re passive. Active solicitation of comments can best be done by contacting customers directly. Surveys after a completed transaction or scheduled meetings work best, depending upon the nature of your business.

The key is to let the customer know that you want their feedback — and that you will act upon it. That last point is key.  If you don’t provide service recovery and fix the underlying problem, the customer will be less likely to voice issues in the future. Also, remember to fix the problem and fix the customer. Included with our fixed espresso maker was a packing slip — no card or note. A small gesture can remedy an upset customer’s attitude.

A business of any size can do this. While there are technology tools, for example, Customer Expressions, that can assist moving to stage 5, the heart of this program is simply executing a well-defined and well-conceived process. Get those complaints rolling in! You may be amazed at what you learn.

Epilogue. A colleague from my days at Digital, Ed Sander, read my article in the Boston Business Journal and provided an additional perspective. How well complaints are handled tells a lot about your management team. Those managers who handle complaints with a positive attitude are likely to be the most successful managers in the long run because they recognize there are always opportunities to improve. Those who balk at addressing complaints typically prove to be more myopic, focusing on internal measures of efficiency and not external measures of effectiveness. Thanks, Ed!

The Color of Feedback

As I write this from my study, my house, which is only 28 years younger than our Nation, is getting a fresh coat of Federalist-period yellow paint. “What does house painting have to do with support services?” you ask. The answer: good service lessons are everywhere — and in more ways than you might think.

Last Friday morning starting at 6:45 am I spent almost two hours with George, my painter, and Ralph, the storeowner of Economy Paint in nearby Leominster, custom creating a paint for my house. The color my wife and I had selected from the paint swatch did not cover the clapboards well because of the quantity and types of pigment in the recipe. In a deliberate and logical way, Ralph added dabs of different pigments to achieve our desired yellow/gold color with the critically important coverage characteristics.

When our experimenting led to opening a third gallon of base, I apologized for wasting two gallons of paint — not being sure on whose bill it was going! Ralph said he had a good field representative from Pratt & Lambert who would be seeing the experiment on his next store visit. While relieved that the store would be reimbursed, this also opened a whole new line of inquiry as the second cup of coffee kicked in.

What made this field rep a “good” rep was that he listened and worked with his customer, the storeowner, to help him please his customer, the painter, and ultimately me. Ralph felt confident the lessons learned from this incident would be heard at Pratt & Lambert through the field rep. Perhaps a new official paint color will be created, one that Ralph can sell with confidence. Since I live in an old house right on Main Street, I may give him a half dozen referrals on the custom color before foliage season traffic ends.

As you read this, what parallels did you find to your own issues in delivering customer satisfaction? Here’s mine. First, notice the cooperation throughout all the value-added chain all targeted at customer satisfaction. Second, this added loop of problem correction was preemptive on the part of my painter. He inspected the work before waiting for me to complain – or perhaps even worse, not complain. Third, while the product and service flowed (pun intended) from paint manufacturer to the end consumer, the information feedback flowed in exactly the opposite direction. More importantly, the feedback loop did not dead end. The feedback should be going to the root cause of the issue.

Hopefully, one aspect does not parallel your own situation. The feedback chain here was not systematic at all stages.  All the players in this chain had good intentions and actively worked to capture information, which is a by-product of every process. But if there is one weak link, then the lessons will not be learned by all. For example, Ralph said that a poor field representative would nod in agreement, but that would be the end of the story.

Capturing customer feedback should not be a casual exercise. Specific events, such as mine, should be examined in detail, but the best organizations actively solicit feedback to maximize their learning opportunities. Ideally, the feedback paths should extend back through the entire length of the product-service supply chain. Support groups should not be capturing feedback solely for the benefit of support!

New tools are being created, such an e-mail survey packages, to simplify this vital organizational practice, but don’t confuse simplicity with casualness. Capturing feedback with automated tools should be approached as methodically as creating a new paint color! Poorly constructed feedback mechanisms may do more harm than good if the information misrepresents customers’ views.

As managers in technical support, we can learn much from our “everyday” experiences — benchmarking should not be limited to competitors — but there is one other lesson here. You’ve no doubt heard that dissatisfied customers relate their experiences far more than very satisfied ones. This article embodies the opposite.  We can all help to make positive feedback a powerful consumer tool.