Archives – June, 2009
One of my pet peeves related to customer care is the [untrue] notion that you can hire a customer service department, buy some tools, and whiteboard a process to deliver service. That won’t work better than superficially.
Here are a list of necessary (but not sufficient in and of themselves) tools to deliver service. Alone, none can deliver exceptional service.
- People – Hiring the right people is certainly important. Without them, you won’t be able to execute a plan. But it’s Step 2. (See Step 1 below.)
- Processes – Dell found out the hard way that processes alone won’t work. They set up call centers offshore (more on this topic another day) and were barraged by unhappy customers. Fact is, you may save money (short term) through lower labor costs. But you may lose customers too. Is it an acceptable risk? You decide. But at least be aware of the risk and take steps to mitigate.
- Tools/Technology – Tools adoption is a pet peeve within a pet peeve. Gartner says that 50% of all IT software becomes shelfware. That statement alone suggests that Tools/Technology are not (and cannot be) the holy grail of customer service.
Put them together and you are headed in the right direction. BUT, having these things is not enough to deliver exceptional service, what will?
The first thing, Step 1, to address customer service excellence is a customer service culture. With the right culture, EVERYTHING else is possible. With the wrong culture, NOTHING can possibly succeed.
Several discussions of culture reach a conclusion that goes something like this “culture trumps strategy”. True! Because bad culture beats down and demoralizes the best people, the most refined process, and the flashiest software packages.
So whether you are considering building a new service model (or company for that matter), or if you’re thinking about how to fix or energize an existing customer service organization, the key lies in establishing and maintaining the right culture.
The pivot point for great service is culture. Get culture right; you have a chance. Miss it; you’ll fail, or have one helluva rough road.
June 27, 2009
The Internet is littered with information regarding customer service and care, and the experience. Some is well-researched and written, but little is actually useful. The chief shortcoming is its extremism. If your mantra is “give the customer what they want” you may be in for a short, unprofitable run.
Each interaction is a balancing exercise between extremes. A balance exists between high cost, high quality service and low cost, low quality service. There is little challenge in selling products for free. Similarly, there is little challenge in delivering palliatives to assuage upset customers. The challenge is to create value for both seller/consumer (mutual benefit) to lead to profitability.
Delivering a high quality or world class customer experience at any cost is not the end-game. So I’ll focus on what I call “pivot point” solutions to help professionals address this balance. We’ll examine critical junctures and factors to consider when designing and implementing the ideal solution for your business or organization.
June 14, 2009
In a previous post I remarked about companies that view customer service as a cost.
Even if service is a cost, various studies still show it to be more effective than sales and marketing costs (as much as 5x, 7x, or 10x). That is, it costs 7 times as much to acquire a customer as retain one. So it is interesting to read blog posts that call retention the “new acquisition”.
I’m not arguing with the thought that retaining customers is a good idea. Heck, it’s a great idea. But retention and acquisition are part of the same continuum. You can’t treat them as separate. When a sale is made, it is largely because the prospect/customer believes they will get value from your service. But after the sale the customer has to live with that decision. If they aren’t satisfied, what happens?
Customers Leave – For some products the consumer leaves forever. If the first impression is a bad one, don’t count on getting a second impression.
Buyer’s Remorse – If the experience is bad enough, you may get the product back, along with a demand for a refund. Time and money – not good.
Word-of-Mouth Marketing – Unfortunately, this isn’t the kind of marketing you want for your company or its products. These words will be loud and passionate. And in the internet marketplace, these words carry the extra poison of being public.
Competitors are always looking out for chinks in the armor. If you fail to protect your position through exceptional customer service, your customers begin to think, “what have I got to lose by switching?”
Great companies realize that customer expectations must be met continually. Just like stock performance, no one cares what your past results were. In retaining customers we acquire them again and again. While acquisition is a one-time activity, retention is acquisition done perpetually.
Perpetual acquisition is possible through great service. And great service is much easier with great products. When it comes to product development, there are two types of companies. Those that develop with the intention to sell once (and move on) and those that develop to sell many times and retain for a long time. Simplified, the latter are those that design with customer satisfaction in mind as a goal. Those companies outpace and outlast those that consider satisfaction a necessary evil. For these companies the experience is the opposite!
Customers Stay – With good service customers may even forgive bad products.
Buyer Loyalty – If the experience is bad enough, you may get the product back, along with a demand for a refund. Time and money – not good.
Word-of-Mouth Marketing – Happily this exposure is exactly what you want for your company. Hopefully these words will be loud and passionate. Now you stand to benefit from widely available praise for your commitment to excellence in all you do. Now, instead of worrying about bad first impressions, you’ll benefit from customers recruiting new customers for you!
The pivot point of retention is that it keeps customers you worked hard to acquire and it creates momentum so existing customers sell new customers for you. Sure, retention costs money, but not as much as new sales!
June 9, 2009
One of our cultural short-comings regarding customer care is that it is treated as a cost and not a benefit. (I say cultural because in simpler and smaller markets it’s quite clear to business owners that they need long-term relationships with their customers.) Short-term gains come from increasing revenues and decreasing costs. So this approach means that to realize gains, a company should reduce customer care. And this thinking, while short-sighted, is actually true… to a degree. At the extreme, one could eliminate all customer care and this would boost profitability. But unless you sell a perfect product that meets each of your consumers needs perfectly, your gains will be short-lived. Why? Because we want customers to remain customers for a long time.
Two Cases
1) In one case, products are transactional in nature. (i.e. Customers are likely to buy only one.)
2) In another case, customers start by buying one product, but then increase their consumption (either of more of the same product or they cross product lines and buy something different).
In both cases, companies must provide service (even if it means a hit on short-term profitability) so that the customer experience is good enough to create the possibility of future sales. In the first case this comes through word-of-mouth marketing (which incidentally, isn’t free) and in the second case comes through a level of satisfaction or trust in the first product.
The pivot point is that customer service is not optional. Whether you sell once to many customers, or many times to one customer, service is required. Companies that invest in service to differentiate themselves and create a strategic advantage reap the rewards long after their short-sighted competitors fade from view.
June 4, 2009
