Tag Archives: Value

Carpet Ride not so Magical

Posted on 22 November 2010 by | 1 Comment

I first noticed Continental Airline’s eliteAccess service when a gate attendant stepped in front of a [apparently] 2nd class customer, placed a barrier across the entry point, and asked them to step around the carpet to enter General Boarding with the commoners.  Not such a magical impression for the customers.

Since I spend a lot of time thinking about customer service these questions leapt to mind:

  • What value do 1st class customers really derive from the carpet?
  • Which airline started this?
  • And why would the competition follow suit?

I see how the program is good for the carpet manufacturers.  But for Delta and United… I don’t see it.  One of these carriers started the program and the others followed.  Free drinks, roomier seats with extra legroom… I get these.  But did 1st class flyers really flock to the airline with the carpet?

The pivot point is to focus on meaningful (i.e. drives loyalty and profit) ways to differentiate on service that are difficult for competitors to replicate.  By providing a small and meaningless benefit, the airlines are just applying lipstick to an already poor experience.  Continental’s money would have been better invested in customer service training so attendants would stop acting like bouncers.

What did you notice about the airlines’ customer loyalty programs when you traveled this Thanksgiving?

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Posted in Best Practices, Customer Service

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3 Ways to Quantify Customer Service Success

Posted on 16 November 2010 by | 4 Comments

One of the reasons customer service is often relegated to the sidelines is that companies struggle to understand the value of delivering the service itself.  How much better could a company perform if service improved from good to great?

A recent HBR post by Whitney Johnson made me think about how customer service professionals can measure the value they provide.  We aren’t sales people, though we impact revenue.  We aren’t marketers, yet our frequent customer interaction shapes the brand (for better or worse).  Here are 3 ways to define the impact of customer service on company success.

  1. Renewal Rates – When customers continue to purchase a subscription (in the case of SaaS) or maintenance (in more conventional software license models) they are literally voting with their wallets.  An improvement in renewal rates increases the customer lifetime value and translates directly to profitability.
  2. Satisfaction or Loyalty Scores – All companies should measure customer perception of their organization, its products, and services.  Whether the measure is a customer satisfaction (CSAT) or loyalty through a measure like NetPromoter Scores, it is imperative to track changes in customer feedback.  Even the rate of response is something to measure since a decrease in response rate could signify a weakening loyalty to your company and its products.
  3. Referral Rates – When customers stake their reputation on your products/services you have achieved a level of loyalty that helps your sales team in future prospecting.  This premise is so important that companies will go to great lengths to ensure their first customers are true fanatics.

A word of caution… these measures cannot be used in isolation and must be used together.

  • High renewal rates with low satisfaction measures indicate that you have customers firmly in your grasp, but that customers want to escape as soon as possible.
  • High satisfaction rates coupled with low renewal rates may signify that your products/services are becoming less relevant in the marketplace.

The pivot point is that when customers tell us and others about their satisfaction and follow-up by renewing services/products, then we can be confident we are adding value.  Measuring the attributes above is a good start to gaining insight into the size and scope of the value.

What measures have you found useful to use when trying to quantify value?

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Posted in Best Practices, How to Deliver Customer Service, Why Bother with Customer Service

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3 Ways to Keep Lipstick from Ruining Customer Service

Posted on 5 October 2010 by | 1 Comment

Good looking customer service provides no value to customers unless it is backed up by substance. Sadly, either through ignorance, lack of vision, or lack of resources, companies spend a lot of time developing great marketing backed by a chimera of support.  Quite simply, the service doesn’t work.

How can companies ensure that their products survive the hype?

  1. Design an End-to-End System – Does it solve a need?  Can it be installed?  Does it operate as planned?  Can your support team answer customers’ questions?
  2. Create with the End in Mind – Hint: the end is not the sale, it is the follow-on sale. The follow-on sale comes through satisfaction and loyalty and value.
  3. Plan to Be Around – Companies that offer bare minimum support are sending “love ‘em and leave ‘em” signals.

Companies taking a short-term view, those that fail to invest in a total solution, profit through the misfortune of their customers.  When that happens customers are filled with the kind of regret in an old Bobby Bare song: “I’ve never gone to bed with an ugly woman, but I’ve sure woke up with a few.”

The pivot point is that companies must invest quality customer service not just flashy advertising and good looking but ineffective 800 numbers and chat windows. Customers don’t try to do business with companies that disappoint them, yet many find out later that their pig in lipstick is still a pig.  When they find out, expect the walk of shame and some old-fashioned bad mouthin’.

What’s the worst “one night stand” you ever had with a company?

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Posted in Customer Service, Influential Factors - Harmful

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