Customer service excellence v 7.10

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CUSTOMER SERVICE EXCELLENCE

DELIVERING CONSISTENTLY SUPEROIOR CUSTOMER SERVICE

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SOMETHING TO THINK ABOUT In a recent study of more than 150 companies with products that range from office furniture to footwear and from auto sales to cement, the conclusion was clear: The combination of increasingly demanding customers and Web-enabled business models is making the old supply chain and purchasing process obsolete—and is creating something far more compelling, challenging and complex. Only companies that can meet the ever-increasing expectations of their customers will be able to successfully compete in the future. The authors of the study then went on to make four key recommendations: YOUR ONLY CHOICE IS TO GIVE CUSTOMERS SMARTER CHOICES. Customer expectations are exploding. Today, almost everyone wants customized products—right away and bundled with convenient services—all at a reasonable price. You don't have to listen very hard to hear what customers expect, even of traditional companies: "Why can't I buy an automobile the same way that I buy a laptop computer?" "Why does it take two months to design and deliver furniture for my new office?" "Why do I have to deal with four suppliers to solve a single business problem?” “This is very nice, but I can get the exact same thing on line for 30% less.” The companies that win in this environment will be the ones with business designs that begin and end with customers. It all comes down to choice: Customers want products and services that meet their unique requirements and they want to purchase those products in a way that is convenient and easy for them and at a reasonable price—not cheap—just fair. CUSTOMERS KNOW AS MUCH AS YOU DO. If the Web has changed the way customers want to shop and buy, it has completely reversed the equation on who has the power in the transaction. It used to be that the seller held all the cards on price, delivery and availability, and would set the terms of the transaction for the buyer. No more. Now customers often know as much or more about your products than you do, and they know what literally everyone else in the world is selling it for and how fast they can deliver it. With nearly universal access to information, buyers now have incredible bargaining power and have also taken away a huge number of tools from the arsenal of the sales force. * Note from John: To me this is good, because it means that being an expert and a trusted advisor is the only way to compete, and that truly adding value and delivering superb customer service are possibly the most important differentiators for successfully competing in this new environment. On the negative side: customers now expect everything to be done in “Internet Time.” In other words, immediately. They are so used to getting instantaneous results from the web, that they expect… no demand… that same level of responsiveness and speed from their vendors. Which leads us to the next two customer service imperatives...

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KNOW WHAT CUSTOMERS WANT: "SUPER SERVICE" AND "PERFECT ORDERS." We define "super service" as a quantum leap in performance in areas deemed crucial by customers. Super service can take many forms, but its two most important features are rapid delivery and reliable delivery. Customers expect what we call "perfect orders." What's a perfect order? It's an order that gets shipped on time and complete: It arrives at a customer's desired location within a precise time window and in excellent, ready-to-use condition. Super service also means having the flexibility to handle last-minute customer changes while continuing to provide the same level of service. FASTER IS BETTER -- THAT IS, IF CUSTOMERS WILL PAY FOR SPEED. Everyone knows that customers want things faster. But what do we mean by "speed"? Speed means instant gratification and high-velocity response. It can mean receiving an urgent document overnight, or settling an insurance claim right at the accident scene. It can also mean bringing new fashions to store shelves within a week of their being designed. It's important to be fast, but it's also important to be fast for the right customers. You have to do enough research to know not only what customers want, but also how profitable different customers are for you. You don't want to provide a beautiful business design that delivers products fast if customers aren't willing to pay for speed. However, once you do find customers who are willing to pay for quick delivery, you can do something really special. QUESTION: HOW HAVE YOUR CUSTOMERS’ DEMANDS AND EXPECTATIONS CHANGED IN THE LAST FEW YEARS?

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10 GROUND RULES FOR GREAT SERVICE YOU ARE THE COMPANY Your organization may have dozens of locations and thousands of employees, but in the eyes of the customer, you’re it. They should see your company as an entire network, funneled directly through you, that is all focused on meeting their needs—not as competing departments preoccupied with their own internal concerns, procedures and politics. In other words, you cannot assign blame to another department or employees—it is WE who screwed up, not THEY. Also, if you do have to turn a customer over to someone else in the organization for assistance, make sure the handoff is to exactly the right person and flawless, and be sure to end the conversation with, “If you have any difficulties at all, please call me back; I am here to help in any way I can.” REMEMBER YOUR OWN EXPERIENCES All of us have had terrible customer service experiences that remain vivid and still piss us off! We have all also enjoyed wonderful service experiences that made us happy and fond of the company that delivered them. The rule is simple: Treat your customers exactly as you would expect to be treated by a person going for the “happy” outcome. This does not mean that you let the customer walk all over you, but it does mean that you walk the extra mile, and then some, to truly delight and amaze the customer with your fairness, professionalism, caring and concern. LET THEM THINK YOU HAVE ALL THE TIME IN THE WORLD You’ve got your hands full. The boss is pushing for you to meet your numbers, your CrackBerry is going crazy and you need to send a proposal by EOB today. Forget about all of it—focus on the customer. A relaxed tone of voice and patient approach will go miles toward keeping customers completely satisfied. Demonstrate through your actions that your customers are important, what they are saying is important, and that you are focused on doing everything you can to try to help them. Even if they don’t actually get the result they wanted, your behavior will often make them feel that they at least got your undivided attention and best effort—which is often all they really wanted. CHERISH THE CUSTOMER WHO COMPLAINS The first words out of your mouth to any customer who complains should always be the same: “Thank you so much for telling me about this.” The reason? Studies show that you lose 90% of the customers who are unhappy but do not complain. And, the exact reverse is true: 90% of customers whose complaints are satisfactorily resolved become more loyal! The lesson: You must make it safe for people to share their concerns with you. Creating an atmosphere of candor and encouraging your customer to be frank with you and to let you know if anything is wrong is essential. ** The Three Main Reasons Customers Don’t Complain** • They think complaining won’t do any good (nothing will be done to help them). • Complaining can be difficult (too much of a hassle to get a manager on the phone). • People feel awkward or pushy (they don’t want to be made to feel like a bad person).

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TAKE FIRST-PERSON RESPONSIBILITY What people want most when they voice a complaint is a human, person-to-person reaction. They want to know that someone actually cares about them and that someone is going to work on their behalf to resolve the situation. Do not say, “We are sorry” or “We’ll look into that.” The appropriate way is to demonstrate real empathy and assure the customer that they can count on YOU to personally champion their cause and work for an acceptable resolution. FIND OUT HOW YOU ARE DOING Check in often with your customer to make sure everything is satisfactory. From simple questions during meetings (“Is there anything that concerns you?” “Do you feel like everything is 100% on track?” “Is there any place that I have not delivered what you expected?”) to regular meetings to discuss your service delivery and even satisfaction surveys, you need to take several paths in how you ask your customer if they have any complaints. MAKE SURE HAPPY ENDINGS REALLY HAPPEN If you are not sure if a customer is 100% satisfied, remove all doubt. Make a follow-up call or visit to ask if she got everything she was looking for, and if there is anything else you can do. If there is, see that it gets done right away. WHAT HAVE YOU DONE FOR ME… TODAY? Unfortunately, customers don’t much care that you have delivered 99% of your products on time, they just care that you missed the deadline this time! Just realize that this goes with the territory and take it in stride when it happens. The goal is not to try to convince the customer how well you‘ve done in the past, but that you are fixing the problem right now. EVERY INTERACTION ENDS WITH A THANK YOU Here are the five “super secrets” to absolutely delighting your customers: SHOW UP ON TIME.

DO WHAT YOU SAY YOU WILL DO.

FINISH WHAT YOU START.

SAY “PLEASE” AND THANK YOU.”

GIVE A LITTLE MORE THAN THEY EXPECT.

I know these seem totally simplistic—but I promise you that very, very few businesses actually do them consistently. (Think about the businesses and business people you deal with… do they do all five of these things every time you do business with them? My guess is a big NO) So, if you are one of the few people/businesses that consistently delivers all five, every time, you will have very happy and loyal customers indeed!

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SUPERIOR CUSTOMER SERVICE DOESN’T JUST HAPPEN Let's get right to the point. Next to your product itself, excellence in customer service is the single most important factor in determining the future success or failure of your company. No matter what your company does, you are in the business of providing customer service. If you take a look at companies that are not doing well or have gone under, one of their common threads is the failure to deliver superior customer service. Look at today's successful companies and you will find that they all understand and deliver what their customers want, and that they are believers in the value of customer service training for management and front-line employees. WHEN IT COMES TO CUSTOMER SERVICE, COMPANIES FALL INTO ONE OF THE FOLLOWING FIVE LEVELS. Level 1: I Don’t Really Care The first type of company may or may not understand the value of customer service, views customer service training as a cost (when in fact it is an investment in the future of the company), and, if they do any training at all, do it sporadically and internally using untrained and unqualified managers. These companies will remain in business only so long as the percentage of first-time customers remains very high. Growth (if any) will be minimal, and without consistent new product introduction and massive advertising dollars spent (not to mention employee turnover), these companies will eventually lose market share and experience decreased profits. Level 2: Why Try Harder? The second type of company views customer service as important and halfheartedly attempts to create the perception that they are service oriented and customer friendly. They try (when it's convenient) to do service and customer awareness training internally (again with unqualified personnel) and are actually putting a small band-aid on a very large wound. Employee programs that focus on customer service are few and not very effective. This company must also largely rely on first-time business, but will experience some repeat customers due to price or location. Customer loyalty is not being established and the value of the long-term customer is not being realized. Growth is minimal with employee turnover high and little opportunity for advancement. This company tries, but just doesn't get it.

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Level 3: Good Enough Is Good Enough The third (and the most common) category of company understands the importance of customer service and knows that rendering quality service will create sales opportunities. In various ways, they advertise they have customer service and view good service as value added for the customer. They think that in providing good service, they are doing something special for the customer. Training and providing a good working environment is more of a priority than the previously described company. A greater emphasis is placed on turning first time business into return business. They are on the right track, but must realize that being good is not good enough anymore. Today's more demanding and educated consumer, coupled with an increasingly competitive marketplace, dictate that they must rise to this challenge and become a provider of superior service. They would prefer to decrease their advertising expenditures, however, they cannot yet rely on positive word-of-mouth advertising. An increased emphasis on the employee, work environment and management involvement has given rise to a respectable level of employee turnover. Sales increases are often up and down and unexplainable, however, year-end profits show a pattern of growth. Market share is respectable, however, dramatic increases in market share and sales can be achieved when a greater emphasis is placed on employee/management programs and training, and when a team environment is established and maintained. Level 4: That Is Really Nice The fourth type of company is defined as one that does a whole lot right and, at the same time, is constantly seeking ways to do better. This company establishes high standards, achievable goals and objectives, and develops useful management-employee communications that have a direct positive effect on the customer. They have a consistent positive pattern of growth and are considered to be a good company for whom to work and with whom to do business. In addition, senior management is involved and a high priority is given to quality training and development for managers and front-line employees. An environment that allows for a feeling of achievement, enjoyment, growth and earned recognition is created and nurtured. Much time and energy is devoted to the employees, and the lip service that is often offered as a replacement for management action is non-existent. Almost everything they do is done with the customer in mind, which is reflected in their profits and market share.

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LEVEL 5: WOW — YOU GUYS ARE AWESOME! The fifth type of company is the easiest to describe. It's the one about which we always hear great things, and year after year experiences positive increases in sales and market share. It has well-thought-out employee benefits and a caring, thoughtful management team with a proactive vision for the future. It also has very low employee turnover and high employee morale, and finds it easy to attract good, qualified employees. This is the successful company of the future that realizes it is only as good as its employees. A firm commitment is made to the employee; management is obsessed with listening to and communicating with employees and brings them “into the loop.” Management strongly believes that if they are going to ask their employees to create a superior and pleasant experience for their customers—one in which the customer will return willingly and bring new business with them—then they, the management team, must create this same superior and pleasant experience for the employee. They understand that employee loyalty, teamwork and customer service are essential for continued growth, and are relentless in their efforts to increase the focus in these areas, all of which have a positive impact on the customer.

Adapted from Myth of Excellence

Level Access Experience Price Product Service

1&2 Consumer Rejects

the Company (Losing market

share)

3 Consumer Accepts

the Company (On par with competition)

4 Consumer Prefers

the Company (Differentiated)

5 Consumer Seeks Out the Company

(Dominant)

Block my way, hassle me, keep me waiting, make it difficult to do business with you.

Make it easy for me to do business with you — fast and efficient.

Make the interaction easy and convenient for me.

Give me a solution; help me out in a bind, be my hero.

Dehumanize me; disrespect me, ignore my needs, treat me poorly.

Respect me; treat me like a human being, listen to my needs.

Care about me and my needs, take care of me, show genuine concern.

Establish intimacy with me by doing something no one else can. Treat me special.

Be inconsistent, unclear, or misleading in your pricing.

Keep the prices honest; don’t jack them up or offer big savings when there are none.

Be fair and consistent in your pricing. I am not necessarily after only the lowest price.

Be my trusted advisor; I will let you make my purchases for me.

Offer me poor quality, services I cannot use and make me wait for them.

Be credible in your product and service offerings.

Be dependable in your selection and in-stock position, so I can rely on you when I am in a bind.

Inspire me with an assortment of great products and services I did not even know about.

Give me a reason to tell everyone I know to… stay away from your company!

Accommodate me; bend over backward sometimes to show me you care.

Educate me when I encounter a product or situation I don’t understand.

Customize the product or service especially for me. Give me a “Wow.”

HOW YOUR CUSTOMER SEES THE FIVE LEVELS

Adapted from David Schreiber

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THE FIVE LEVELS FROM THE CUSTOMER’S POINT OF VIEW Levels 1 & 2 Frankly, at these levels of customer service, you will not have customers for much longer. In today’s market, there are simply too many options for customers to put up with poor service. If you see ANY of the characteristics of these levels within your company, you should make it an absolute top priority to address these service issues immediately. Level 3 Level 3 is the threshold at which customers say, “I accept you. I trust you enough to buy your products and services and to consider coming back.” If they find honest pricing, credible products, accommodating service, easy access, and the respect they believe they deserve, chances are that an opportunity exists for you to establish a comfortable interaction with a consumer, one that could lead to strong ties and some degree of loyalty. In a level 3 relationship, consumers are willing to make their routine purchases from your company, but if anything goes wrong, or your price is just a little too high—they will leave. Level 4 At Level 4, you have the opportunity to create customers that say, “I prefer your company’s products and services, and—all things being equal—I will probably make my purchases with you.” At Level 4, consumers actually prefer one company over another, one brand over another. This happens when the company makes access to its facilities, products or website convenient, shows respect on a personal level, clearly presents consistent prices, offers reliable products, and is able to educate a consumer on how a product or service works. To hit Level 4, you must clearly differentiate yourself from your competition. Because Level 4 companies have distinguished themselves from market competitors, they build a degree of trust sufficient to cause consumers to prefer doing business with them. There is an affinity that causes the consumer to recall the company’s name in a highly positive manner at his moment of need. The consumer may also think of two or three other companies offering similar products and services, but they are rejected as quickly as they’re recalled—in favor of the Level 4 firm.

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Level 5 At Level 5, the consumer says to the company, “I trust you so completely that I will not only seek you out among all other options, but I will also give you the authority to edit my options for me.” This is the ideal state where a consumer will refuse to do business with any other firm than yours. Getting to Level 5 doesn’t just happen. Companies achieve this degree of loyalty and authority only through constant monitoring of consumer interactions at a level of detail that other companies could not comprehend. There is a total dedication to high levels of customer service, and people inside the company will tolerate nothing less. WORKSHOP Based on the levels you circled on the chart, please answer the following questions: WHAT ARE THE TOP THREE THINGS THAT YOU DO WELL FOR YOUR CUSTOMER? WHAT ARE THE TOP THREE AREAS YOU NEED TO IMPROVE?

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WHY IS IT SO IMPORTANT TO GET TO LEVEL 5? It is a proven business fact: The combination of quality products and services (P&S), with very high levels of customer satisfaction, directly drives significantly higher profitability. In other words, it should be spelled Customer $ervice — with a big capital $.

Financial Performance

Very High Quality P&S &

Superior Customer Relationships

Employee Satisfaction

Empowerment High Standards

Long-term Orientation

Enthusiasm, Commitment,

Respect

Training & Development

Fair Compensation

CR=104.12

CR= .404

CR=.334

CR=.277

CR=.275 CR=.249

CR=.280 Coaching

CR=.28 CR=.37 CR=.36 CR=.19 CR=.24

What this chart shows: According to this massive research study, by going from an average of “Somewhat Agree” to “Agree” on the Quality and Customer Relationship scores (in the eyes of the staff) the average company would more than double (104%) its financial performance! As another example: If you improve the average rating on Employee Satisfaction by 10 to 15 percent (again going from “Somewhat Agree” to “Agree”) it will cause a 42% improvement in financial performance, including both profitability and growth.

From: Practice What You Preach by David Maister - Free Press

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HERE IS THE LIST OF THE TOP FACTORS THAT DROVE THESE COMPANIES TO BRING IN FINANCIAL RETURNS THAT WERE OFTEN 20 TIMES LARGER THAN THEIR COMPETITORS: 1. We have an uncompromising determination to achieve excellence in everything we do _____

2. We have a real commitment to high-quality work, and tolerate nothing less _____

3. We have a real commitment to high levels of customer service, and tolerate nothing else _____

4. In this company we set and enforce very high standards for performance _____

5. Management gets the best work out of everybody in the organization _____

6. The quality of the work performed by our group is consistently high _____

7. We keep customers informed on issues affecting them and their projects _____

8. We make our customers feel as though they are very important to us _____

9. Customer satisfaction is a top priority in our company _____

10. We listen extremely well to what the customer has to say _____

11. We are extremely good at building long-term customer relationships _____

12. The people in our company do “whatever it takes” to do a good job for the customer _____

13. We do a good job of quickly resolving customer problems when they occur _____

14. We always place the customer’s interests first, ahead of those of the company _____

15. The level of quality service delivered by my group/department/team is consistently high _____

READ THAT LIST AGAIN… AND AGAIN!!!!!

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CUSTOMER SATISFACTION DRIVES CUSTOMER LOYALTY… AND CUSTOMER LOYALTY DRIVES PROFITABILITY

100%

90

80

70

60

50

40

30

20

Extremely Dissatisfied

Somewhat Dissatisfied

Slightly Dissatisfied

Satisfied

Very Satisfied

Zone of Defection

Zone of Indifference

Zone of Affection

Loya

lty

Customer Satisfaction

Terrorist

Evangelist

Customer Loyalty = Profit and Growth To maximize profit, managers have pursued the Holy Grail of becoming number one or two in their industries for nearly two decades. Recently, however, new measures of several industries suggest that customer loyalty is becoming just as an important determinant of profit. A recent national survey conducted by Harvard researchers demonstrated that a 5% increase in customer loyalty can produce profit increases from 25% to 85%. They determined that quality of market share (in other words; getting the right type of clients to be loyal) deserves as much attention as market share (just getting more customers).

5% = up to 85%

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HOW DO THE BEST COMPANIES DELIVER SUPERIOR CUSTOMER SERVICE? From a study of more than 3,000 companies—narrowed down to the top 101 companies that profit from customer care—here are the top five factors that were the fundamental tactics used to build and manage extraordinary levels of customer satisfaction and loyalty. • These companies listen to, understand, and respond—often in unique and creative ways—to

the evolving needs and constantly shifting expectations of their customers. • They establish a clear vision of what superior service is, communicate that vision to

employees at all levels, and ensure that service quality is personally and positively important to everyone in the organization.

• They establish concrete standards of service quality and regularly measure themselves

against those standards, not uncommonly guarding against the “acceptable error” mindset by establishing as their goal 100% customer satisfaction performance.

• They hire the best people, train them carefully and extensively so they have the knowledge

and skills to achieve the service standards, then empower them to work on behalf of the customers, whether inside or outside the organization.

• They recognize and reward service accomplishments, sometimes individually, sometimes as a

group effort, in particular celebrating the success of employees who go “one step beyond” for their customers.

As part of the same study, a massive survey was undertaken to develop a universal set of measures for what the typical customer expects in excellent customer service: Reliability: The ability to provide what was promised, on time, dependably and accurately—every time. Another key word was: Dependable. You do what you say you will do. Assurance: The knowledge and courtesy of employees, and their ability to convey trust and confidence, their willingness to go the extra mile to help, assist and support the customer. Empathy: The degree of caring and individual attention provided to customers. The attitude of truly enjoying the act of serving the customer. Responsiveness: The ability and willingness to provide prompt and courteous service—and making the delivery of that level of service a top priority throughout the organization. Tangibles: The physical facilities, equipment, and appearance of the personnel. The design, packaging and presentation of the product. The letterhead, marketing materials and business cards of the company. All of this should be focused on the needs and wants of the customer, be exceedingly well designed and completely congruent across all areas of the business.

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UNDERSTANDING THE CUSTOMER-DRIVEN COMPANY From a five-year study of 563 senior executives at 44 of America’s top service providers, here are the seven fundamental imperatives that work together to produce a well-integrated organization that can deliver high quality in both products and service: 1. CREATE A CUSTOMER-FOCUSED VISION. A clear and compelling service vision backed up by a well-defined service strategy is paramount. 2. FLOOD YOUR ORGANIZATION WITH VOC (THE VOICE OF THE CUSTOMER). Create a truly intimate relationship with your customers, solicit robust feedback, and clearly communicate that feedback throughout the entire organization. 3. BECOME AN EXPERT ON DELIVERING SUPERIOR CUSTOMER SERVICE. Go to school on the winners, steal the best ideas, benchmark against the top performers. Make learning about and working on improving customer service a core competency of your company. 4. TURN YOUR EMPLOYEES INTO CUSTOMER SERVICE CHAMPIONS. Most employees want to serve the customer well. Help them with the tools, training, equipment and support they must have to consistently deliver excellent service. 5. DESTROY ANY BARRIER THAT STANDS IN THE WAY OF SUPERIOR SERVICE PERFORMANCE. Look at all systems, policies, procedures, reports and rules. Wipe out anything that creates friction in the effort to always delight the customer. 6. MEASURE, MEASURE, MEASURE. What gets measured gets attention. Create a clear, specific and extremely well-thought out program for systematically collecting and quickly communicating the MOST IMPORTANT customer service delivery measurements to the people that can then act on them. 7. WALK THE TALK. Every level of the organization, starting at the very top, MUST be a living example of your service strategy. From customer visits to handling complaints to everything in between—ALL employees must clearly demonstrate an obsession for consistently delivering superior customer service (as defined by the customer themselves!).

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THE SERVICE 500 FROM ANOTHER STUDY OF 7,000 LEADING COMPANIES, TO DETERMINE THE TOP 500 SERVICE FIRMS IN AMERICA. HERE IS HOW THE CHAMPIONS DO IT: They have the basics down pat ______ They realize that a quality product, delivered for a fair price and produced at an acceptable cost, is the starting point for service success. They grasp that no amount of extras, special touches, or fancy packaging will overcome the limitations of a mediocre product. They build service excellence upon a strong foundation of customer approval of the primary quality of the products and services they deliver. They believe that quality drives profit ______ The top leaders of the excellent service companies start with quality, not cost, in evaluating the effectiveness of their operations. They believe that if quality is there in good measure, the profits will follow. In contrast, the leaders of mediocre service businesses tend to be compulsively and fearfully preoccupied with costs and profits, hoping that somehow quality will take care of itself. They know their customers ______ They are virtually obsessed with understanding the customer interface of the organization and making sure they are in tune with the customer’s needs, attitudes, perceptions, values and buying motivations. They continually conduct research into customer perceptions and opinions, and they make sure their key people clearly understand the implications of that research. They begin and end with the “voice of the customer” in defining and developing products and services that will meet the true needs and desires of their customers. They have a “moments of truth” focus in their operation ______ They think in terms of customer impact rather than in terms of jobs, tasks, departments and procedures. The service champions tend to be outcome oriented rather than tool and task oriented. They do not allow themselves to become so inwardly focused on day-to-day operations that they lose customer focus. They have a “whatever it takes” attitude ______ They focus on solving customer problems and meeting customer needs, not just on doing the day’s work. They are willing to do the unusual when it is warranted. They recover skillfully from the inevitable blunders ______ They maintain a collective sense of responsibility that crosses all organizational boundaries. In the excellent service businesses, each person feels personally responsible for contributing to positive customer outcomes.

Score on a scale of 1 –10

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Service happens inside the company as well as outside ______ Internal departments that may never see customers accept their responsibilities to contribute to the ultimate moments of truth that make the product. They focus on making an important contribution to the total process of serving the customer. They see management as a supporter ______ Managers in the outstanding service companies see themselves as charged with the mission of enabling frontline people to serve the customer effectively. They ask, “What can we in management do to help you get your job done and to serve our customers excellently?” They care about their employees as well as their customers ______ They understand very well that if you take care of your employees, your employees will take care of your customers. If employees are not satisfied, customers will not be satisfied either! They are perpetually unsatisfied with their performance ______ They are constantly looking for ways to improve or refine their service product. They measure and evaluate their quality on an ongoing basis and look for areas that may need attention. WORKSHOP Based on your scores on this audit, what are the areas that your company excels at? What were your low scores, the areas you must focus on for improvement?

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Do you treat different customers differently? Some customers are simply worth more to you than others are. And different customers also need different things from you. The rule is: Treat different customers differently. You should differentiate customers first by their value to you and then by their needs. *** It's simple: You don't want to waste time differentiating low-value customers by their needs, because you don't want to create a high-cost relationship with a low-value customer. Once you know who your highest-value customers are, you can differentiate them according to what they need. Do you keep your customers? You never want to turn a customer loose. You have to be on top of what the customer wants. Customers are diverse and dynamic—their tastes and needs change from day to day and even hour to hour. The more you customize your product or service, the more marketing becomes part of customer service, and the more customer service becomes part of marketing. You erase the distinction between getting a customer, keeping a customer, and growing a customer. If you want to do a good job of acquiring new customers, you can hire a marketing director or an ad agency— no problem. But if you want to do a better job of keeping your customers longer and growing them into bigger customers, there's nobody you can hire to do that; that desire has to permeate your organization and become your way of doing business. Do you organize around customers? Most companies aren't organized for this new way of working and don't have anyone in charge of making it happen. But the firm of the future will be organized around individual customer relationships. You may not be able to make that change overnight, but you can start by identifying your highest-value customers and putting somebody in charge of them. That's an incremental step, but it speaks to three issues: organization, time, and money. As long as no one is responsible, no one is going to have the money or find the time. But if you put someone in charge, you'll make more money, and suddenly you'll also find the time. Some people ask, “Do our customers really want this?” That's really old thinking! The fact is, customers want different things. Some really want this kind of individualized service; others don't. Some will always award contracts strictly according to bids; they don't want a relationship with you. Others will gladly offload functions to you if you perform them competently, and will remain loyal to you forever. You have to think of customers as individuals. Once you start to think that way, you realize that your business is your customer, not your product or service. A great customer relationship gives you long-term business. The simple truth is, any company that can't identify its customers individually is going to be history.

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THE SERVICE EDGE From a study of more than 3,000 companies down to the top 50 that were identified as delivering the best customer service in America. SUCCESSFUL, SERVICE-ORIENTED COMPANIES ARE: • Obsessive about listening to, understanding and responding to swiftly changing customer

wants, needs and expectations; • Creating and communicating a well-defined, customer-inspired service strategy; • Developing and maintaining customer-friendly service delivery systems; and • Hiring, inspiring, training and developing customer-oriented employees. These findings were explained using a Triangle of Service:

People Systems

Service Strategy

CUSTOMERS

It is a relevant model and should raise four critical questions for any organization seeking to create or extend a competitive advantage through the delivery of consistently superior customer service. HOW WELL DO WE UNDERSTAND OUR CUSTOMER AND THEIR EXPECTATIONS? HAVE WE CLEARLY DEFINED OUR SERVICE STRATEGY? ARE OUR SYSTEMS ACCESSIBLE, APPROACHABLE AND ALIGNED TO MAKE IT AS EASY AND DELIGHTFUL AS POSSIBLE TO DO BUSINESS WITH OUR COMPANY—AND GET PROBLEMS RESOLVED QUICKLY IF THEY SHOULD EVER ARISE? ARE OUR PEOPLE SELECTED, TRAINED, EMPOWERED AND REWARDED FOR PROVIDING EXCEPTIONAL SERVICE TO OUR CUSTOMERS?

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THE KEY TO CONSISTENCY IS MEASUREMENT Begin with your service strategy. If it is well designed, you should be able to pull out a number of key service result areas that can be easily quantified and measured. Measure frequently. Once a month is the best, because a lot can go wrong in 90 days and you want to be able to identify and quickly rectify any issues or problems before they get too big to fix, or you make the customer wait too long for resolution. Ask customer-focused questions. Look into both the customer’s experience (What happened to you?) and the customer’s perception (How did you feel about the what happened?). The customer’s specific, personal experience—their interpretation of the situation—and their emotional response to how you dealt with it will enlighten you far more than general questions such as, “Was the product delivered on time?” Collect quantitative and qualitative data. You need numbers, opinions and feelings. Benchmark your findings against your competitors and best-in-class companies. Look anywhere and everywhere to find the very best examples of superb customer service delivery (regardless of industry), and measure your performance directly against these top performers. Make the results visible. Show everyone exactly where you stand and where things need to be improved. Make the results employee friendly, easy to read, easy to understand. Make sure the results are believable. If employees have seen the results collected, know how they are being compiled, and have evidence that it was their customers who gave the information, they are much more likely to act on the results. Make sure the results are used. When customer satisfaction and service delivery performance information is widely shared and discussed, used for problem-solving meetings, high on the agenda and tied directly to what is celebrated and rewarded, people will take it seriously. Simply posting a chart or sending out a newsletter does not demonstrate the level of commitment needed to show the entire organization that delivering consistently superior customer service is a priority and considered and competitive advantage. A FEW QUESTIONS TO KEEP IN MIND: • Is the information being used to scold, punish or embarrass employees? (If it is, it can be

counterproductive in some surprising ways.) • Is the information too late for the employee to do anything about it? • Is the feedback about something that the people receiving it cannot change or affect? • Is the feedback about the right things? Are these actually the most important measures to

ensure service superiority?

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TOP CUSTOMER EXPERIENCE PRACTICES SCALE OF 1-10 CULTURE and LEADERSHIP

_____ We believe that giving customers a consistently superior experience will lead to profitable growth.

_____ We have customer-focused leaders at the top of the company.

_____ We have a strong brand identity that promises customers a unique and satisfying experience.

_____ Our leaders believe in, and strongly support, a “superior customer experience” strategy.

_____ Our leaders are passionate about superior customer service.

_____ Customer-focused employee behaviors are recognized and rewarded.

PEOPLE

_____ The interests of customers are put ahead of the interests of other stakeholder groups.

_____ In the interest of customers, we avoid bureaucratic processes or policies.

_____ Managers know what to do to improve customer loyalty.

_____ Employees are kept informed about business results.

_____ Our leaders provide an engaging customer-focused vision for the employees.

_____ Managers make sure that employees behave in ways that benefit the customer.

BUSINESS PRACTICES

_____ Our business is organized much more around the customer than functions or departments.

_____ Customer data is used to manage the business.

_____ We work to develop products and services that are very appealing to our target customers.

_____ As much attention is paid to customer satisfaction and loyalty as to financial measures.

_____ Our company is highly innovative—both in products and in customer service delivery.

_____ Our service system has been carefully designed to add real value to our target customers.

_____ Feedback is gathered from customers on a continuous basis.

_____ Feedback from customers is gathered using a variety of methods.

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CASE STUDY: MBNA AMERICA (From the former CEO Charles Cawley, before the merger with Bank of America) MBNA’S NINE CRITICAL BELIEFS: First, set an unswerving goal of putting Customer Satisfaction above all other objectives. Second, tell everyone about it. Everyone has to believe that there is an absolute obsession with quality and with Customer satisfaction. Third, measure Customer satisfaction daily—post the results and award everyone when it is achieved. Fourth, hire people who like other people. Hire and retain people who will accept and enthusiastically carry out the things necessary to satisfy the Customer. Fifth, let them know what to expect and what is expected of them. Every successful candidate for employment at MBNA reads and signs a list of precepts that clearly spells out expectations. Sixth, educate people from the time they are hired. The overriding focus of training is to ensure that all employees understand the very existence of MBNA rests on Customer satisfaction. Seventh, create an environment that makes people feel good and supports enthusiastic pursuit of Customer satisfaction. Eighth, treat all employees of MBNA like Customers. Treating the company's people like Customers sets a clear example, and at MBNA we are all each others’ Customers. Finally, think of yourself like a Customer. People who like people find it natural to take the Customer’s point of view. Simply treat every Customer in the way you would hope and expect to be treated and everything will work out fine.

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CASE STUDY: STARBUCKS What is the true scale of Starbucks’ success? If you had invested $10,000 in the Starbucks IPO on NASDAQ in 1992, your investment would be worth approximately $650,000 today. Starbucks has grown substantially faster than the average S&P stock. To get the sense of its profitability, one need only appreciate that since 1992, the value of the S&P rose 200%, the Dow 230% and the NASDAQ 280%, but Starbucks… 5,000%! Today Starbucks opens five new stores a day, 365 days a year—and in great part this success can be contributed directly to their expertise in delivering a consistently superior customer experience. The coffee is good, but not particularly unique in any way—but people are willing to drive miles out of their way and spend significantly more for a cup of Joe—largely for the experience of the purchase and consumption of that drink with the nice people from Starbucks. How have they done this? What makes the experience of shopping at Starbucks so compelling? Here are some ideas and insights into what has made Starbucks one of the most profitable companies in the world. THE FIVE CUSTOMER SERVICE RULES OF STARBUCKS 1. MAKE IT YOUR OWN 2. EVERYTHING MATTERS 3. SURPRISE AND DELIGHT 4. EMBRACE RESISTANCE 5. LEAVE YOUR MARK MAKE IT YOUR OWN No manager can tell employees how to bring out their individuality while functioning effectively in accordance with the business’s priorities; no scripted customer service approach can make this happen. But leaders at Starbucks have provided a structure that allows partners to infuse themselves into their work, so they can inspire customers in legendary ways. The leaders call this the “Five Ways of Being.” • Be welcoming: Treat customers as you would an honored guest in your home.

• Be genuine: Do not put on an act, be yourself.

• Be considerate: Treat customers with kindness and respect.

• Be knowledgeable: Have a deep understanding of your products and processes.

• Be involved: Take an active participation in delivering awesome customer service.

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EVERYTHING MATTERS Starbucks’ management understands that a competitive advantage occurs when everyone in a company appreciates that nothing is trivial and that customers notice everything. As a result, Starbucks leaders have gone to great pains to execute their strategy precisely—right down to the last coffee bean. “The Starbucks sensation is driven not just by the quality of its products but by the entire atmosphere surrounding the purchase of coffee: the openness of its store space… interesting menu boards, the shape of its counter…the cleanliness of the floorboards… What Starbucks recognized long before its imitators was that the art of retailing coffee went way beyond product. The details of the total experience mattered. Every particular—from napkins to coffee bags, storefronts to window seats, annual reports to mail order catalogs, tabletops to thermal carafes—seems to reflect the authentic and organic roots of Starbucks.” QUESTIONS TO ASK: • How do you and your business attend to the details that affect the experience you wish to

create for your customers? • Where can you execute more consistently on details so that customers will feel that your

organization is distinctly superior to any of your competitors? • When has your customer service experience been compromised by missed details, even

when the product delivered was a quality one? • What can you do to put yourself more directly into the experience of the customer? • What quality control safeguards can you employ to assist your team in attending to the most

important details for consistently delivering superior customer service?

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SURPRISE AND DELIGHT Consumers want the predictable and consistent, with an occasional positive twist or added value thrown in. However, there is no cookie-cutter approach to surprising customers. It is not a one size fits all, but instead must be completely customized for each and every customer according to their likes, dislikes, desire, fears and concerns. The key: Genuine and meaningful gestures are all it takes. The most authentic surprises are simply thoughtful and personalized gestures tied in to the company’s regular products and services. EMBRACE RESISTANCE This Starbucks service principle revolves around understanding that complaints can be good. When presented with negative feedback by a customer, recognize that you may have an opportunity to actually strengthen that relationship. By first thanking the customer for their business and recognizing their grievances, you are far more likely to keep that customer as well as to gain useful information on how to improve your business. When employees see that top management actually cares about feedback—positive and negative—they are likely to care as well. When they see that management is personally committed to addressing issues, repairing/solidifying relationships, they will likely be more committed as well. ** However, this principle requires leaders to distinguish between customers who want their concerns to be resolved and those individuals who will never stop complaining or be satisfied. LEAVE YOUR MARK All of us leave some mark on the world. What varies is whether the mark is positive or negative. Do we give back more than we take, or do we take more than we give? This is particularly important in the world of business, where that actions of leaders and managers have a profound effect on individuals and society. Some leaders are content with hitting the firm’s profit goals. They cut corners and everything from employee benefits to capital expenses. Others, however, believe that an important part of their business success is linked to the powerful and positive impact they have on their employees, customers and communities.

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IDEAS TO ACTIONS WORKSHOP Go back and look over all of your answers to all of the various audits you have taken on the current customer service delivery of your company. Look for your high scores and your low scores. Is there a pattern? What ideas can you adapt from the case studies and the research? Give some serious thought to what you have learned in this class, and how it applies to how your organization currently serves your customers. WHAT ARE THE TOP THREE AREAS AT WHICH YOUR ORGANIZATION EXCELS IN CUSTOMER SERVICE? WHAT ARE THE BOTTOM THREE AREAS THAT MUST BE IMPROVED?

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The key to building a culture that is dedicated to delivering consistently superior customer service is to base that culture on a clear and vivid description of the level of service that the employees, especially the front-line employees, are passionately dedicated to truly delivering on a daily basis. Some companies call this a “Customer Service Credo” or a “Customer Service Pledge.” You have seen some examples such as the MBNA “Nine Critical Beliefs” and the “Five Customer Service Rules” of Starbucks. Now it is your turn… Please list what you believe should be the key customer service beliefs, promises, standards — that each and every employee of your organization would passionately commit to delivering—every single day — for ever single customer. This would be a list that was given to all customers and they would be told to expect this sort of service in every interaction with every one of your employees. These core service values will become the foundation for the culture of your company and a set of firmly held standards that every employee will be held accountable to. They will also serve as a strong differentiator from every other competitor and, if consistently executed, will allow your company to dominate the marketplace and create a large group of wildly loyal and supportive customers. Think about this carefully and create your list of core service values. You can do it as bullet points, short sentences, or as small paragraphs. The goal is to make them very clear, straightforward and simple to understand.

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IDEAS TO ACTIONS Looking at your answers from the previous workshop and everything you have learned in the workshop, and then make a list of at least five highly specific and measurable action steps to take the ideas you have generated and turn them into solid plans for improvement. What specifically can you do in your organization to dramatically improve the level of customer service you deliver on a daily basis. It is critical that you be as detailed and clear as possible in creating these action steps.

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UNDERSTANDING THE IMPORTANCE OF CUSTOMER SERVICE TOUCHPOINTS A customer Touchpoint is any time your customer comes directly into contact with your organization’s service delivery system. To give you an idea, here is a short list of some routine customer service touchpoints: • Meeting with one of your salespeople • Calling in to talk to a customer service representative • Visiting your website • Receiving your product or the delivery of a service you sell • Understanding your pricing, bids or contracts • Receiving an invoice • Driving into your parking lot • Walking into your offices • Using the restrooms in your building • Dealing with a front-line person representing your company • Waiting for a call back from your company So as you see, every time a customer comes into contact with a part of your organization—one of your company’s products, services, systems or people— that is a touchpoint. However, not all touchpoints are equally important. There is typically a set of touchpoints that your customers consider absolutely the most important for rating the service levels of your company. These highly critical touchpoints are also called “Moments of Truth” because they represent an opportunity for you to either strengthen or destroy your relationship with your customers. What truly great service providers do is to define sharply the MOST CRITICAL customer service touchpoints (MOT) for their organization (as defined by the customer), and then put into place very specific, detailed and comprehensive systems and processes to ensure unquestionably that the appropriate level of service is flawlessly delivered each and every time. The process has to be: • SPECIFIC • MEASURABLE • REPEATABLE • ABLE TO BE CLEARLY TRAINED AND MANAGED • CONSISTENTLY MEETING OR EXCEEDING THE ACTUAL SATED NEEDS OF THE CUSTOMER Remember: the goal is to deliver Consistently Superior Customer Service—as defined BY the customer!

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EXAMPLE: A LIST OF TOUCHPOINTS FOR THE AVERAGE RESTAURANT… OUTSIDE ARRIVING First sight Parking availability Cleanliness of lot Condition of lot Entrance to lot LOBBY Hostess appearance Hostess greeting Lobby happening Cleanliness of lobby Bar Entering bar Server appearance Server greeting Cleanliness of bar Happening at bar Drink order Drink delivery Drink appearance Drink taste Check-back Presentation of bill Dining Room Escort to dining room Server appearance Cleanliness of dining room Being seated Server greeting Respond to any special needs Embracing diversity Menu presentation Presentation of specials Drink order Drink delivery Attentiveness to children Drink appearance Drink taste Food order Special request

Food delivery time Food appearance Correctness of order Food taste Special requests Needed condiments Dining room lighting Request to use restroom Cleanliness of restroom Restroom supplies Staff appearance Customer appearance Manage table visit Server table attentiveness Noise level in dining room Request for doggie bag Dessert specials Dessert order Dessert presentation Appearance of dessert Correctness of order Taste of dessert Check presentation Check clearing Getting up to leave Thank you from serve Cleanliness of dining room exit Leaving lobby Hostess goodbye Anticipation of special needs Outside-Leaving Parking lot lighting Parking lot security Last thoughts / impressions

Which would be your key Moments of Truth? Out of this list what MUST be right, and where can a restaurant slip a little?

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EXAMPLE: LEXUS

Here are just a few examples from various top Lexus dealers across the US.

The stated service goal for Lexus is to make every customer feel like a special guest in your

home…

• Building designed by leading architect Jim Sherburne to resemble Japanese gardens.

• Huge windows, earth tone colors, river rocks and abundant (low) landscaping.

• Large fireplace, high-end custom made sofas, original artwork, 4 large-screen plasma TVs.

• Marble cappuccino bar, juice, soda, water, popcorn and fresh baked cookies—all free.

• Eight private rooms with phones, high-speed internet and access to printers.

• Large picture-window so that owners can watch as technicians work on their cars.

• Owners meet with service manager and the actual lead technician who will work on their car.

• Computer system that allows service people to ID customer as soon as they drive in.

• Loaner car is a new Lexus—usually the next level up from the one dropped off.

• Dealer will come to your house and pick you up and drop off your car.

• All Lexus owners enjoy 24-hour roadside assistance—with rental car, room and food covered.

• Car is returned with a fresh wash, all fluids full, a full tank of gas and a rose on the dash.

• Restrooms are sparkling and have mouthwash, mints, saline, lotion and other accessories.

• Service center is open from 5 a.m. until 10 p.m. and on Sundays.

• Dealership bought a street sweeper because the city did not do a good enough job.

• Information assistant who answers questions, but cannot sell the car and gets no commission.

• Phones are answered by the second ring. All messages are returned the same day, all emails are

returned the same day. No customer will ever wait more than 5 minutes to see a sales person, see a manager, pay their bill or ask a question.

IS THIS THE WAY YOUR CAR DEALER TREATS YOU?

The items that are bold represent the Key Customer Touchpoints—the things that the customers identified as the absolute most important elements of having a superb customer service experience. Although all of the things on this list contribute to an exceptional customer experience, if one of the key touchpoints is not done correctly, it carries substantially more weight with a customer and can ruin the entire service experience, even if all of the other elements were delivered flawlessly.

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WORKSHOP: TOUCHPOINTS PART 1 Identify what you believe are the most critical customer touchpoints for your organization What are the select few interactions that are pivotal for your customers—the things that stand out as the most important interactions they focus on — the handful of Moments of Truth that MUST be delivered flawlessly—every single time—to truly ensure the best possible customer service experience. I know that your dealings with your customer are VERY complex, and much like the restaurant example there are dozens and dozens of touchpoints, but the goal here is to identify the “Make or Break” elements — the ones that simply must be perfect. AT THIS POINT SIMPLY WRITE A LIST WHAT YOU HAVE IDENTIFIED AS THE 5 MOST CRITICAL MOMENTS OF TRUTH: (It will probably help to write out ALL of the touchpoints you can think of, then go back and identify only the top 5 most critical MOT)

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WORKSHOP: TOUCHPOINTS PART 2 Now that you have identified a short list of what you feel are FIVE absolute most critical Moments of Truth for creating a superior customer service experience, take each of these MOT and clearly outline exactly what steps must be taken to ensure that it is consistently delivered in a superior way. What is the specific, measurable and repeatable process — a check list — a procedure — a system — that can be put into place, taught and measured to make sure that these MOT are preformed flawlessly each and every time? Think of a pilot’s check list before takeoff, or a recipe for creating a gourmet dinner, or the instructions for how to build the lawn furniture or the new BBQ you just bought. A step-by-step guide for precisely how to deliver this Moment of Truth perfectly — every time. Write each Moment of Truth, then create the specific, clear and detailed procedure for delivery excellence below it.

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Education

Customer service excellence v 7.10