By Alan C. Brawn CTS, DSCE, ISF, DSDE, DSNE, DCME, ISF-C
We will begin our journey into the concept of differentiation through customer service by posing a pretty basic question. How many of you are satisfied with the treatment you receive as customers? Think about it for a while before answering. Research conducted by several respected firms tell us that over 85% of consumers surveyed either feel ill served or at least, taken for granted by those they purchase products from. The only thing left to say is that their perception is reality to those holding those opinions. Our goal is to explore where this stems from and take a look at approaches that can and do yield significantly more positive results.
It wasn’t always this way. If we look at how we purchase all types of things today it is highly different from the way we conducted our business 50 years ago. Over the span of time, 50 years is a minuscule speck in history but we can learn a lot from looking at that tiny particle of time. Only a few decades ago we did business with individual merchants and while it has always been the products and services that initially drove the business, it was the development of those personal relationships and “hand shake” agreements that cemented the deal and caused us to be repeat customers. We actually knew who we were buying from and they in turn knew us at least to a certain degree. When I was a kid my Dad only bought Pontiac automobiles and only from Roy Tedrick the owner of Tedrick Pontiac in Wood River Illinois where I grew up. They got to know each other and they trusted each other and after they negotiated a deal, Mr. Tedrick took care of my Dad. To paraphrase Walter Cronkite of CBS News fame, “that is the way it was”.
As we know the only constant is change and changes we certainly have had. Tedrick Pontiac is long gone and both my Dad and Roy Tedrick are fond memories of a kinder and gentler time. Nostalgia aside, it was really that way “back in the day” but fast forward to current times and all of this has changed and in some ways for the better and in others for the worse. Back then we had a more limited group of products from which to choose with some being cheap and poorly made and yet others could be rated as good, better and best. We also had a limited number of places from which to buy those products and services. Selection was limited at best in the “old days” but for the most part we did not feel deprived by this lack of choices and most importantly we felt well served by those who sold to us.
Over the ensuing decades, with the evolution of products and services, has come product parity. There are very few product’s that can be considered poor today and the gap has narrowed between good, better and best and in many cases the differences are minor in nature. The majority of manufacturers make great personal computers, excellent cell phones and great electronics of all types and yes really good cars. My Dad would not recognize the comfort and deluxe features of even the lowest priced cars of today compared to those “deluxe” Pontiacs he used to drive in the 1950s through the 70s! Suffice it to say that today we live in a world of parity and not only do we have significantly more selection to choose from, we have an ever expanding network of merchants we can buy from as well. From the strip malls to the mega-malls to the internet, never in the history of mankind have we had these kinds of choices and options at our fingertips.
Putting my nostalgia hat back on for a minute, there is a personal point to make; it pleases my heart to see a resurgence of small shops in revitalized downtown areas around the country and industries like craft brewing popping up all over. For example, in San Diego county California we have over 100 local microbreweries and they are scattered around the entire county and thriving. We can learn something from all of this and it is all about anti-parity and anti-commodity and totally about individuals and individualized services hearkening back to my Dad’s time and my (sometimes misspent) youth. Now the nay sayers will point out that all of this is a found memory but a model that cannot translate to the world of reality in business today. I beg to differ and plan to prove it.
Given the nature of the “real world” as it exists today and the parity of products and commodity nature of what we buy, this begs the question of differentiation and why to select one product or service over another or why buy from one vendor or merchant over another. After all, if the quality of the products are on par with one another, what is the reason to buy one over another? Well, the answer is good old fashioned relationships and customer service. All things being equal, research shows that it is not price that defines the final selection of one over the others but the service that we receive during that purchase and carrying on to the experience with the product over a period of time. Let’s dig deeper into the rationale behind all of this.
Several years ago working alongside McKinsey & Company, the noted research firm, our team created a way to evaluate products and services called the 5P Approach. It is a listing and comparison of competitive Products, Prices, Programs, Processes, and People in a given category of goods from various manufacturers. We were looking to see what went into the buying decision and why a person or a company would purchase from one over another. Conventional wisdom would say that people selected based on the Products and Prices but the facts did not bear this out. Research showed people selected a vendors based on Process (how “good/easy” a company was to work with and most significantly the quality of their customer service) and People (i.e. relationships). Cutting to the chase, I am happy to report (with research proof!) that people still predominantly buy for similar reasons that our parents did 50 plus years ago and ages before that. Even for commodity products like food items it often boils down to Process and People.
The concept of customer service has several meanings so let’s drill down and explore a few of those that might be helpful to expand our understanding of what that good old fashioned customer service we speak about can do for our modern businesses. From a more formal definition, “Customer service is the provision of service to customers before, during and after a purchase.” To dig just a little deeper, “Customer service is a series of activities designed to enhance the level of customer satisfaction – that is, the feeling that a product or service has met the customer expectation.” We recognize that the importance of customer service may vary by product or service, industry and customer. The perception of success of such interactions will be dependent on companies and more importantly individual employees within a company who can “adjust themselves” to the personality and ultimately the needs of the customer. From a business perspective, customer service plays an important role in an organization’s ability to generate income and revenue. It is a truism that a customer service experience can change the entire perception that a customer has of the organization.
Along with the parity in goods and the commodification of products coupled with all the various channels where items can be bought, the quality and level of customer service has decreased in recent years, and once again relying on research, it shows that this can be directly attributed to a lack of support or understanding at the executive and middle management levels of a corporation and/or absence of a customer service policy. When interviewed by researchers in the same report that said 85% of customers had a negative attitude about how they were treated, over 65% of senior and middle line executives thought that customers would report their satisfaction with how they were treated. In unison we need to all say disconnect! With this being the case, it is no wonder that employees in those companies were left to their own devices to handle customer service in compliance with company policies that do not reflect the customer experience from the point of view of the actual customers. As the kids of today would say…Duh?
The good news is that some companies are passing up the diet of drinking their own Kool-Aid™ (sugar free or not!) and looking at input and tracking real data to see how effective properly designed and executed operation strategies like customer service, customer retention, repeat business, etc. can be. Progressive companies establish what is known as key performance indicators or KPIs for short. A company would use KPIs to evaluate its success in one or more activities in which it is engaged. Sometimes success is defined in terms of making progress toward strategic goals such as zero defects in manufacturing, lost time do to accidents, achievement of departmental goals and yes, the afore mentioned customer service and customer attrition and retention rates. The data that is gathered can often lead to the identification of problems and then potential improvements, so KPIs are routinely associated with performance improvement initiatives. The actual analysis can be in a letter grades like ABC or in a number ranking of 1 to 10 or in a percentage compared to 100% achievement of a goal but no matter the way the analysis is stated; it is a snapshot in time of how a company is performing with no self-aggrandizing “beverages” being consumed. Several trite but true adages come to mind:
- If you can’t measure something you cannot manage it.
- You are entitled to your own opinions but not your own facts.
- It is much less expensive to keep an existing customer than to get a new one.
Pick one of more of these and apply it to customer service which is the lifeblood of a business. Ultimately you will be judged by what you do, not what you say. Customer service is about satisfied customers who not only come back to do business with you but often go forth and “preach the gospel” of how good you are to work with. The best and most effective advertising is word of mouth.
One of my favorite approaches to customer service is a universal fit from a small mom and pop company up to the giants of industry. It is the Ten Simple Rules of Customer Service:
- People want to talk to people so answer your phone.
- Don’t make promises unless you will actually keep them.
- Listen to your customers. Hearing is not listening.
- Put yourself in the customer’s position.
- Recognize and deal with complaints immediately if not sooner!
- Be helpful – even with no immediate and obvious benefit for you.
- Make being helpful, courteous, and knowledgeable, a stated company policy.
- Go the extra mile. This is the shortest trip you will make.
- Throw in something unexpected.
- Actually care!
Whenever we speak of good customer service, the subject of complaints always comes up. Remember that only 10% of the customers who really want to complain actually do. They do not tell you but they do tell each other. Since customer service encapsulates satisfaction on one end of the spectrum and dissatisfaction on the other, believe it or not, it is the area of dissatisfaction where customer service proves it value when something goes wrong. Mistakes, if handled properly can be tangible opportunities to shine. Studies show that a satisfied customer will tell 2-3 people about his experience with your company. A dissatisfied consumer will share their lament with 8-10 people and some will push that number to twenty or more via social media today but an unhappy customer will become a loyal and repeat customer if you fix his/her complaint and do it quickly. Eighty percent (80%) of the people who complain will come back to you if you’ve treated them fairly and the figure rises to over 95% if you respond immediately. Not exactly lead into gold, but almost!
To really “do” customer service right, you have to build a customer service culture inside the company. It all starts with the company mission with a clear vision that is embraced from the top down and also, as importantly from the bottom up. Just remember it is rarely the senior management that is actually providing the actual customer service one on one. It is that first line of defense on the phone or behind the counter that is the face of your company to the customer. Sorry to all you senior executives but the folks on the front lines can make you look like geniuses!
- Recruit the very best for the team. Customer service is an attitude.
- Train the team. Knowledge breeds confidence in doing the job.
- Empower the team with an “I can fix that attitude”
- Embrace and respect the team as critical to your success.
- Recognize the team.
Make customer service easy to access for the customer and provide live help whenever you can and make certain that sales and service are directly linked together as an integral part of the overall customer service experience. This eliminates the finger pointing and provides accountability. Also, provide a method or forum that gives a voice to the silent customers who are not comfortable with complaining directly to you. Give these people an easy way to tell you how you’re doing. What you don’t know can certainly hurt your company. Do a follow up call with them or send them an e-mail or even write them a letter. Come right out and ask them if they are happy and if not what can you do to make them a satisfied customer.
After all of the ranting and raving about customer service, who gets it right? The good news is that today we are seeing an increase in those adopting positive customer “serving” policies. I used the word “serving” because ultimately it is much more than just responding to complaints or addressing issues. Of course on the high end retail side of things we see companies like Nordstrom, Saks Fifth Avenue, Mercedes, BMW, and Mini Cooper provide high levels of service but I must also add, at a price. I know you get what you pay for but how about companies that are more mainstream where you do not pay that premium price for service? Once good example is the turnaround in both Home Depot and Best Buy. You are now greeted at the door and both companies train their staffs to consistently check to make sure you are being served during your time in the store. The results are showing up on their bottom lines. Not a bad thing!
Now these are all retail stores but how about the world of audio visual especially in light of the fact that we are seeing more and more manufacturers use distribution as their sales channels. Evidently the customer service mentality is getting through and I will use a recent situation as an excellent example at Premier Mounts with their tag line The Original Mount Company. I have been impressed with what Premier has done on the product design and manufacturing side of things for some time but their work in handling difficult issues for customer has not be heralded up until now so please permit me to do so. It is kind of like the Marines who say they do the difficult immediately but impossible takes just a little longer. The following is a great case in point.
I received a short note from Rich Piero the Co-CEO of Premier Mounts and he told me one of the better customer service stories I have heard in a while. He began his story with a statement of their values at the company, almost as a challenge saying this is what we stand for and we aim to prove it every day. Okay, he caught my attention so I proceeded to read his note.
- Our people define us, make us different and fuel our growth
- Customer Centricity
- Organized around our customer, we strive to increase their satisfaction and their business profitability through superior understanding of customer needs.
With that in mind, here is the story Rich sent me.
“Robert Guzman of our staff received a request from a good customer to expedite his order for 36 mounts from 12/30 to the coming Monday 12/23. The customer also asked if we could have 30 more units ready on Monday 12/23. So not only was the order increased, the time line was dramatically shortened! (I must add parenthetical for all of you involved in manufacturing, as you know this type of request can be a real nightmare since it was not planned for in advance!)
Well this now spanned the weekend and the whole crew already had long standing plans for the weekend. Our guys, Mario and Francisco of their own volition, cancelled their personal plans in order to come to work on Saturday, starting at 3:00 am (!) to ensure early delivery to the customer.
Thanks to this kind of above and beyond effort on the part of our manufacturing team, the new orders were built and shipped by the new deadline. Values confirmed.”
After reading the story, I have no doubts who that customer will buy from next time and according to Rich, this is not an isolated incident rather part of their actual business plan and management meetings reviewed every week. They obviously keep those KPIs we spoke about earlier in mind. As their values statement clearly points out, their company is “organized around our customers, we strive to increase their satisfaction and their business profitability through superior understanding of customer needs.” As Rich has communicated and as I thoroughly believe, customer service and customer serving is not a dying art form but is due for a resurgence and the good news is that we are beginning to see that. It is truly and clearly the path of differentiation as much today as in the past and the majority of the time it is why you do business with one company instead of another.