Comments

Perdernales Electrcic (www.pec.coop)has been ranked by JD Powers every year for customer service satisfaction. 24 hours a day when you call the customer service line you get a "hello" within 1 or 2 rings. Happy customers stay customers.

What is the cost of an additional 25%-30% increase in the number of customer service reps to your bottom line? How about giving some of the marketing budget to the customer service department? Your C.S. is the most important touch point. ....and this is coming from a marketing manager.

P.S. It also goes back to well design products/quality.

Posted by adhder at January 22, 2007 5:08 PM

Sorry to get on my soap box again but it does go back to intangible vs tangible. The cost of customer service is very tangible (I know I work in this arena) but we are still very bad at measuring the benefits it brings and what the relationship between CS and increased revenue is. Somehow marketing is able to make the case but not CS.

I think to a certain extent CS has to grow up a little and change the perceptions in companies. from cost to benefit. It has to sort out what it actually delivers (forget CSAT, Calls per rep stats that just leads to a cost based mentatlity)

Posted by PaulH at January 23, 2007 3:29 AM

Thanks for raising this important topic Madeline. I would estimate (conservatively) 99% of my family, friends and work colleagues are negative about their experiences of out-sourced (usually to Far East) customer care. I have given up on quite a few occasions due to language problems. That sort of service makes me feel - as a customer – completely devalued by the company and the impression it creates in my head is that they are just out to save money with no regard whatsoever to real customer sensitivity. Call me cynical if you like. Just to balance my comment and be fair I have also had exceptionally efficient, friendly and caring service from Far East customer care operatives in respect of IT problems. On those occasions they put much of the British customer care service to shame.

What this all tells me is not ground breaking theory. It tells me that the best companies who genuinely care about their customers will place huge priority on recruiting superb front line staff; they will encourage front line staff to use their own high standards of care; they will support front line staff fully and make them feel valued. The companies that don’t value their front line staff will in return provide crap customer care. In fact in my opinion ‘twas ever thus.

While companies continue to ignore these simple principles about valuing their front line staff they will continue to lose custom and they deserve to. More power to front line staff.

Wonderful blue sky, clear, frosty, crisp morning - Minus 2 Deg C morning in England for my 6.30 am 5km run … Winter is wonderful on days like today

Posted by Trevor Gay at January 23, 2007 3:41 AM

Madeleine - it's interesting that you assume business needs economies of scale to be competitive today. I think a large part of the problem is that scale might bring some cost benefits (although I'm far from convinced this is always the case) but it often mitigates against service. People - providers and users - want to feel like individuals and to be treated as such. They want to be allowed to use discretion and judgement and to cater for individual cases. This, more than anything, is about the attitude of management and the managed. Paul and Trevor both make good points and the nub of it seems to be that somehow business must look past the scale and CSAT issues to get a feel for the business, its staff and its customers.

Posted by Mark JF at January 23, 2007 4:00 AM

Great posts all. I believe the scale issue can and does get in the way all too often. The larger the organization, the more likely you'll find strict metrics in place to "measure" the efficacy of CS reps. One particular bank comes to mind in which there exists a strong culture committed to making the customer happy. However, employees in the call center get frustrated trying to fulfill this ambition, and will often knowingly "lose points" on their metrics in order to ensure the satisfaction of the customer. I, for one, stand up and salute any individual who is willing to risk a negative review in order to obtain a satisfactory mark in their own personal metric of customer happiness. Cheers!

Posted by Nick Adams at January 23, 2007 8:24 AM

don't know how they do it, but spanish insurance company MAPFRE is absolutely great. they do not just answer your calls - they actively manage your case keeping track of your deadlines, reminding you by phone and mail, making everything completely carefree for their clients.
somehow they believe that handling costs can easily outgrow the insurance sum.
the result is a truly convincing service experience.

Posted by jens at January 23, 2007 8:51 AM

...How about giving some of the marketing budget to the customer service department?...

adhder is right on here. Nothing is more important to marketing than satisfied customers, and marketing and customer service should work hand in glove. I worked for one service provider and for one brief shining point in time we (marketing) had a joint-project going with customer service to help stem customer churn by being more proactive and engaged with customers. We were making good headway with renewals when executive management decided it was more important to "the Street" to attract new, big name customers than to keep existing customers happy. So, they cut the number of CSR's rather than add the number we'd proposed, and used the money to ramp up sales. The results were predictable.

Posted by Maureen Rogers at January 23, 2007 9:00 AM

Mark,
I agree that size often mitigates against service. But I don't think it needs to be that way. That's the real question. Can you have economies of scale AND people who feel they they have high levels of discretion and may apply their judgement. You are right to point us at managerial attitude.

The issue to my mind is that mediocre is still good enough. Most businesses are NOT YET in enough troble to be seriously seeking new ways of getting the best out of their talent. So OVER control of the wrong elements of the business (ie people) remains the order of the day?

I expect that the organisation as we know it today will evolve more by death than change.

Posted by Chris Nel at January 23, 2007 9:07 AM

Good points Nick

I have worked in support organisations as they have grown from a values based culture to a numbers based culture and then desperately tried to get back to values!

Part of the problem with metrics is what I call the metrics intraspective spiral. Basically metrics are set to try and drive a particular business need (nothing wrong with that) however over time the number actually takes over as the goal rather than a tool to help understand the goal. This then leads to a spiral downwards as the organisation looks inwards more and more to try and drive the number. I am sure that Trevor with his NHS experience can relate to "hitting the target but missing the point". It usually takes a shock event (new management or feedback from an influential customer) to jolt the organistaion out of the spiral and back to looking at the actual reason you set the metric in the first place.

The other part that leads to this is when a company gets beyound a certain size the drive to measure stuff comes in - basically snr management can't know everything and assess performance so they come to rely on numbers. Trust and values based leadership goes out of the window.

The third part is that we tend to measure what is easy to measure rather than what should be measured.

Posted by PaulH at January 23, 2007 9:19 AM

1. Customer service staff beatings shall cease once their performance dramatically improves

2. Be worth $3M or so ... then the CS types become servitude lapdogs as they should

3. Behave like royalty all the time and demand Diva-status in all experiences & events

Posted by sean_sir_CS at January 23, 2007 10:10 AM

Maureen – you ask ‘How about giving some of the marketing budget to the customer service department? - You are so right.

When I managed mental health services one of our bright young managers (in a residential facility for patients with long term mental health problems) gave the budget for the household goods to the cleaning staff - we saved money on that budget heading and the place was far cleaner.

Below are my three Simplicity principles. Plenty of people disagree but that’s life. Sweeping generalisations I know but I am just tying to make the point - this stuff is not rocket science.

1 Staff at the front line know ALL the answers ALL the time. 2 If managers have a job at all in 2007 it is to make it easy for front line staff to do their job with freedom. 3 Give all the money – YES ALL THE MONEY to front line staff

Paul - love the reference to 'hitting the target and missing the point' - I use that expression often in the NHS as you say :-)

Posted by Trevor Gay at January 23, 2007 10:13 AM

1. Take ALL the money from the minimal wage CS front-liners

2. Feed CS front-liners [all-you-can-eat] scraps @ 6 AM so they show up on time

3. Transfer ALL the tax burden to CS front-liners [Congress @ Midnight] ... they won't notice since they are too busy being lapdogs

Posted by sean_pays_zero_tax at January 23, 2007 11:31 AM

I'm relieved to hear that there are at least two examples of companies delivering great service! As many of you have said, great service is not rocket science, and yet companies, particularly large companies, do seem to get lured into the measurement of their tangibles, forgetting the all important intangibles.

Good challenge, Mark, about the assumption that economies of scale are essential for competitiveness today. I guess that assumption has turned into one of those universal truths that people tend to treat as a given in business. Wouldn't it be great if tomorrow's successful organisations threw that logic right on its head? How would that change the shape of our organisations? Discuss.......!

Posted by Madeleine McGrath at January 23, 2007 1:19 PM

Thanks for that challenge Madeline.

A topical story to illustrate my stanceon this. Today I had to phone a large academic institution that owes me significant money for work done. I submitted my bill on 20th December. I subsequently sent two e mails chasing payment – one e mail was not even acknowledged. Finally I received one e mail to say I needed to fill in a form for the finance department (hard copy form that must be sent through the post). I did that and sent back the form. Today I rang in frustration to ask when the bill would actually be paid. I was told by a charming but frankly unhelpful woman that the regular payments will be next Monday and that is the best she can do (unhelpful because she just related the ‘rules’). I asked whether the payment could be hurried along – I said cash flow is an important issue when one is self employed and working single handed. With the greatest respect I don't actually think she ‘heard’ what I said. All she could do was apologise and keep saying that cheques are only sent on Mondays – ‘marvellous’ I thought. I gave up and will now wait for payment by cheque. It means it will be 7 weeks from the time I submitted my bill before it ends up in my bank account. In my experience this is what happens when we promote the ‘economy of scale’ argument. I am sure we all see and experience this sort of scandalous lack of care for customers and vendors. I cannot help but contrast this with the electronic payment I receive within two days of submitting my bill to smaller organisations on a regualr basis. The sad thing is no-one in the large organisation seems to even care about it. Poor service and institutional thinking becomes the norm and God forbid that anyone should have the temerity to challenge the ‘sacred cow’ of systems thinking. The new organisation you mention Madeline needs to give much more power of discretion to people at the front line so they can deal with customers in an adult-adult relationship rather than parent–child.

Posted by Trevor Gay at January 23, 2007 4:00 PM

Trevor- Don't want to take credit for the notion of giving marketing budget to customer service. I was quoting the comment placed by "adhder", but I think my cite of his post got lost in the lower-case reference to it.

It is a great suggestion - just wanted to make sure it was properly attributed.

Another good and interesting post and commenting going on here.

Posted by Maureen Rogers at January 24, 2007 6:56 AM

Sincere apologies 'adhder' - I must learn to do detail as my headmaster always said. I am sorry. Thanks for pointing that out Maureen - much appreciated. I agree with your view about the quality of discussion - top notch as always. One day - when I grow up - I will learn to 'do' detail and engage my brain before opening my mouth or perhaps using modern jargon 'hitting the keys.'

Posted by Trevor Gay at January 24, 2007 8:07 AM

Thanks for the compliments, folks. I agree that the debate has been excellent. I'm glad you are enjoying it!

Posted by Madeleine McGrath at January 24, 2007 11:18 AM

Madeleine, you note that the Guardian says of the insurance company:
Their solution is to provide every customer with their own personal customer manager. This
manager will be personally accountable for their own customer accounts.

Great, except perhaps when the personal customer manager is taking a 4 week vacation.

There is no formula that will solve their problem.
They will never find an answer that makes this easy.

The best they can hope for is a unending search for excellence.

They can improve their odds by
• designing products and procedures so it is easy for everyone to do everything right
the first time.
• hiring people who know how to smile on the phone
• hiring enough of them that they can easily handle the work load
• training them until even Tom Peters would be satisfied with their ability to straighten
things out. (I did say they would never solve this problem, didn’t I?)
• constantly rewarding good performance
• etc. ad infinitum
(Or to put it another way, just do everything TP recommends -- now and forever.)

Posted by ShakespearesFool at January 25, 2007 11:04 PM

Shakespeare's Fool (what a lovely name!!!), you have put your finger on the very reason for the title of this blog (Systems plus Passion, an impossible dream?). As you so rightly say, there is not formula to solve this customer experience problem.

In my experience, so much management effort goes on getting the right system, and yet so little on things like the fabulous list of 'to-do's' that you cite. Managers continue to look for things that they can put into a box; they can then check and reward when it is done (or more likely, punish when it is not done!!).

In one of Tom's presentations he describes 'metaphysical management' - which I take as getting to grips with the intangible, hard to measure, spiritual dimensions of the boss's job. I'm not sure any MBA courses are tackling that agenda yet. Now there's a market opportunity.......!

Posted by Madeleine McGrath at January 26, 2007 7:14 AM