Tag: customer service

Owning the customer

Is it possible to own the customer?

During the tech boom of the late 1990s the early wave of web developers had a business model that required locking customers into a relationship.

Having spent thousands of dollars for designing and building a website, a business then found they would have to spend hundreds of dollars every time they wanted to make even a minor change.

While that model didn’t work out for web designers as new tools appeared that made it easy for customers to look after their own sites, it’s still the ambition of many businesses to ‘own’ as much of the customer as possible.

Department store credit cards, supermarket petrol cards and airline frequent flier programs are all examples of how big businesses try to lock their customers into their ecosystem.

Possibly the dumbest, and most counterproductive all, are the media companies with policies of not linking outside their own websites. The idea is to keep readers on their sites but in reality it damages their own credibility and betrays their lack of understanding how the web works.

The airlines too have discovered the risks in trying to ‘own’ their customers as their devaluing frequent flier programs has irritated and disillusioned their most loyal clients.

Many businesses, particularly banks and telcos, try to tie you up into knots of contractual obligations with reams of terms and conditions. All of this is an attempt to make the customer a slave to their business.

Outside of having a legally protected monopoly, you can’t ‘own’ a customer – the customer has to grant the favour of doing business with them.

They’ll only do business with you if they trust that you’ll do the right thing by your promises; whether it’s delivering the cheapest product, the best service or quickest delivery. The moment their trust begins to slip, you risk losing their business.

Executives who talk of the concept of owning the customer are either working in organisations with little competition or those steeped in 1980s management practices. If you hear them talking like that, it might be best to take your business, and investments, elsewhere.

Owning customers didn’t work for the web designers of the early 2000s and it won’t work for businesses in other sectors. The only way to ensure most of your clients keep coming back is to deliver on what you’ve promised them.

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Empathy and the genius salesman

Apple’s Genius training manual shows the importance of empathy and investing in staff.

One of Apple’s great successes has been in delivering services through its stores. Tech site Gizmodo managed to get a peak at Apple’s training manual for their in-store ‘Genius’ technicians.

A word that keeps popping up in the manual is ’empathy’ – as Gizmodo says;

The term “empathy” is repeated ad nauseum in the Genius manual. It is the salesman sine qua non at the Apple Store, encouraging Geniuses to “walk a mile in someone else’s shoes,”

While the Gizmodo writers and many of the site’s readers seem surprised or cynical about this, it’s not surprising for anyone who’s worked in sales or tech support, and the Apple Store Geniuses are doing both.

Empathizing with the customer or caller gives them confidence and builds trust. For someone in sales, listening and emphasizing is how one finds out what the customer really want. On the support desk, putting yourself in the customer’s position makes it easier to diagnose the problem.

That empathy a real return on investment – US Apple Stores earn 17 times more per square foot than the average retail store. The next most profitable retailer is Tiffany & Co who only boast have the revenue.

What Apple again show is that training matters. Every surly computer store assistant, every grumpy flight attendant or bored call centre worker can, with the right training and incentives, be just as effective as an Apple Store genius.

Sadly too many businesses, particularly retailers, see training as a cost and their employees as naughty children. Those businesses have a serious problem.

Without empathy – the ability to put yourself in your customers’ shoes – your business is working with a distinct disadvantage.

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Creating a service mindset

How tough is it for a business to change it’s customer service focus?

In the Foreign Correspondent report that inspired yesterday’s post about the start up community angel Investor Raval Navikant said  “you don’t need customer service anymore, you have Twitter.”

While it’s refreshing to hear that Twitter is now rightly seen as a customer service channel rather than a marketing tool, it’s worrying that startup businesses still have such a low opinion of supporting their users.

This is the mindset for the web2.0, social and cloud computing communities – that user support can be done though Frequently Asked Questions (FAQs), user forums or an anonymous email address that might get read once in a while. It’s the self-help model of helping your users and it’s the biggest weakness of online services.

A worry for these businesses is that big organisations now beginning to remember the importance of customers. What has traditionally been small business’ advantage is  being eroded.

At an Australian Computer Society Foundation lunch in Sydney yesterday Testra Corporation’s diector of Products and IT Enablement, Jenny Woods described how her company is moving to a more service centric culture.

While this isn’t simple in a company the size of Telstra, a task made harder by the telco industry’s customer hostility, it’s certainly a process that’s underway.

There’s a long way to go for Telstra. Along with that traditional telco antipathy towards their customers, they are big company with plenty of silos and aligning management KPIs so the temptation isn’t simply to gouge customers for short term profit is a big change.

Changing that ‘soak the customer’ mindset is the biggest challenge in making companies like Telstra service centric and that means management at all levels have to buy into the process.

Without that senior and middle management commitment, customer support will just be seen as the poor relation to other divisions and will be outsourced to the lowest cost provider at the first opportunity.

Part of that change to a service mindset is in trusting your staff. Jenny described how Telstra abandoned scripts for their home Internet customers and told the support agents they could use their initiative – as a result customer satisfaction went up, problems were solved faster and the number of modem returns slumped.

“The people who do the work, know how to do the work” says Jenny and it’s good that Telstra’s management is recognising the skills in their workforce.

Much of that anti-service culture we see in large organisations is because management don’t respect the skills, experience and knowledge of their workers. Instead they’re treated as naughty children who can be slapped into line with a stern memo.

Today’s economy doesn’t favour businesses and managements who think like that, the organisations that will do well this Century those who are flexible, value their staffs’ skills and have managers who see their role as more than micro-managing their silos.

It also means delivering a product you’re proud to support. If you won’t support your products, then your customers will go to a competitor who looks after their clients.

We fell into a trap into thinking customer service didn’t matter during the late Twentieth Century, it was always a myth and now we have to deliver.

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Losing the hospitality battle

Are smaller hospitality businesses falling behind big hotel chains?

Travel review site Tripadvisor released its 2012 Industry Index examining the 25,000 responses from hotels around the world and 1,000 Australian hospitality businesses who took part in the survey.

The index covers a wide range of areas of how the hospitality industry is dealing with connected customers, the web and how hotels are dealing with the relative performances of markets in Europe, North America and Asia.

A disturbing part of the survey was how many smaller businesses are falling behind their bigger competitors with less than half of Australian Bed & Breakfasts agreeing the statement that an “ability to book via my property’s website on a mobile device is ‘very important,” while 70% of hotels agreed.

The failure of smaller properties to engage online is borne out anecdotally as well, at a recent business breakfast a B&B owner – whose main business was furniture retailing – moaned about the negative TripAdvisor reviews his place had.

When it was suggested he might want to engage with the unhappy customers, the proprietor threw his hands up and said “our solicitor told us that it was too expensive to sue.” He wouldn’t accept that the dissatisfied guests might have a legitimate complaint that should be addressed.

At the same time larger hotel chains have full time teams monitoring comments on Tripadvisor, Facebook and other online forums, fixing problems that are being mentioned and then telling the world they have resolved the issue.

There’s a good reason for this. Ask someone planning a major holiday and you’ll find almost all of them are reading reviews on sites like Tripadvisor, Fodors or Lonely Planet’s Thorn Tree before booking accommodation or flights.

While many of the hotel management responses are boilerplate – repeated replies like “Thank you for your review and we appreciate you taking the time to share with us your experience as we are always pleased to receive feedback from our valued guests” is not what social media or customer service is – at least there is a perception that senior management is listening.

At many establishments senior management really is listening, a country manager of one of the world’s biggest chains describes how his three person team sends him a report each day of any complaints being listed online. These are checked out and any systemic problems they find such as surly front of house staff, poor housekeeping or incorrect billings are addressed immediately.

Having a direct line to happy or dissatisfied customers is one of the major benefits social media offers businesses. That smaller hotels aren’t doing this while their multinational competitors indicates the independent sectors of the hospitality industry are falling behind the majors.

The furniture shop owner with a B&B investment illustrated the problem, not only was he not engaging with dissatisfied customers on TripAdvisor, he had no idea whether his businesses were listed on Google Places, Facebook or any other online listing service – “my wife does that” was his dismissive answer.

Possibly the most overused quote in modern business is ice hockey star Wayne Gretzky’s “skate to where the puck is going to be, not where it has been”. Those smaller hospitality businesses not taking the mobile web, review sites or social media seriously aren’t even in the skating rink in today’s game.

There’s a lot more interesting ideas in the TripAdvisor report that should have any hospitality thinking about how customer service and marketing are evolving in a connected society. It’s worth a read.

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Outsourcing the service economy

The forces that shrank our manufacturing economy are now affecting the service industries.

Through the 1970s and 80s we accepted manufacturing industries moving jobs offshore because those jobs were done by working class, blue collar workers and the future lay in white collar, middle class service industries.

As a consequence of moving manufacturing offshore, the US, British and Australian economies became more service based. The thought in the 1980s was that while goods could be made in Taiwan, the ‘knowledge industries’ couldn’t be.

Then the Internet came along.

A panel on The Future of Outsourcing convened by the Indian Institute of Technologies Association of Australia last night discussed some of these issues.

Now the service industries are being offshored, at first it was the low skilled service jobs like call centres but it didn’t take long for higher value work – such as paralegal, medical transcription and of course IT services – to follow.

The belief that white collar jobs couldn’t be taken over by cheaper foreign labour has been proved wrong.

It isn’t just those working in the call centres or IT departments of telcos and big banks that are being affected, those small businesses in support industries like secretarial services or design are finding their clients are moving offshore too.

What’s interesting with all of this is how long the executive classes can resist being outsourced. Indian and Chinese managers work for harder for less than their US, British or Australian colleagues and in many cases are better educated.

One can only wonder how long the partners of major consulting business can hold the line as well, these guys – the vast majority are men – have done very nicely charging first world rates while increasingly paying developing world rates.

Already Indian outsourcing companies, including at least two sitting on that Sydney panel, have set up their own consulting arms that cut out the expensive middle men. Without the overheads flashy offices and big packages for entitled partners, they’ll have a pretty competitive offering.

While we can cry for the high paid management consultants and executives who are increasingly threatened by these changes, the Anglo-Saxon economies have a real problem as service industries move offshore.

In Australia, the Bureau of Statistic’s 100 Years of Change in Australian Industry tracks how the nation’s industries have changed – in the 1950s Australian manufacturing peaked just shy of 30% of the workforce, by 2000 it had shrunk to 11% while service industries were doubled from around 25% to 50% of the economy.

While it’s unlikely we’d see the service sector workforce shrink by 2/3rd over the next fifty years, there’s a good chance incomes will fall in these industries unless we start to invest in education and skills which allow Australia to stake a place in the global economy.

One of the key takeaways from the Future of Outsourcing event was that this change is happening regardless of what we think is a fair wage for our work. It’s something our government and business leaders need to start considering.

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Hanging on the telephone

Is there a digital divide appearing in customer support services.

Ever tried to call an online company about a problem? As the New York Times explains, it’s often hard to find the telephone number, let alone someone to answer your call.

The NY Times article worries a new type of digital divide is appearing between those happy to do business using email or social media and those who who demand to speak to someone.

In reality, the truth is more subtle than just generational differences – it’s about the web2.0 service-free business model where few, if any, resources are spent on customer support. The idea is the an assistance can be given out on “self service” basis through a website or, better still, crowdsourced on a user forum where the customers work together to figure out solutions themselves.

For many of the web based cloud computing and social media businesses, this model is essential to their survival. If you were to add a customer support department answering telephones, the viability of the business would collapse.

While it’s uncertain if that business model is sustainable for many of these web based companies, it’s interesting to ponder how many phone calls most businesses could avoid by having relevant information on their website.

It’s worthwhile looking at call logs and asking your staff what are the most common questions to your business. Answering those on the company web site might mean happier customers and fewer staff distractions.

For some businesses, letting customers discuss issues in an online company forum might be a way of crowdsourcing support and giving ideas for future products or service improvements.

Rather than leaving customers and staff hanging on the phone, having relevant and helpful information on the website saves everybody time and money.

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Feeling the currents

Customer service means listening to clients, we have the tools to do it.

Internet and marketing everyman Seth Godin makes an interesting point on his blog post Silencing The Bell Doesn’t Put Out The Fire.

Seth’s point is that satisfying vocal complainers doesn’t address underlying problems in the business and cites the Dell Hell saga of Jeff Jarvis as an example of where load complaints were a symptom of a much deeper issue within the business.

For Dell, this had been the choice to focus on the low value, high volume market segments. To compete there it meant cheap components and selling to comparatively uneducated, price sensitive consumers.

Compounding that decision was Dell’s decision to partly address the inevitable cost pressures they had put themselves under by outsourcing their support lines to truly dire, lowest price providers.

As a consequence of abandoning its service culture, Dell rapidly gained a reputation as being unreliable and unhelpful. One only has to look at the Dell Hell comments on Jeff’s original posts to see how damaged Dell’s name was.

I encountered Dell’s shocking support during that period first hand in PC Rescue, one customer asked me to troubleshoot her Dell PDA after their support line had reduced her to tears.

Very quickly I discovered why, the installation software supplied by Dell didn’t work properly – testing was obviously another victim of budget cuts – and the tech support people were working with an early version.

We managed to fix the problem without the “help” of Dell’s helpdesk and the client swore never again to buy Dell. She’s now a happy Apple customer who is a happy to pay a slightly higher sticker price for a better product and service.

The real concern was that during this period Dell’s management were oblivious to the problems they were suffering in the marketplace, they were meeting their KPIs and appeared to be growing sales while the business itself was about to go over a cliff.

Dell’s management could have recognised this had they chosen to, the company had plenty of market intelligence, customers surveys and their support logs to tell them they had a problem. It wasn’t in their interests to do so.

Today every business has those tools to monitor what customers are saying about them. Google Alerts, Facebook and – if you’re in hospitality – Tripadvisor, Yelp or Eatability.

With social media it’s easy for the bad message to get out; it’s also easy for management or owners to watch out for problems.

Dell only survived the Dell Hell experience because they were big and well capitalised, no smaller business could have survived similar damage done to their reputation.

Smaller businesses don’t have the luxury of ignoring their customers until the screams become too loud.

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