Customer Service and Why It's a Critical Part of Business Strategy

Directionally Correct podcast

Customer Service is a key component to any good business strategy. Today we talk to an expert about why getting more complaints is actually a GOOD thing, the benefits of considering your customers-customer, and the one thing about your business that is fundamental to its success - and by the way it also offers a huge return on investment. Greg Saltsman interviews customer service expert, George Saltsman.

1. WHAT LED YOU TO BECOME INVOLVED IN CUSTOMER SERVICE?

THE FIRST THIRD OF MY CAREER WAS IN MANUFACTURING WITH ONLY A SMALL AMOUNT OF EXPOSURE TO CUSTOMERS AND THEN THIS WAS ALL B2B..

WHEN I LEFT THE PLANT ENVIRONMENT, I WAS PUT IN CHARGE OF - AMONG OTHER THINGS - A CALL CENTER THAT TOOK IN ORDERS FROM OTHER FIRMS.

IN THOSE DAYS THE COMMON METRIC FOR CUSTOMER SERVICE PERFORMANCE WAS COMPLAINTS.

COMPLAINT HANDLING WAS VERY NEGATIVE AND OFTEN ENDED WHEN THE BLAME FOR INCIDENT HAD BEEN DETERMINED, USUALLY WITHOUT ANY INVOLVEMENT OF THE COMPLAINING CUSTOMER AND NOT A LOT OF URGENCY. IT WAS AN IMPEDIMENT TO MANUFACTURING/MARKETING RELATIONSHIPS AS WELL

DURING THIS TIME I WAS FORTUNATE TO HAVE A CO-WORKER WHO HAD BEEN RAISED WORKING AT HER DAD'S SERVICE STATION AND SHE KNEW CUSTOMERS FIRST HAND.

WE SAT DOWN ONE DAY TO DESIGN HOW WE MIGHT APPLY CONTINUOUS IMPROVEMENT (BILL CONWAY) AND CAME TO THE CONCLUSION WE NEEDED TO INCREASE FEEDBACK – COMPLAINTS – FROM CUSTOMERS TO BETTER UNDERSTAND WHERE TO IMPROVE.

We came to realize

SOLVING PROBLEMS DID NOT REQUIRE ASSIGNING BLAME .

NOW MORE COMPLAINTS WAS NOT POPULAR WITH SENIOR MANAGEMENT. FORTUNATELY, I WAS ABLE TO CONVINCE MY VICE PRESIDENT TO APPLY QUALITY IMPROVEMENT METHODS TO CUSTOMER SERVICE AND WE EMBARKED ON THE QUEST FOR MORE DATA, MORE FEEDBACK, DISCARDING COMPLAINTS AS A BUSINESS PERFORMANCE MEASURE.

OVER THREE YEARS WE WENT FROM 6 COMPLAINTS/YEAR TO ALMOST 2,000 - AND LEARNED A LOT (MIRROR, MIRROR ON THE WALL.....)

THE LARGEST NUMBER OF COMPLAINTS FELL INTO AN AREA WE DID NOT EXPECT: BILLING. ADDRESSING THAT SUBJEC AREA FIRST, IT TURNED OUT THAT THE BILLING PROCESS SEQUENCE WAS ALL THAT NEEDED TO CHANGE.

IN ONE MEETING WE FIXED IT AND CURED THE LARGEST DISSATISFACTION CATEGORY AT VERY LITTLE COST.

DR DEMING (THE GURU OF QUALITY) WAS RIGHT OF COURSE :

90% OF DEFECTS COME FROM THE PROCESS, ONLY 10% FROM PEOPLE.

THE REACTION OF OUR CUSTOMERS WAS STUNNING, EVENTUALLY LEADING TO SOLE SUPPLIER STATUS WITH TWO OF THEM, BASED ON THE TRUST WE EARNED BY ACTUALLY IMPROVING IN AREAS THEY VALUED.

BY-THE-WAY : THE COWORKER WHO TAUGHT ME THE PRINCIPLES SHE LEARNED AT HER DAD'S GAS STATION LATER BECAME PRESIDENT OF THE INTERNATIONAL CUSTOMER SERVICE ASSOCIATION

2. HOW DOES CUSTOMER SERVICE FIT INTO A SUCCESSFUL BUSINESS STRATEGY?

I ONCE CAME ACROSS A SLOGAN ON A LAPEL BUTTON:

“NOTHING HAPPENS UNTIL SOMEONE BUYS SOMETHING”

CUSTOMERS DRIVE A BUSINESS. FAILURE TO OBTAIN CUSTOMER SUPPORT IS THE DEFINITION OF BUSINESS FAILURE. NO CUSTOMERS, NO BUSINESS.

UNDERSTAND THAT I AM TALKING ABOUT FOUR “CUSTOMER” GROUPS, ALL WHO NEED THE ATTENTION AND PRODUCT OF A SERVICE STRATEGY. THEY ARE:

1. THE CONSUMER - OBVIOUS
2. THE STAKEHOLDER – POSITIVE RETURN ON INVESTMENT
3. THE ASSOCIATE – COMPENSATION ABOVE PAY
4. THE PUBLIC – INCLUDING MEDIA, REGULATORY, COMPETITION, AND NOW SOCIAL NETWORKING

EACH GROUP SEEKS TO HAVE THEIR EXPECTATIONS MET BY A BUSINESS IN VARYING DEGREES. EACH SUPPLIES A UNIQUE FORM OF FEEDBACK AND SUPPORT. COLLECTIVELY THEY MAKE SUCCESS.

AS INDIVIDUALS, WE BELONG TO ALL FOUR GROUPS.

TO CREATE CUSTOMER SERVICE STRATEGIES - TARGETING EACH GROUP – REQUIRES UNDERSTANDING THE BASIC BUYING TRANSACTION, UNIVERSALLY APPLICABLE – THAT MAKES OR BREAKS A RELATIONSHIP

FORTUNATELY THERE ARE ONLY TWO DIMENSIONS – TWO FACTORS – TO THE RELATIONSHIP BETWEEN CUSTOMERS AND SUPPLIERS

IT IS BASED ON A YES OR NO ANSWER TO TWO QUESTIONS:

1. DOES THIS OFFERING HAVE SUFFICENT VALUE? – PRECIEVED BENEFITS DERIVED @ COST OR PRICE (TIMEX VS. ROLEX)
2. DOES THIS SUPPLIER CARE ABOUT ME? – DO OUR INTERESTS ALIGN?

#1 IS ABOUT PRODUCT DESIGN & QUALITY AND PRICING

#2 IS THE MISSION OF CUSTOMER SERVICE

THIS RESULTS IN FOUR POSSIBLE OUTCOMES :

1) NO VALUE, NO CARE = NO SALE, NO RELATIONSHIP – A VERY STABLE RELATIONSHIP

2) NO (NOT ENOUGH) VALUE, BUT YES, THEY DO CARE = MAYBE SOME DAY; POTENTIAL – THE ISSUE OF DEMAND CREATION

3) YES THERE IS VALUE TO THE OFFER, YES, THEY CARE ABOUT ME = CUSTOMER ENJOYS HIS CHOICE OF SUPPLIER

4) YES, THERE IS VALUE, BUT NO, THEY DON'T CARE = I'M FORCED TO BE A CUSTOMER (CABLE COMPANY; UTILITIES, AIRLINE) (LACK OF COMPETITION)

COMPETITION USUALLY KEEPS BENEFITS IN BALANCE WITH PRICE; IN THE CASE OF LACK OF COMPETITION, AS SOON AS POSSIBLE THIS UNSTABLE SITUATION REVERTS TO THE #1 CASE, NEVER TO BE A CUSTOMER AGAIN ; AS I SAID, A VERY STABLE SITUATION.

NOW THE GREAT NEWS IS THAT CARE (THE CS COMPONENT) HAS UNLIMITED POTENTIAL TO GROW IN THE EYES OF THE CUSTOMER

CONSISTENTLY EXCEEDING EXPECTATIONS CREATES “SUPER CARE” - AND THAT YIELDS TRUST (WHERE VALUE IS A “YES”) OR “WANTS TO BE A CUSTOMER” ATTITUDE (WHERE VALUE IS NOT OVER THE BUYING THRESHOLD) (DISNEY WORLD )

EXPECTATIONS ARE TRANSFORMED INTO PROCESS OUTPUT BY

1) LISTENING TO CUSTOMERS

2) ADAPTING PROCESSES TO MEET EXPECTATIONS

3) ANTICIPATING SITUATIONS AND SOLUTIONS, IN ADVANCE OF FAILURE

3. HOW SHOULD A BUSINESS APPROACH MEETING CUSTOMER EXPECTATIONS?

FUNDAMENTALLY, EVERY CUSTOMER HAS THEIR OWN CUSTOMER THEY WANT TO PLEASE RESEMBLING A CHAIN, CUSTOMERS ARE FOCUSED ON THEIR CUSTOMERS

ONCE YOU ASSERTAIN THE CHARACTERISTICS OF YOUR CUSTOMER'S CUSTOMER, YOU CAN TRY TO ANTICIPATE AND DESIGN-IN WHAT YOUR PROCESS MIGHT PRODUCE FOR THEM TO DELIVER SATISFACTION TO THEIR CUSTOMER. APPRECIATION OF YOUR CONSISTENT SUPPORT BREEDS TRUST.

ONE CAUTION: DON'T PROMISE WHAT YOU CAN'T DELIVER. RELY ON INSTALLED, DOCUMENTED AND TRAINED PROCESSES TO EXECUTE DELIVERY; NOT INDIVIDUAL INITIATIVE. LACK OF CONSISTENCY CAN DESTROY TRUST - FOREVER

ITS EASY TO UNDERSTAND WHY EXCEEDING EXPECTATIONS YIELDS POSITIVE STORIES : THE “WOW FACTOR”; THE PLEASANT SURPRISE OF DELIVERING UNEXPRESSED DESIRES

THE DISADVANTAGE OF EXCEEDING EXPECTATION IS THAT THEN THIS OFTEN BECOMES INCORPORATED INTO FUTURE TRANSACTIONS.

NEGATIVE EXPERIENCES

1) GENERATES THE “YOU DON'T CARE ABOUT ME” ATTITUDE

2) SUBTRACTS FROM CUSTOMER'S AVAILABLE TIME

3) PUTS CUSTOMER'S AT RISK OF DISAPPOINTING THEIR “CUSTOMER”

4) HAS DEMONSTRATED MORE ENERGY FOR REPEATING THE STORY: THEY DO MORE DAMAGE THAN GOOD STORIES DO GOOD (UNITED AIRLINES)

FEEDBACK ANALYSIS CAN PROFILE THE NEGATIVES AND WEIGHT PRIORITIES. BUILD THOSE INTO YOUR QUALITY REQUIREMENTS & STRATEGIES FOR PRODUCT DELIVERY

ANTICIPATE WHAT MIGHT PLEASE THE CUSTOMER'S CUSTOMER: LIKELY IT SOLVES A PROBLEM. LISTEN TO YOUR CUSTOMER'S CONCERNS. WHAT WOULD IT TAKE TO ADDRESS THEM?

INNOVATIVE / CREATIVE SOLUTIONS CAN YIELD COMPETITIVE ADVANTAGE

POSITION YOURSELF WITH A QUICK RESPONSE PROCESS TO COMPLAINT/DEVIATION, A RISK MITIGATION TEAM (FIRE EXTINGUISHER), TO DEAL WITH NEGATIVE SITUATIONS AND QUELL THEM BEFORE THEY GAIN MOMENTUM. THIS IS VERY DIFFICULT IN THE AGE OF SOCIAL MEDIA. (THINK FRONT LINE EMPOWERMENT; E.G. A WAITER OFFERING FREE DESSERT FOR A SERVICE COMPLAINT).

4. WHAT ADVANTAGE CAN EXCELLENT CUSTOMER SERVICE PROVIDE?

RESPONSIVE, CARING, LISTENING, ADAPTING , AND ANTICIPATING PROCESSES FOCUSED ON THE RECIPIENTS OF BUSINESS' PROCESS YIELD ENORMOUSLY POSITIVE RESULTS TO A BUSINESS. CUSTOMERS COME FIRST SHOULD NOT JUST BE A SLOGAN BUT A FUNDAMENTAL OF A BUSINESS.

AMONG THE RETURNS ARE:

1) BUILDING THE PRICELESS ASSET OF REPUTATION

2) REPEAT BUSINESS / LOYALTY / WELCOME / OPEN DOORS / RETAINED STAFF

3) INCREASED COMPETITIVE SHARE / MARKET POSITION

4) LESS DISTRACTION FROM NEGATIVE ISSUES (YOU WILL NEVER KNOW RISKS AVOIDED)

5) PRO-ACTIVE, EVOLVING DEFINITION OF PRODUCT/SERVICE QUALITY REQUIREMENTS

6) INSIGHT ON DESIREABLE IMPROVEMENT OF PRODUCT/FEATURES (FORD'S CUP HOLDER)

IT'S INCREDIBLE THAT CUSTOMER SERVICE HAS TO BE PREACHED BECAUSE IT IS FUNDAMENTAL TO BUSINESS SUCCESS AND IT'S RETURN ON INVESTMENT IS HUGE

MY FAVORITE SIGN OF ALL TIME WAS IN ONE OF SUPPLIER'S WAREHOUSE:

“CUSTOMERS FEED OUR FAMILIES – TREAT THEM ACCORDINGLY”

TO ME THAT SAYS IT ALL.

WE ARE IN BUSINESS TO FEED OUR FAMILIES:

CUSTOMERS (ALL KINDS OF CUSTOMERS ) ARE THE KEY TO OUR SUCCESS

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