Nice article on improvement in customer service. This could be the next thing for branding rather than product features.

Too often we treat the symptoms of customer defection but not the cause. The customer service experience deserves much closer attention in most organisations. Perhaps even more so than the brand itself, the service experience has extroadinary ability to enhance or damage customer loyalty and retention. It is too often the cause of defection yet wouldn’t be with more regular ‘check-up’s’ in place.

This article is right on the money. In our experience few organizations correlate the customer experience with the true business drivers or lifetime value of the “customer”. Generally organizations make calculated guesses and end up working on the wrong part of the business. The surprise arrives when, after the intervention, there are no changes in the metrics. The data are almost always resident but the information is poor. We use the accronym DRIP—data rich information poor. The data should drive information that gets one to the root cause in a just-in-time feedback and just-in-time reporting system. The information should be available to all tiers of management to effect change. The technology to accomplish this today is available and is not an expense but an investment. Recovery of 2 to 3 customers per month easily covers the cost. There is also a cost saving in that the personnel required to crunch data become obsolete and dash boards become electronic.

The days of data crunchers are over and technology is in. The days of the balanced scorecard are over and the era of the dynamic dashboard are in. “The Listening to the Customer” has never really been here until now. Do the test for yourself. If you are customer focused, do you come to your office every morning and look at a dashboard to tell you how your customer experience measurements were yesterday and what the trend of these measurements have been over the past number of periods? In striving for excellence, one should be positioned as a racing car driver with a dashboard that gives them the information to win the race in time all the time until the race is won. Imagine driving a car and hoping to finish (forget the win) with no dashboard; many organizations and teams do.

Neither all customers nor all service situations are the same. Reducing service on the basis of a random survey can lead to serious loss of market share. Similarly, the most patient customer will need immediate service in an emergency. I think it makes more sense to introduce price points and a dedicated line for emergencies. Customers should have the option to subscribe to priority services. All customers should be served without delay when they need help in a hurry.

This week market research stats came out confirming that customers are “bored” with the retail experience—the same products, stores they can’t navigate yet all look the same, nothing new.

When the economic pendulum swings as radically as it is now, pulling back to traditional customer basics can be critical: assuming nothing, going past complex-but-distant results of analytics, and getting back to face-to-face interactions. Asking the simple questions, really caring about customers’ reactions, needs, feelings, and wants. Asking, “Do you want us to stay open for business? and if yes, would you continue to be our customer?” “What are the three words you’d use to describe your experiences with us through time?” “Have you been surprised and/or delighted with any aspect of our products/services and, if yes, which ones and would they sustain you as our customer?” “Have we disappointed you and, if so, how?” “What kinds of things would you like to keep buying from us?”

Customers respond at a gut level about their experiences. Executives in charge need to have the courage to raise these questions to their customers, face to face.

The best directions I’ve ever received about my business—about designs, clothing styles, color, materials, and pricing—have come directly from customers. Primary market research never fails; whether it’s on a street corner, in an airport terminal, through a focus group, in a well-crafted survey, at check-out or in a “How’d we do?” post-experience e-mail. People are still people, and they still think it’s really important when people care enough about them to ask. When we give customers what they want, and don’t give them what they don’t want, business works and those 20 percent bread-and-butter customers come back 80 percent of the time. That’s focus: building on mutually-beneficial loyalty.

It is easy to see that like most of the problems businesses face, this one doesn’t have a silver-bullet solution.

The article rightly lists what is required. However, exactly how to go about doing this is the challenge that confronts most organizations today.

It may be possible that the solution lies somewhere between an organizational restructuring (marketing and sales, specifically) and an attitudinal change in how senior management perceives and interacts with ground level information. For example, a company might assemble a ‘crack’ group of professionals from different departments to track these kinds of discretionary measures and investments. Formalizing the process of gathering market intelligence, and giving it due weight in the decision making process, might be another required step.

Today the implicit mindset around traditional contact center metrics—such as call volumes, first call resolution rates, call handling rates, hold times, cost per call, and transfer rates—will typically not provide enough insight for organizations to optimize their customer service assets. The ‘break point’ is certainly both interesting and compelling. What was not touched upon is that customer service needs change quite frequently and gathering enough data points to identify the break point will take time. Having a formal iterative process in place will provide the information needed to allocate appropriate resources to optimize customer service assets to retain customers and reduce costs. This can be done by consistently analyzing the break point in conjunction with other metrics in the contact center.

I enjoyed the article, but I think this downturn is highlighting something much bigger: the need for retail to reinvent itself. Retailers are generally large, slow-moving, bloated organizations. During this downturn, as retailers slash costs, they should be approaching their cost cutting with a “core vs. critical mentality.” That is, if a business operation is not core, then it should be cut or sourced. An example is database marketing. Retailers have spent billions to build marketing databases and to analyze customer buying patterns. Many retailers will tell you it is one of the most strategic assets they have. The reality is that the information from those systems is the strategic asset, not the data itself. Data management is a commoditized service that should be sourced and retailers need to learn how to manage those relationships rather than internalize the costs.

During the 1990s, Wall Street consistently battered retailers who had internal credit card operations asking the question, “Are you a bank or a retailer?” Often, banking results either propped up poor retail operations or dragged down good ones. Likewise, this downturn should force retailers to reexamine who they are and specifically what functions are core to their business. Those functions include: design, merchandising, channel management, brand marketing, pricing, and customer experience. Any other service, whether it be Human Resource administration, database marketing, production sourcing, or distribution should be very carefully examined for third party sourcing opportunities.

Best Buy has started down the path to become lean and nimble and to find trusted partners who have full access to the brand to provide support services. In many ways, this is the trusted supplier methodology that Japanese manufacturers have used for years. There are partners and there are vendors. Vendors produce widgets at your direction. Partners produce new ideas and opportunities that make sense for your brand because they are a de facto extension of your business.

Retail needs to change. It needs to go on a diet, slim down, become nimble, shed unnecessary costs, and shorten design to rack cycle times. Those retailers who do will thrive; those retailers who do not will eventually succumb to superior business practices.