Success of Fast Food Restaurants Starts With How Customers Order Their Food

A few years ago, I took my operations management team on a field trip in downtown Hartford, Connecticut. The destination? Fast food restaurants. The purpose? To experience how process design impacts customer experience, and ultimately the success of the establishment.

Our first stop: McDonalds. The five of us crammed into a tight crowded area, spreading out into separate lines in front of a register. The five order takers were busily moving their specific lines as fast as they could, but large complicated orders were clogging up the line, slowing the pace. While the order was being filled, people milled in front of the register waiting. And when the food arrived, people would grab napkins, stirrers and straws from containers at the register. The result: A crowded mess and unhappy customers.

Lesson learned: In that location, McDonalds probably did 75% of its overall business during lunch, yet it was clear that the lobby was just not big enough. The separate lines for each register, the lack of space for waiting customers, and the fulfillment of napkins at the same place made the purchase experience completely problematic.

Our next stop: Wendy's. When we entered the restaurant, there was a feeling of order...a single line organized with rope barriers guiding people. When a register opened, the next person in line moved to that spot. When the single line became long, a Wendy's person came out and took orders for each person in line, giving them a slip of paper to hand to the register clerk for faster ordering and payment. Once an order was given, the customer shifted to the side where condiments and napkins were available, making plenty of room for the next customer. Once the order was ready, the customer was called, and the food was given. The result: a fast and responsive system.

Lesson learned: Given that orders are not uniform, the Wendy's line systen eliminated the unlucky line selection from the process. As well, the ordering and the fulfillment process were separated so as to keep the flow moving. Lastly, when the line queued up during rush hour, Wendy's employees came out from behind the counter to take "pre-orders" so that when the customer made it to the register, the transaction was sped up dramatically.

Our last stop: Sbarro's Italian. This food setup is cafeteria-style, in that customers take a tray and single file move their way through the selections. Seeing and smelling the food was a lot different than just ordering from a board. HYowever, the speed of this process was totally dependent upon the orders of the people in front of you. If you just wanted a slice of pizza and a fountain drink, the speed of your order may be a minute if the line is short, but 10 minutes if the person in front of you ordered four calzones. The result: the potential for extreme delay.

Lesson learned: Single queues with variable service times may be the easiest of all processes to set up, but have the real potential to clog up. Here you are only as fast as the slowest order.

My View:

Commitment to service is more than just enthusiastic employees and encouraging posters. Sometimes the commitment is also in the thoughtful design of the service delivery itself.

These three restaurants were within a block of each other, competing for basically the same clientele...the business employee. The criteria--good food in quick delivery--was the same for all three. Yet, each designed its delivery differently...and according to my operation management team, with different results.

Wendy's clearly understood and designed its process to deliver. Its single line system with different areas for ordering and pickup sped up the process. Its contingency plan to take pre-orders enabled the process not to get bogged down the volumes increased.

McDonalds was poorly designed, from process to lobby space. The entire experience left the customer wanting better.

And Sbarro's restaurant, while showcasing its food, created a potential for severe bottlenecks, especially for those ordering quick items. When a slice and a Coke take 15 minutes to order, no matter how good the food is, the customer will be unhappy.

When a company makes the commitment to deliver permium service, understanding how it is delivered and the impact on satisfaction is critical. Then the company can design its processes to deliver. This is one of the themes within "Perfect Service."

Get Rid Of Automated Voice Response Systems; Let Call Center Reps Service Your Customers!

Bill Taylor, co-founder of FastCompany Magazine, recently blogged about a particular customer experience that we all face--and we all hate. That of the Automated Call Centers or Voice Response Systems. These are the mazes of telephonic options callers are forced to navigate in order to either get an answer to their query or to talk to a customer service representative.

Everyone hates them. To read his blog article:

http://blogs.hbr.org/taylor/2010/11/press_3_if_automation_is_makin.html

Despite efforts to make them "human-like" or friendly, their function continues to be to try to filter away all unnecessary calls that humans are required to take. Despite their universal distaste, there is not a company in the land that does not utilize the technology. Why? The cost of an automated call is pennies compared with the dollars it takes for a human response.

Taylor believes we have it all wrong. Instead of thinking about call centers as expenses to be minimized, leading to more automation efforts, he thinks businesses should view them as business centers that are there to enhance the business through service.

"It's worth noting that some of the most successful, advanced, cutting-edge consumer brands I've gotten to know over the last few years explicitly reject the idea that that customer service is a cost to be cut rather than an strategic advantage to be honed," Taylor writes.

My View:

For years, the Automated Voice Response system has been used for two purposes: 1. To route calls to the correct location, and 2. To answer routine questions in a fast and efficient manner.

With the advent of convenient centralized toll-free 1-800 numbers, companies need to be able to get callers to their needed departments. This need still exists.

However, the second purpose, to deliver routine information, has become obsolete as the Internet is clearly a superior choice for users. Therefore, account balances, transaction statuses, trade instructions, and more are no longer needed on the telephone system. In fact, they are now negative in that call tree menus are way too long and impact customer satisfaction. My wife just called the State Department of Consumer Protection for a business matter and endured nine levels of menus before she was able to speak to the correct person. Frustrating, even though she got the answer she wanted very quickly from the person.

Moreover, Taylor and others argue that a personal conversation is an asset rather than an expense. I wholeheartedly agree. Call center customer service representatives give companies the ability to:

--reinforce the Customer Service experience through caring, expertise and efficient handling of the call;
--identify opportunities for up-selling or cross-selling the company's other offerings;
--identify issues that a customer has with the company's services or products before they leave for the competition;
--collect data about customers' satisfaction with service or product that can be used for future enhancements.

Call centers can be the best asset a company has for satisfaction, retention and growth. Why companies continue to invest in technology to prevent that conversation from happening is short-sighted.

Great At Delivering Service? The Best Strategy Is To Tell Everyone About It!

This morning I commented on a blog from the Harvard Business Review about "Understanding Customer Experience" written by Adam Richardson. He tries to define what Customer Experience is as well as to document steps to design the experience. He cites the usual suspects when describing companies that get it right--Zappos, Southwest Air, Google, etc.

This list got me thinking. Why do we always go to these companies when listing great service providers? How do companies break through to be viewed as "legendary?" I have cited Zappos, and yet I have never bought a pair of shoes from them. I have purchased numerous items from Amazon.com (Zappos new parent) and have been very impressed with them, but they rarely make the same list. Why?

Here is my comment:

Adam--

I think part of the reason that Zappos, Southwest and others are consistently cited as being prime examples of delivering premier customer experience is because the companies themselves tell you that they are. It is part of their image campaign that starts at the top and cascades down the organization. Even our mentioning those companies enhances their image.

One company I worked for years ago improved its customer satisfaction scores on an industry survey by writing a timely letter to its customers reminding them of the great job our firm was doing for them. In short, we gave them the words that they then echoed on the survey. The result--improved scores.

Companies that "full body commit" to their strategy and service image are more likely to gain this reputation. Have I had the same bad experiences flying Southwest as I have had at Delta? Sure. But I give Southwest the benefit of the doubt for a bad experience or two because I am bombarded with messages telling me they are great.

I would encourage any company that commits internally to designing a premier customer experience (which is vitally important) to spend as much time thinking through the external portrayal of their services. And then to aggressively play offense. If you keep telling me that you are the best, I might believe it, and maybe even tell my friends.

--Christopher W. Myers

My View

You can read the blog here:

http://blogs.hbr.org/cs/2010/10/understanding_customer_experie.html

I think, in addition to providing great service, these companies also market themselves as service champions. When you go on the Zappos website, there are dozens of reminders that are in your face telling you about their great service. From awards to customer testimonials to bumper stickers saying "I heart Zappos.com." They tell you they are great, and then we believe them.

Then bloggers and business writers and academians pick up the torch and run with it, citing the extraordinary service.

When companies decide to make the journey to becoming a premier service provider, and commit to designing a uniquely satisfying customer experience, they also need to commit to an aggressive campaign to tell everyone about it. That is almost as important as delivering the experience.

Customer Experience Comes From Focus--Here Is One Company That Is Headed For Problems

Here is a customer service effort that is doomed to fail. Here is the project's obituary.
--------

I was performing a competitive analysis recently on a large mutual insurance company, and came across these paragraphs in its 2009 annual report:

CREATING AN EVEN MORE CUSTOMER-FOCUSED ENTERPRISE

For many of our customers, “service” and “ease of doing business” have become key differentiators and qualities they’ve come to expect in a business relationship. During the past year, we conducted a frank assessment of how (the Company) stacked up in delivering these qualities and concluded that we can do better.

As a result, we implemented a company-wide Operational Excellence Program aimed at assuring that we achieve continuous improvement across the enterprise to enhance service and ease of doing business, while also empowering employees and eliminating wasteful activities.

Our goal is to provide the best possible experience for our customers and to operate as efficiently as possible so that we can provide the highest quality product at the lowest possible price and pass the efficiencies to our policyholders in the form of dividends.

The initial paragraph, written by the company's chairman, speaks about how the firm must strengthen its customer focus in order to maintain competitiveness. It appears that analysis shows it has fallen behind.

The problem begins in the second paragraph when the company's customer service focus begins to smell a bit like a productivity mission. I have observed many "Operational Excellence Programs" and none of them have been centered around improving the customer experience. By the end of the sentence we are introduced to the dual nature of the program--improve service and eliminate waste.

The last paragraph completely muddles the mission by stating that the goal is to provide the "highest quality product for the lowest possible price." And then to pass the financial rewards of all of this new-found efficiency onto policyholders in the form of dividends. Sigh.....

What began as a focused mission to improve customer service instead became an unfocused mess of enhancing products, eliminating waste, and, oh yes, improving service. Since the savings from this program will be passed onto policyholders, there is no question that victory will be declared as costs are slashed, and that customer satisfaction will remain at competitive disadvantage.

My View

This effort will undoubtedly fail. It is doomed from the start. The reason: a lack of focused commitment.

I have written before about a company's need to decide how it will compete, and then fully commit to that course. It is about a "full-body" effort to be the best at some aspect of its competitive landscape, and then to take advantage of that leadership to grow and profit.

It is clear that this Insurance Company is concerned that it is falling behind in its Customer Service standing. Is this bad? Only if the company is competing against other insurance companies on the basis of Service Excellence.

But what is also implied is that the company has cost concerns. Is this bad? It is, again, if the Insurance Company competes based on price and cost. Given the price wars going on in the insurance marketplace, this could be a big concern.

I am the first to believe that improving Customer Service should lead to lower overall costs over time. But to a company to want to be a competitive leader in service, cost leadership should not be the focus.

Even calling your Service Improvement Project an "Operational Excellence Program" is so internally focused that it is laughable. The project should be named "The Customer-Is-The-Center-Of-Our-Life Way of Doing Business."

Instead, the strategy should be to delight your customers so they stay at higher premiums and bring in more customers through unsolicited referenceability. It is not a short-term project that will yield efficiencies that will be available to pay out as dividends. It should be a revamping of the way of doing business. If there are any wasteful practices discovered, the funds should be reinvested in enhancing the service infrastructure to develop differentiable and lasting service leadership. Only when the business effort is successful should policyholders be paid.

That is, if the company really even cares to improve its service. My suspicion is that this is a cost cutting effort in the guise of customer service. I will be watching this company now from a different perspective.

Perfect Service Magic Comes From Wowing Current Customers

Not Related But A Funny Advertisement About Service

I am spending some time in Wisconsin these days, and I noticed an interesting phenomenon on the radio. At least 80% of the advertisements for local businesses promoted their high levels of service, their moneyback guarantees, and their industry rankings for satisfaction. All types of businesses were advertised: health insurance, roofers, car dealerships, and security firms. And most tried to position themselves as the market's service leader.

I am of two minds about this:

1. I think it is great that companies believe selling service satisfaction is a viable competitive weapon. They are counting on a sizable segment of the population to positively respond to the idea that being satisfied with the service is more important than having the lowest price or the most progressive features.

2. I worry that promotion of premium service is not over-hyped to the point of numbness. And that this is viewed as a way to get new customers, and then under-delivered. It reminds me that 80% of companies in a recent survey said they wanted to use the customer experience as a competitive differentiator, yet only 40% had any type of formal service program in place.

I hope that these offers are truly well thought out, and that when customers are attracted to the offering, the company can deliver on the promise. After all, saying you have the best service is easy to do, but much harder to deliver.


My View

While advertising for new customers is important, Perfect Service programs focus on your existing customer.

• By delivering a premier experience to that customer, an asset is created that continues to grow. The customer will stay with you, buy more from you, and serve as a reference for future sales.


• The customer experience is designed based on a model for a "perfect" or ideal transaction. All aspects of the delivery of that perfect transaction are measured and improved upon. The feedback is frequent and instantaneous.


• Satisfaction is unconditionally guaranteed.


• Client satisfaction success stories are trumpeted throughout the organization.

Only then can a company confidently go to the marketplace and tout its services. And the experience will match the promotion.

SuperGuarantees and Angie's List Are Changing How Consumers Make "Perfect" Choices

At its core, Perfect Service is based on delighting customers through guaranteed offerings. These customers will then stay with you, buy more from you, and help attract others to you. A formula for success and growth.

One of the most important elements for establishing a "Perfect Service" program is to establish and boldly promote a "Perfect Guarantee." This one act sends a message to potential customers, as well as current clients, that your company is serious about providing satisfaction.

Another element is for your customers to promote their happiness with your services. Companies need to get creative in how they get the word out.

I am seeing a lot of work being done in both of these areas, and while I believe they are not fully developed, the trend is a good one:

SuperGuarantee Designation

Consider the Phone Directory....in recent years, these businesses have been a major victim of technology advancements with online and mobile data replacing the hefty phone book. When I need a phone number, I no longer even think about using the book or even the Phone Directory's website. I can go direct to the provider's website or query my search engine for a listing of providers. If most people this this way, why would businesses advertise in Phone Directories any more?

Lately, I have begun seeing advertisements from the Yellow Pages about a new program called the "SuperGuarantee." In short, if a consumer registers with the SuperGuarantee service and selects a service provider from the Yellow Pages listings that has a "SuperGuarantee Shield" designation, the work is guaranteed. If work is not completed satisfactorily, the service will mediate the conflict and, if still not satisfied, will pay the consumer $500 for the trouble. (Obviously lots of terms and conditions apply, but the concept is clear.)

For businesses, the SuperGuarantee "Shield" is given to companies who meet advertisement criteria of the Yellow Pages. There is no review of services, no adhering to specific business practices, etc. You pay for the advertisement, and you get the Shield at no extra charge. The Shield means that the SuperGuarantee company will guarantee the work, not the service company.

Collecting Service Reviews

Another service that is also growing is one called "Angie's List," where members can access "thousands of unbiased reports and reviews abouth service companies in your area." Again, the concept is simple: consumers report their experiences and members can review these experiences before buying a service. Should there be a problem with the service, Angie's List members also have access to a "conflict resolution team" that will try to settle the dispute.

The only way for a company to be listed is to have performed a service, and have that service experience reported and rated by a member. Companies, however, are permitted to advertise discounts to members, but only if they have an A or B rating.

While there are no guarantees offered, the collection of unbiased reports assist consumers in making the right choices.

My View

When selecting service providers, consumers are constantly looking for ways to sift through all of the information available to pick the right provider. Horror stories abound about the impact of bad decisions.

Both the Yellow Pages SuperGuarantee and the unbiased reporting from
Angie's List attempt to help the consumer with this selection. Both are unique
in their approach, trying to add value to what is perceived as a high risk
transaction.

SuperGuarantee spotlights service providers with its "Shield," offers provider conflict resolution services, and offers a financial guarantee if the experience fails. But service providers get listed if they advertise in the directory, not if they provide premier service--this lack of screening is a problem.

Angie's List delivers user-generated reviews on service providers, offers provider conflict resolution services, and has some membership benefits like discounts to services reviewed. But the consumer is powerless should the provider not perform, other than the power of a bad review in Angie's List. I am not sure this is enough of a deterrent.

I believe, however, that both services are on the right track. Consumers need help to wade through the potential providers of service, and both get partially the way there. Perhaps, each company can take their service a step further:

• SuperGuarantee needs to establish a filtering mechanism so that only companies that provide excellent service be permitted to advertise a Shield. The right to advertise the Shield is a premium and should be earned.
• Angie's List should consider awarding its top companies its own version of the "Shield" to designate top providers according to its members. Then perhaps if members select companies with the "Angie Shield," Angie's List will guarantee or insure satisfaction with the work. That would make the user feedback a meaningful metric rather than just anecdotes.

I like the number of ways this area is evolving. The spotlight needs to shine brightly on companies providing top service. Keep going!

Huh? Did I Read This Right? CIGNA HealthCare Wins Customer Service Delivery Award Through Focus on Helpful and Easy Interactions!

Gartner Group recently announced the awarding of its Outstanding Customer Service Delivery award for 2010 to CIGNA HealthCare. This follows its 2009 award to CIGNA for Outstanding Customer Service Strategy.

Huh? Outstanding Customer Service Award to a HealthCare Company? Isn't this the same industry that for years has been viewed as the poster child of customer abuse and mistrust? Isn't this the same company that had a nickname amongst doctors and patients as "CIG-NO."

In previous posts, I have often said that if one healthcare company can break from the pack based on a service strategy, it would help transform the industry.

It appears that something significant has indeed been launched at CIGNA and, according to Gartner, has begun to take root. I took a look at CIGNA's website and found just how simple and aspirational its new mission is:

The Mission:

To help individuals enrolled in CIGNA plans achieve their health goals with helpful information, trusted support and excellent service.

To do that we must: communicate simply, consistently, and in ways they find personally relevant, compelling and easy to understand.

Every interaction must be helpful
Every interaction must be easy

The Plan:

If we:
•Make interactions with us positive, productive, and seamless
•Provide helpful information that’s understandable and easy to obtain
•Do this repeatedly and reliably

People will:
•Trust us
•Come to us so we can help them
•Fully use their benefits
•Take better care of their health

And if this happens, the cost of health care will be lower for all.

I like it.

I like big goals, and there is none larger than the goal of lowering the cost of health care for all.

I like simple plans that are easy to understand, and this one points out that "if we do this, then people will do that...."

I like fact-based approaches that outline what the company has to do in order to accomplish the mission. CIGNA's website points out that, among other things, it has:

• eliminated what frustrates--if you want a human, you get one, 24/7


• redesigned explanation of benefits brochure


• redesigned new and simple enrollment guides

My View

CIGNA's efforts are to be applauded, For now, it appears that it is truly focusing on many of the features that matter to customers. Should it continue along this path, we believe what may emerge is a company that is approaches its business differently than others in the benefits industry.

As a former CIGNA employee, I find this a refreshing focus in that the company for years has found itself mired in an expensive technology and re-engineering debacle that cost the company dearly in customer goodwill, client focus, and employee morale.

The caution I put out there is questioning how deep this commitment to Customer Experience may be. As Bill Hogg recently wrote in his blog "Customer Service That Astonishes," companies need to become a premier customer service company in its strategy and culture, rather than having Customer Service as a tactic that sits alongside all other tactics in the corporate tool box.

I look forward to seeing more progress from CIGNA, and other HealthCare companies that must follow suit. This is how we will see leadership in transforming a troubled industry.

After The Win, Companies Need To Deliver "A Perfect Conversion"

Your company has worked for weeks and months on positioning your services exactly the way you want. The client has given the right signals that it values your service proposition, and thinks your approach is intriquing. There seems to be a connection forming between the decision-makers and the sales team.

And then you get the word....you have won the big sale! Congratulations. Time to brew the pot of coffee...the real work begins.

Now comes a critical stage in the relationship...the Implementation or Conversion process. This stage is the first time your company moves from typical sales hype to reality of having to deliver what you sold. In many instances, this is a sobering time in the deal for both parties, one that Perfect Service companies need to critically analyze and design.

Bruce Temkin, in a recent blog post, describes this as the "Engagement Phase," the underappreciated stage between Point of Sale and Service. He believes that during this stage instead of worrying about collecting the proceeds from the sale, companies should focus on getting their customers satisfied. http://www.customerexperiencematters.wordpress.com/

The longer the transition period, more risk, and opportunity, a company has to reinforce its value proposition. Companies take this transition stage way too lightly.

My View

Many industries, particularly those delivering outsourcing services, experience long periods between sales and ongoing service. Typically, this stage is viewed as a technical experience as the service provider is taking its new client's detailed requirements and translating them into service capabilities. We are in the weeds here.

To perform this phase, most companies deploy a dedicated conversion or implementation team to the transaction. This team is staffed with Project Managers, Business Requirement Analysts, Technical Analysts, and other members of the Project Teams

To collect client requirements, there is a lot of client interaction and documentation, often with face-to-face meetings. Any confusion or details that are unclear are addressed here by this team.

In short, the conversion process is an intense learning experience, with frequent client interaction.

And once the conversion is completed and services are now live, the client is transferred to the Relationship Manager and the ongoing service organization. Several things can be improved with this typical arrangement:

1. Most of early relationship building is done with Conversion Team, not ongoing Service Team. The early meetings are where first impressions are created. While probably personable, the Project Manager's chief talent is most likely structure, detail clarity, and adherence to schedules.

2. Most client learning is experienced by Conversion Team, and although details are likely documented, the "soft" learnings are not as well as the conversations leading to specific decisions. As a result, client particulars must be "re-learned" by the service team.

3. There is often a lack of continuity in commitments made from sales to conversion to ongoing. This is understandable given that each group has its own objective. Unfortunately, that objective is rarely the same.

As Temkin describes: the main objective of Sales, Conversion and Ongoing Service should be the satisfaction of the client, not just the achievement of a departmental goal. Companies that recognize this will review their conversion processes with a different eye:

--Involving Client Service staff during the conversion process;
--Training Project Managers on the tenets of delivering satisfaction rather than merely the execution of the project;
--Identification and resolution of client dissatisfiers early in the Conversion process, rather than waiting for them during service delivery.

In Re-Engineering The Corporation, the classic business book, a view presented is that Conversion is just an extension of the sales process. That makes some sense, since business requirements and offerings are collected during the sales process and are used for implementating that business.

Instead, I offer the following thought: that Sales and Conversion are just the first part of the Service Process, and need to be as thoughtfully designed.

Obama Speech May Have Gone Over Head Of Many In Televised Audience -- That's Okay!

Saw this news item about President Obama's recent televised speech about the Gulf Oil Crisis:

(CNN) -- President Obama's speech on the gulf oil disaster may have gone over the heads of many in his audience, according to an analysis of the 18-minute talk released Wednesday.

Tuesday night's speech from the Oval Office of the White House was written to a 9.8 grade level, said Paul J.J. Payack, president of Global Language Monitor. The Austin, Texas-based company analyzes and catalogues trends in word usage and word choice and their impact on culture.

Though the president used slightly less than four sentences per paragraph, his 19.8 words per sentence "added some difficulty for his target audience," Payack said.

In order to clearly convey your message, one must always keep in mind your target audience and the tone of the message you are trying to communicate. It is inconceivable that President Obama's staff did not purposely craft and deliver this speech as intended.

My View

Without opining on the state of American education, general guidance is to craft important messages at a 6th grade level. And without expressing a view on clearly divisive politics, I believe President Obama purposely took a different tact.

Why? I think that the Gulf Oil Crisis is a serious and complicated issue, one that requires careful description, planning, and messaging. The President needed to communicate to multiple audiences in an even-handed, yet compassionate way. While BP is an obvious villain in this episode, it is also a necessary partner in the fix, both in terms of capping the "spewing" oil and in funding the cleanup.

The President knows that using flip or overly simplistic antagonistic rhetoric will not remedy the situation any faster. The day following the speech, Obama met with BP officials and secured $20 billion for a recovery fund.

It is expected that citizens impacted by this disaster are angered. Those directly representing them must also express outrage. This outrage can be easily described in language concepts that are simple, emotional, and elementary.

However, when the senior leader speaks during difficult times, he or she must always be mindful of the exponential impact of his or her words on those listening. Those words must be consistent, factual, empathetic, but solution-based and hopeful.

To do this, President Obama stepped up the level of communication in his speech. He sounded like he understood the complicated issue, tried to put it in perspective with examples of other disasters, and was working all angles to minimize its impact. I think there has to be some comfort that the leader is in charge, even if the message sounded more professorial than preacher.

Senior leaders must understand their audiences, but should not simply communicate in simple terms. Rather, thinking through the intended outcome, and then crafting an appropriate message and medium is preferred.

Delta: Sometimes The Quality Of Service Is About The Art of Recovery

In a private moment after a particularly tense meeting with an important client, the senior manager at the client wrapped his arm around my shoulder and said, "Sometimes the quality of service is about the art of recovery." That lesson stuck with me throughout my career, and I was reminded of it recently while reading a letter from Delta Airlines this week.

In short, the letter apologized for a recent unpleasant flight experience when my bag was left behind (made even more frustrating since I had to pay $25 to check the bag in the first place.) The letter announced that I was going to be awarded 1,500 frequent flyer miles for my troubles.

Last week, I received a similar letter from Delta Airlines awarding me 1,000 frequent flyer miles for a cancelled flight.

Despite the inconveniences from the delays and the baggage mishap, I did not walk away from those incidents at the time with a poor feeling about Delta, rather sensing it was just my time to have problems that are common on all airlines. During the delay, Delta updated passengers with honest and relatively accurate progress reports, and ultimately we reached our deistination. When my bag did not show up, the clerk methodically and efficiently recorded my information and the next morning my bag was delivered to my hotel, as promised.

So while the letters and frequent flyer bonus miles were more symbolic than substantial, they were recognition that something went awry, and Delta management noticed. I like that.

My View

It is an unfortunate fact of business and life that things will go wrong. Using that long ago observation about recovery, Perfect Service identifies these as opportunities to demonstrate superior service.

One of the Perfect Service building blocks, that of "Perfect Improvement," is that customer service people must be empowered to "fix the situation" while the organization reviews the problem to determine root causes and ways to prevent it in the future. Customer service people do not wait until the problem is solved, but rather, do their best to make the impact of the current problem minimal.

Customers should feel like the error is not a usual event, and that the
service provider takes this specific situation very seriously. My counsel is to
make the company or person feel like you are "over responding" to an unusual
situation.

My son was recently receiving baseball lessons from a pitching coach to help him control where his pitches were going. After throwing a bad pitch, my son would think he was a wild pitcher. The coach said that when a pitch is wild, the pitcher should think that this is an unusual situation, and that the next pitch will be back to normal. That mindset alone gave him confidence, even when things go wrong.

At the airport, my expectation is that flight delays and baggage problems are normal events. What Delta did was to remind me that, at least to this company, the situation was being viewed critically, and they were sorry. This reaction makes me think that perhaps my situation was not normal, and that Delta was going to figure out how to make sure it doesn't happen again.

Of course, if it does happen again, and I get a third and fourth letter, then my conclusion is that Delta is using these apologies as the primary means of recovery, rather than improving the process. And that would be bad.

Don't Commoditize Your Services; Taking The Weather Out Of The Weather Channel

I've read in many business publications that the number one job of the senior executive in any company is to keep products and services from commoditizing. That is, to keep away from competing on generic characteristics that ultimately ends up a price war and depressed margins.

When we speak about Delivering Perfect Service, it is with the aim to carve out a niche in the marketplace by offering services at a level that is decidedly different and superior than other competitors. For those customers that value permier service, price will be a secondary consideration. The mission for the service company then is to continue to improve and focus along that specialty...to invest in differentiation.

A news item caught my eye that speaks to curious decision-making from management at The Weather Channel. http://news.yahoo.com/s/ap/20100524/ap_on_bi_ge/us_dish_weather_channel_1

It appears that The Weather Channel, previously THE authority on all things weather, has opened up its programming to movies and other general entertainment offerings. We have watched this slippery slope into the entertainment realm for several years as the channel has packaged many weather-related documentaries for its viewers. But the move into general-topic movies has created friction with cable and satellite carriers who view The Weather Channel as a public service channel, particularly for local weather warnings.

The move follows a trend amongst other specialized television channels in recent years to stray from their original purpose. MTV rarely plays music anymore. The History Channel, A&E, Science Channel, Discovery Channel all have added content such as specialized reality shows like Deadliest Catch on The Discovery Channel, Ice Road Truckers on The History Channel, Hoarders on A&E. These are entertaining shows, but what does Ice Road Truckers have to do with history? And don't get me started on Jon & Kate on The Learning Channel.

So why do it? The answer is simple....specialized programming is attractive to a select audience. General programming is attractive to a wider audience. The thought is that a smaller share of a larger audience is potentially more lucrative than a larger share of a smaller audience.

For years, The Weather Channel honed its weather-based programming, creating a ubiquitous brand and service for viewers across the country.

But is that about to change? Will we no longer see weather on The Weather Channel?

My View

It is a curious, but common phenomenon. Management looks at the market and realizes that there are many opportunities beyond the borders of its offering. By altering its features, marketing differently, perhaps even changing pricing, companies move into new territory.

The problem is that the value proposition that vaulted the company into its leadership position in the specialty niche may be compromised. The specialty offering may soon be overtaken by competitors, and soon is no longer special.

I have seen it time and again in the benefits marketplace. Competitors serving small companies decide to focus in the large company space; companies that offer a specific product now expand to offer a full-service suite; companies that offer a premier service begin to offer scaled-down versions of the product that are less expensive. And so on.

The end result: the companies gain a few marginal wins, but I have never seen significant marketshare gain for these companies. In the meantime, the focus on the primary specialized business is lessened, and as a result so is the company's differentiation.

The Weather Channel runs the risk of becoming a marginal general programming channel, instead of the valued premier content provider that it was previously.

Before management strays into other markets and generalize their products, they would be advised to think through their current unique competitive positioning and exhaust ways to extract value and keep their products worth the premium dollar their customers are spending.

Can A Company "Evolve" Into Premier Service Provider? Yes, But Few Make It!

A critical question has been bouncing around my brain for the last week or so, and that is:

Can a company truly transform itself into a premier service organization, or must the company be "born" with that as its central mission?

It is easy to find examples of companies that make service excellence "the" key competitive dimension--think Zappos, Ritz, and JetBlue. But the question is whether these companies began ascendancy as premier organizations, or were transformed into premier organizations as a result of changes to a failed business strategy.

Bruce Temkin of the Temkin Group talks about Customer Experience maturity in a recent post in his blog Customer Experience Matters. http://experiencematters.wordpress.com/2010/05/19/how-voice-of-the-customer-programs-evolve/ He cites four stages of company evolution:

• Collectors--company focuses on getting the right data.
• Analyzers--company focuses on uncovering insights from the data.
• Collaborators--data insights are used to help departments understand issues, help continuous improvement efforts.
• Transformers--data insights are linked into most departments operations and strategy.

Bruce estimates that 40% of companies trying to create a premier customer experience are in the Collector stage, 40% are in the Analyzer stage, 18% are Collaborating, and only 2% are actually Transforming.

What does this say? It says that although many companies are indicating they want to invest in delivering premier customer service, few are getting any benefit from their efforts. Only 20% are getting the customer's voice into their decision making, and only 1 in 50 companies are actually making the customer central to their operations and strategy.

Since there are companies that are truly Customer-centric in their approach, this begs the question: did these companies follow the steps that Temkin outlines, or did they grow up already transformed. Can companies evolve?

My View:

Ouch! This data further confirms my belief that senior management in many companies are saying the words (80% of companies say they want to compete based on superior customer experiences) but are not doing what is necessary to get there. This strategic positioning runs the risk of being a "thing"--something all companies have to say because it is fashionable to do so--rather than a substantive business initiative.

Many companies that are the benchmarks for premier service have benefitted in terms of marketshare from that positioning, and have grown profitably as a result. Without knowing the companies Temkin has listed in the 2%, my bet is that many of them have grown up as "transformers."

Does this mean that if your company is in the middle of the service experience pack today that it cannot differentiate itself in the future? Not at all. But the executive "rubber meets the road" work begins when the company has gathered data and gained insight. The executive needs to make critical organizational changes that features that data, improves customer experience based on that data, and makes business priorities using the voice of the customer. In short, the executive needs to believe in the strategy and the data, and drive the company.

Without that, the company will never evolve and reach tranformative stages. Most will not. Enlightened and focused companies can.

My View: Net Promoter Is A Stat On A Scoreboard, But To Improve You Need More

My View:

In my last post, we reviewed the Net Promoter score and methodology, as well as some criticisms.

I believe that Net Promoter Score is a useful indicator as to how a company is satisfying its customers. The end.

Not very satisfying is it?

Sort of like hearing the score of the ballgame with no details--you know who won, but do not get any context that makes the game richer as a fan. Was it a good game? Did your team play well? How did your favorite player do?

As a manager, the score may be a measure of success, but did the team perform according to plan? Did winning the one game use up all of the players' energies so that they will not be in position to win future games? Did players perform as expected, or did it take heroics from one player in order to win?

As a player, the score would certainly not be enough to know how well you personally did. Did you make any mistakes? Did you miss any signs or not follow the coach's instruction? Did you take advantage of other team's mistakes?

While the Net Performer Score tells companies whether or not they performed well, it does not give a company enough information to do anything to improve their performance in the future. It doesn't tell management whether the company is performing well compared to the competitition, and whether that performance is improving over time.

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I just watched a web lecture by Frances Frei from Harvard University speaking to a group of managers about Customer Service. One item from her excellent presentation that stood out is that great companies "relentlessly pursue problems." She believes that most organizations do not treat people who expose problems as heros, and if problems never surface, companies cannot improve.

Net Performer Score does not identify problems, does not tell management how each service attribute that is critical to success is performing, does not give any root cause for the satisfaction or dissatisfaction.

It is a score. Yankees 4 - Red Sox 3.

If you want to improve your company's service performance, you must go beyond the scoreboard.

Net Promoter Score Methodology Is Popular But Has Many Vocal Critics

Measuring customer satisfaction is a critical yet surprisingly complex endeavor for a company that wants to deliver "Perfect Service." It is the process that measures accomplishment in acheiving vision-critical goals, while fueling improvement initiatives in priority areas.

Obviously, asking customers how satisfied they are with a recent transaction is the most basic question of all, but for it to be truly meaningful, the question(s) itself must be just right....simple and specific.

One measurement technique, Net Promoter, has become increasingly popular over the past few years. According to its website, Net Promoter was developed by Satmetrix, Bain & Company, and Fred Reichheld, and the concept was first popularized through Reichheld's book "The Ultimate Question." The link to the site is http://www.netpromoter.com/np/index.jsp

In short, Net Promoter "is based on the fundamental perspective that every company's customers can be divided into three categories: Promoters, Passives, and Detractors.

By asking one simple question — How likely is it that you would recommend [Company X] to a friend or colleague? — you can track these groups and get a clear measure of your company's performance through its customers' eyes.

Customers respond on a 0-to-10 point rating scale and are categorized as follows:

---Promoters (score 9-10) are loyal enthusiasts who will keep buying and refer others, fueling growth.
---Passives (score 7-8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
---Detractors (score 0-6) are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.

To calculate your company's Net Promoter Score (NPS), take the percentage of customers who are Promoters and subtract the percentage who are Detractors."

For example, if a company's survey results found that out of 100 surveys, 50% scored 9-10, and 30% were 7-8, and the remaining 20% were 0-6, then the company's Net Promoter Score would be 30. The higher the score, the better. A negative score indicates real trouble. (Almost every Healthcare company scored a negative NPS, with CIGNA scoring a low -30.)

Companies use this score to determine, on a relative basis, how well they are satisfying their customers. It is a simple, easy-to-understand, method. Customer Satisfaction surveys around the world now include this one question.

However, the score methodology has numerous critics, citing flaws in its approach and lack of depth of information.

Barry Dalton, in a recent post from his blog "Customer Service Stories...And Other Posts", declared "there seems to still be an increasing number of customer service practitioners talking about NPS and staking a significant portion of their customer service time and resources on collecting it. At the same time, oversimplification of the concept is epidemic, creating a clouded view of the company's performance vis-a-vis the customer's perception." http://custservicestories.blogspot.com/2010/04/ultimate-question.html#comments

His main criticism is that the information gathered from this question is too generic to be meaningful. He believes that surveys should evaluate the specific interaction that took place, and not the intended bahavior (the recommendation to friend or colleague) after the fact.

Taking the critique a step further, Ron Shevlin, posted a scathing comment on Dalton's blog:

Net Promoter Score is the biggest bunch of snake oil to come to the world of management in 25 years. There's so much wrong with the metric, it would take a couple of hours to just begin to list the reasons.

Shevlin goes into detail on his objections with the score in his blog "Marketing Whims." http://marketingroi.wordpress.com/2007/01/11/stop-measuring-your-net-promoter-score/

In his post, he lists the reasons why companies should stop using Net Promoter Score in their surveys:

• Doesn’t help explain WHY a customer would recommend the firm.
• Measures intention, not behavior.
• Doesn’t capture inherent consumer differences.
• Can incent undesirable behavior.
• Uses funds better deployed elsewhere

"It’s been said that you can’t manage what you don’t measure. But a metric that doesn’t help you manage isn’t worth measuring. And the Net Promoter Score is a measure that doesn’t help you manage."

Next Post: My View On Net Promoter Score

Important Lessons In Collecting Satisfaction Feedback--Purchasing A Used Car From CarMax

After looking at the prices of larger, well-equipped new cars at local dealerships, my wife and I decided it made sense to check out CarMax, where we thought we could find what we wanted at a reasonable price.

Of course, we were nervous about buying used...I always think I am being taken advantage of whenever I am buying a car. The end result is typically an expensive nice car with expensive extra features I don't want and expensive warranties I don't need.....but at least we have a nice car. With a used car, I'm not even sure we'll get that!

So three weeks later, we are driving home in our newly-purchased auto from CarMax. (Yes, I bought the warranty....but the car price was fixed so I knew I wasn't paying more than anyone else...).

My wife was happy that she is now driving a nice car, and I was happy that I didn't have to pay a new car price for the "luxury" vehicle. I was also intrigued by the business model at CarMax and was overall pleased by the process that didn't make me feel like prey waiting to be pounced on by carnivorous salesmen.

So now it is several weeks later, and the CarMax Customer Satisfaction Survey arrives in the mail. When my wife and I sit at the kitchen table this morning to evaluate, I begin to understand that we view the experience very differently. And rating CarMax was not going to be easy.

What Is Being Evaluated?

CarMax's stated mission is to sell "great quality cars at low prices with exceptional customer service." To achieve that goal, the survey states that our "honest assessment" of the buying experience was needed. On the survey is our name, our salesman's name, and some coding presumably tracking back to the purchase...so nothing anonymous here. Also of note is that the survey is from CarMax itself, and not a third party like Dalbar.

My approach to the survey is to evaluate the "buying experience," using past miserable transactions as my benchmark. In that regard, I found the experience positive.

My wife's approach is to evaluate her satisfaction with "the car" as her primary satisfaction criterium, presumably using a problem-free new car as her benchmark. Since her car has been in the shop for a week fixing things we did not see on the lot, she is finding the experience problematic.

Both are legitimate approaches, based on the customer's expectations and definitions of satisfaction. And both viewpoints must be addressed for CarMax to achieve its stated mission.

The CarMax Survey

The CarMax mission can be broken down into three parts: great quality cars, low prices, exceptional customer service. Presumably, satisfaction must be evaluated across all three categories. Of course, CarMax may view the three categories with unequal weighting, such as focusing mostly on "exceptional customer service." If they did, they might be missing something important!

CarMax's survey starts with Satisfaction and Loyalty questions, including the ubiquitous "How likely is it that you would recommend CarMax to a friend or colleague?"

The survey then dissects the buying experience:

• Greeting at the Store
• Wait List
• Selecting A Vehicle
• Product Knowledge
• Communication Skills
• Appraisal Process (in case I wanted to sell my car to CarMax)
• Competitive Performance (versus other dealerships)
• Business Office/Paperwork

Then the survey veers into gathering information about how we became aware of CarMax and our shopping process and past experiences with CarMax, none of which evaluate our experience.

The survey, using a quantitative bubble answer format, leaves no room for explanation. In its instructions, however, the respondent is told he or she may use a separate piece of paper or log onto the website.

Clearly, CarMax has a business formula that is carefuly crafted in its mission statement: great quality cars at low prices with exceptional customer service. I am wondering, however, whether the survey will capture what it is looking for? No survey questions asked about our satisfaction with the vehicle we bought. Only one question asked about the price, and that only in relation to other dealers.

Our response to the survey?

Experience with sales process--Very positive (5 out of 5).
Will we recommend CarMax?--Not at all likely (1 out of 11).
We we buy from CarMax in future?--Not at all likely (1 out of 11).

My View

CarMax has identified the right buttons to push for a great buying experience. Its mission is simple and clear: great cars, low prices, exceptional customer experience. But all of these elements must be working in order for the customer to be truly satisfied. If one of these traits goes awry, then the whole experience is sour.

It appears that CarMax has focused its attention on its service, and has done a great job at making used cars sales a "less risky" and more "professional" transaction. Clearly the sales process has been carefully scripted and choreographed, and its survey asks for evaluation of each step. Good job here.

But it also appears that the other two elements of its mission (price and quality of car) may need additional attention. The best way to understand this is to ask. And CarMax missed the opportunity in its survey.

CarMax customer experience analysts will scratch their heads when they read our survey. It will say:

You did everything great BUT we are not satisfied nor loyal.

And they will not know why.

Can Healthcare Insurance Companies Transform Their Poor Image? CIGNA Is Going To Try!

There is no question that the Health Benefits, Insurance and Delivery industries are in major flux...increasingly expensive and seemingly not making anyone happy.

For example:

My health plan with United Healthcare simply can't get my dependents right. I have twin sons and the insurance company struggles with their having the same birthday. I also have a junior Christopher and we are constantly letting them know we are not the same person, which was a real problem when we both had the H1N1 flu and needed medicine. Just silly administrative nonsense that gets in the way of a bigger discussion.

Much in the same way that my son tried to order a "Hi C" from the drive-thru at McDonalds and instead received an "Iced T." A nuisance, but almost understandable.

Apparently Health Insurance Companies are beginning to wake up and understand that they have to address this high pay-low service reputation or their very existence may be in jeopardy. For example, CIGNA has enbarked on a mission to improve the clarity of its communications, as one step in its overall service transformation.

According to Linda Ireland, co-owner and partner of Aveus LLC, a global strategy and operational change firm, CIGNA set up a Customer Experience team whose mission is:

To help individuals enrolled in CIGNA plans achieve their health goals with helpful information, trusted support and excellent service. To do that we must: communicate simply, consistently, and in ways they find personally relevant, compelling and easy to understand.

In her blog, Customer Experience For Profit, she writes:

What I like so much about the CIGNA approach is that
they’ve articulated why they’re changing, what the plan is, and what’s been done
so far. I like that the changes they’re working on should strengthen their
experience while improving financial performance – fewer questions and problems
will drive down the cost to serve customers. And I imagine there was
some candid fact sharing in the conversation that triggered this effort, about
how they got to where they are.

You can read the full text of her work at http://www.ceforprofit.com/2010/03/will-cigna-free-its-customers-of-insurance-ese/

My View

The CIGNA focus on its service experience seems to come at a good time. Not only is the industry on an unsustainable path, but its performance has opened the door to government intervention.

CIGNA's Net Performance Scores (NPS), a measure of satisfaction (more on that measuring technique in other posts), is very low.

In late March, 2010, Satmetrix released its annual Industry Benchmark survey. According to the press release, Blue Cross Blue Shield of Illinois was the only health insurance company profiled with a positive NPS, scoring 5% in a sector with an average of negative 13%. CIGNA ranked last among major health insurers with an NPS of negative 28%. Full reports are available for purchase on http://www.satmetrix.com/and http://www.netpromoter.com/. A summary of the press release can be read at :http://www.customerthink.com/news/satmetrix_releases_net_promoter_benchmarks_for_customer_loyalty
A negative score means that more people rate their satisfaction poorly than acceptable. In an industry of major dissatisfaction, CIGNA ranked the worst.

I hope the efforts that CIGNA is undertaking are truly meaningful, not only for their millions of insured, but also to establish a new benchmark for the industry. As a former employee of this company, I hope it works.

This is one industry that can use Perfect Service.

Return on Satisfaction: Experts Struggle With Establishing Financial Metrics

There is a lot of thinking going on regarding establishing a financial Return on Satisfaction metric for companies looking to invest to improve customer service. While returns are tangible for productivity (expense) and features (sales), companies struggle to find the right metric that captures improving satisfaction.

In John Oswald's Buzz Tank blog, he captures the research that companies that deliver satisfaction are also more profitable. http://www.buzz-tank.com/2010/02/11/on-measuring-the-return-on-customer-experience/

Within the comments section is a challenge by Don Peppers, a principal at Peppers and Rogers, about taking these economic concepts down to the project level. These comments are below:

Financial success that seems to be correlated with better customer experience at a company is certainly welcome news, but it hardly helps a marketing executive during a debate with other executives at the firm about how much investment a company should make in which kinds of experience-improving services. It has become fairly easy to “prove” that good customer experiences have some kind of impact on a company’s results, but Martha Rogers and I have always been struck by the fact that all these indicators are inherently non-financial metrics. Using these kinds of indicators, you still can’t actually quantify the financial benefit of, say, investing an extra $25 million in contact center training, or installing software and re-engineering a system for $50 million, in order to do a better job of treating different customers differently more effectively.

And, if your marketing exec says, well if we want a good customer experience then we should just DO these kinds of things, then our question is: What if the cost is $100 million? Or $500 million? See the problem? At some point a balance has to be struck, but where? Simply saying that CXP leaders tend to have better financial results than CXP laggards won’t solve the hard problem of resource allocation. To solve this problem you need a metric for the benefits of customer-experience-management that can be converted to dollars and cents.

----------------------------------

Peppers and Rogers have developed a Return on Customer metric that uses many of the same principles as the Return on Satifaction metric in the Perfect Service construct. I will study the Return on Customer metric and determine its benefits/shortcomings for the financial/benefits industries.

My View

My comments on Buzz Tank blog in response to Don Pepper's post is as follows> (Shortened for convenience of readers....for full post, link is posted above)

Don/John:

I think the ultimate question for Customer Service specialists is the exact question you pose: how can I calculate a Return on Investment for ncreasing the satisfaction of customers. Ultimately, to improve experiences, a company must invest capital, and that capital must have return. As you state, in the macro, it all makes sense, but how about the micro…in the world of competing priorities…how do you get a customer satisfaction project funded? Productivity projects promise reduced expenses, feature enhancement projects promise increased sales and revenue. But what about satisfaction?

I have worked on this problem in the past and developed an ROI metric for translating increased satisfaction into financial return. While developed for financial and benefits servicing markets, I think it works in concept for others.

In short, for those clients impacted:
–Probability of retention of the prevent value of current profit margins

--Probability of additional sales to that customer at the present value of current profit margins

–Probability of additional sales from referrals from that customer at the present value of current profit margins

The return on the requested investment is how many levels of satisfaction will be increased through the execution of a specific project.

One can quickly see how the math sorts itself out. By determining the clients impacted, the improvement in satisfaction metric from a 3 to a 4 will result in financial gain for the company. The more clients impacted, the better the financial return.

Customer Service Starts With Caring

"Perfect Sales " Process: Finding Those Prospects Who Already Want Your Service

Part 2--Targeting Potential "Perfect Service" Disciples

As president of your company, you have already focused the company to differentiate using a premier service approach. You have implemented many of the tenets of "Perfect Service," have begun delighting your current customers, and beginning to focus on profitable growth.

Remember, the magic "Perfect Service" success formula: Satisfied customers will stay with you at premium prices, buy more services when appropriate, and serve as enthusiastic references for new customers. The sales idea, then, is to find more customers who will act as disciples for your success.

You have now segmented your market into three sets of buyers:

1. Low Cost Buyers
2. Rich Features Buyers
3. Premium Service Buyers

Customers who value your key proposition--Premium Service--will appreciate the unique nuances of your offering, and be willing to pay higher fees. Your growth strategy should be to dominate the Premium Service segment, while working to grow that segment overall. Larger slice of a growing pie, so to speak.

There are a few categories of potential customers upon which a sales organization may target. For expediency, I will call them all "Service Prospects.":

• Prospects who value your service proposition and are willing to buy from you;
• Prospects who value your service proposition but don't know you exist;
• Prospects who don't know if they value your service proposition but know who you are;
• Prospects who don't know if they value your service proposition and don't know you exist;
• Prospects who don't value premium service but know who you are;
• Prospects who don't value premium service and don't know you exist.

An effective sales effort needs to quickly determine into which of these categories a prospect falls. Depending upon sales situations and service offered, once the category is determined, sales efforts must be targeted and proportional. Selling a service requires intimate understanding of the prospects specific needs, so the correct solution/service may be offered. Cost of sales effort is likely to be high, and also requires a high close rate. This requires time and resources, and must be focused on those prospects that already value what your company offers.

The prospects you should see out include:

• Prospects who value your service offering, and who already know you;
• Prospects who value your service offering, and who don't know you;
• Prospects who are unsure about the value of service, but who know you;
• Prospects who are unsure about the value of service, and don't know you.

Once identified, it is not useful to pursue those customers who do not value your service proposition. You will spend a lot of time convincing them that service matters, and will likely entice them with lower pricing for service that they will not value over the long run. They will never be "Perfect Service" disciples. Therefore, do not pursue:

• Prospects who do not value service, but who know you;
• Prospects who do not value service, and don't know you.

It may seem elementary, but few companies are so focused on their competencies that they are willing to cede potential sales on the grounds that the sales efforts will be wasteful, and the subsequent relationship will never be totally fruitful.

My View:

Targeting the right customers is an essential first step for the "Perfect Service" organization. Creating customized service solutions requires time and effort to understand each potential customer's situation, needs, and desires. (More on that process in future posts.) So it is critical that there is a high probability for a successful sale.

How does a firm determine the prospect's buying criteria? It is not cookie cutter, but there are a few indicators:

How is the prospect currently being served, and from whom? This is often an indication of past buying criteria, as well as an understanding of the service the prospect is currently experiencing.

Why is the prospect undertaking the search? Oft times, it is merely a due diligence search required by a purchasing department. Other times, this question uncovers a dissatisfaction with current service. If the dissatisfaction is with price, it is strong indication of a commodity shopper...but not always. Price dissatisfaction could also be a prospect currently paying for service not valued.

Why is the prospect willing to talk to us? Somehow, the prospect is communicating with your company. If you called, then they took the call. If they called, there is something they want to know. Either way, the prospect is most likely willing to learn, either about your service proposition, or about your company.

By identifying the type of buyer, a sales organization can now get to work on finding service solutions for this company's unqiue issues. This is where "Perfect Service" is first demonstrated.

Designing A Customer-Centric Store: Thoughts About Best Buy

A Harvard Business Review blog entry http://blogs.hbr.org/hbsfaculty/2010/04/inside-best-buys-customer-cent.html describes how the electronics store Best Buy has seriously focused on designing its stores around the customer. Working on research about electronics purchasers, store management found that most buyers were women, and that women bought differently than men. They designed solution for women buyers. For example:

• women care about installation; men think they can do it themselves. Best Buy bought Geek Squad and packaged installation with all purchases.


• women care about bundles, like plugs and wire accessories; men think of these items as discrete purchases. Best Buy arranges its stores so accessories are conveniently located with the electronics.


• women often shop with children; men mostly solo. Best Buy has play areas in each store so Mom can get some quiet shopping time.

From shopping assistants greeting customers to selling solutions rather than products, Best Buy has transformed its experience in a way that has enabled it to survive the recent economic downturn in good shape.

The key to Best Buy's insight? It is the commitment of management to declare that to remain relevant in today's electronics marketplace, Best Buy needed to see the world throught he customer's eyes. Author Ranjay Gulati describes:

"Becoming customer-centric means looking at an enterprise from the outside-in rather than the inside-out — that is, through the lens of the customer rather than the producer. It's about understanding what problems customers face in their lives and then providing mutually advantageous solutions.

"It's the approach Best Buy took and it's a key reason why the company has survived in the tumultuous consumer-electronics marketplace, while Circuit City is gone. Best Buy took the time to understand who its customers are and what they need and then started selling solutions instead of products."

My View

As we examine the role that Perfect Service design plays in creating a successful sales process, it is useful to look at companies who have done so. Best Buy decided to take a traditionally price and features sales process and turn it into a needs and solutions process. It even targeted a specific buyer to make the experience even more specific!

The wisdom to do this is bold...and rare in business these days. Awareness is only part of the equation, since even with the knowledge, most managers do not commit to transform! States the writer:

"Even when a company and its employees try to make sense of what they are hearing from their customers, they often find themselves immobilized by their own organizational architecture — the internal "silos" that inevitably grow around specific units and functions.

"I hasten to add that there is nothing intrinsically wrong with silos. Division of labor, specialization, and departmental responsibility are necessities in any operation. But most firms today are still structured around product and geography. They have excellent perspectives on what they make and where they distribute and sell it, but poor views of customers and their problems. And these inadequate sight lines impede coordinated action toward solving these problems."

It appears that most companies desire to deliver a premium customer experience, some may even organize to gain insight as to what that experience entails. But too few actually do what is necessary to deliver that experience as a matter of competitive differentiation.

My comment on the HBR Blog:

"Great insight into a company that is taking its delivery of customer experience seriously. I took particular note of the comment that "it would be hard to find a CEO who would tell you that his or her firm isn't customer-centric already. And that's exactly where mass delusion begins for most companies."

"I have also found that many companies want to think of themselves this way, but do not have the nerve to walk away from any part of the market in order to focus on this perspective. So these campanies become pretty good at the customer experience, pretty competitive when pricing their products, and fast followers when it comes to product/service features. In short, they are pretty good companies on their way to long-term extinction.

"For companies to stay relevant and viable (read non-commodity), they must decide their market, and fully fill that market's needs in some dimension. For Best Buy, it may be service; for Apple, it may be product; for WalMart, it may be price. But in the end, management must decide and act."

Question: Are Sales And Great Service Really The Same Thing? Isn't It All About Meeting Needs?

PART 1

I've been questioned recently about the sales process, and have been thinking a lot about the similarities and differences between Sales and Perfect Service. That is, when a company designs its practices to deliver premier services, what does this practice do for the sales process?

Quality expert Joseph Juran observed, "There should be no reason our familiar principles of quality and process engineering would not work in the sales process." Juran was speaking mostly about efficiency and error-reduction, and many of his metrics are about productivity. But if we substitute the words "Perfect Service" , I believe we can get to a similar conclusion:

"There should be no reason our principles of "Delivering Perfect Service" would not work in the sale process." Further, for those companies who embark on designing a premier service offering, I would emphatically state that it is a requirement to align service and sales practices. One step even further, premier service and sales practices are the same thing!

Sales Training books identify specific steps or stages in a sales process. These generally include the following elements. I am going to group these into three broader categories:

Prospecting
Initial Contact
Application of Initial Fit Criteria

Consultative Approaches
Sales Lead
Need Identification
Proposal

Closing
Negotiation
Closing Deal Transaction

In my next few posts, I am going to examine some of these characteristics.

Hampton Inn Gets Its Guarantee Right, And Customers And Staff Know It!

The Hampton Inn, a mid-priced, value national chain of hotels, is obviously trying to be thought of as a "satisfaction leader." When you stay at one of their locations, they are going out of their way to make you feel comfortable, with free hot breakfast, or even a breakfast bag for those who don't have the time to sit down and eat, free high-speed internet service, and comfy, fluffy pillows, mattresses and blankets. It is clear from all of the signage and messaging, they want you to enjoy your experience.

But it is the guarantee that separates Hampton from the pack:

100% Hampton Guarantee

Read Our Lips:

100% satisfaction or you don't pay. When it comes to guaranteeing your satisfaction, we're much more than lip service. Since 1989 we've offering the 100% Satisfaction Guarantee to each of our guests: Friendly service, clean rooms, friendly service, every time. If you are not satisfied, we don't expect you to pay. Real value from your friends at Hampton.

Think about this. This is not about the cheapest room or the plushest amenities. This is about pure satisfaction, against a presumed Perfect Hotel Service model. One can only imagine the satisfaction categories that are being measured: clean comfortable room, convenient breakfast, basics like breakfast and internet included in price, friendly desk people.

Also think about this. The employees at each Hampton Inn know what is important, and knows the consequence of failing to perform. It is as clear as can be for staff and customers.

My View

My parents and their friends are from the car-trip generation where everyone piles in the vehicles and drive to vacation spots or to family who live out-of-state. They have recommended Hampton Inn to me for years, mostly because it is a good room at a good value and you get free breakfast. It is not a resort or a destination hotel, but they feel it is a good one or two-day transit experience.

I took a look at TripAdvisor (http://www.tripadvisor.com/) to see how travelers write about their experiences. It is one thing to say you want to service customers, it is another to deliver it in a way that customers want to talk about it.

Bartlesville, Oklahoma:
I like Hampton Inns, because you know what to expect, and almost all of them adhere to at least a certain minimum standard of cleanliness and comfort. The Hampton Inn in Bartlesville, however, is one of the best Hamptons I've ever stayed in. I think it is a fairly new facility - maybe 4 or 5 years old, but it has been very well maintained. The pool, breakfast room and common areas are all very clean and neat. The rooms are spotless and the staff are very friendly and helpful. I rate this one as excellent, because they deliver in every category of what this type of hotel strives to deliver. Like all Hamptons, it is not a luxurious, full-amenity hotel, but is a nice, reasonably-priced road hotel, that delivers great value for the price paid. It wouldn't stack up favorably against a well-run luxury hotel (in any category except price), but then it doesn't try to, so I give them an "excellent" rating, for being very good at what they are trying to be.

Quite simply, Hampton Inn is an example of a company that has figured out the path to excellence. Can your company be as clear in its mission, its priorities, and its commitment?