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.
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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.

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.

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.

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.

Brand Based On Extraordinary Service

There are few companies out there who are able to state unequivocably that they are the premier provider of services in their particular market. A lot of companies would like to position that way, but few are able to transform their reputation.

Several excellent blogs focus on "branding" and how companies can position themselves to be identified singularly.

"Customer Experience Matters" by Bruce Temkin at Forrester Research is an excellent source for all matters service. In a recent post "Is It Time For An Unconventional Strategy?" he points out how even small players in a marketplace can beat larger competitors by focusing on a niche. Here is the link....http://experiencematters.wordpress.com/

My Point: By focusing on extraordinary customer service, a company can win against the marketplace. But first the company must fully commit to owning the niche. Anything less not be enough to compete against other firms with more resources and power. That's why "Perfect Service" should be a roadmap for competitive advantage,