What’s the difference between sales and service? Nothing.

Call centreWhen a customer expresses a need, then a failure to sell to that need is a failure of service. Thinking about sales as a service opens the door to genuine alignment of customer experience.

A long time ago, I spoke to someone who helped set up the contact centre for a new retail bank.  He explained that the philosophy of this bank was different from any other than in operation in the UK. Its aim was to help customers and give them a good experience.

I was intrigued when he explained that for the contact centre this meant not distinguishing between sales and service. The same agents handled all customer queries, including selling new products to the customer .

“Surely,” I said, “this has to compromise the customer experience?  When I, as a customer, need help, if agents try to sell me stuff when I call I will get annoyed very quickly.”

“Not at all,” he said. “Our agents are bonused on customer retention and advocacy, not sales.”

I said, “So won’t that mean, instead, that your agents won’t sell to customers for fear of hacking them off? Won’t that damage your revenues?”

He smiled. “Just the opposite. We train our agents to understand that their role is to help customers with their needs as much as they can. Each customer who calls us needs help – or else they wouldn’t pick up the phone. Most of these needs we can help directly: make a payment, check a transaction and so forth. But sometimes a customer’s need can only be helped with a new product.

“For example,” he continued, “a customer might want a better return on the surplus money sitting in their zero-interest current account. The best way we can help them is to explain the kinds of additional services we can offer such as savings accounts, bonds or ISAs. We then give them a chance to buy.

“If we don’t have this sales conversation, we will have had a customer with a need and we have not helped. That failure to sell is a failure of service.”

This philosophy seems to have worked. From its founding, this bank has balanced solid customer and revenue growth with a reputation as the UK bank with the most satisfied customers.

This principle seems to me to lie at the heart of the term ‘customer-centric’.  It connects sales and service with the same goal: helping the customer.

It means that agents have to believe that what they are selling is of genuine value to the customer: as they have to service the customer afterwards, there is no incentive to sell them a pup. And it properly positions sales as part of a positive customer experience – which is as it should be.

For those of us who are striving in our organisations to make things better for customers, this story poses two challenges.

First, how is the way we sell genuinely part of a joined-up philosophy of customer service – or are sales ‘pushed’ on customers regardless of value?

As for the second challenge? Customers now have many more channels for service. These include email, chat, forums, web sites, mobile or social media.

This challenge, it seems to me, is not the technology. Nor is it the need to design for the interactions we might have with customers (and which customers might have with us) (and with each other).

It is instead to do with how well, when trying to give customers a consistent, seamless, multi-channel experience, we apply a key principle:

How do we make sure that every customer touch point adds value to the customer, helps them with their needs and, yes, sells to them as part of the service?

As my friend with his contact centre showed, if we can meet this challenge and begin with this principle, the results, for our customers, and for our business, can be phenomenal.

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Seth nails it

Sinclair C5Only when we build for our customers will they come.

Seth Godin’s blog offers profound, sparse and almost haiku-like wisdom about the new marketing.  If you don’t follow him yet, you should.

In this post, Choose Your Customers, he explains, in very few words, what in my experience is the most common problem leading to product and market failure: when we begin with the product, not the customer.

When we begin with our great product and try to sell it, we are doomed to fail.  If we want people to buy what we do, we have to begin instead with what they need and want, and build (and sell) (and service) from there.

Simple, really – but so easy to forget in the daily muck and bullets of business.

 

Stop complexity from killing the customer experience

Complexity mazeComplexity kills good customer service. We can use the rule of 50/5  to cut through this complexity and  transform the customer experience.

I once worked for a multi-national technology company with a turnover of tens of billion of pounds. The organisation’s processes and systems were so complicated and intertwined that any improvement efforts were doomed, if not to failure, then to mediocrity.

Any new customer fix – a system, a process, a metric or a behaviour change – was just another complication in an already complicated environment. Sooner or later, those in the customer front line would make mistakes because complexity introduced by the new fix made errors more likely. Their normal tasks might often take longer, as the new fix might need new skills or new thinking. It might increase complaints, perhaps through teething problems, or because expectations for improved performance were too high.

In short, because corporate sclerosis was gumming up the customer experience veins, ‘improvements’ were likely to make things more error-prone, slower, less easy, and, almost certainly, substantially more expensive.

This is because of one of the infallible laws of business, something I was fortunate to learn early in my career, courtesy of George Elliott: complexity ALWAYS increases costs, and by much more than we think.

Paradoxically, however,  how complexity drives costs offers a powerful way to enable customer transformation. This is because (again as George explained in my youth) these costs always appear in the same way: they follow the rule of 50/5.

50% of your costs are associated with 5% of your activity, and vice versa.

In the almost one hundred companies with which I have worked, while some the precise numbers have varied a little, I have never seen this rule to be wrong. It is a cast iron law of business.

What’s brilliant about this principle is that it applies in so many ways. Here are some I have found useful:

  • 5% of customers account for 50% of service costs
  • 5% of customers account for 50% of revenues
  • 5% of our customer enquiries yield 50% of our sales
  • 50% of our people’s time is spent working on issues raised by 5% of our customers
  • 50% of escalations come from 5% of customers

For each one of these, the complementary statement is also true: as well as 5% of customers causing 50% of service costs, so 50% of customers cause only 5% of service costs.

Why is this important? Because it means we have a practical way to focus our improvement efforts to deliver effective transformation, reduce complexity and make things genuinely better.

So for one tech company for which I worked, we found that 3% of escalations were consuming 38% of engineer time. We identified and eliminated the causes of almost all these escalations. This enabled the organisation to free up a quarter of their engineers to work on proactive services,  adding value to their customers. At the same time they kept some engineer capacity in reserve to handle the many fewer new escalations which inevitably would still arise.

For another company, recognising that 4.5% of their customers yielded 53% of their revenues drove them to offer premium services to these customers – increasing revenues and retention.

At the same time, they reduced services to the 48% of customers who contributed only 4.9% of revenues, but offered them the chance to upgrade. Result? Some of these unprofitable customers left, some stayed, but cost less to serve – but enough upgraded to make this customer segment twice as profitable.

This thinking works.

But beware. Standard accounting cost models don’t give you a true picture of these costs (because they assign overhead costs uniformly across the board as opposed to how the costs are actually being consumed) .

So let’s begin using the rule of 50/5, but not by looking at budgets and costs on a spreadsheet. Let’s get out from behind our desks to see what is really happening. Let’s look, not at the cost numbers, but where our people are putting in the work with our customers. We’ll soon see where the rule of 50/5 works in our business, and how we can use it to cut through complexity to make things better for our customers.

 

Let’s go HiPPO hunting

Hippo“Most websites suck because HiPPOs create them.”

– Avinash Kaushik,  Web Analytics 2.0

HiPPO? “The Highest-Paid Person’s Opinion.” In organisations the tendency is to make decisions based on what the highest-paid person thinks is right. While they are often very capable, their judgement is no substitute for testing concepts and ideas with real customers in the real world.

This applies beyond website design. When we consider the  procedures and policies which we use to serve the customer, how many if these have genuinely been designed to be ideal for the people who buy from us? Compared with how many have been designed to optimise the process for the organisation instead?

To talk to my telephone operator provider, for example, I need my “customer number” and my “area code”. I keep these in the cloud. Which means that I can’t get them when my telephone (and internet) line is down. Which is, of course, why I want to call in the first place…

Some highly paid process expert, or worse, a CEO, (a HiPPO) will have designed these processes, not for the customer, but almost certainly to optimise the internal technical operation, probably on the grounds of cost and efficiency.

If they had worked with customers to get behavioural data to help them design and test the these processes, they might even have been able to turn contacting the service operation into a positive experience.

Yet I am sure that instead, the costs in agent time, customer frustration and, ultimately, customer churn will almost certainly outweigh any savings made by using a special “customer number” to identify customers.

For this is one of the great secrets of customer experience. A good customer experience is almost always more cost-efficient than the alternative.

Fewer customers complain, sales become easier, and we spend less money and time on workarounds and fixes. In turn, this frees up our resources to spend on positive things that matter to our customers so we can sell more. Cost reduction, revenue growth – a better bottom line.

And this is one of main reasons we need to go HiPPO hunting. Because if we listen to the HiPPO, as opposed to our customers, then pretty soon our customers won’t be our customers any more.

Next time you find yourself face-to-face with a HiPPO, go armed with the most potent data of all: how customers really want to behave.

(If HiPPO hunting is new to you, then this Wired article is worth a look, and I also commend Avanish Kaushik’s blog, Occam’s Razor).

Release the brilliance of your colleagues

Team GB Olympic Track Cycling teamGood customer experience is a result of great people doing great things. Luckily, your colleagues are great.

Think about the people you meet in the workplace. In almost every case, from the janitor to the CEO, two things are true. The first is this:  your employer believes this individual is the best person for that role whom they can get. If they weren’t, your employer would get someone else. Second, this person believes that this is the best job for them. If they didn’t, they would go get a better one.

That’s right: pretty much most of the time, you are working with great people in great jobs.

I have been lucky enough to have worked around the World with almost a hundred companies and in my experience this is overwhelmingly true: your people are brilliant.

But so many companies don’t believe this.  They seem to expect that their people are unmotivated and are doing mediocre jobs. So that’s how they manage them and guess what? That’s what they get.

But mediocrity is not what we promise our customers.  If we want to do things better for customers, it isn’t good enough.

So let’s not manage for mediocrity.

Let’s manage for brilliance.

How do we this?

Here’s what we don’t do.  We don’t police our people’s activities to catch them doing the wrong thing.  We don’t set up elaborate reporting of pointless metrics which make no difference to the customer.  We don’t have a big kick-off meeting with a motivational speaker and hope that this is enough.

Instead? We set important goals (maybe unreasonable goals?) and standards for performance. We do what we can to make achieving these goals as easy as we can. We give people what they need, pay attention to how well they are doing and look for ways to help them.

Then we keep paying attention so that they continue to  know this matters: to us, to the customer and to them.

Then we get out of their way.

Brilliance will happen, I promise you.

Your people will love making the difference.

And your customers will love what results.

 

SMED – The secret sauce of customer experience

pressSMED proved that if you remove the big bottlenecks which slow down your ability to respond, you can revolutionise the service you offer you customers.  

SMED: one of the reasons Toyota became a powerhouse global auto manufacturer. SouthWest Airlines, Tesco and UPS all apply its principles, even if they don’t know it.  It governs agility, speed, cost and enables the customer experience.

SMED? Single Minute Exchange of Dies.

Say what?

Stay with me as I explain.  It’s worth it.

In the sixties, auto manufacturers had to operate long production runs. They produced the same car, over and over, offering customers a limited choice. If customers wanted more options, they couldn’t get them.  The reason? Setting up a production line to produce different variants of car was HARD.  Machine tools had to be recalibrated, components all along the line had to be replaced, and hardest of all, dies had to be changed.

Dies are the blocks which stamp blank sheets of steel into the shape of the  car body.  They weigh many tons, are very difficult to manoeuvre, and have to be  consistent to within a fraction of a millimetre.

Changing dies typically took  between 12 hours and three days. So changing the line meant stopping production for at least this long. Change them more often than once a week and the factory could spend more of the year idle than making cars.  In effect, too much choice would make the company bankrupt.

Then Toyota employed Shigeo Shingo to help solve this problem. He and his team observed and measured every aspect of the die change process.  They filmed changeovers.  They looked at non-manufacturing examples, like Formula 1 pit crews.

And then they changed things. They reduced human error by using precision metrics.  They prepared each exchange of dies in advance, dedicating and scheduling equipment and resources.  They  clarified roles so everyone involved could, as it were, “do it by the numbers”.

And while they never quite got it down to a minute, they got it down to less than ten. On average, Shingo and his team cut the time to change dies to one fortieth of what it had been before.

The result?  Toyota could offer customers what they wanted, not what the manufacturer hoped they might want.  Toyota could slash costs, as they no longer needed to hold so much inventory and WIP (work in progress). And they could improve quality, as smaller production runs enabled more rapid, cheaper fixes.

It could be argued that SMED enabled the revolution in manufacturing quality, processes and techniques which have transformed our lives since the sixties – what is often referred to today as “Lean

Most of us don’t have to swap dies weighing tens of tonnes in and off a production line. But many of our businesses have big things which slow down our ability to respond and make it hard to give customers what they want.

Some companies have put in the focused effort necessary to transform these things. Doing so has greatly strengthened their ability to compete both on costs and customer service.

SouthWest airlines revolutionised budget air travel, in part by being ruthless about minimising aircraft turnaround time on the ground between flights.  Quicker turnaround = more flights per day, more customer choice and more efficient customer management.

Tesco dominates the UK supermarket scene in part because they worked out how to get goods (especially perishable goods) from source to store in hours instead of having them languish in warehouses; in many cases, the lorry is the warehouse.  A faster supply chain is a cheaper supply chain, gets fresher goods to the customer and can respond more quickly to customer demand.

UPS has put significant effort into minimising the time a parcel just sits. By putting in more dynamic sorting, smaller dispatch sizes and smarter routing, they can offer delivery times and service quality unheard of even ten years ago.

SMED thinking is one of the keys to customer service transformation.  Think about your business.  There must be one or two ‘big things’ which make it hard to flex the business, take time away from delivery or make it slower to respond to customers. What if you put real, rigorous effort to redesign these things, drawing on thinking like Formula 1 pit crews? What if you gave yourselves an unreasonable goal for improvement – like cutting cycle time by a factor of forty?

Wouldn’t that be brilliant? For your business? For your customers?

Go ahead. SMED.

How Amazon turned a chore into a positive customer experience

five acesReframing the experience can make things better for customers.

About fifteen years ago, a client in the US told me how her company had improved the customer experience – by making their service worse.

Their call centre’s promise to pick up any customer call within three rings was key to the company’s competitive positioning. It was fine most of the time – but at peak periods, it was a promise they could not keep.  The delays weren’t bad – four or five rings at most – but they were breaking their customer promise. Result? Unhappy customers.

My client tried the usual things: rejigged rosters to provide extra agent cover, optimised call routing and, despite tight budgets, hired a few more agents to cover peak periods.

Ring, ring, ring, ring….Three-ring nirvana seemed as far away as ever.

Then an agent, at home on her time off, called to make an appointment with her doctor. Waiting on the line, she noticed – nothing.

More precisely, she noticed that she only became irritated by the delay on the line once she heard the ring tone. Waiting for the phone company to connect her call, however, she didn’t mind at all. She discounted this ‘dead time’ when she heard nothing as acceptable, while a ringing telephone line was a failure of service by the doctor’s receptionist.

Her company acted on her observation. They suppressed the first two rings on the line while the customer was waiting, so the customer thought that the call was still trying to connect.  Agents now had five rings in which to answer, while customers on the line heard only the last three rings.

The average time it took to answer the phone did not change. But the customer experience did. Customers were impressed by the speed of response they perceived: “Wow! You answered even before the phone even rang!” was a typical comment.

Was this sleight of hand? Perhaps. Did it matter? Perhaps not.  Customers got the service they wanted and were happy. Nothing wrong with that.

Nowadays, Amazon does something similar. Normally, paying for things online is a pain. We’ve filled our shopping cart and we want to order. So we have to sign in with user name and password, get out our credit card, type in the number and details, fill in the delivery address and wait for payment to be authorised.

Amazon’s great secret is that they get us sign in to browse their shop when we arrive. We do so happily to get offers and ‘Personalised recommendations.’  But this sign-in process also sets up payment and delivery. So we think we’re signing in for a personalised experience, but we’re signing in for payment.

So when we want to buy, we pay by ‘One-Click‘ and think how great it is (cycle time of zero, anyone?). We don’t associate the chore of signing in with the business of payment. Like my client, they are employing customer experience sleight of hand.  And it’s so good they licensed it to Apple to use on iTunes.

Customers hate waiting on a ringing telephone line and they hate signing in to pay.  By reframing how customers perceive such things, we can transform the customer experience.

Question: is there anything which your business does now which your customers hate? Could you could reframe this to make into a good experience?

And if you have to use sleight of hand, don’t worry: I won’t tell.