Be Lean to your Customers.

James P. Womack and Daniel T. Jones (yes, the same pair that brought us Lean Thinking) wrote an article published in the March 2005 issue of the Harvard Business Review. However, this time is not about applying “lean” principles in Production, but in the consumption of goods and services. Here’s an excerpt from the executive summary:

By streamlining their systems for providing goods and services, and by making it easier for customers to buy and use those products and services, a growing number of companies are actually lowering costs while saving everyone time.

The easier the service experience, the better for both customers and vendors.

Technorati Tags: Customer Service Business

Which one makes a better conversation topic?

Which one makes a better conversation topic at the water cooler?

• The pizza that was delivered within the 30 minutes limit?
• The pizza that arrived after the 30 minutes (and was free)?

or

• The pizza that arrived one hour late –and cold- after three phone calls to the store?

Get our point? Customers are much more likely to talk to other people about their bad service experiences than their “normal” business interactions.

The Five Dimensions of Service Quality

One of the “classic” books about Customer Service Quality is Delivering Quality Service by Valerie A. Zeithaml, A. Parasuraman, and Leonard L. Berry (The Free Press, NY, NY). The first edition of this book was published in 1990: long before the Internet, Outsourcing, CRM systems... and mobile phones were the size of a brick.

But nowadays, its essence is still valid: the importance of measuring and improving quality in services.

The model proposed by these fine authors to measure service quality is called SERVQUAL. In this post we’ll focus on the five dimensions of service, or the criteria used by customers to assess the quality of services according to this model:

1. Tangibles: Appearance of physical facilities, equipment, personnel, and communication materials.
2. Reliability: Ability to perform the promised service dependably and accurately.
3. Responsiveness: Willingness to help customers and provide prompt service.
4. Assurance: Knowledge and courtesy of employees and their ability to convey trust and confidence.
5. Empathy: Caring, individualized attention the firm provides its customers.

Customers’ expectations and perceptions are measured across these five dimensions using questionnaires.

Even without surveys, these five dimensions help us to better visualize and analyze the services provided to customers. They make the term “service” less ambiguous.

And which dimension is the most important to customers (according to the authors)? Reliability. Do what you say you are going to do.

Don’t worry, we’ll continue writing about SERVQUAL later…

Technorati Tags: Customer Service Business

Satisfaction at Airports

When we think about customer service quality in air travel, most of the time we think about airlines. But what about airports?

In their fifth annual Global Airport Satisfaction Index Study^SM, J. D. Power and Associates found out that the best rated airports are the ones at Hong Kong (HKG), Singapore (SIN) and Calgary (YYC).

However, one of the most interesting points of this study is that most air travelers still crave the human touch in their transactions. Here’s a copy/paste from their press release:

While overall satisfaction is higher among passengers who check in at curbside, online and at self check-in kiosks, a majority (59%) of passengers check in at the main counter, which takes an average of 19 minutes. Just 18 percent use a self check-in kiosk, which averages 8 minutes, while 10 percent check in at curbside, which averages 13 minutes. While many airlines now allow passengers to obtain their boarding pass through the Internet, currently only 5 percent of passengers use this option.

Anyone remembers the 1987 book Moments of Truth by Scandinavian Airlines’ then-CEO Jan Carlzon?

Technorati Tags: Customer Service Business

Late fees are gone, but attorneys' fees will continue...

The State of New Jersey has sued Blockbuster for deceptive advertising in its “No More Late Fees” campaign.

(Via plenty of places, but The Experience Economist blog nails it:

[This] is a great example of what happens when your words and actions don't match. Once you make the statement, you need to back it up completely with your actions or the word will get out. There are just too many choices for the consumer to stay with a brand that breaks its promise)

Technorati Tags: Customer Service Business

Air Passenger Rights

Airline travelers in the European Union recently gained additional rights in case of problems with their carriers. For example, if a flight is delayed for more than five hours, the airline must refund the amount paid for the ticket (plus a free flight back to the initial point of departure, in some instances). Also, a passenger can claim monetary compensation for any resulting damages due to the delay. Oh my.

Obviously, airlines –particularly the cash-strapped ones- are complaining that they are being held responsible for problems beyond their control, like the weather.

If you wish to turn green with envy (assuming you are a non-European frequent flyer), read this poster that summarizes these rights.

Technorati Tags: Airlines Customer Service Business

The Airline Attendant

You’ll learn something about managing difficult customers, and you’ll also have a good laugh reading this great post from Trevor Gay’s Simplicity Blog. Go visit it.

Technorati Tags: Customer Service Business

Soft-drink-damaged Licorice and ISO 10002:2004

Sometimes, employees don’t care about comments made by customers. Here’s a great example from Des Walsh in his Thinking Home Business blog, where he writes about an Australian supermarket that apparently didn’t care much about Des’s comments regarding soft-drink-damaged licorice.

Just like ISO 9000 is an international standard for quality management, there are ISO guidelines for handling complaints in organizations: ISO 10002.

From the ISO.ch website:

ISO 10002:2004 provides guidance on the process of complaints handling related to products within an organization, including planning, design, operation, maintenance and improvement. The complaints-handling process described is suitable for use as one of the processes of an overall quality management system.

Also, in the ISO1Stop.com online forum, there is a quite comprehensive review of the ISO 10002:2004 standard. Now we have to make some businesses read it and apply its concepts. Like that supermarket in Australia.

Technorati Tags: Customer Service Business

Anger, and how to be Intelligent about this and other Emotions

Customers can be angry because someone cut them off on the freeway on their way to your business, because they had a fight with their significant other, or just because they just are ticked off for no particular reason.

To get an overview of what anger is, visit this page from the website of the American Psychological Association: Controlling Anger -- Before It Controls You

Also, there’s something called Emotional Intelligence (EI), a concept that has some advocates –such as David Goleman, author of the 1995 book Emotional Intelligence- and quite a few detractors. Most of the discussion is about the scientific validity of Goleman’s work. To give you an idea about the extent of the contest, the neutrality of the article in Wikipedia about EI is currently being disputed.

Here are some “copy/pasted” parts from the Wikipedia's article:

John D. Mayer and Peter Salovey introduced the term [Emotional Intelligence] to psychology in a series of papers. They suggested that the capacity to perceive and understand emotions defined a new intelligence. The Mayer-Salovey model defines emotional intelligence as the capacity to understand emotional information and to reason with emotions. More specifically, they divide emotional intelligence abilities into four areas -- in their four branch model:

1. the capacity to accurately perceive emotions
2. the capacity to use emotions to facilitate thinking
3. the capacity to understand emotional meanings
4. the capacity to manage emotions

...

[David] Goleman divides up emotional intelligence into the following five emotional competencies:

To identify and name one's emotional states and to understand the link between emotions, thought and action

• To manage one's emotional states — to control emotions or to shift undesirable emotional states to more adequate ones
• To enter into emotional states associated with a drive to achieve and be successful
• To read, be sensitive to and influence other people's emotions
• To enter and sustain satisfactory interpersonal relationships

Debate aside, there are many things we can learn from EI. The main one is the possibility of managing our own emotions, particularly those ones that may tarnish our relationship with customers.

Just remember. It's not personal.

Technorati Tags: customer service business

Service productivity and service quality don't mix?

Are service productivity and service quality completely incompatible?

Not necessarily, writes A. Parasuraman, in this essay in the Managing Service Quality journal (pdf. See details below). If for productivity’s sake, resources are reduced in an area that directly impacts the service that customer receives, then service quality is adversely affected. However, if expenses are reduced in items not perceived by the customer, then service quality levels remain practically unchanged.

The essay Service quality and productivity: a synergistic perspective by A Parasuraman; was published on Vol. 12 Issue 1 of Managing Service Quality on 2002, and it is one of two samples of this journal at Emerald, from Emerald Group Publishing Limited.

The cost of customer service by phone at FedEx

From Baseline magazine (via Business 2.0 magazine's weblog): FedEx saves $1.87 each time a customer uses FedEx’s website instead of calling a rep over the phone.

Why spend money on a call center? Here’s a copy/paste:

One reason for this expenditure is that the cost of a customer being frustrated by the company Web site is incalculable, and most customers are easily frustrated given the current state of Web design. People are willing to encounter one or two obstacles in a system, maybe three at most, says Eric Mathews, associate director of the FedEx Institute of Technology. But then, "they totally abandon it."

Also, “chatty” customer service reps do more harm than good to their employer:

FedEx studies reps' behavioral techniques to discover which ones work best with customers. Steward's technique is considered effective. The company found that reps who have no time limits with customers tend to talk too much. Customers view them as "chatty" or "overly nice" and ultimately develop a negative impression of FedEx. "Customers want the facts," says customer service VP Sheila Harrell. Better if the rep solves the problem the customer called about and gets off the phone.

But remember, what works for FedEx will not necessarily work for other companies. Including yours.

Lean Services

The website from the Lean Enterprise Institute has slides for a presentation about applying “lean principles” to optimize services (free registration required).

“Lean principles”? Manufacturers have been applying them for years. The main idea is to make production more “productive” by getting rid of all the steps in the process –or “waste”- that don’t add any value to the product itself. For example, soldering two parts of a bicycle together adds value to the bike, but moving the uncompleted cycle around the factory floor from one workstation to another other does not. In lean lingo, the waste is called “muda”. Obviously, getting rid of the steps that don’t add value to the product or service makes the process faster… and guess what? It also saves money!

From the customer perspective, the main difference is a faster service, and because there are fewer steps in the process, there are fewer “opportunities” to make a mistake, which improves quality.

Next time you go to a fast-food place, take a look on how they do things. One of my favorite examples is getting the soda machine out into the dining area where customers can help themselves. It makes the food ordering and fulfillment processes much faster and cleaner, and the consumers get a sense of choice and abundance.

But keep in mind, some fast food won’t help your own body get leaner.

Perception thru the Ages

Perception equals reality. It is one of our favorite mantras here at Servimétrica. Perception is also affected by many factors, both external and internal. Is the age of the “perceiver” one of them?

Take a look at this entry from David B. Wolfe’s blog, Ageless Marketing. It is about how perception changes across the lifespan of a person. Here’s the copy/paste of a juicy paragraph:

In the first half of life, beginning in adolescence on, perceptions generally reflect an objective bias – more strongly influenced by external factors than by inner-sourced factors. However, as midlife approaches, perceptions generally begin taking on a more subjective bias. What a person feels is the truth increasingly carries greater weight than what others say is the truth. Faith begins to outweigh logic, subjective perceptions often trump objective conclusions.

This has implications on how we want our customers to perceive our service, depending on the demographics that we have chosen to serve.

We will not have a TV ad in the Super Bowl (but GoDaddy.com will...)

For the record, CustomerServiceQuality.com, Servimetrica.com, or any of their affiliates, will not advertise during tomorrow’s TV broadcast of the Super Bowl.

But, let us point you to a very interesting discussion at the brand autopsy blog, about the pros and cons of GoDaddy.com’s intentions of advertising during the Super Bowl. However, some comments to the post were from customers that either praised or complained about GoDaddy’s service.

The point is, ladies and gentlemen, that sometimes an innocent discussion about a product or service might bring comments about good and not-so-good experiences from customers. And needless to say, not-so-good experiences make better conversations topics at the water cooler.

The Greatest Experts of Telephone Customer Service

The greatest experts of telephone customer service are the 911 dispatchers. They deal with stressed citizens in life-or-death situations while keeping their cool. They also have resources like the customer service section at 911dispatch.com

Also, next time you handle a difficult customer on the phone, think about the work that emergency dispatchers do. It should help to put things into the proper perspective.

Some dining out empathy

Really want to know what’s in your waiter’s mind, particularly when you don’t tip him well? (Inquirer minds want to know!) An article on the Dining and Wine section of The New York Times website (free registration required) will let you get that insight, and maybe it’ll make you reach deeper into your pockets when you leave him a tip.

Also, if you own or manage a restaurant, or some other service business, this article will give you an idea of the pressure that front-line employees have to withstand.

More of the same:

• Here's a Tip
• Some holiday shopping empathy

Three Interviews in Rotman Magazine

The winter 2005 edition of the magazine from the Rotman School of Management at the University of Toronto (PDF) has not one, not two, but three interviews with experts about customer experiences (well, the cover is quite unambiguous about the topic of this issue)

First there’s an interview with Joseph Pine and Jim Gilmore, authors of the book The Experience Economy.

How do they distinguish a service from an experience? Here’s a copy/paste:

Goods are tangible and services are intangible, but experiences are memorable.

Second, the questions are for University of Michigan Professor Claes Fornell, inventor of the American Customer Satisfaction Index. This is the reply to the last question in the article, about the key drivers of customer satisfaction. (Ctrl C and Ctrl V again, with some Ctrl B):

In general, there are three: Market matching, quality, and price.

Market matching is the most potent. It simply means that both buyer and seller do a good job – the buyer in terms of judicious choice and the seller in terms of buyer selection, targeting and segmentation. If the buyer selects the ‘wrong’ product or if the seller convinces the ‘wrong’ buyer to purchase, the outcome will not be favourable.

Quality as a general concept also plays a fundamental role.

Price has an effect, but it is much more limited. A low price may make someone buy, but its effect on customer satisfaction is relatively minor. In the end, satisfied customers are very good for business, but dissatisfied customers have even more impact in the opposite direction. A bad customer experience does more harm than a good one does good.

Third, the founder and chairman of IDEO candidly talks about designing products and services, including ‘experience prototyping’.

And as a bonus, there’s also an article by David Dunne, who is a professor at the Rotman School. This is the opening paragraph:

The secret of great brands is the customer experience. If more companies recognized this, brand experiences could go much further in connecting with consumers.

It’s good to see that customer service and experiences are getting more attention from the academic world (check our previous post).