Customer Service White Paper

1. Regaining Focus on True Customer Service
Driving Business Through the Core Value
By Michael O’Keefe
President – O’Keefe Holding Group, LLC
March 19, 2008

2. Regaining Focus on True Customer Service
Introduction:
Is customer service taken for granted? When you have a good customer
experience, do you think how that applies to your business? How do you make
customer service a core value?
Every business talks about providing excellent customer service, but few really
live the talk or consistently achieve it. How many companies actually invest in
making improved customer interaction and service happen? How many really
believe that adequacy in the pursuit of excellent customer interaction and
service is not an option. Each year, companies implement a goal or objective
to improve customer service, but all too often that objective gets pushed aside
by what is seen as more immediate priorities, especially since outstanding
customer service is not easy to measure (impact) on the company’s bottom
line. The reality is that companies turn their primary focus on quarterly
revenue and results. But, it also is a reality that companies need to invest,
focus, and drive a commitment towards great customer interaction and service,
if they want to deliver extraordinary results, especially when times get tough
and competition intense.
The problem with a short-term focus in a tight economy and with increasing
competition, is that companies need to secure their customer base, which in
part comes through customer service. What can companies do to gain a
competitive edge? The answer is not a simple one, but starts with improved
customer interaction and service. Customer interaction being the direct
interaction between the employee and customer. Customer service is customer
interaction plus the full experience (policies, processes, etc), that the customer
experiences in dealing with your company.
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3. Regaining Focus on True Customer Service
If you look at the financial results of companies that are rated high in customer
service, they have seen strong and above average revenue growth over the
past several years. These companies all have a unique or quality product, but
the truly world class also excel in customer service. It is my belief that the
combination of product and customer service put these companies over the top
and are key factors in their achieving strong results over time.
My family recently took a Disney Cruise, and although my wife does not like to
be on a ship, wants to book another Disney Cruise because of the experience.
That experience had more to do with the level of service, and less to do with
being on a ship. No matter where we went, and encountered cruise staff, they
stopped what they were doing and greeted us with a smile and inquired how we
were doing. Something so simple, but it made a lasting impression that will
keep us as loyal customers, and is part of the reason for Disney’s reputation.
In addition to treating customers well, companies and employees must know
how to minimize the impact of negative customer issues. A customer can be
dissatisfied for a number of reasons, but if they feel that they have been
treated fairly and professionally, they will give the business a second chance.
In an environment where poor customer service is all too prevalent these days,
a concern and acknowledgement of their unhappiness can make a positive
impact.
Customer interaction and service applies to all industries, and all positions.
Character does matter and is evident in our daily interactions. People buy from
people, and when given a choice, if all else is perceived equal, will buy from
those they like or who provide better service. This applies to all business, not
just retail or hospitality, and will drive better results.
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4. Regaining Focus on True Customer Service
This paper is intended to show why positive customer interaction is important,
identify actions to keep you better focused, change your team’s philosophy, and
show the results that can be derived from excellent customer interaction and
service.
Top Company Results:
Here are some of the companies that have been acknowledged for great
customer service:
USAA Washington Mutual
Four Season Hotel & Resorts Cabela's
Cadillac Raymond James Financial
Norstrom Porsche
Wegmans Food Markets Apple
Edward Jones Publix Super Markets
Lexus Hertz
UPS FEDEX
Enterprise Rent-A - Car JW Marriott Hotels & Resorts
Starbucks T-Mobile
The Ritz-Carlton Buick
AMICA Insurance Lincoln
Southwest Insurance
* Business Weeks 2007 Customer Service Elite
Are these some of the companies that you do business with?
As you look at the financial results of those companies that are known for
excellent customer service, their annual revenues continue to grow year over
year and out perform their competition. Even in those cases in which revenues
do not grow, great customer service can help keep them in the top ranks of
their industries.
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5. Regaining Focus on True Customer Service
The grid below is an example of results by some of these companies above an a
few I believe excel at customer service (many of the above are private
companies or subsidiaries):
COMPANY 2004 2005 2005 CHG 2006 2006 CHG 2007 2007 CNG
Southwest Airlines $6,397.0 $7,412.0 15.87% $8,884.0 19.86% $9,587.0 7.91%
Starbucks $5,294.2 $6,369.3 20.31% $7,786.9 22.26% $9,411.5 20.86%
UPS $36,582.0 $42,581.0 16.40% $47,547.0 11.66% $49,692.0 4.51%
Walt Disney Co $30,752.0 $31,374.0 2.02% $33,747.0 7.56% $35,510.0 5.22%
Apple Inc. $8,279.0 $13,931.0 68.27% $19,315.0 38.65% $24,006.0 24.29%
Costco Wholesale $48,109.9 $52,952.2 10.07% $60,151.2 13.60% $64,400.2 7.06%
Washington Mutual $4,298.0 $5,096.0 18.57% $6,533.0 28.20% $6,042.0 -7.52%
FedEx $24,710.0 $29,363.0 18.83% $32,294.0 9.98% $35,214.0 9.04%
* Al Dollars are in Billions and based from Business Week online Financial reports
One interesting fact is that a number of companies that excel at customer
service are private companies and do not have to report quarterly results. It
would be interesting to see how this impacts their focus on customer interaction
and service.
How much does it cost you to get a new customer? What is the value of a loyal
customer? What is the cost of a lost and dissatisfied customer? When you
answer these questions, you start to see how important customer interaction
can be to your company.
Consumer research suggests that every dissatisfied customer will tell 10 other
people about their bad experience. Are you willing to take that risk? Without a
strong commitment to customer service, employees can be exposing you to
that risk every day. Understanding the importance of customer satisfaction,
every company must find a way to drive more focus on the customer while
supporting their other business and financial objectives.
Why do world-class companies have such a strong customer commitment?
When you look at the benefits, the reason is obvious. Benefits of good
customer interaction and service are:
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6. Regaining Focus on True Customer Service
Cheaper to retain and grow existing customers
•
Satisfied customers spend more
•
Satisfied customers tell others about their experience (New customers)
•
Positive impact on employees and employee retention
•
Improved employee productivity
•
Making Customer Interaction Last:
Many companies preach customer service or have customer service initiatives.
But in many cases, as the year progresses and the need for reaching quarterly
results intensifies, this objective becomes less important. The problem is that
long-term results are compromised. A commitment to excellence and
outstanding customer service cannot be turned on and off like a light switch.
Suggesting that something is important, but then not following it drives
cynicism. If you believe that people tend to do business with those whom they
like, or treat them well (all other things equal), then customer interaction and
service is still critical and must be consistant.
How can companies instill a lasting commitment to customer interaction and
service into its employees? The best way is for it not to be an “initiative”, but a
core value and part of the company culture. Company culture is simply “the
way we do things”. Leading by example, regular training, backed-up with a
reward and recognition program, demonstrate that words have meaning and
that excellent customer interaction and service is the only way to do business.
When your employee’s are working with a customer, they must demonstrate
that the customer is important to them. There needs to be pride associated
with satisfying a customer, knowing that will drive business results. The
importance of customer interaction and service has to become second nature
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7. Regaining Focus on True Customer Service
for all employees, one that they strive to excel at. How many of your
employees see a customer problem arising before it happens? How many of
your employees seek out customers to see if they need something? If the
answer is not most of your employees, you may have a problem.
If you are going to make customer interaction last, then a lasting impression
must be made and it must be sincere (a customer either knows or will find out
when someone is not being genuine). There are many ways this can be done;
it just takes some effort and focus. Each specific market, environment, or
situation will dictate how and what should be done, and it should be lasting.
There is a weekly e-letter I receive called “WOW Marketing” by Joel Cohen that
focuses on this very idea – how do you WOW customers, thus making them
satisfied and loyal customers.
The importance of customer interaction and service has to become part of your
company’s culture (i.e., Disney, Costco, Ritz Carlton). This is not done through
a one-time event, but an ongoing focus and reinforcement. Do your employees
really care about their customer’s problems? If not, this is when the problem
begins. Companies that excel at customer service find and keep those
employees that live the culture and get rid of those who do not. Employees
must have passion and believe in the product / service in order to achieve true
success. The focus on customer interaction and service must be reinforced on
a regular basis, rewarded and recognized.
Minimizing Negative Customer Issues:
Even the best companies cannot satisfy every customer all of the time. Some
customers cannot be satisfied and they are not the ones you want to keep.
However, no matter what, every effort should be made to minimize the
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8. Regaining Focus on True Customer Service
negative impact since one bad experience stays with that one customer and
does not impact 10 more customers. This requires employees to be able to put
themselves in the customer’s place, and relate to the customer, and show the
customer that they understand their issue. This is true, even if there is not
much that can be done to change the situation. Employees should be
encouraged to show initiative and deal with a problem as promptly and
effectively as they can. Problems happen, but if left unresolved, become bigger
and have a greater negative impact. How many times have you contacted a
company about an issue, and they do not get back to you to resolve it? How
frustrated do you get? If they would just call you back and acknowledge the
problem and your disappointment (even if unresolved), you would be unhappy,
but probably just move on and do business with them in the future. But many
times, they just do not get back to you, which then cause you to get even more
frustrated. What may be a little issue becomes a bigger one, and now 10
people will certainly know how you were treated (with your own unhappy slant
on the issue).
In all customer interactions (i.e., a sales call or in a restaurant, etc), customer
problems do not just happen, they build on events or situations. When
employees are in tune with the importance of customer interaction and service,
they can see issues developing. For example:
A call center agent dealing with an unhappy customer. During the call,
there are many opportunities to take a call from an unhappy customer
and make it an event that solves the problem. But in many cases the
agent does not care or try to understand the customer’s position. They
just follow a script. This makes a bad experience, worse.
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9. Regaining Focus on True Customer Service
A waiter or manager in a restaurant that is attentive can see a customer
becoming unhappy and intervene before it gets to be a bad situation. A
customer not eating their food indicates something is wrong. But many
times nothing is asked or done. You can bet, in most cases, that
customer will never return and will tell others about this experience.
The sales person on an important call, misses signs of an issue that will
prevent sales and possibly lose the customer. There are reasons for a
line of questions or posturing by a customer. We must always try to
understand what is driving the customer and what they are driving
towards.
Character Matters:
In all cases, the character of a company and its employees does matter. All
customers deserve to be dealt with in an honest, truthful, and respectful
manner. Customers know when they are not being told the truth, if not at the
moment, they do find out, which will have a bigger impact. This does not
require an employee to share every detail, but carefully divulge what
information they can, understanding that the customer is what provides your
paycheck, and we all work to provide a product and / or service to a customer,
that should be extraordinary. Not being candid and truthful may provide short-
term results, but cause long-term problems that negatively reflect on your
company.
Regaining True Customer Interaction Focus:
How does a company establish true customer interaction focus? It starts from
the top, but includes the following:
Start with management involvement
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10. Regaining Focus on True Customer Service
Constant focus on customer impact (desire to exceed customer
expectations)
Pick a theme to focus on each day, week, or month
Focus on making customers feel special - Inspire employees to WOW a
customer or do something very unexpected
Open communication with customers
Show urgency in dealing with customers
Minimize negative customer events
Reward great customer service
Understand the positive impact on results from great customer service
Every company can deliver great customer interaction and service, but only a
few will choose to do so. Will you choose excellence?
Tracking and Measuring Impact:
As with any business initiative, it is important that every effort is made to
measure and track any initiative implemented. Although some customer
interaction / service will be hard to measure, it should still be rewarded and
encouraged. What you measure, and reward is what you get. Rewarding great
behavior will cause it to spread.
Everything starts with management and continues through the use of tools
(i.e., survey’s, score cards / dashboard). How many of you’re managers
actually get out and meet their customers to see how they are being serviced?
How many regularly call customers? When previously leading sales teams, I
would regularly call our customers to see how they were being handled, if any
problems existed, and seek feedback. At my restaurants, I require every
manager to personally visit every table. When I am at any of the restaurants, I
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11. Regaining Focus on True Customer Service
personally visit every table to ensure things have gone well, but also to see
how we can serve them better in the future. Some times I can make a change
based on a suggestion, and other times I cannot, but most customers
appreciate that I gave them the time and listened. There is no substitute to
leading by example. It is also helpful to use simple surveys to help drive the
right behavior and to understand what is going on (positive or negative).
As with any type of measurement, a scorecard needs to be created to track and
report results, so decisions can be fact based and employees can be rewarded.
Summary:
Along with other company initiatives, a focus on customer interaction and
service can help lead a company to long-term success. There are many ways
that a focus on customer interaction and service can be achieved. But it takes
focus, commitment, and a realistic plan that can be implemented to be
successful.
Along with the other important initiatives, companies should commit
themselves to a standard of excellence in customer interaction and service.
One that is stressed every day, week, or month. Running a successful business
can be challenging, but it is the little things that make all the difference. While
we strive for excellence, mistakes do happen. It is how we handle the mistakes
that will drive either positive or negative results.
Regaining focus on true customer service starts at the top and impacts every
employee, especially those who interact with customers on a regular basis.
Great customer interaction and service does make a difference in how we feel
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12. Regaining Focus on True Customer Service
about ourselves, how our employees feel about themselves, and the business
results we hope to achieve.
Are you ready to invest the time and effort to focus and commit to great
customer interaction and service?
About the Author:
Michael O’Keefe is President of O’Keefe Holding Group, LLC, which owns several
Foster’s Grille restaurants in the Atlanta Georgia area, and Customer
Interaction Solutions consulting company, which assists companies to focus on
improving customer interaction and service.
Mr. O’Keefe has over 18 years of experience and has excelled at providing great
customer service. He started his career with AT&T, much of which dealt with
customers. Then went to a subsidiary of Bell Canada (Teleglobe), in which he
drove a customer focus throughout the sales and marketing organizations.
Michael spent the next 4 years with two small software companies leading the
sales and marketing efforts, before starting O’Keefe Holding Group, LLC.
Michael O’Keefe
President – O’Keefe Holding Group, LLC
okeefehg@bellsouth.net
404-432-5022
P.O. Box 689
Alpharetta, GA 30004
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