Gratitude.

A partial list of Twitter friends, acquaintances and personalities I’m grateful for having had the benefit of 2010. Each enriched my experience in social media, business, marketing, leadership, and life to an extent I can only hope to ever reciprocate. I’ve listed them by their Twitter handles, but they also have blogs, businesses, speak, write and are generally present in the business and social media communities. The commentary is a rough copy of what I tweeted about them under the #100PeopleImGratefulFor hashtag.

• @briansolis, @danielpink, @unmarketing: Terrific work I would not have discovered in 2010 without Twitter.

• @KetelboeterPR, @dawnamaclean, @JenKuhnPR, @aimeelucas: For your passion discovering & promoting great service!

• @VIVAssistants, @PhaseWare, For some of the best commentary I hear every week in the #custserv chat.

• @sokoloffharness: For being a terrific friend and the surrogate jewish mother everyone deserves.

• @theroasterie, @johnnystavern, @nelsonatkinsmuseum, @henhousemarket, @boulevardbeer: Kansas City businesses engaging in the social media conversation.

• @ZapposD_Rob: for evangelizing a worthy culture in a way that can be applicable to every culture.

• @PricingRight: For having the service orientation, but also demanding the data.

• @barrypeters, @choypw, @jen_reyna, @jeanniecw, @chris_bailey, @Lisa_A_Ford, @CoCreatr, terrific customer experience leaders!

• @mjayliebs, @ralph_ohr, @JohnFMoore, @btemkin: For exposing so many to terrific service design content.

• @WPCCSL, @AliciaHatCSL: For hosting the Compete through Service Symposium and advancing the Science of Service. #ctss

• @Brainzooming: Terrific mentor. Better friend.

• @customers_shoes, @yourcustomers, @ecocustomers: For your passion discovering & promoting great service!

• @Jeannebliss, @ChipRBell, @EYellin - some favorite service biz (and it’s all service biz) authors.

• @zappos & @bonobos: For leading your peers in joining the dialogue about your brand.

• @mannysdeli: For the best damned sandwich I’ve ever had. (I’m a sandwich guy)

• @josephmichelli, @saltpeppergroup: customer experience allstars and terrific writers!

• @tompeters: classic, but willing to evolve to the world we face today and the one we’ll face in 10, 20, 100? years.

• @amandakaufmann, @gregortbach, @action_jay, @ty_sullivan: great weekly commentary in the #custserv chat.

• @artduservice, @sarah_gore, @stephaniethum, @jowyang: For your passion for promoting great customer service!

• @SybilQSM, @bcarrol7, @KristinaEvey, @ScottMcKain, @9Inchmarketing: some of my favorite service blog posts of the year.

• @TalentCulture, @MeghanMBiro: For collecting such a talented group of servant-leaders, innovators, and change agents.

• @guy1067, @knowledgebishop, @richardnatoli, @EYellin, @geoff_snyder: some of the best commentary weekly in #custserv.

• @chriszane: For the living & proving the business philosophy of giving more than seems reasonable.

• @frankeliason: For true leadership in making service social.

• @bsdalton, @DeliverBliss, @ericjacques: outstanding service business kindred spirits.

• @royatkinson, @marshacollier, @JeffreyJKingman: creating, hosting, leading, giving themselves to the #custserv group.

• @ariegoldshlager, @wimrampen, @prem_k, @GrahamHill, @ekolsky: for being my window to the best service design content.

• @jedlangdon, @LindaIreland, @meannie, @kevinstirtz, @jon_ferrara, @chris_bailey: Some of my customer experience allstars!

• @tedcoine: For being one of the few standing at the intersection of C-Suite Avenue and Common Sense Road.

• @WriteTheCompany: For demonstrating humanity (or lack of it) in corporate communications, making us laugh while doing it.

My deepest thanks to all this group has brought the service business community, and me personally, over the last year.

How do you show your promises?

A nice surprise from CVS this weekend. On my way to pick up a prescription for my under-the-weather wife, I noted a small note at the top identifying prescription ready time by the word, “promised”.

They could have used different verbiage to describe when they told my wife her prescription would be ready. (In fact, they could have just called it “prescription ready time”.) I’ll bet very few people even notice this text on the top of their package.

But they specifically use “promised”.

It’s both a reminder to front line employees about what they’re making and to customers about what CVS and its people are delivering.

I’ve said in this space that all businesses are service businesses. A corollary to that is that all services fundamentally are promises that are made to be fulfilled.

Making those promises explicit – as CVS does – makes the expectation clear for everyone involved, and when it is fulfilled, reinforces the performance in the eyes of the customer.

Many companies have made high art of being noncommittal on what they will deliver to customers. It’s a malady that keeps them from being exceptional. If more businesses made their commitments clear - easily identifiable for front line employees and easily measurable for customers - we wouldn’t have nearly the chasm between the service that companies have the opinion they're providing and the service customers percieve.

Service Rant: How are you doing today?

I was boarding an American Airlines plane yesterday, and as I passed the flight attendant, I offered a hello and asked how she was doing – something I do in every service encounter, and likely a hundred times a day with great friends and complete strangers.

Her response, unfortunately, was not atypical: “I’m at work, so what does that tell you?”

What does that tell me?

Actually, a lot. For starters, that you don’t like your job, and that I’m probably not going to enjoy this experience. (I didn’t.) That your leadership is doing some fundamental things wrong that, while not your fault, present themselves in the way you serve customers. That, on aggregate, your company’s experience is likely inferior to someone else’s. Maybe many “someones”.

The truth is, for front line employees performing a service experience, there is really only one response to the question, consisting of some form of, “I’m doing great, and I’m ready to perform for you.”

And because staffers’ sole purpose is to support (i.e./ serve) the line organization, it should also be the answer for anyone not in a front line service role.

Is it okay to have an off day?

Of course it is – we all do.

But who wants to hear it? Not your customers. Not the front line employee facing more customers than she can handle. Not your reports. Not the project team you lead. To ALL of these people, the answer includes “I’m ready to perform. To get this thing (whatever it is) going, to not waste everyone’s time and create an outcome we can all be proud of.”

Not convinced?

Imagine you’ve shelled out a hundred bucks or so for tickets to a Broadway show this holiday season. At the intermission of a poor performance, you make a wrong turn while looking for the restroom and end up running into the lead actor doubled over a garbage can, who, recognizing you as a patron, says, “Hey, sorry the show isn’t going so well today. I caught a bug a few days ago and I’m just not my regular self.”

Would you be disappointed? Pissed off?

Don’t think the analogy applies?

You’re probably right. The plane ticket cost more than the Broadway show, the front line service performers had a smaller audience to attend to, and a greater ability to connect directly and more tools to do so.

Black Friday Lessons in Experience Adaptation

Black Friday provides terrific lessons for anyone looking to see service businesses at their best and worst, given the extreme conditions for all involved. On Black Friday, no one involved in a retail service encounter is their normal selves. Customers and the retailers that serve them are stressed, tired, and have sky-high expectations of success from their respesctive points-of-view.

From midnight through about 10:30 am yesterday, I hit walmart, Target, Costco, Best Buy, Toys ‘R’ Us, Office Depot and Office Max to see how some major retailers changed their behaviors to cope with the demand extremes while staying true to their service promise.

In too many cases, retailers reacted to their highest-stakes day without regard to experience component of the event – unresponsive to the extreme variances in customer composition, behavior, and the volume of demand for every service a store offers.

Most retailers approached the experience with the strategy of doing the same thing they do every day, only more: placing higher stacks of product in the normal locations and employing the “throw bodies at it” method of handling demand increases for all service types. They used the same check out process, just opening the maximum number of checkout lanes, forcing customers into lines literally hundreds deep. A number of major retailers could have taken a page from an airport Starbucks, and at least changed their checkout routine.

But there were some examples where companies changed their everyday service processes to adapt to the environment they faced:

• One retailer had premium product handed out through a manual control point. It instantly created an in-environment event, with the floor employee handing out high value electronics from a cage like he was Santa Claus himself. Reception to the tactic was so good, the retailer could have created an even grander spectacle. After all, he was already on a figurative stage; why not give him a literal one?
• Another retailer created an in-store Disneyland routing pattern, cordoning off some aisles, sticking arrows along the floor and reserving the route for shoppers as they checked out. Once in the line, the rest of the experience was blocked out by row after row of product not on sale.
  

Most evident whether in the midst of a good experience or a bad one, was that delivering on promises is even more important in periods of high customer stress & expectation than it is every other day. More than a few brands that tout everyday reliability were conspicuously short of product when customer expectations were at their highest. Retailers that won hearts were those that had sufficient quantities of the promotional product to ensure that no one felt like they lost out.

In short, they didn’t disappoint on their core service promise.

How well does your experience respond to its environment?

I see my share of airport terminal Starbucks, and always marvel about their dramatic demand variance. It seems I’m just as often to walk up to am open counter with three baristas attending to me alone as I am to join a line fifteen deep.

It’s the latter scenario where I tend to pay more attention, watching how teams react. Often, they’ll send one member, equipped with a headset and note-pad pre-printed with drink options, out from behind the counter and into the waiting line. She / he will then walk the line, taking orders, relaying them back to the counter via the headset, writing the Starbucks shorthand on the pad and handing the waiting customer a ticket to give to the cashier.

It’s an operational change that allows them to increase throughput, using time spent in line taking advance orders to eliminate the exchange that usually happens when the customer reaches the counter. I’ve heard a few fellow caffeine “enthusiasts” scoff at necessity of the high-tech headgear, but it’s great practice for both its real and perceptual effects.

The real operational impact is that the process makes Starbucks faster, allowing them to serve more customers (and take in more money) in a shorter amount of time. This in itself likely makes the practice worthwhile.

As tangible as those impacts are, the perceptual impacts may add up to something just as significant.

The approach divides the time between service activities and makes the line wait seem shorter. I don’t notice I’ve been in line 7 minutes if my order was taken 90 seconds ago.

They demonstrate process flexibility by modifying their operation to fit their demand minute-by-minute. While doing it, they provide tangible proof of their order customization by involving the customer in a direct role - providing the formatted order sheet to the counter staff.

Starbucks’ flexibility shows their responsiveness to their customers. Responsiveness is tough to measure at the best of times, usually incompletely measured as how fast a request meets a reply. It is that, but flexibility and customization also factor into responsiveness, and in modifying the service experience during heavy demand periods, Starbucks wins on all fronts.

Internal Service Themes from the 21st Annual Compete Through Service Symposium

I had the pleasure to spend last week at the 21st annual Compete Through Service Symposium (#CTSS). It’s been a few years since I’ve been back, and the experience has gotten even better since I last attended. Speakers as diverse as Fortune 500 CEOs, CNN Money’s Smartest People in Tech, a folkhero entrepreneur, a Cultural Evangelist for arguably the world’s hottest service brand, and the President of a professional sports franchise got together to talk about what makes services businesses successful.

While there was great diversity of perspectives and material, a number of themes remained consistent throughout. I have to caveat that #CTSS attendees generally don’t fall into the typical command & control model of organizational leadership. They’re a group that not only believes in the service profit chain that begins with internal service and ends in customer loyalty and long-term profit, they live it. In formal presentations and informal discussions, there was wide agreement on the principle that exceptional service starts with meaningful engagement of employees, and that only once the internal investment in employees has been made can the meaningful customer engagement occur through exceptional service.

Some other themes around internal service that remained remarkably consistent across speakers:

• Successful service businesses are made up of employees with a shared vision, understanding of and belief in the culture and the freedom (and responsibility) to make business-impacting decisions. In no fewer than three organizations, employees had a hand in creating core values through some consensus exercises. In one organization, they also prioritized those values.
• Best-in-class service organizations recognize the linkage between internal satisfaction and external satisfaction. They’re measuring internal customer satisfaction and loyalty and linking it to (and in some cases have successfully established it as a predictor of) external customer satisfaction measures across service touchpoints.
• We often talk about infusing voice of the customer into service design and experience management. Just as frequently at #CTSS, we heard leaders talk about putting the voice of employees into service design and experience management, though a challenge common to all organizations is to get employees to consistently advance those ideas.
• Despite being service industry leaders, many of the companies presenting faced financial challenges in the recent economic crisis. Each discussed as a separate topic the challenge of maintaining employee engagement through periods of financial trial and necessary force reductions. Not all approached it the same way, but all addressed the issue as though it was the most important challenge facing their business.
  

A few select highlights from a terrific week spent with some of the best in service business. Next, I’ll cover the external themes on service, customer satisfaction and loyalty that were present throughout the week’s speakers.

I want my “OpenTable” for appointed services.

I need a haircut. People can gauge my mood by the height of my unkempt coiffe. (If you wonder whether this is possible, ask @Brainzooming. He’s seen done it.)

It’s 10:00 on Sunday night, and I want to schedule an appointment now, not leave it until tomorrow, when I get into the swing of a busy week and forget about it until I’m sitting here again next Sunday night.

Problem is, my hair place (salon, if I must) isn’t open. Though it should be.

Why can’t I go online or use a smartphone app to schedule an appointment with my regular service professional at a time of my preference? My place has a website, and while it is good at telling me where they are and when they’re open, it has no scheduling application. Nothing that would allow me, during a time when they’re not open but that I have some time, to see my hairdresser’s schedule, pick a time that works and confirm it without having to call anyone.

While we’re at this, surely my dentist could also pick up on this need and stop giving me appointment cards that get lost in my wallet never to be seen again, or at least until call to tell me I’ve missed my appointment and they’re going to charge me for it.

A rule of business (maybe not the “first rule”, but still pretty important) is, “make it easy for customers to buy from you”. Being open online when customers are looking for you extends your ability to take orders and fill your schedule with paying customers. Better, it does so in a way that works to customer convenience. Better still, it does all this without needing an “appointment desk” to be staffed.

If you aren’t available to your customers when they want you, maybe they’ll call you when you are. Then again, maybe they’ll just find a service provider who is.

Managing service at arms-length.

This week I used Home Depot for some installation services. Of course Home Depot doesn’t come to your home, they use local companies to execute the service encounters as intermediaries.

Since the purchase was a relatively large one, I solicited some opinions before choosing. Those that had tried HD had universally good feedback, while some that hadn’t felt I might do better finding a local contractor on my own.

In the end, I chose the Home Depot brand for an intermediary-provided service for reasons most people choose brands in general. They may not have been the least expensive option, but they eliminated the search costs of finding and evaluating a set of service contractors. While I might have found a better quality through my own search, I could rely on their protection of their own service reputation and brand to ensure I would be satisfied.

They delivered on their promise.

The service was performed efficiently and well. As proof of their concern over the quality of the service encounter, I received 2 survey opportunities, 4 follow-up calls (2 from the provider, 2 from Home Depot) and a thank you letter as opportunities for me to provide my feedback on the experience.

Product companies & retailers are expanding into intermediary-fulfilled services (Turtlewax Carwashes, Scotts Lawn Service, and Tide Dry Cleaners as examples). They are often a logical extension of the brand, provide another source of revenue, and the service-based model generally carries higher margins than the product business. But managing intermediary-fulfilled services is tough. Companies lose a measure of control over the customer experience, and need to ensure that their brand isn’t compromised by an encounter they don’t provide but are accountable for.

Some might think that 7 post-transaction requests for feedback is overkill – and in fact my wife asked me when they were going to leave us alone. Home Depot is managing a service encounter, and an experience with their brand, at arms length. The cost and the fact that someone is in their customers’ home makes it a high risk / high impact experience. In addition to managing the shared service fulfillment process, solicitation of feedback on the encounter, is the best way to ensure these encounters are positive ones. For me, it also showed that they put the additional effort (and money) into ensuring the experience is a positive reflection of their otherwise strong brand.

Compete Through Service Symposium: A source for services thought leadership.

I credit two early sources for much of my perspectives on service and leadership – formative years spent as an officer in the Canadian Navy and in a program associated with the Arizona State University Center for Services Leadership.

The Navy is the sort of place that, once you leave, you really can’t go back to refresh your perspective - at least not formally.

The Center for Services Leadership, its objective in bridging the business & academic communities to compete strategically through the profitable use of services, is much more accommodating. They offer array of continuing programs, including service business webinars, cutting edge research & resources, and a series of events capped by the annual Compete Through Service Symposium.

Symposium is the venue for some of the best service content I’ve ever taken in, and year-after-year is a veritable who’s who of businesses engaging in service excellence. This year, Avnet, DuPont, Marriott, IBM, Zane’s Cycles and Zappos, and others are represented as content providers.

Symposium offers any service business great lessons with practical application for:
- Service design & innovation
- Use of technology to facilitate the service experience and service environments
- Transformation product-based companies into services oriented companies
- Creation of lasting customer loyalty
- Service process improvement by mapping the service encounter
- Service recovery
- Service culture & values
- Service differentiators for B2B

This year, I’m proud to be not just an attendee, but a contributing member of the social media team. You can look for updates on Twitter under the hashtag #CTSS, in the Center’s official blog, and in this space.

This post preaches to the converted, but I know hundreds of service business professionals that care deeply about creating customer value and want to continue to get better at their craft. Regardless of level or organizational function, the Compete Through Service Symposium has content, experts and opportunities to help any business or individual differentiate on service.

A 'free skate' on customer roles.

This weekend, I watched my 5 year-old cruise easily through skills test his first formal skating class.

I wasn’t surprised, but not because I see in my son a budding Gretzky. He enjoys skating and puts effort into the activity – in formal practices, when we skate together recreationally and on his own. (An aside, I highly recommend Talent Is Overrated for terrific reading on where "innate ability" actually comes from.)

I mention all this because skating lessons, like any form of education, represents an experience where the customer role is generally greater than the role of the service provider. It’s the extreme example that proves that while different services have varying levels of commitment, all have a role the customer must know, accept, and be willing & able to perform. Without these, the ability to create successful outcomes is substantially diminished.

Proper attention to customer role is one of the more neglected aspects of service businesses. Companies invest in employee training, employee process and employee-enabling technology, but too seldom make the same investments in customer training, productivity & quality.

The result: companies know their role exceedingly well. They execute their role in the encounter, and feel that their outcomes are generally successful. From this vantage point, when failures occur, it is usually because the customer hasn’t performed in their role correctly.

To begin understanding the gap between customer role and performance, start by asking (and getting customers to help answer) questions like:

What is the customer role in delivering a successful service experience?

How well do customers know the impact their role has to a successful outcome?

Are customers willing to perform their role?

Do they have the knowledge, tools and abilities to perform their role reliably?

Answers to these questions help guide us to decisions that make customers higher performers on the part of the encounter that they fulfill, whether it be educating customers on their role, giving them tools to fulfill it, redesigning processes to make their role simpler / smaller; or making the outcome more appealing.

My son’s skating lessons are a successful service experience because he knows his role (mainly practice) and has the tools to perform it (mostly ice time). He values the outcome highly and performs his role accordingly. Understanding customers' varying knowledge, willingness and ability to perform their service roles helps make improvements that lead to more successful encounters.

Who makes your promises?

Who is responsible for the promises your business makes to customers? Marketing? Sales? Operations? Customer Service? Is it a collaboration effort? And when promises are made, are they accounting for differences in importance of each attribute to overall success of the encounter?

Two recent examples:

This week, I opened a bank account online. The website proudly claimed, “Open an account in 5 minutes.” I love a challenge, and with fingers flying, I attempted to get the account opened under the promise time. As it turned out, I cruised through the experience, but was at 11 minutes, on the final screen, when I was prompted to call customer service. (The account open activity ended up taking just over three days) But I don’t engage financial services with speed as my primary objective, and so while I was critical of what was clearly an overexaggerated promise, the failure didn’t dissatisfy me.

In another recent encounter, failure happened on a much more important attribute promise. It’s recreational hockey season again, and my skates need new blades to prevent me from falling down even more than usual. I asked the arena’s pro shop how long to get them replaced, referencing that I thought a nearby hockey shop could do it if they didn’t have the parts. “Should take no more than 5 days” was the reply, and I gladly handed my skates over for the change. That was 15 days and 4 outings on borrowed skates ago. In this case, the delivery date was a critical aspect of the promise. If the answer had been, “A little over two weeks” I would have gone somewhere else.

In too many cases, the service encounter fails before it even begins, when the business opens its proverbial mouth and makes a commitment it can’t consistently keep. The effect is compounded when the promise is made on a critical aspect of the experience

Two lessons on setting appropriate expectations from these experiences:

Know what service attributes are important to customers before making promises on them as part of your positioning. If a customer doesn’t value an attribute, consider whether you have to make a promise on it at all.

Once you understand what attributes customer value, set appropriate expectations that can lead to satisfying service encounters, rather than stretching your promise to its absolute maximum. While it is possible for skates to be done in 5 days and an account could be opened in 5 minutes, your everyday promise shouldn’t reflect your performance on your best day.

Just what am I deciding on?

Self-service can be incredibly enabling for a businesses.

It can increase access to your business beyond the customers and markets you currently serve, improve your number successful outcomes by putting control in the hands of the customer, increase satisfaction through self-gratification, and decrease your service costs.

No wonder most service businesses have been quick to jump on the self-service bandwagon and continue to make self-service investments a priority. Unfortunately, cost impact is too frequently the driving force behind self-service processes and technology, and is widely attributed to much of the vehement dissatisfaction customers have with service in general.

When implementing self-service processes, the critical considerations are in providing customers sufficient knowledge, tools and empowerment to successfully serve themselves. The same service processes you consider when deploying your own labor to serve the customer are the ones that need to be considered when you are using customer labor.

I came across this imperfect execution of self-service process at the local Conoco.

It is clear that they’re giving me choices. I can select between 5 different gasolines with differing octane levels when I fill my car, and Conoco will charge me 5 different prices for them.

Unfortunately, that’s all the support I get. No decision support, no education, no sources for more information. What should I use? What is better? I assume that what costs more is better, but is something that costs less more “right”. Is 88 really better than 87? Is it 1% better, or proportionally more?

Variety is good, but in this case, they’ve left me with a choice without supporting how I would make it.

And so, in a self service situation such as this most customers will do what I did – choose the lowest price and hope for the best. Yet many times I’ve driven away wondering if I should be paying more for a different product in order to take better care of my car.

Most companies would blanche at not providing their front line enough information to make informed decisions, so why would they provide lay customers with less information to make similar decisions?

Better information in customers’ hands yields better self-service decisions, more satisfaction at having performed their role correctly, and in this case, likely more revenue & profit for Conoco.

Crowdsourced service: Not whether, but how.

A debate in the regular Tuesday #custserv chat on whether or not customer service activities should be crowdsourced spilled into the customer service blogosphere last week.

One side was enthusiastic about finding a way to enable customers to help other customers, while the other was reluctant to yield control of the experience to customers.

While it was a spirited debate with a lost of great supporting points made on both sides of the issue, I see it as an unimportant question, though it does lead to some very important questions.

Whether or not to involve customers in the provision of customer service is moot. It already happens. Companies may not be aware of it. They may not control it, may not have the resources to take advantage of it and ultimately, they may decide that they do not want to support it. But it exists, nonetheless.

Brainzooming’s Mike Brown recently told me an air travel story where a gate agent could not help a customer with a new gate assignment because they hadn’t received the information. A bystanding customer armed with a smartphone successfully retrieved the correct gate information from the airport website and provided it to the inquiring traveller. While there are several things wrong with a service environment where a customer is more enabled to provide service than an employee, in the end, a need existed and was filled.

With accessing accurate information becoming easier for customers to do themselves, variations on this encounter happen more every day.

In every service encounter – from legal defense to customer service call – the customer has a role to play. The important decisions revolve around what role you want the customer to play, and how you get customers to embrace the role, and how you support that role’s success.

The customer role absolutely can (and does) include serving other customers.

As such, the choices companies have to make are more fundamental to strategy than, “should customer-to-customer service interactions happen?”

Your customers are already making service promises, on your behalf, to other customers. Are those promises accurate and relevant? Could they be made better with your input? What would that look like?

They also help you fulfill those service promises through their own effort. Should that effort be supported? Will it lead to better outcomes for all parties? Will it lead to lower costs?

Increasingly, companies need to examine what role they will play in their customers’ tendencies to provide service to other customers.

While the answer varies from organization-to-organization, my general view is that this type of service is becoming too visible to be ignored or left alone. That companies increasingly look uncooperative or incompetent by disregarding customer-to-customer service, and would be better served by finding ways to channel the energy that already exists within their customer bases, harness it creatively, and use it to provide better service than they could relying only on their own (paid-for) resources.

Happy birthday to...who exactly?

Relationship marketing is getting better.

Well, maybe just, “more prevalent”.

Every year, my birthday provides my very own “Big Mac Index” measure of the growth of relationship marketing, as service companies use show their CRM investment by sending me a birthday card. It was novel when I received my first one more than a decade ago. Truthfully, the novelty hasn’t worn off much, though I’m getting to the point where company-initiated cards are competing with the number I receive from friends & family.

But while more companies are showing me that they are using information to monitor and respond to important events in a customer’s life (though no one has ever asked me if I consider birthday important) the use of that information for relationship-building activities – the part requiring human thought and creativity – still has a galaxy of room to improve.

Cards I recieve generally fall into one of three categories, with my utility for them decreasing below zero by the 3rd:

A card accompanied by a genuine gift. The gifts are usually token, $5 - $10, sometimes much less. But these small recognitions of the relationship without any expectation of reciprocity get my greatest response. They fit with the birthday theme of gift giving, and usually get me to engage them in a service encounter in order to “redeem” my gift, where I likely spend in excess of the gift amount.

A simple birthday greeting. These represent a majority of the cards. Not much in terms of tangible benefit, but recognition of the event representing a genuine appreciation for the business I do. Even though I know how little effort this type of program requires, the fact that any effort is taken, without the express objective of corporate gain, makes me appreciate them.

A birthday greeting including a promotional offer. These often come as a 10% / 20% / 30% off coupon – “because it’s my birthday” – on an upcoming purchase. Of course, 10% off means than I’m still likely spending hundreds in the redemption transaction, and doesn’t consider whether I need the service in the promotional timeframe. These create an almost viscerally negative reaction, and have caused me to speed ending a relationship with a company that, not surprisingly, was not a very good service provider to begin with.

Companies talk almost constantly about developing “relationships with loyal customers.” What surprises me is how many of those same companies execute their relationship communications with their own benefit as the sole objective. When I see a “birthday wish” conveying 90% of the benefit back to themselves, I am capable of little sympathy as a company grumbles about their customers being “price-driven”. When all customers have seen through the false-intentioned rhetoric, the only ones that remain are those you've conditioned to be price purchasers.

In company customer relationships, like interpersonal ones, it is wise to remember that we reap what we sow.

On Encounter #2, Zappos Delivers. Early.

I wrote in a past post that my first Zappos service encounter, while good, didn’t exceed any sort of expectations I had going in. Having heard so much about their corporate culture and noting the cult-like service following they’ve developed, I engaged the initial experience with heightened expectations that would have been very difficult to surpass.

While they didn’t “wow” me, they did offer an experience that scored high on some service quality dimensions – a user-empathetic experience that was easy to interact with, name brands backed by good prices assuring the overall value, and most of all, reliably delivering on their promise.

It wasn’t enough to get me to sing their praises the way others do, but it was enough to turn me into a repeat customer and give them another chance to make me an outspoken advocate. Of course, the second service encounter began with expectations reduced at least a little by the first.

This time, they exceeded those expectations.

I made a fairly routine purchase, replacing the wallet I lost while on vacation a few weeks previous.

After receiving the usual order confirmation email, I quickly received another email from Zappos. Usually when this happens with an online retailer, someone is telling me that the item I ordered is out-of-stock and resetting expectations for when my purchase will arrive.

In this case, however, Zappos was informing me that the shipping on my product would be upgraded to expedited, free of charge.

I know that my service upgrade was an opportunistic move for them. It came at no additional charge (depending on fulfillment costs, potentially even a savings) to them. Still, the consideration that goes into evaluating the service promise and committing more than was asked is worth noting. It knowingly creates a potential dissatisfier if the commitment is unable to be kept, but also builds in the customer the sense that Zappos is empathetic to customer desires, responsive in finding and executing on opportunities to surpass their commitment and is confident in their reliability to perform.

For encounter #2, not only did Zappos retain a repeat customer, they also created someone willing to advocate their commitment to service.

What should companies & customers commit to each other?

In response to “Decency is a Customer Role,” Wim Rampen introduced me to the company customer pact – an open call for companies and customers to share responsibility for building “long-term relationships that lead to trust, strong communities, and sustainable businesses.”

While it is an intriguing idea, I’m still undecided as to whether I’m in favor of this version of a company / customer pact, or any such pact for that matter.

I’m a fan of standards in the service environment as sources of performance measurement and shared expectations. This includes standards for dialogue between company and customer. But something tells me that in the service environment – the type of business the Company-Customer Pact is most intended for – there are too many heterogeneous inputs across industries & companies, among differing customers & service providers, and in highly variable environments to make it practicable.

This pact has limited scope, addressing primarily company-customer dialogue. Much attention is paid to respectfulness, responsiveness, good intentions and clarity, and provides a good foundation for mutual respect. Missing, however, is mention of pther important company commitment characteristics, such as reliability, empathy, and assurance. In fact, the pact may actually undermine loyalty, as so much of the important company-customer interaction lies in non-communication service aspects not covered by the pact.

Finally, in committing to a conservative standard, companies may actually be limiting their ability to delight customers on all attributes.

In the end the company / customer pact may just not matter much. In any company / customer relationship, companies have the short-term leverage and customers have the long term leverage – it’s a good balance. Companies that exert the short-term leverage without consideration for customers’ ability to vote with their feet eventually get what they deserve. Good companies are going to live comfortably above the minimum standards, while bad companies will live comfortably below it, which may beg the question whether such a pact is needed at all.

So how about it – am I being too hard in what is a generally agreeable initiative between companies and customers to establish a baseline for their interactions quality? Should the pact be expanded to cover a broader range of the company / customer relationship? Should it be abandoned altogether?

Time Warner Cable wants my help.

It’s renegotiation time with Disney, one of their largest suppliers of programming content, providing ESPN, Disney, & ABC family channels. Time Warner doesn’t want to pay more for content, and Disney is threatening to cut them off. So they’ve appealed to their customers to help support their renegotiation efforts through vocal opposition to their suppliers’ demands.

Using a multi-channel media campaign, they're informing customers that their options are now reduced to “roll over and raise prices to customers” or “get tough and risk losing the programming customers love.” 1 million people have visited the rolloverorgettough.com, leaving some 300,000 comments. TWC has supplemented the site with TV and radio ads, suggesting that not only will they have to raise customer prices if they lose, but that switching providers won’t help, as similar renegotiations with other cable providers are inevitable.

As member of the Customer Service Hall of Shame from 2007-2010, Time Warner playing the role of consumer advocate may seem disingenuous to some.

I'll table whether TWC has the reputational capital with its customers to ask for help for another time. My question in this is whether this represents an appropriate role for TWC to expect its customers to play.

On one hand, the personal financial benefits are obvious if Time Warner, with my help, is successful in its negotiation with Disney – or any other supplier for that matter.

On the other, supplier negotiation is about as internal to Time Warner as who gets Jeffrey Bewkes' coffee. If customer leverage can be used on a programming supplier, why not a supplier of TWC employee healthcare benefits?

Southwest Airlines built their culture around getting the customer to do more to directly support the service operation, with lower prices and better service as the perceived payoff. But a service company is involving its customers in supplier negotiations feels like we might be crossing a line.

Am I wrong? Is use of customer purchasing leverage where the company / customer relationship it going, or is this example an inappropriate solicitation of customer effort?

Decency is a customer role.

While the commentary on the Steven Slater incident is already overdone, this story has clearly captured the public attention, perhaps because and the deteriorating state of customer behavior and the customer / service provider relationship in general represents a social aspect most of us have sensed first hand if we haven’t been guilty of participating in ourselves.

I won’t offer an opinion on whether or not Slater was justified, but will cover a needed fix for the source of his actions.

It’s a paradox in service businesses that the employees most responsible for the company / customer relationship and that most personally reflect the brand are front line service employees ranking among the lowest paid in the company. We place these service professionals in front of customers and entrust the encounter, and our brands, to their care. Their success is a direct reflection of the support they receive – training, service processes, enabling technology, and management backing they perceive as they do their jobs.

Some companies are exceptional at providing the needed support for front line providers to be effective. But when you look at the worst service companies and even entire industries, their shortcomings are usually indicative of a lack of support for the roles of front line providers.

As the airline industry has cut customer value, so too has it reduced the tools available to employees to serve customers effectively. Fewer benefits & less support have created one of the most antagonistic service environments – in some cases verging on customer mutiny. In most cases what you get is a bare minimum, where FAA-required service components are retained at the expense of relationship-building opportunities.

But decency is customer role and a service provider right. While it would take time and resources, why not spend some time in every flight reminding / setting expectations with both the service provider and the flying public about the role of each in the successful encounter?

The poor-quality image above is the customer bill of rights posted in the back seat of every Chicago taxi. As a passenger, it lets me know what I can expect and reasonably ask for in any encounter. (Yes, I have invoked my rights a time or two) It also reminds me of driver / service provider rights, and what my role is in providing that environment. This could easily be done in the airlines. A seat-back card, some language inserted into the pre-flight brief that lets customers know their service rights, and what environment the service providers can reasonably expect.

It is valid to say that such an effort shouldn’t be needed, that people should know how to act in public. Perhaps, but setting role expectations in the service environment is never wasted effort. More to the point, if people need a reminder not to be a jackass to someone serving them, companies should be willing to provide that as process support to the critical teams of professionals that steward their customer relationships and their brand.

Does your service celebrate new customers or bemoan them?

On a recent trip, I unexpectedly needed to rent a car. The company I use almost exclusively was out of stock, and faced with limited options, I went with Dollar as a first-time user. As new service encounters go, I came away extremely frustrated by the experience.

I’ve been a National customer for years. Their Aisle services were truly innovative in a stagnant space, and I was an early adopter. The “skip the line” rental process is so familiar, I don’t know how the standard rental process works, with National or any company. For the occasional lost receipt, I also signed up some years ago for automatic email distribution of all receipts. I’m a high-productivity user of National services - convenient for me and lower cost for them.

The first noticeable difference with Dollar was the price – unbelievably high, no doubt driven by their dwindling stock. While a company has a right to re-price service capacity as it becomes scarce, a customer’s first experience with your brand shouldn’t invoke reverse-nickname irony.

If the price was a turn-off, the experience was worse. Already annoyed at having to re-learn the counter check-in process, I was greeted by a service agent equally annoyed to be serving me.

Because I wasn’t a returning customer, he had no prior information to use in setting up my rental. Our annoyance build together as he asked enough questions to buy a house and he entered my endless details into their system. Asked when I would be dropping off, I replied that it would be about 5:00 AM the following day. My agent replied they wouldn’t be open, and that I would have to use the overnight drop box, a process I asked for clarification on.

As he dismissively handed me the keys and motioned me to the lot, he quipped that I must not rent cars too often.

It amazes me how companies treat a new customer.

Some roll out the figurative red carpet as if to say, “Thank you for giving us a try! We’re going to make this go as well as possible in the hope that you return.”

Most, however, provide a more or less extreme version of what I encountered with Dollar. Annoyance at having to create a new relationship, a lengthened initial service process, the highest possible price because they’re not a returning customer, and an overall experience that is singularly unspectacular.

Ironically, Dollar will see the profit from my one encounter spend resources trying to determine whether they can create a loyal customer out of me. They’ll likely conclude that I’m not worth pursuing because I don’t book cars that often, not sensing that I have a biweekly relationship with the company 3 counters down.

Most of it wouldn’t be needed if they put energy & process into new customer indoctrination, rather than treating it like a new customer is the last person they’re happy to see and ensuring a first encounter memorable for the wrong reasons.

You're such a lovely audience, we'd like to take you home with us.

Some entertainment acts I’ve experienced are among the best service providers I know. Last night I had the opportunity to see Paul McCartney in concert, a tremendous player and a businessperson committed to connecting with his audience (we, the customers) by delivering on expectations, involving them in co-production of the experience, and showing gracious appreciation for their choice.

It would be easy for someone who holds the titles of “Knight of the Realm” and “Beatle” to be self important and disconnected from his customers. I’ve seen far lesser acts disengage completely as if to say, “Your inability to appreciate what I’m doing is your problem.” (Does that sound like a company or two you may know?)

Sir Paul ended a near-perfect evening perfectly, playing an amped-up version of Sgt. Peppers Lonely Hearts Club Band, working special emphasis into the stanza thanking the audience. The audience reciprocated the appreciation, singing and well & as loudly as they /we could.

Throughout, the elements of a successful service encounter were present – the reliability that the band would play to (and above) audience expectations, the empathy to understand that most in attendance would hang on stories from his Beatles days and the tributes to John & George, the responsiveness to sense the crowd and involve them in co-producing the event.

But in the end, the most striking element of the encounter was the appreciation that an act that needs no adulation had for his audience, serving as a reminder for the rest of us that work in less high profile - but no less important - service businesses.

He ended the concert with the famous line “The love you get is equal to the love you give.” As a provider of an entertainment experience, that is exactly what occurred.

A friend in need is a friend in deed.

Which services you use are equipped to handle emergencies? I mean, really handle them? Recognize the state you’re in. Empathize and understand what you’re going through. Act responsively & flexibly to deal with the emergency. Provide the assurance that everything will be alright and the reliability to make it happen.

I see customers in emergencies of varying degrees almost constantly. The signs are unmistakable. A customer enters a service moment of truth flustered, rushed, sometimes angry, in near panic and not thinking clearly at all. What customers want at that moment are the things that a customer wants in every interaction – empathy for their plight, responsiveness to the situation, assurance that they will be taken care of, and the reliability of a solved crisis.

What surprises me isn’t how often I see customers in emergencies, but the completely standard way they are treated by the companies they’ve reached out to for help.

Responding effectively in a customers’ time of greatest need is a strong loyalty builder as a creator of positive memories. It providesan execution-reference halo for a company’s standard-level service. Depending on the urgency behind the request and willingness to pay for a solution, emergency service experiences can also be a tremendous source of profit.

Yet most companies fit emergency customer experiences into their standard operations, using the same process and people to resolve an encounter with higher stakes, more urgency and more emotion than standard processes are designed for. Worse, I hear front-line service staff using policy as an excuse not to help when a simple act outside of the established rules would fix a problem without detriment to the company.

It’s worth considering development of a separate emergency process, perhaps staffed by emergency service employees with a different skill set, to deal with customers in emergency situations.

Maybe even consider turning effective emergency resolution into the main business line.

How about a plumber whose main business is responding to weekend & holiday emergencies? She doesn’t charge the double time other plumbers get for emergency services, but still gets a premium on what is for her the “standard business line”. Her business is configured to cater to the type of work her peers avoid, but for routine work, she schedules prudently around the days she’d like to take off.

Process and people are critical elements of the service encounter, and much thought obviously has to go into providing effective service to customers interaction after interaction.

But for emergency situations, examine closely whether the process and people you have performing it fit the emergency, or if your service wouldn’t be better suited with its own emergency response capability.

The Wrong Tool for the Job.

I left my drycleaner for Tide Cleaners, and haven’t regretted it in the least.

Master of the product world, Proctor & Gamble also knows how to produce a service encounter using process, people and the physical service environment as effectively as they use promotions in a retail environment.

Still, when my old cleaner sent me a handwritten note to let me know that they have missed my business and asking that I call, I felt compelled to talk to them – to give them a chance or just some advice.

My conversation with their district manager was pleasant. She wanted to know why I had left and what they could do get my business back. Solid business fundamentals - when previously loyal customers leave, work to understand why they did and try to win them back.

I told her I wasn’t dissatisfied with their core service or price, but for me, Tide was providing a better experience by putting more convenience into a service I see generally as an inconvenience. I referred specifically to using the drive thru, as well as the off-hours drop box for times when my only available time was after close-of-business. She was aware of Tide improving on the convenience aspect of the experience, and told me she was looking into ways they could be more convenient themselves.

Then as we wrapped up, she offered me a store credit if I’d use them again.

I reiterated that I wasn’t dissatisfied with their prices - that I was looking for something else - thanks but no thanks. Still, she insisted they apply a store credit in the event that I would try them again. I told her what I really wanted was improvement on attributes not related to the price or the actual drycleaning service.

At its most basic, value is what you perceive you get, relative to what you perceive you give. A company can improve it for a customer by increasing perception of what they get or by decreasing their perception of what they give.

My ex-drycleaner did what so many businesses do when competition changes a customer’s perception of their value. Almost reflexively, they improved value in the easiest way possible – by reducing price, even when it wasn’t merited and wouldn’t be effective.

When someone tells me how difficult their business is / industry is and how tight margins are, I can’t help but wonder whether things really are that tough, or whether they choose to make it tough by following the easiest-yet-most-vulnerable path to gaining or keeping a customer.

Zappos is just Okay.

I know, heresy.

Zappos is the example of the modern enlightened organization, held up by service & leadership experts as the first company to tap into the service profit chain and the original inventor of outstanding service.

At least it seems that way, with legions of raving employees and fans & the success they’ve had merchandising their culture - the leadership books, the blogs, maybe the Amazon merger itself. They’ve turned into a social media-enabled service industry legend, extending to reach or even surpass the fabled Nordstrom experience and the Ritz-Carlton credo.

Like those examples, I’d guess that Zappos has many boosters that have never actually experienced their service. Full disclosure, I counted myself amongst them - until recently.

I'm a fan of Zappos’ position. They say the right thing about internal service & employee engagement, and how these lead to a superior customer experience. More than once used them as an example of how a good service business should be run.

But I've refrained from commenting on the actual experience, as I had yet to witness it firsthand. Recently, I decided if I was to hold them up as representing what a modern service business act like, it was time for an encounter of my own.

The experience went off without a hitch through every moment of truth. The registration-through-purchase experience on the site, the in-process updates, and the fulfillment were as expected, and I ended up having a good experience buying a good pair of shoes for a good price.

The entire experience was good – pretty much exactly as I had expected.

And there's Zappos’ problem.

Because of considerable build up – much of it self-produced – on what a wonderful a service organization they are, Zappos would have had to absolutely rock my service world in order to be notable.

In all fairness, my expectations were sky high for a first time service use. Sensitivities were heightened to every aspect of the service encounter, as though by having it, I would come away with a different perspective on how a business should be run.

For companies that set high-level of expectations, it is extremely difficult for a service business to exceed them. Unless something goes monumentally wrong and is spectacularly recovered, it’s unlikely the experience will seem more than adequate.

But in a time when many businesses seek to establish & perform to an adequate level of service expectations, Zappos seeks out a higher level of criticism. That in itself says that much of what we read about their culture might actually be true.

I'm not a fan of the "underpromise / overdeliver" ethic that has swept business culture, and while Zappos didn’t “knock my service socks off” with my first encounter, I respect them for trying, and I’ll likewise be giving them another try.

Service like a highway with no fast lane.

Stopped in to Costco on Saturday of the holiday weekend.

In a hurry. I had a small gathering to host, and I was under orders to come home with two platters of various vegetables, meats & cheeses, or to not come home at all. (The departure call of Spartan wives, updated for 2010 suburbia)

But Costco is no place for a person in a hurry, especially on a holiday weekend. Long, winding lines of cargo ship-capacity shopping carts stacked to adequately resupply a 50’s-era bomb shelter, and there I am, standing with two items.

The self check-out line helped, but not nearly enough. At a point, I would have gladly paid to skip the line. Not double, but maybe as much as 25% more.

For large-format retailers, (such as Costco, Sam’s Club, Home Depot) I wonder why an premium express line hasn’t been created for the busiest times to help serve customers in a rush. It could definitely be done, though they would have to set some rules. For example, no more than 5 items. No cash. No coupons. No price checks. They would also have to provide assurance. “Out in 60 seconds, or your 20% up-charge turns into a 10% discount.” I would have used it, and looking around, I wouldn't have been alone.

The warehouse format retailers perhaps didn’t intend a single-item shopper, but they get them. Forced to serve customers that don’t fit well with other customers, the company can either stick to the efficiency of the basic model knowing some customers will be dissatisfied, or serve customers with different needs differently, perhaps taking the opportunity to make a premium margin on a premium service level.

No customer can be characterized as shopping solely based on speed & convenience or solely on cost. If your standard service model trades these characteristics off to best serve the regular customer, look for ways to serve them in those times they need a different kind of delivery. It’s likely they’ll gladly pay a little more, and you get to provide service to your best customers along more than one dimension.

A 3-legged entry in the 100M dash.

I ran into an interesting capacity dynamic yesterday when I stopped to run a few errands on the way home at the end of my “official” work week.

My favorite time for an extended grocery run is late Friday afternoon / early Friday evening. Everyone else is on patios, in restaurants, bars or dens unwinding from the work week. Few are thinking about how bare their pantry is or how the fridge only contains condiments – that is a problem for Saturday.

On Friday evening the grocery store(s) I support offer few competing shoppers, though all of the weekend sales are already posted, and scores of people to help should I need something in particular.

Yesterday, however, I also walked across its parking lot to a liquor store. Same time & place, completely different result. The liquor store was a madhouse. The narrow aisles completely cramped with carts not designed for the space, store employees at a near sprint trying to attend to every customer with a question or and keep stock on the floor, every check-out line seven or eight customers deep.

Why don’t these businesses just team up?

They really don’t compete. The grocery store sells little beer, and the only items the liquor store sells that could be found in the grocery store are lemons, limes & Red Bull.

They could be balancing their service capacity with demand much better if they would take the Friday afternoon excess grocery store employees and apply them to the shortage of help in the liquor store. On weekend days and during the week, the flow could reverse to accommodate busy times for the grocery store.

Take it a step further. Move the liquor store from the place across the street into the adjoining retail space, knock out part of a wall and provide an experience where two patrons can sell complementary products through a single shared experience, supported by employees that know their stuff in both, able to offer suggestions on pairings, even “cross the transom” to support a single customer’s shopping experience.

Matching service capacity with demand is tricky in any environment. The natural flows of these businesses are too great a gift to be overlooked. A business can try and make it on its own, staffing for service & knowing full well they’ll have times with both excess capacity and times when they’re dissatisfying customers with inadequate staff. Conversely, they can partner to expand their formats & share labor cost, to make the most of the customer experience and approach the capacity problem creatively.

...but you can choose your business partners.

I wonder if AT&T is feeling the heat.

The best thing to happen to the company in years – exclusivity on a consumer market phenomenon – is breaking the back of it’s ability to deliver on service promises.

First the network problems and the complaints about service coverage. Then the 2GB data plan limit following shortly after the iPad release, effectively decreasing its experience value. Then the botched support on the iPhone 4 release, including inability to fulfill demand for the phones, inability to process orders, inadvertently cancelled orders and unintentionally shared private consumer information.

You have to wonder is AT&T isn’t considering asking Apple to introduce another provider (a competitor), just to prevent a complete service failure. Too much demand is a good problem to have, unless your business is a network-based service, and that demand is both abundant to the point of damaging the experience and comes at a pre-negotiated rate.

I also wonder if Apple feels like it has lost control, and a once-in-a-generation opportunity is being limited by a partner of their choosing.

Most complex services need networks of business partners and intermediaries to manage delivery. Whether it’s iPhone service or the fulfillment of online retail purchases to your home, most businesses put a portion of their customer promises in the hands of someone else to fulfill.

I don’t know specifics on where issues lay between Apple and AT&T, but I have to believe Apple is not seeing their vision of quality & consistency fulfilled by their exclusive partner.

While the selection process is critical (and it is possible that this is where Apple failed) the day-to-day management is much more important. Conflicts are certain to arise over objectives, performance, costs and rewards.

The easiest way to resolve these conflicts is the mundane stuff that most innovators don’t want to suffer through – establishment of expectations, measurement & review of performance – these are key activities businesses should must employ when using another party to be their face to the customer, or even a part of promise fulfillment.

If these are insufficient, sometimes the service owner has to engage more – helping the intermediary provide service the way they expect through standards & training on what it means to serve the customer in their intended. In extreme cases, they may even have to front service enabling technology to make the relationship work (or in Apple’s case, prevent it from failing).

It probably seems unfair that Apple may soon get to the point where it has to invest its own resources in the development of AT&T service capabilities, perhaps even going so far as to own a part of the network

But fairness doesn’t matter when you’re talking about the detrimental impact to the brand that stands on its flagship product that right now is dangerously close to falling far short of its ability to deliver on its substantial promise.

Hohm Improvement.

I’m trying hard to use Microsoft Hohm, but someone is making it difficult.

Hohm is a home energy management service with a lot of potential to help people understand more about their energy use through measurement & analysis and change
their behavior to save money & be a better steward of natural resources.

What makes it “work” is data – specifically a periodic intake of the electricity & natural gas usage information from your home.

The theory goes that Microsoft connects with your local gas & energy supplier, who feeds monthly usage data to the service, and the analysis begins.

The problem is, neither my energy nor my gas provider is linked. When I first signed up for an account, I got a message that Hohm was connecting with new providers by the day. All I had to do was wait and mine would surely get onboard. Half a year later, they’re still not connected, and wanting to see how the service works and realize its benefits, I’ve started inputting my own bill information, manually.

I emailed each of Hohm, KCP&L (my power company) and Atmos Energy (natural gas) to see whether they were working on a linkage that would enable the service to work for me. I received only one response, from KCP&L, stating that they were evaluating a linkage, but had no commitment planned. They pointed me to some helpful energy-saving tips on their website.

There’s plenty of blame to share on this one. (Even ingnoring the fact that hat two of the three inexcusably declined to answer me at all.)

Of course, there is no incentive for my natural gas and power companies to link to a service that allows customers to analyze reduce their energy usage – it represents customers tracking their usage and making better decisions - essentially money out of their pocket. I don’t know which is worse – that the regionally monopolistic utilities so blatantly ignore the desires of their customers or that Hohm didn't have the foresight to see that the main value their new service provides required input of outside parties and working with them ahead of launch to gain their support.

I’m guessing I’m a lead user of Hohm – at least in my market. Microsoft should know that lead users of services aren’t typically as forgiving as they are for software products, where they’ll often tolerate, point out and even help fix problems. With a service, if the process doesn’t work and the customer has no way to fix it, there can’t be a successful encounter. If the failure looks unfixable – as it does in this case with the providers unwilling to connect – the customer will likely abandon it entirely, rather than live with something substandard while they “work out the bugs”.

If your service depends on an intermediary or a 3rd party for fulfillment, make sure that it offers more than a reduction in revenue for them, and if you haven’t fully worked out connectivity processes, don’t launch beyond where you have.

“Internal Revenue” I get, but “Service”?

I made a call to the IRS Friday, having received one of those, “we believe you made an mistake, here is an amount of money owe us, + interest” letters.

My service expectations were low – somewhere along the lines of the 7th level of IVR hell, followed by someone who either couldn’t or wouldn’t respond to my question.

I was pleasantly surprised when my call was answered, by a human, after about 45 seconds, which unscientifically put the IRS in the top 5% for shortest customer service call wait times on this past month.

The answering agent took a minimum of information & quickly found find my case. (Their customer indicator is this handy 7-digit “social security” number. Based on the ease of use, I’m thinking others may begin to adopt this as a standard record locator.)

We exchanged some information, and having identified the source of the confusion, the agent stated, “If that is the case, you don’t owe anything at all.” Some direction on next steps ensued – steps that exactly corresponded to the letter I was sent – and she pleasantly sent me on my way after a total of about 5 minutes on the phone, or, about a half hour less than I was expecting.

Views on fairness in what we pay in taxes & what they’re ultimately used for may vary greatly, but in my encounters, I’ve experienced great service levels from the IRS.

Believe me. I paid taxes for years in Canada. As a civil service organization, the Canada Revenue Agency is far less courteous about it they taking a higher percentage of personal income. While I’ve never compared the codes (too geeky, even for me) my perception through years of use are that Canadian forms are longer & less intuitive than the U.S. as well.

There is power in words used as brands or labels. Perhaps their treatment of customers stems from the differences in their names.

“Canada Revenue Agency” provides their exact purpose & intent. They’re an Agency. Whose purpose is getting Revenue. For Canada.

The IRS has no different an objective.

Yet by adding “Service”, they not-too-subtly remind themselves that the organization is far more likely to be successful by being competent, empathetic, and responsive to the people they take money from, and whom they ultimately serve.

The theatre gets a stadium-style seating upgrade.

I went to my local AMC Theatre for a rare mid-week date with my wife. Its been months since we’ve seen a movie, and we were surprised to be treated to a new part of the box office experience when the attendant has us pick assigned seats from a touch-screen theatre layout.

My wife asked whether ticket price changed based on what we picked, and when the attendant replied that it did not, she openly wondered why the theatre would bother installing this expensive-looking technology and changing the service. AMC claimed it as improvement to the experience, but I think my spouse correctly sensed a coming change, with movement to a pricing method that varies ticket prices by theatre section.

Truthfully, I’d be alright with it, and I’m surprised theatres haven’t made this change some time ago.

The theatre is improving their service process for their own benefit - extracting consumer surplus from the seats they believe people will be willing to pay more for. Sports & concert venues long succeeded in segmenting their audience by willingness to pay for various levels of seating. (Though scalpers do better at understanding & extracting consumer surplus. I’m waiting for the day when the venues "in-source" the scalper business model to gain even more revenue from scarce commodity seats.)

It’s well accepted that mid-theatre seats, centered on the rail seats are the best in the house, while the front row, side angle seats are the worst. Personally, I’d be willing to pay a buck or two more to sit in an area where I won’t have to call a chiropractor the next day.

Will it dissatisfy some? Of course. A majority of customers will be paying more for the same level of service as they received before the change. It may even offend the egalitarian sensibilities of those who prefer the model that rewards personal time investment with the best seats in the house.

But it is fair. Based on what a customer is willing to pay, AMC undercharges for some seats and overcharges for others. Changing the pricing of the seats to gain that revenue isn’t draconian, its good business.

Now, when I start seeing scalpers outside movie theatres, I may reconsider...

Service Rant: “Underpromise, Overdeliver.”

Under promise, Over Deliver.

One of the most common business refrains, it often goes by its alias “undercommit, overdeliver”, which is the same thing.

I hear it all the time, as a consumer of various B2B services, as a manager of service businesses working with other service businesses, and as a customer in my personal life.

As a management philosophy that doubles as a service philosophy, I hate it.
At its best, it prevents companies from providing the kind of mind-blowing experiences their people want to. At its worst, it is a major contributor to big-corporate groupthink ruining customer service overall.

Underpsomise / overdeliver originated as a way for managers to advise their reports to manage expectations as an internal CYA, ensuring neither they nor their bosses would ever have to face the embarrassment of a missed commitment - a self-protective, “how to fulfill what is asked without failing / casting a negative light on our silo.”

But it has extended as a way to manage customer relationships, and service promises. External application of the credo is as big a mistake as it is internally.

The problem is that the first part of the equation gets fulfilled. Under committing is easy – it just means that you don’t promise to do as much as you know you’re capable of. But faced with someone not complaining about the level of care they receive, they forget to over deliver. Conserve resources. Get satisfied (lazy) delivering what is “good enough”. Ride the self-created perception of satisfaction rather than putting forth the extra effort to delight & surpass what the customer is expecting.

As they deliver a level of service best described as “tolerable enough not to complain” these providers tout how they “exceed expectations”, when they’re truthfully only exceeding adequacy.

The entire premise of under commit / over deliver has become a source of pervasive mediocrity. It’s why 80% of companies believe they provide an superior service experience, yet only 8% of their customers agree.

The solution:

Invest – time, effort and money – in understanding what the customer expects, and how different that is from what he / she truly desires. Start by committing to no less that what they expect. (it shames me to say that in many cases, businesses commit to less than base expectations) Deliver. Use the learnings to improve. Commit more. Deliver on that promise. Repeat the cycle until you’re delivering in the neighborhood of customer desires, stated or unstated. Maybe even beyond desires.

There are other ways to get there, but undercommitting provides no path to exceptional.

Is Zappos the Anti-United?

Both companies have had service experience foul-ups that became publicly visible throughout the social media sphere.

United involved a single case of a damaged guitar handled poorly, but that spawned a video since played virally over 8 million times and chronicled as a case study by Harvard Business Review.

Zappos involved thousands of customers impacted by an incorrect implementation of a pricing change and ultimately the temporary shutdown of the site.

In recovering service, providing a fair outcome for the customer is the key, but almost as important is the speed with which the company reacts, usually driven by the ability of employees to make good on their service promise after it has initially failed.

United is literally a case study in how not to approach service recovery. By refusing to pay $3,000 for the damage to Dave Carroll’s guitar because he failed to file the damage claim within 24 hours, the company provided no fairness of outcome. They acted slowly, hiding behind process & red tape, hoping the customer would eventually tire of the claim process and simply give up. Along the way, they repeatedly showed their insensitivity through employees not empowered to act on the behalf of the customer.

Zappos, on the other hand, handled its service encounter miscue with fairness, honoring the purchase price of all items at $49.95, regardless of what they were supposed to sell at – a move that instantly cost the company $1.6M. They acted quickly in doing so, announcing within hours of the occurrence that they had made a mistake, that the mistake had been corrected, and that the purchase prices on the transactions would be honored. One could argue that as the CEO, of course Tony Hsieh is always empowered to make decisions. But part of empowerment is the ability for the line to make critical issues visible to leadership, so that they can act quickly and appropriately. (It’s likely that an organization without that kind of upward information unempowerment is the culprit behind the millions of gallons of oil still gushing into the Gulf of Mexico.)

If you ever wanted to draw attention to your fledgling luxury site, there are worse ways to do it than spending $1.6M in what amounts to free advertising that reinforces the offering, the service integrity, and the brand. On the other hand, while the ultimate cost of United’s flawed customer service wasn’t likely the 10% of market cap claimed by The Times, it probably cost them more than Zappo’s $1.6M in negative reinforcement.

We often speak about the power of word of mouth. With over 8M hits and an HBR case study, the negative WOM is evident. I still feel like we’re a viral video short here, but “Zappo’s Honors its Purchase Prices” is harder to fit to a rhyme.

Pearl Jam: better service marketers than most.

A problem service providers have with their good experiences is that they are, by nature, intangible. After it is over, you have no product to hold and often nothing remains but the memory of the event.

The challenge is to extend the emotion & feeling of the experience after it has ended. Often, this can be done through creative use of physical evidence – a tangible good the service provider gives or sells the customer that serves as a reminder of the experience and – in the best cases – a driver of desire for a repeat engagement.

Having attended one of their shows earlier this month, alt-rock pioneers Pearl Jam grasp this concept fully.

The Pearl Jam experience starts with value. They played 26 songs themselves, providing almost 4 hours of entertainment, counting the opening act – much more than you get at a typical concert.

They added tons of local customization to the experience, including hometown / Midwest nods to the Kansas City Royals, a local Iraq war veteran, and capped by Curt Tomasevicz, Nebraska native and member of the 4-man US Olympic Bobsled team joining the band for the final song in the ultimate fan dream fulfillment.

As an intimate, customized entertainment experience, I found myself almost immediately wanting to relive it. Fortunately, Pearl Jam knows this and makes it possible, through the production and release of every one of their concerts on an official concert “bootleg” endorsed by the band. I just picked mine up. Of course, I had to wait a couple of weeks for file processing & printing, but really, it’s a very quick turn on providing a quality live recording as memorable physical evidence of the experience that 20,000 people shared.

Start with value, provide customer-specific customization and extend the experience with physical evidence that helps customers relive the best part. Think of how many Fortune 500 service providers could learn from an anti-establishment rock band.

Tide takes competition to the cleaners.

I love the idea of consumer packaged goods masters getting into the service arena. Long considered the worldwide leader of the consumer packaged goods industry, how would it turn out if Procter & Gamble were to package a service experience?

The Tide Cleaners slogan is “A brand you trust. Quality you’d expect. Service you’ll love.” They’re right. As a trusted product brand, expectations of a Tide-branded cleaner are high. But the execution level-of-difficulty is higher in a service environment than for the product offering. The service delivery operation is more complex, while the experience is delivered through hard-to-control intermediaries.

Fortunately for Tide Cleaners, they're up against some easy competition in the drycleaning services market. The cleaners I’ve used provide the same service out of nondescript locations in strip malls, usually looking more like the failed business they’ve been converted from than any concerted attempt at a service environment. It always surprises me that as far as service environments go, drycleaners are amongst the least clean – not exactly confidence instilling.

Tide takes the traditional model and gives it a much needed infusion of service and brand experience.

The environment is clean, well-lit and with a fresh, coordinated paint scheme that reflects the brand colors. Signage makes the location look professional and provides a physical separation between backstage and service areas. Service employees are consistent with the environment, similarly branded and presented in Tide orange.

You can already see what we know about P&G at work. While I’ve always assumed my drycleaning service options included “clean”, “please see if you can remove that stain” and “light starch”, Tide has branded their experience with trademarked “Spotlift”, “Freshscent”, and “Color Guard”, while offering premium drycleaning services for restoring faded clothes of all types to their original colors.

Like every other dry cleaner in the local area, Tide Cleaners also has a rewards program. Unlike every other cleaner, they tell me what I receive beyond the free drop bag and a modest discount, to include special access services, members-only promotions and a “birthday gift”.

They’ve also advanced some service innovation, with a 24 hour drop off box, and 24 hour access lockers for after hours pickups in addition to their premium cleaning services. I don’t know how many times I have wished for both of these capabilities, and I can’t wait to use them. Finally, they commit to searching out and replacing broken or missing buttons free of charge. Missing buttons have been happening on my clothes for so long that I had come to accept it as a part of the cost of having clothes professionally cleaned.

The Tide brand carries heavy expectations as to what an associated service experience should feel like. On all counts, it delivers on those expectations in a way that not only reinforces my perception of the Tide brand, but has also resets what I expect from an experience with every other cleaner I might ever come into contact with, assuming I ever need to.

Things to tell people who give you money.

My Saturday routine starts by paying bills.

Regardless of whether I pay online or send a check in the mail, the companies I give my money to are missing an opportunity to send an important message.

A bill is another customer touchpoint, but one with a unique opportunity to reinforce the value that the provider brings me on a monthly basis.

Because they represent a personal cash outflow, monthly bills are seen as necessary negatives. But because cost of the services I use is tangibly quantified, it is a great opportunity to also quantify the value I’m getting out of the experience.

Why don’t companies do this? Because they’re afraid I’ll begin to question the value I receive? Because communications dollars are spent on attraction of new customers rather than improving the experience for existing ones? Or just that the billing process isn’t within the purview of anyone responsible for reinforcing the customer experience.

There are some easy ways companies could be using the billing process to reinforce the value they’re providing me:

Tell me how you performed. If the cable / internet were up 100% of the time for the month, tell me. If it has now been 13 months since I’ve had a power outage, let me know.

Provide some comparative analytics. Power & gas companies have started to do this, but not nearly enough. Power companies should have owned the space that Microsoft Hohm now occupies in energy measurement and assessment. They could still benchmark me against the rest of my street / block, or against similar houses in my neighborhood. Tell me how I should feel about how much energy I’m using, and I’ll likely modify my behavior and start using less.

Remind me how much you’re there for me. If I made a customer service call, remind me of the usage and ask me to rate the outcome.

Reinforce my role as a customer. If something I did led to a higher cost than I might otherwise expect, reinforce the behavior you want out of me.

The monthly billing cycle is the necessary interaction by which your company makes its collective living. Use the encounter creatively and positively. You should be proud to talk about the value you provide, and equally proud to collect money for it.

The kind of physical evidence you hide.

An important but oft-overlooked aspect of experiences is the role the physical elements of the service environment play in facilitating the experience, setting expectations and providing cues as to quality, while sometimes serving as a post-experience reminder of the recent service.

Lamar’s, a popular donut chain in my hometown, has a loyalty program called the “Lamar’s Lovers for Life”. Like most frequent purchaser programs, they register repeat customers with a program number, and give them a card or key chain tag to swipe with every visit, so that customers can conveniently accumulate rewards based on purchase frequency.

A significant problem in using this common execution of the purchase card concept is the negative perception created in many users minds by owning & displaying a key tag with a giant icing & sprinkle-covered donut on it, scribed with “Lover for Life”.

Now, the good people of Lamar’s have a passion for their craft, and they make terrific donuts. But if I'm conscious of the message I send others via the brands I wear & carry with me, “Power Consumer of Donuts” is not likely one that I’m going to choose, regardless of the truth that may or may not lie behind it. As a loyalty program, Lamars’ may be the greatest on earth, (And it is pretty good) but if I’m embarrassed to have the tag, I’m not going to have it on my keychain, and so not going to use it.

Something to consider when developing loyalty programs for services with potentially negative associations is how they should be executed through the recognition, physical evidence and redemption encounters.

In this case, I would consider using a more subtle recognition mechanism. The "Lovers for Life" name should be changed, and the physical evidence downplayed or eliminated, so that we “donut lovers” don’t have to be so declarative every time our keys come out of our pockets.