Every business is a service business.

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Sunday, July 25, 2010

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.

Friday, July 23, 2010

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.

Friday, July 16, 2010

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.

Saturday, July 10, 2010

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.

Wednesday, July 7, 2010

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.