Every business is a service business.

We apply the tools that make service businesses stronger through better strategy, innovation, marketing and day-to-day management.

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Friday, October 28, 2011

Compete Through Service Symposium: Guest Post by Sybil Stershic

Today's guest post comes from Sybil Stershic, author of the Quality Service Marketing blog and the tremendous book "Taking Care of the People Who Matter Most".  Sybil's business focus is on using internal marketing and communications to engage employees and positively impact employee satisfaction and customer retention.  I'd been following Sybil's work for awhile without knowing that we covered some of the same ground at Compete Through Service Symposium, and we were able to finally connect in person at last year's event. Unfortunately, Sybil is not attending this year, but she gave Service Encounters her thoughts on what she's missing.

With my entire career in services marketing, I consider The Center for Service Leadership’s Annual Compete Through Service Symposium to be THE best gathering of professionals who come together to share ideas, best practices, leading-edge research, and current and future issues in services marketing and management.

My professional passion is engaging employees and customers with internal marketing, and the Symposium is a meaningful source of insight on employee and customer focus, workplace culture, the customer experience and services leadership. In addition to services marketers and managers, the Symposium also attracts executives from product-oriented companies interested in becoming more service-oriented.

Although I haven’t been able to attend each Symposium, I’ve been following the program since its early days. Back then several staff members from the Center for Services Leadership and AVNET, a program sponsor, published follow-up summaries of conference ideas and takeaway questions for application. I’ve got several editions ranging from 1997 to 2005 in my office library … and still refer to them.

The good news is Symposium summaries from 2002 to 2006 can be downloaded online for free!

If you’re unable to get to this year’s program, I highly recommend you include it in your          professional development budget for next year.

I'll be blogging and live tweeting the 2011 Compete Through Service Sympsosium Wednesday through Friday of next week.  Follow me on Twitter to see more from this tremendous event.

Monday, October 24, 2011

The restaurant that never brings me what I order.

My wife & I frequent a sushi restaurant we’d both describe as our favorite. Having lives and travelled the Pacific Rim, it’s not the best sushi we’ve ever had – but for Kansas, it’s very good.

What makes us to choose their experience over competing experiences: since we’ve been going there, they have never brought us what we’ve ordered.

Sure, they take our order and bring us the appetizers, rolls, entrees and desserts we’ve asked for.

But as long as we’ve been going there, we have yet to have a meal that didn’t include an extra added in. Always free of charge, and usually something that isn’t on the menu that they bring over and ask us to try.

Some are terrific, while others are misses. (Japanese-Mexican fusion inspired tempura-battered green beans are a product innovation that should not have “left the garage”.)

Stan Phelps and the Purple Goldfish project call this lagniappe, associating the Cajun expression for giving a little extra to a great service business practice that delights customers. It is that – they give us more than we’ve asked for, exceeding both our expected and requested service experience – but it’s also more.

A few of the items that we’ve tried have ended up on the menu. We’ve had prolonged engagements with staff, talking about a dish and what might make it better. That they include us in new product development makes us feel like partners, invested in the success of their menu and their restaurant.

It took time – months, years – to develop a bond this deep. But consider the sushi joint down the street that instead of investing time & effort, offers up a frequent diners card to tie their customers to them. Their main business line has its margin voluntarily eroded by a program that doesn’t make a customer choose them any more or less than the other purchase frequency programs they use.

Tuesday, October 18, 2011

Jimmy Johns: "Freaky Consistent" Brand Delivery.

Today's features a guest post from Sean Roark, a working marketing professional and graduate student in the Integrated Marketing Communications program at the University of Kansas.  This semester, students in Max Utsler’s “Innovations in Marketing Communications” class and Barrett Sydnor’s “Integrated Marketing Communications and Sales Strategy” class are writing blog posts on branding, marketing, social media, experience marketing, and innovation.

Sean's post on Jimmy John's consistent brand delivery through the service experience fits well with a Service Encounters theme of using marketing to consistently make the promise you deliver through the experience.  I also thank Sean for writing a post that gives me an excuse to post a picture of Krist Novoselic.  

"Freaky" Brand Delivery

My lunch hour had arrived and this blog had to be ready for you fine people in five hours. I needed something quick – not quick, fast. The usual suspects ran through my head. Wendy’s? No, too slow. Sonic? No, I don’t want to tip. McDonald’s? No, gross. I know! Jimmy John’s – “freaky fast.”

Frequenters of Jimmy John’s know “freaky fast.” It’s what makes Jimmy John’s what it is. Sure the “mama approved” sandwiches are delicious. The over-staffed and surprisingly friendly workforce is refreshing. The wall hangings are always good for a chuckle, that is, if you have enough time to read them. But it’s the “freaky fast” preparation and delivery of my sandwich that keeps me coming back every week. Today I walked in the door, placed my order, handed the clerk my credit card and received my receipt and freshly prepared sandwich at the same time. It was freaky --at least that’s what I used to think.
The Jimmy John’s brand should be a benchmark for all marketers. JJ’s understands their relevant difference -- Jimmy John’s is “freaky fast”, equal parts “freaky” and “fast”. However, the critical component to JJ’s benchability is that Jimmy John’s reinforces its brand promise throughout every customer touch point. There’s Ed, Jimmy’s “freaky fast” delivery guy. Don’t forget the JJ Freaker blog at, you guessed it, freakyfast.com. Even the napkins are freaky.
But all pale in comparison to the freakiest of them all -- Jimmy John himself. Jimmy John’s is now America’s second fastest growing restaurant chain, averaging one restaurant opening each day. Jimmy John Liautaud’s recipe for success is simple. Listen to your customers and outwork your competition. Simple but rarely duplicated.
Most companies say they listen. Some companies do. Few companies do anything worthwhile with what they hear. Jimmy John’s has delicious subs, but delicious subs alone don’t open a store a day. JJ’s customers told them they want more than just another delicious sandwich. They want a delicious sandwich with minimal line time. Jimmy’s delivered and pointed it out.
Jimmy’s has its shortcomings but so does every company. Jimmy John’s doesn’t try to be all things to all people. Jimmy John’s simply provides “freaky fast” quality sandwiches and entertains its customers for the short time they’re in the store.

I guess it’s working. Freaky huh?

Saturday, October 15, 2011

Mastering the Science of Service: A CTS Symposium Primer

November starts with the 22nd annual Compete Through Service Symposium, produced by the Center for Services Leadership at Arizona State University. I’m a multiple event attendee. Because I’m also an alum, they let me hang around and produce some social media tied to the event.

This year may feature the best roster of service business speakers yet. If you’re going, here’s a peak at the who’s who of service businesses you’ll see on the main stage. If you’re not, it’s who you’re missing, but can catch snippets of if you’re following me on Twitter or following the CTS blog.

To get warmed up, I’m including a few articles from some of the speakers, showcasing their service models:

Services at Procter and Gamble - A Paradigm Shift: Nathan Estruth, General Manager, The Procter & Gamble Company

Related content:

The Grameen Method of Action in Business Services: Vidar Jorgensen, President, Grameen America and Grameen Research Advisor, Grameen Trust and Grameen Health Trust Chairman

Related content:

Luck & Perspective: Bob Parsons, Chief Executive Officer, Go Daddy Group.

Related Content

A Relentless Focus on Member Service: Wayne Peacock, Executive Vice President, Member Experience, USAA

Related Content

A Nice House in a Tough Neighborhood: John Beuerlein, General Partner, Client Service Excellence, Edward Jones

Related Content
I'll feature more Compete Through Service content in the days & weeks leading up to November 2nd.  From Symposium, I'll be giving live updates by Twitter, and updating the blog with updates of what is certain to be some spectacular content.

Monday, October 10, 2011

Guessing isn’t anticipating.

I was witness to a train wreck of a service encounter yesterday. A well meaning service provider was trying to go “above and beyond” in anticipating an unstated need of the customer in front of me. The customer was definitely not looking for the “perk” she was offered, and based on the interaction, was understandably taken aback. At best, she left annoyed and maybe slightly offended. At worst, the provider lost a customer.

What struck me is that the encounter would have been a success if the provider would have simply not tried so hard to guess what the customer wasn’t saying about herself.

Her efforts were met with a sour response because instead of anticipating her customer’s need based on knowledge, she guessed at what the customer wanted based on an incorrect assumption about her.

I’ve seen the popular literature that companies should just focus on the basics of the service customers expect and stop trying to “delight” them. Both notions are right and both are wrong.

A company is better off designing a customer experience that aligns with business strategy – their industry / market / customer expectations, their own business model, and who they are trying to be in their market. If you’re McDonalds or the local drycleaner, consistent execution on basics represents your market. If you’re Ritz-Carlton, a flexible service model that allows individuals to go beyond the minimum fits with service strategy.

But alignment of business strategy and service strategy wasn’t the problem in this case.

The issue was that while the provider, likely told by a supervisor to look for opportunities go above & beyond, tried to delight a customer based on a guess about that customer’s characteristics, based on appearance. Instead, she should have used certain knowledge about the customer to take a logical next step in providing what the customer needed. If that knowledge didn’t exist, then concluding the encounter providing only the basics would have been an acceptable outcome, and in fact much better than what happened.

Lawyers subscribe to the notion of never asking a question to which they don’t know the answer. Similarly, when trying to delight a customer, do so in anticipation of a need based on certain knowledge. Not one based on a potentially faulty assumption.

Friday, October 7, 2011

The (service) revolution will not be televised.

What makes service businesses so exciting is that when it comes to services, inefficient systems abound. Opportunities are everywhere you look.
An example:
Product recall systems are about as inefficient as it gets, still relying on news releases, direct mail and mass media – that is, when a recall is dangerous enough to consumer health be picked up by the five o’clock news. If your product is simply defective, you’re out of luck here.
I asked Hen House Market, an absolutely terrific local food & grocery chain, how they distribute recalls.
Spreading the message through informed teammates and social media updates were the top answers. Those likely inform a lot of people, but far from everyone.
I then asked whether they measured the effectiveness of the communications. Sadly, the answer was “no”. (As an aside, if you’re faced with a choice between measuring the effectiveness of your latest direct marketing initiative and the effectiveness of your product recall communications, choose the latter. It isn’t tied to revenue, but it’s better business.)

But interestingly, they also mentioned that to improve the effectiveness of recall messages, they were working on a text message alert system for loyalty program participants. You know – those annoying key chain tags that provide savings on select products, where when you’re filling them out, you wonder, “what are they ever going to do with my cell phone number – call to tell me they’re having a sale on cantaloupe?” Once launched, loyalty program participants would receive text message alerts if they’ve purchased a product on a recall list using their rewards card. Discounting products AND helping prevent me from accidentally killing my dinner party guests? Talk about a loyalty program worth signing up for.
It's a small fix to a long-standing problem.  These kinds of service inefficiency problems are so prevalent, most of us don't even think of them.  Yet people are addressing them in increasing numbers, using technology in dramatically new ways, whether the local grocery store’s use of text messaging for recall information, or the IBM Watson project, a program devised as an initial salvo in the fight to create better service outcomes through technology.
My own personal request for technology to improve my service encounters: In a world with nearly universal wi-fi, Google maps and Twitter, why do I ever have to wait in a line?

How about you:  What services would you like to see made more save time & effort or produce better results?

Saturday, October 1, 2011

Credibility. Critical to all, but more so to some.

How credible does a service have to be in the eyes of its customers?

It depends on what the service means to the people that use it.

Imagine you visit the ecommerce portal for one of your most-used service experiences.

The site is down.

Inconvenient. You wanted to use them today. You feel a little dissatisfied at the (lack of) an expected interaction, but not too put out by it.

Now imagine that the service business is a bank. Maybe they look after a lot of your money, maybe just a little. But your money nonetheless.

The angst grows just a little. “It’s my money. I demand access whenever / however I want it.” (Of course, forgetting weekends in college where you had to hand a withdrawal slip to a teller on Friday to get you through a weekend’s worth of social activities.)

Somewhere in the back of your mind, it occurs to you that this bank is one of the “too big to fail” banks. That for the last couple of years, it has been mentioned in the same conversations as AIG, Fanny & Freddy, and more recently, Greece.

Surely nothing is happening – of course not, it’s all insured (Note to self: review the FDIC site one of these days to see just what is insured) – but still, the thought creeps into your head, doesn’t it?

I don’t care if the company that made my toaster goes out of business. Oh sure, in the macro sense perhaps, but not in the way where I get concerned about a direct personal impact.

But service experiences with ongoing relationships carry an expectation of stability & credibility. It’s part of how customers evaluate reliability. The deeper the personal investment in the relationship, the more critical the evaluation. Because a person’s money is involved, banks are about as deep as a personal investment in a service gets.

Consumers’ brand decisions are a reflection of themselves, and particularly their ability to make good decisions. If what people see & hear about a brand strikes at its credibility, they judge it more harshly. The negative press may put them onto the attrition ledge, but it can be a small thing that sends them over.

Like a site outage. That still isn’t resolved overnight.

Tuesday, August 16, 2011

Great promise. Why are you hiding it?

By now, most Starbucks regulars are aware of their quality guarantee.

They’ll remake any drink that isn’t to the customer’s liking, free of charge.

It's not stated as a guarantee, but it is, and a good one. It would be enough to say that they’ll remake any drink they don’t make correctly, but their promise goes farther to the source of customers’ satisfaction with the experience.

But here’s the problem with this outstanding promise. It's unstated, and almost hidden.

In a local store, this sign was posted in a dimly lit hallway on the way to the restroom. To get even this poor image, I had to move 12 inches from the picture and manually disable the flash on my phone’s (admittedly awful) camera.

Making a guarantee promise so softly detracts from its value to customers. Those that are unaware, have forgotten, or feel too intimidated to engage the promise end up not saying anything, walking out of the store with an ultimately unsatisfying service encounter.

Marketing pros with a finance mind love this scenario, (it’s a form of slippage), the idea being that a large proportion of guarantees on defective experiences will go unclaimed, allowing the company to save money while claiming the value of a guarantee without having to fulfill it.

But customers that walk away disappointed diminish the value of the brand, regardless of whether they enacted a guarantee or not. Companies should be seeking customers with less than stellar experiences in order to recover them, not hiding their guarantees furtively around the corner near the service entrance in hopes that they never say anything.

If you’re going to make a great promise, then make it loudly.

Post the sign in a place immediately noticeable, in a high traffic area where customers are actively engaging in the evaluation of their service experience. Encourage customers to invoke the guarantee, and send them away happy when you get it right.

Monday, August 8, 2011

When a referral reflects badly on the referrer.

This past weekend, this sign stopped me in my tracks as I was walking into a Wendy’s.

Apparently, famed restaurant survey company and industry reference – Zagat – rated Wendy’s the #1 restaurant. A claim like this is so amazing it has to be true, so I investigated further.

It turns out that Wendy’s had both the Top Food and Top Overall rating among mega chains in Zagat’s 2010 Fast Food Survey. Still, something doesn’t fit.

What do you use Zagat for? To find which breakfast sandwich will work best on the way to your son’s Saturday baseball practice? Which fast food restaurant you should be dining at during the spare fifteen minutes in your crazy day? Which children’s meal your little ones will enjoy most while doing the least long term damage to a lifetime of healthy eating?

If I’m considering a fast food meal, it’s unlikely that I consult Zagat, or any ratings agency. The rating is far too vague to be of much use, even if it is credible, which, coming from Zagat, it may not be.

Zagat may conduct a survey rating the “mega chains” (their term, not mine), but the rating applies at the system-level, and gives little indication as to the quality of a specific location. As evidence, the “#1 rated restaurant” was out of both biscuits and sausage during the service encounter when I took this. Without debating whether they were doing me a favor, I wanted a sausage biscuit, as did the people behind me and the people behind them. Does a restaurant that on a Sunday morning negates 6/13 of their breakfast menu warrant the top rating?

A referral is a promise, usually given by a trusted 3rd party, that your experience is going to be a good one. Its critical characteristic is its credibility.

Zagat is, in general, a credible restaurant referral. It’s a good thing too, because their entire business hinges on the credibility of their referrals.

You have to wonder whether rating the mega chains doesn’t undermine their overall credibility in the view of customers who see a sign like this as they engage in a mediocre dining encounter. It did for me.

If Zagat can’t be a credible referral for all restaurants, perhaps they should focus on those in the core of their model – those where customers actively seek their opinions and rely on their credible referral.

Sunday, August 7, 2011

Brevity is overrated.

Some terrific business strategy leaders espouse brevity as a virtue in business writing. There are hundreds of examples of books, articles and programs on the suject. Seth Godin, Mike Brown, and many others others have, in the in the last few months, reinforced the requirement for brevity in business as a cultural truism.

And some believe the benefit of brevity in correspondence extends to the customer experience, with the emphasis on finishing engagements as quickly as possible. I'd argue that for the best of service encounters, brevity is not always the best course of action.

Does The Phoenician spa shepherd guests out of the immediately after their experiences?

Does Art Smith at Table 52 hustle patrons out so he can get in another seating?

Does Chris Zane get customers out of his shops in the absolute minimum of time?

Damn right he does - when it’s appropriate. But Zane’s Cycles doesn’t have an espresso bar in the shop to give customers the bum’s rush as soon as they’ve been seen by an associate. It’s there because the experience is about more than keeping dialogue to the bare minimum needed to make a sale – rich dialogue with customers makes Zane’s service experience work better.

What makes your favorite book your favorite? Its length? Or that it is well crafted, appropriate for you and therefore memorable beyond others?

Brevity can be efficient. Brevity can be effective. But use it when its appropriate. If your experience hinges on being memorable, on being crafted specifically for someone, be selective with brevity.

Wednesday, August 3, 2011

Trader Joe’s: Can you join a cult slowly?

Trader Joe’s arrived in my community last month. I had reviewed them before, but inspired by this week’s post at Write The Company, I planned an excursion to see if the home town service encounter was more compelling than the one I wrote about on a trip to the west coast.

Not unexpectedly, the place was packed.

Trader Joe’s enjoys a cult-like following wherever it crops up, and suburban Kansas was no exception. The number of patrons was the major difference between this visit and those I’ve had previously, in mostly west coast stores, and those other customers that finally turned the light on for me as to what the Trader Joe’s experience was all about.

It seemed every time I picked up a store-branded item – I’d guess 6 times in a 30 minute visit – a nearby customer either asked me whether the product I’d picked up was good, or offered their opinion on the product. The customer-to-customer interactions were rich throughout the store, and all based on the unique merchandise that Trader Joe’s carries. As time went on, I felt badly, as though I wasn’t contributing as much to the experiences of other shoppers as they were to mine.

All of my previous visits to Trader Joe’s had been in the middle of a mid-week day, few patrons, mostly rushing in to rush out. Now, I had seen it for the other side – where unhurried customers stroll through the store, asking other customers about the products and referring products they like to them, in a social network defined by the outer walls of the store.

At the checkout, the attendant gave me details about each of the products that I had purchased. When I asked her what proportion of customers she thought had been Trader Joe’s customers in other areas of the country and were familiar with the store, she astonished me with a reply of 90%.

90% seems like a high estimate. But even if it were half that, you’d have a retail store, completely foreign to the region and open less than a month, where almost half of customers were familiar brand users. That’s still amazing.

I used the word “cult” before, and I think it does apply, in that a cult – in this case the Trader Joe’s experience – doesn’t make sense to people that aren’t “in” it, but it makes complete sense to those who are. My service encounter was terrific, and as a result, I'll go back and get a little more familiar with the cult-ure.

A sign near the exit reads, “There’s no place like Trader Joe’s.” The quote is likely a an outsider's nod to Kansas culture based on their perception, but for those that have indoctrinated into the experience, it’s an apt comment. For cult members, there really is no place like Trader Joe’s.

Monday, August 1, 2011

Restaurant reviews also help the reviewed.

My wife and I are fans of the Top Chef television series, so I was thrilled when this year the one of the Top Chef Masters contestants was Celina Tio, proprietor of Julian here in Kansas City.

A Top Chef Masters selection represents a strong endorsement of a Chef’s work and, by extension, their restaurant. In the show, they showcased Celina's credentials as a Top Chef, which included Chef Magazine’s 2005 Chef of the Year and the 2007 James Beard Best Chef: Midwest region.

Impressive stuff, and my wife & I were excited to try her service experience.

But when we started looking at some reviews, we noticed that not everyone who had an encounter at Julian had come away impressed. OpenTable users rated it 4.2 out of 5, but had chared some negative comments about the service. Google reviewers were less kind, rating Julian 2.5 out of 5.

Among the comments on Google:

“Our server was also unattentive and our water glasses sat empty for most of the meal.”

“Food was excellent, however the service and atmosphere left much to be desired.”

“The servers were very unkept and unmotivated.”

Its tough to say - we may not have felt as good about the food had the reviewers’ comments not tempered our Top Chef-level expectations, but the meal was terrific all around.

The most notable thing about the service encounter: How unlike the reviews the service staff were.

Sure, they were dressed casually, but casual is the vibe of the place. Every person we interacted with went out of their way to thank us for coming, asked multiple times how the evening was going and if they could do anything to improve on it. As we left, service staff we passed but had never otherwise interacted with thanked us for coming. It's a small place, but by the time we hit the door, it felt as though every employee of the restaurant had helped us or thanked us.

Its possible that the service staff, who the comments largely reflected on, had read the negative comments and amended the service behavior themselves. If they didn’t, it is likely that Celina read them and conveyed their content to the staff, with some additional direction.

For anyone labeled a Top Chef Master, their name is their brand. Their reputation is on the line not just with every meal, but with every service encounter. The negative reviews didn’t just give prospective diners information about what they can expect, it also gave the service provider additional cues on what customers think they can improve on.

Saturday, July 16, 2011

Great failure AMC – keep ‘em coming!

I’ve written about the service innovation going on at AMC Theatres – both the introduction of Fork & Screen and the rollout of reserved theatre seating.

So I was surprised when, taking in a movie with my children, I noticed this sign stating that AMC is discontinuing the reserved seating process later this month.

AMC says that the while theatres were intending to improve the viewing experience by introducing assigned seating, customers were not receptive to the $2 additional charge above the standard movie ticket required to cover the cost of the additional technology to guarantee a seat and an usher to guide you to it.

It has been positioned as the kind of value that a customer appreciates but isn’t willing to pay extra for. This kind of decision happens all the time, when would-be innovations are doomed because customers aren’t willing to pay for them. If this were a hyper-competitive local market where little things made the difference in brand selection, I might suggest that the “sunk costs” of the technology were just that, and that any additional value perceived by the reservation system would help bunker them from the ever-present competition. But it’s not. AMC is almost the only choice in local cinema, and if the variable cost of the ushers isn’t offset by people willing to pay for the experience, the sunsetting of the offering (or storing it in a closet until a more appropriate time) is likely best.

But beyond the immediate decision, I’m hoping more that someone at AMC isn’t fretting over the result and hoping that they never make a mistake like that again.

Whatever the strategic decision, I appreciate that the theatre was willing to take the chance that ultimately made the mistake. I wish that more service companies I deal with did the same. Many service encounters could use a fresh perspective and the benefit of a new take on their old models. Movie experiences are high among them, having not changed much since the 50’s.

Companies like AMC aren’t letting nostalgia for one format get in the way of creating a better model. Many other service businesses – those stuck in the “this is how it has always been done” mode, should take note.

Sunday, July 10, 2011

Efforts too small to matter.

Terrific use of physical evidence to reinforce the experience from Garry Gribble’s Running Sports, a local running shop where my wife got her most recent pair running shoes in advance of her first half-marathon.

It reminded her of why she went there in the first place and the value her unique experience provided. It differentiated their experience from the alternatives, and reinforced what a great decision she had made by purchasing from Garry Gribble’s.

It would be easy to skip this step. Every other place I have ever bought shoes simply puts the shoebox in a bag and lets the customer walk out the door.

It takes more effort – though not much more – to commit your service manifesto to a printed 3x5 card and tape it to an outgoing package. They also sent a handwritten note shortly afterwards. Three lines thanking her for her purchase and wishing her luck in her run. Again, more effort required, and again, nothing backbreaking.

You know who does this, takes the time to perform these small experiential elements that are so small that others see them as not worth the bother, because how could something this minor really make a difference when after all our price on the same shoe is 8% lower?

People who care about their business and who they serve.

People who succeed in building the unassailable brands most of us talk, tweet and write about.

People who get these. (Not that it matters to them)

Thursday, July 7, 2011

Asking someone to play a role? Ask plainly.

Today I was booking a trip on Southwest.com for my two sons (and I) to head home for their summer visit with their grandparents. They’re 6 and 2 years old.

When asking for the ages of the travelers, Southwest asks for travelers by category. Curiously, the “full fare” category is labeled “Adult Age 2+”. Now, my youngest is mature for 30 months, and might arguably identify more states on a map than several people whose opinion is showcased on prime time game shows, but I’m not sure I’d describe him as an “Adult, 2+”.

Seniors are identified as a separate category, exclusive of “adults. I could see and can understand a member of The Greatest Generation getting offended that my LEGO aficionado and my Elmo fanatic are considered adults, while they are classed otherwise.

I don’t know the operational reason behind this. I’m guessing that the term “full fare” may not be as marketing friendly as “adults”. It’s unnecessary. Companies are better off in a service environment in describing their process and its inputs as plainly as possible.

Since the only people that are subject to a reduced fair are those under two or 65+, identify the category as “full fare travelers”, defined as anyone 2 to 64.

Don’t forego accuracy for a term that sounds a little more appealing. Say what you mean. At worst, the simplified language will reduce confusion. At best, it will earn a measure of respect for being forthright with customers trying to fulfill their role in the service encounter.

Monday, July 4, 2011

Sewing the seeds of defection.

This holiday weekend, my county got a good lesson in how a failure with one service encounter can create a trcikledown of additional failures. The local water company, WaterOne, experienced a loss in pressure in their lines. Because they couldn’t guarantee the safety of the water during that time, they issued a countywide water boil advisory for roughly 36 hours.

From the beginning to its (thankfully) rapid end, the boil advisory impacted local residents and businesses significantly.

The idea that Johnson County might not have safe drinking water for a few hours sent residents into a frenzy. Water flew off the shelves of local grocery stores, leaving local businesses failing their regular local customers at a moment when those customers perceived they needed them most.

Service businesses that use water as an input to their experience (i.e. most food services businesses, including this Starbucks) had a major operations hurdle to overcome. At best, they increased cost to work around an input quality issue not of their making. At worst, they were unable to operate.

For businesses that depend on other services as an input to their experience, what is their recourse for the a failure like this? Usually, the utility tells them they don’t have to pay for service for the period in which it was inaccessible or unreliable. But what about increased operational cost? Lost revenue? Utilities are often insulated from the threat of customer defection due to dissatisfaction. They almost as often act that way.

It’s a reminder that service failures at utilities are unusual, but when they happen, they’re deeply felt. They're the kinds of events that, even if they only ever happen once, get companies thinking about contingency plans, “what-if” scenario planning based entirely on the idea that “we don’t ever want to go through that again.”

No matter how secure a business is in their local market - even if they enjoy a monopoly - this exercise gets customers looking for alternatives.

Tuesday, June 28, 2011

Every businessperson is a service agent first.

Through a strange set of circumstances, a junior colleague was scrambled on short notice last week to be the lead contact for our company at an industry tradeshow.

As he was getting ready for his first major solo customer-side contact, someone in our group asked him if he was prepared to answer customer questions onsite. He rattled off corporate positioning detail and product knowledge like the most heavily-trained sale professional, gaining confidence as he did. As he was about to leave, we threw him one more question.

“What if someone asks you for service?”


“We’re a service business that runs 24/7. How do you handle a customer who approaches and would like you to help with a service issue?”

Blank stare.

“Do you know how to get him / her to someone locally who can help?”

We spent some needed time giving our friend some critical detail on how to resolve a few service issues without reaching out, and hooked him up with someone that would know most local customers and could step in to provide assistance.

This story is unfortunate, but not unusual. Every time you see a company’s social media expert ask a customer with a complaint if they have called customer care, it is this dynamic at work. We’re a culture of corporate specialists. If you are unlucky enough to work in a corporate headquarters, picture all the people that could serve a customer immediately, if one approached them in a crowded airport and asked for help. Probably not many. (As an aside, are any of the faces C-level executives?)

It’s flawed logic to say that because serving a customer is not a role that everyone in an organization plays, not everyone needs to know it is done. Anyone in a support role ultimately plays a part in serving customers. Consequently, we should know how that job is done and be able to do it. Support organizations (that army of staffers most of us are part of) provide better internal service and customer support when we know the details of the customer experience.

The Army gets this. The idea that “every soldier is a rifleman first”, doesn't mean that infantry is everyone’s primary responsibility. It means that everyone should know how to help the organization achieve its most basic objective, because that knowledge helps the organization better support those that play that critical role.

Zappos knows it too. I hear experts claim that the Zappos culture can’t be replicated – that their culture is specific to their business model and doesn’t translate to other organizations. That may be. One aspect of their business that is transferable to any company is their core understanding of each function’s role in supporting the overall mission.

My new colleague did spectacularly well in his impromptu field assignment, because he carries a service orientation and had the willingness to learn a role others might feel was beneath his level.

Organizations that aren’t top performers are the ones that don’t stress to all employees the importance of understanding the service role.

Monday, June 20, 2011

Customer-centric leadership? I'll take Sir Richard, thanks.

We’re in an interesting time, where the ubiquity of business has created an environment where some CEO’s have become celebrities like their entertainment and athletics counterparts.

There has been much written about whether having a celebrity CEO is good or bad for a business. But it is good for service businesses, in that celebrity CEO’s keep companies honest by keeping them in touch with customers at the highest levels.

Lack of interaction between management and customers is a problem that has long plagued all kinds of companies. How many service businesses do you support through a regular billing cycle, for which if the CEO rang your doorbell on Saturday morning, you would recognize them?

The flipside also applies. I know several senior leaders who couldn’t pick one of their customers out of a lineup. Not that they don’t know any individual customers, more that they are too far removed to be empathetic to their customers’ lives and experiences.

But take a handful of celebrity CEO’s. Richard Branson of Virgin, Mark Cuban of HDNet, Gary Kelly of Southwest, Tony Hsieh of Zappos. They’re highly recognizable to their customers, but more importantly, they are often caught moving among them in the service environment. When a customer recognizes one of these business leaders in the service environment, there’s a good chance they’ll take a second to give feedback – good or bad – about their encounter. There’s also a good chance that these CEO’s spend a minute or two asking customers about how their experiences are going.

Feedback – solicited and unsolicited – begets questions that CEO’s ask their teams. Why do we have this policy? Couldn’t we change this process to make things easier? Why can’t we deliver this part of the experience better?

That kind of connectivity is contagious. Leaders that report to a CEO that spends a good portion of their time interacting with customers, aren’t going to spend less, and so on and so on.

Many senior leaders never bring these questions up because they don’t have the context to do so. Their only connection to customers is through the customer satisfaction reporting and 4 layers of staffers at corporate headquarters. The only hard questions they have to answer come from Wall Street. If that’s the only constituent input to base future business direction, it’s a bad one. Celebrity CEO’s may have their problems – it seems that more of them are prone to incarceration, though that may be a visibility thing too – but for customer service driven by the interaction of business leaders and customers, they have the built-in advantage of customer connection.

Sunday, June 12, 2011

We’re running out of stupid customers.

Years ago, I worked with a company President that remarked on multiple locations that his best customers were stupid, and what he really needed from sales & marketing was for them to find more stupid customers.

What he meant was that, at least on the surface, customers that showed the highest levels of operating profit were those that were willing to sustain a long-term relationship with our organization but did not price-compare among service brands. As a result, the price they paid was dramatically above-market.

Apart from the customer contempt that this remark showed, it also showed his (and that organization’s & really, that entire industry’s) fundamental lack of understanding of cost-to-serve and customer lifetime value. As the industry rejected any effort to base it’s business model off of contemporary service pricing schemes, it developed another industry comprised completely of intermediaries who (smartly) made their money by helping end users make more informed decisions.

The pattern repeats itself across service industries. Airlines had their own version of the imperfect information problem. Wireless and cable services are well known examples, but any industry that has an ongoing service relationship model faces a version of the same thing – a company’s commitment to an existing profit stream favors new customers, allowing them better access to value than existing customers exhibiting brand loyalty.

Is this a fair outcome?

It doesn't matter what the company thinks. It isn’t perceived as fair when the relationship customer accidentally gets a “service invitation” promotion in the mail, and calls the cable company for the new customer deal, only to be told their ineligible. (I have heard literally scores of those stories about cable companies)

The Internet changed many business models, and it has become the great equalizer when it comes to improving the information customers rely on to make purchase decisions. Small, loyal customers that once happily paid above-market prices today have full visibility to what a fair price is, and can compare their deal with that of others.

The counter I often hear – usually from pricing and finance organizations – is that “our company can’t afford to give those customers the same deal that new customers get.”

That’s a shortsighted answer. Those loyal customers are precisely the one that your competitors are targeting with their new customer offers. When they ultimately discover what their relationship is worth, they won’t be nearly as receptive to your matching offer. Some of the most intelligent people I know have run themselves ragged trying to figure out how to stop loyal customers paying above-market rates from churning from a business, without ever considering what loyalty looks like to a customer who learns that a prospect who has never put a penny into the company's coffers is more prized than their relationship.

The only thing that hasn’t exposed how bad this is as strategy is that in each industry, every competitor follows the same strategy. A company married to this business model inevitably loses that business to someone who isn’t, who doesn’t draw their profit from a small base of loyal stupid customers.

We don’t have perfect information yet, but it’s closer than it was 10 years ago and approaching rapidly. The pool of stupid customers is getting too small to sustain everybody. Amen to that, because it’s about time that these service industries started designing value into their offer, rather than dispatching search parties for the increasingly elusive stupid customer.

Sunday, June 5, 2011

Sports. Just service encounters with extreme customer interaction.

I’m a sports fan.

My pragmatic side knows athletic competition is mostly arbitrary, but as entertainment businesses go, sports have some of the richest service environments developed.

Customer-to-customer interaction isn't just encouraged, it's expected. (In fact, without any other customers, sports entertainment would be a pretty silly service encounter indeed.) Front-line service providers (the athletes) prefer the environment when customers (fans) become part of the performance.

And so it is with today’s post.

With a nod to the ongoing Stanley Cup final series, here is how the Vancouver Canucks anthem singer Mark Donnelly and 18,500+ fans collaborate on production of Oh Canada. (Full disclaimer, I’m a born & raised western Canadian, though I would think this was a cool execution in any context.)

Notice that Mark raises the microphone to the crowd to indicate that it is their turn to carry the song. This isn’t a singer taking advantage of an unusually participative crowd, it’s the way the service encounter begins on Canucks game nights. Customers know & accept their role in the production. Even those attending for the first time pick up the social cues from other customers quickly enough to participate.

In this encounter, something so routine as the singing of a national anthem, when embraced by the customers, changes the entertainment experience and makes it much more compelling than it is in other venues.

It is the nature of sports experiences that the customer-customer interaction makes the experience richer. Customers arrive in the service environment ready for a heightened level of customer-customer interaction and co-production. But they didn’t always show up to Canucks games expecting to sing the national anthem. That built over time.

Ironically, customers’ ability to impact the result of their service experience is greater in almost every other type of service than entertainment. So how do you take a standard service environment and, like Mark Donnelly has done, create one where customers support each-others’ experiences? How do you develop, over time, the customer role in the production of the encounter?

Tuesday, May 31, 2011

Are we changing how we complain, or just how often?

A New York Times article “Consumer Complaints Made Easy. Maybe Too Easy" sparked some dialogue yesterday on the nature of complaints, complainers and service recovery effort.

I joined Wim Rampen, Arie Goldshlager & several others to discuss whether social media has indeed made it too easy for customers too complain, and if this has led to “social bullying”.

My quick take: Social media hasn’t made customer complaints “too easy”. Instead, good service businesses are happy to have yet another way for a customer with a complaint to have that complaint heard and responded to. Companies suggesting that it’s too easy for customers to complain may not have the right service orientation in the first place, which leads to those scores of complaints that they’d rather not hear.

In a related post on Arie Goldshlager’s Posterous, he commented on the proliferation of easy, uncommitted complaints and “social bullying” as a potential resource drain on well-meaning service organizations that tried to serve all customers to their fullest extent.

With the rise of social as a venue for complaining, the ground may be shifting on this one. If a company responds to customers that are complaining for popularity reasons and aren't looking to engage them, they may waste valuable service resources chasing service experiences that can’t be recovered with customers that aren’t looking for resolution as much as they are a chance to use their social media bullhorn.

Pndering the issue for a few more hours, I’ve got one more issue to add to the body of work.

Complaining about failed experiences is easier with the availability of social media than it was before, no doubt. But in any service experience, customers themselves play a role in a successful outcome. When a customer with a failure complains directly to a company, the company has the ability to help fix problems that began with the customer not accepting their role or not playing it well. But when the interaction happens in full view of social media, there’s less opportunity for that type of customer coaching.

Will social media move companies toward limiting customer role in production of their own experiences, making service more servant-like & less collaborative?

I sure hope not. The customer, because of their unique knowledge of their needs, has the potential to be the most productive resource in the service experience, if & when we make good use of the shared effort. It would be a shame for businesses worried about the complaints that could be best fixed through better company-customer interface to design the customer out of the fulfillment process completely.

Saturday, May 28, 2011

Old School CRM.

For those skeptical whether a company wants or can have true relationships with its customers, here is the bulletin board of a Starbucks I happened upon in my travels:

A simple note, handwritten cards with customers' names, favorite drinks & details. The odd customer photo. How long do you think that it took to construct this mural? 30 minutes? 60?

The answer is on the blackboard. 4 years of investment in customer relationships, made 30 seconds at a time.

ANY company can have this kind of relationship with its customers. Only those willing to invest 4 years do.

(No, it’s not lost on me that it is really people that create and maintain the relationships. Service businesses are about people, and front line staff in particular. Front line people are the are “product”, the marketers and the customer service staff. Customers’ feelings about them are transferred to the company. Customers’ feelings about the company are likewise transferred to them.)

(One other note from this: Want to be the Mercedes of your industry? The Ogilvy of your local market? The Zappos of your niche? In service businesses, all three are represented by your front line providers. 3 functions in 1. Don’t tell me service businesses are inefficient.)

Thursday, May 26, 2011

Saturday Night, Alive.

I’ve been holding onto this one for a few days because I didn’t quite know how I felt about it.

On Saturday evening, we heard tornado sirens sound in our neighborhood, as they do anytime a tornado is sighted in our rather large county in northeastern Kansas.

It was late, and not wanting to wake the kids up unnecessarily, we quickly tuned in to the local television broadcast to quickly see what exactly we were faced with and whether we would have to beat a hasty retreat to the basement.

It turned out that the tornadoes were as far away and as small as they could be and still cause the alarm, but in our minds – as always with these things – better safe than sorry.

But here’s where the service encounter comes in. To broadcast the emergency, the Kansas City area NBC affiliate broke in on Saturday Night Live. Specifically, the season finale featuring Justin Timberlake and Lady Gaga.

As they did so, the meteorologist almost continuously apologized for preempting SNL, which to me seemed a bit unnecessary, in that I couldn’t imagine anyone who would be willing to forego their own safety or that of their neighbors for a rehashed version of dick-in-a-box.

At that point, I did a quick twitter search on “SNL Tornado”, and saw the vitriolic reaction that the weather alert was generating towards NBC.

At first, I didn’t consider this a service failure, so much as a group of irates voicing their displeasure at a very sensible action on the part of the network. But the idea stuck with me. I wrote a post about situations when one service experience (National Weather Service) interferes with another and another about cases where the customer isn’t right, taking the position that the Meteorologist shouldn’t have to apologize for keeping viewers safe by the best means available.

What I came back to, though, was that as much as I didn’t agree with their positions, this was a service failure in the eyes of the customers that were complaining. Their service outcome – namely experiencing the finale of SNL – was not fulfilled by NBC, regardless of how good the reason. The local NBC meteorologist was right to apologize. Better, their service recovery of pointing watchers to the broadcast streamed over the internet kept with a key element of good service recovery, providing successful delivery – either through the streaming video or a later rebroadcast – as a fair outcome.

NBC prioritized the service needs of its customers appropriately. Serving some caused an unavoidable service failure for others. But in recognizing it and offering an alternative, they provided each customer group a fair outcome in the service they wanted or needed in the first place.

Monday, May 16, 2011

Lessons in customer role, from a chainsaw company.

In the summer months, I'll often throw my local Kansas City Royals baseball game on the TV to serve as background noise as I settle into my evening routine.

One of the advertisers on the local broadcast – Stihl – a chainsaw manufacturer, gets experience and customer role well enough to mention, even though I don’t own a Stihl chainsaw, nor am I likely to anytime soon.

The ad is for a dealership promotional period, but doesn’t offer a price discount. It doesn’t even offer suggestions on where they can be found beyond, "your local Stihl dealer".

Instead, it talks about the quality of the product, reinforces the quality of the product, and closes with the quality of the product. Somewhere in the middle, they mention that if a customer purchases a 6-pack of oil with the chainsaw, Stihl will double the warranty period.

Tremendous service marketing from a product company.

The logic is simple: If a customer buys the oil, they’ll either use it or they won’t.

Most people that buy a six pack of oil will likely use some, if not all of it. Doing so inherently lengthens the life of the chainsaw. So for those that use it, they get a customer who spends additional money upfront on a maintenance product and understands and accepts his or her role in maintaining the product.

The life of the chainsaw is extended by a well-maintained machine, the likelihood of needed repair decreases, and the customer’s perception of Stihl as a brand of high quality, (or at least long-lasting) chainsaws increases.

For those that don’t use it, the purchase of the oil at least partially offsets the warranty costs for repairs to the chainsaws that aren’t maintained.

As a side benefit – call it the Chris Zane corollary – any competitor that tries to match warranty terms without the added benefit of customer-provided maintenance may find themselves with a money-losing warranty.

The warranty is a service aspect of a product purchase. The customer role of maintenance is part of the product experience. Stihl may not be Zappos, but they know their service marketing. It’s a good promise. You do your part in maintaining the product, and we’ll guarantee that it will stay running for years.

Saturday, May 14, 2011

I unfollowed @PV_at_SAP today.

Along with @outdoorrussia, @CarinaAllen and 20 others. At least, so said a tweet from @PV_at_SAP caught by my mentions column yesterday afternoon:

“@Reaburn , @outdoorrussia , @CarinaAllen and 20 others unfollowed me today ... checked by http://fllwrs.com”

An interesting way to mention someone. Of course, it was entirely possible. I do unfollow people from time to time. So I checked, and actually, I had unfollowed @PV_at_SAP the day prior, making the mention ever so slightly inaccurate.

It's not the first time I’ve unfollowed someone. But it is the first time I’ve been called out for it, and I’m not quite sure of the purpose. My guess is that “PV” wants to alert the twitterverse that someone isn’t playing by the implied reciprocity rules.

Interesting take on the purpose & use for twitter. Yes, building one's self-perceived popularity through masses of followers is one potential source of value for Twitter, though it’s not where I find value, and in all fairness, I doubt PV does either.

For me, Twitter’s value is in engaging experts, leaders & interesting people on subjects I want to learn more about, contributing to the collaborative dialogue where I can, while creating a shortcut to exceptional content for which the search cost would be too high for me to ever obtain it on my own.

Right now, I’m near the magical 2,000 twitter followers, so Twitter demands that I watch my balance of follows to followers. I’m trying to break through that mark, not because I want access to legions of potential pseudofans, but because I’m pretty certain there are more than 2,000 people out there that I’m going to find interesting, and I want to be able to find & follow them with fewer restrictions.

PV isn’t following me, and so he’s limiting my Twitter experience by hampering that objective. I also don’t find much value in his content – nothing personal, it’s just not for me.

Any customer-customer interaction can change behavior in the service environment. In this case, unfollowing PV was my way of improving my own experience, since PV wasn’t contributing to it, and actually was limiting its effectiveness.

I’m sure PV would understand. After all, his bio reads “Its all about the Customer and the Experience at SAP.” It’s a sentiment I share (it was likely a reason I chose to follow PV in the first place), and exactly what I was practicing when I unfollowed him.

Homeaway.com (Pt II): Don't take a customer's need for assurance lightly.

After reviewing their Super Bowl advertising as part of this year’s #BZBowl, I was intrigued enough by the Homeaway.com service model to give them a try, using their marketplace for vacation rental properties to book a condo for a future family vacation in an area of the world I've never spent much time.

I was blown away by the front-end, but there were some execution inconsistencies and assurance misses that could be improved to make the booking experience as tight as the search & engagement process.

Once I had potential locations down to a short list, I contacted the property managers to check specific dates, availability and to inquire further about the properties themselves. Not all of them replied, and of those that did, I had response times from a few hours to almost a week. It's difficult to manage any network of intermediaries responsible for fulfilling your service experience. A network of small business owners / property managers that spans the globe has to be one of the most complex intermediary networks I’ve ever encountered. Still, the variance between responses was a bit extreme. While I was down on the hotel experience in part one, I’ve never had a hotel not respond to my inquiry as to room availability.

Once the short list was narrowed down, I began an engagement with the manager of the property I was most interested in. The manager seemed extremely nice, wrote back to me in my first language even though it wasn’t his, provided detailed information on the property and included references – all great stuff. But it was when he - a service intermediary that I’ve never met, whom I know isn’t employed by Homeaway and operates out of another country - asked for my credit card information that my service encounter needed some assurance that this was a normal part of the experience, and that I could trust in the intermediary network.

To get that assurance, I checked with Homeaway, asking if this was common practice or if I should look elsewhere. In this case, Homeaway didn’t respond for 3 days. That may be acceptable for routine questions (or not) but certainly not for what was to me an urgent inquiry about information security.

Marketplaces like Homeaway, where networks of service intermediaries gather to compete for the aggregated demand of a mass market, are growing in number and breadth of the markets they serve. But they are fundamentally difficult service models to manage with consistency. Service quality basics such as reliability, empathy and expecially assurance have to be considered at every step of not only the engagement experience, but the purchase, service experience and post-experience as well.

Homeaway had me with the engagement, but a small fail at a critical point just about lost me at the exact moment I was willing to put my money down.

Homeaway: A refreshing un-hotel encounter.

After reviewing their Super Bowl advertising as part of this year’s #BZBowl, I was intrigued enough by the Homeaway.com service model to give them a try, using their marketplace for vacation rental properties to book a condo for a future family vacation in an area of the world I've never spent much time.

The Homeaway accommodations marketplace provided a service encounter far superior to the hundreds of hotel and hotel aggregator sites I’ve used in the past.

With thousands of properties spanning the globe, individual property managers compete with each other for travelers' vacation accomodations experiences. They’re motivated to position their properties in the most compelling possible way – making their best promises as to the experience a vacationer would have. Users see extremely detailed information on the properties, surrounding neighborhoods - often including an insider’s information on local events. Property managers usually include property layout diagrams, a full suite of pictures, including video walkthroughs for prospective renters. Those promises are kept honest through user reviews, with past renters posting reviews of the amenities and the service for the properties where they’ve stayed.

By comparison, direct hotel sites typically give a generalized room category with some vague images of the accommodations style, and a price. Aggregators of hotel accommodations (like hotels.com and priceline) may offer even less, narrowing down to a neighborhood (not a specific property) a nebulous star rating for the property and a price.

With more space, more variety, and more decision information at every bit as competitive a price, the homeaway.com search and engagement experience is so much better than traditional hotels and site aggregators, it makes me wonder if the hospitality industry isn’t undergoing every bit the business model change that happened when the demand aggregators first arrived on the scene.

But while the experience of finding potential vacation sites was an exceptional experience, there are a few service experience missteps and inconsistencies that took place in part two of my service encounter, once I committed to using a property.

Thursday, May 5, 2011

AT&T broadband cap gets a consumer wag-of-the-finger

AT&T made news this week by announcing a cap on broadband for personal internet use. Based on my own (purely unscientific) review of the comments circulating through social media sites, the move wasn’t favored by consumers.

From Twitter:

JD_Wright: Broadband cap? I think our days with AT&T for internet service are very limited.

Joel_Turnipseed: @att added a cap and didn’t lower price, this is why I have moved internet providers "att capping broadband http://t.co/u9YrKmi"

kevinlam14: AT&T cap broadband usage! 150gig for DSL and if you go over, $10 is charge for another 50gig
http://ow.ly/4NAAs This is a load of crap!

beermonkey: Time to switch providers out of principle alone. RT @News4WOAI: AT&T putting cap on broadband

But before committing to indignation about how this is a money extracting move by an evil cable company who doesn’t want to provide the service it’s loyal customers, consider this as a move that potentially protects the service experience.

According to AT&T, the top 2% of customers – those for whom the cap will apply – use a full 20% of broadband.

When one customer’s service experience adversely impacts the service experience of other customers, the company has a decision to make – protect the experience for the customer whose use is negatively impacting others, or intervene to protect the experience of the many.

In some cases, the decision is easier than others.

If the customer is improperly using a company’s service experience – think of a severely intoxicated passenger on an airplane – the difficult but appropriate response is often to remove them from the service environment, to be served in another way or not at all.

On the other hand, if a customer simply uses “more than their fair share” of the company’s service capacity, the company has the option to charge for the capacity-draining use to either modify the behavior and bring capacity use back into balance or ensure any continued extreme usage of the service is compensatory.

The AT&T cap on broadband (which isn’t a cap, as much as a charge for excess use) isn’t without precedent. In fact, it is somewhat similar to the intelligent traffic system IBM implemented in Stockholm, which concurrently solved a major congestion problem while increasing municipal revenue and was ultimately seen as a creative solution to a difficult problem.

What is interesting to me is that while both organizations made changes to preserve scarce service capacity to serve more customers more effectively (and make more money doing it), one is met with case studies while the other is met with catcalls.

Monday, May 2, 2011

Rating "Rate Our Chicken."

Successful service encounters start off with well executed marketing as the process of making relevant promises that set the expectations of what will be delivered through the experience.

The Domino’s ad “Rate Our Chicken” is an effective one not just for the promises it makes but also for how it personalizes promise fulfillment for customers.

The ad makes that simple promise that is easy to evaluate - specifically that we’re going to like their new chicken product. But while most advertisements stop here, Domino’s challenges customers to evaluate their delivery of the promise by asking every customer to rate their chicken with a survey on the box the chicken is delivered in. If you’re a fan of Chip & Dan Heath's SUCCES formula for evaluating marketing, there aren’t many promises you’ll see that are more concrete than this one.

But because service encounters are about more than the tangible goods associated with them, and successful service marketing finds a way to express the intangibles of the offering. Featuring the people who make and fulfill the service promise in marketing is a usually a strong execution of the message and the brand.

In this case, Domino’s personalizes the promise by literally giving it a name. I don’t know if Tate Dillow is really the man behind Domino’s chicken, but putting him in front personalizes it as one person making a promise to customers. There’s a good chance customers will feel sympathy when Tate’s boss asks customers to rate the job he’s doing with the new chicken by putting a survey on the box.

As a service ad, “Rate Our Chicken” works because it is a simple quality promise well executed by making it easy to evaluate and including the people responsible for performing it in the service encounter.

Monday, April 25, 2011

Does a company's executive pay impact the service experience?

Executive pay has been in and out of the headlines for some time now, but is there a consumer impact for companies involved?

Attention and public outcry peaked when executives of some of the financial industry companies bailed out by the U.S. government were treated to pay increases and large bonuses, even as millions were being put out of work throughout the rest of the US economy.

That outrage sparked change in the form of legislation, granting shareholders a larger hand in determining CEO pay through an up-or-down vote. While many are adopting the new standards (and many still have not) it is still being debated whether the shareholder say in CEO pay will have the desired effect.

These measures are interesting from a shareholder’s rights & corporate governance perspective, but I’m interested in executive pay from another angle.

As a consumer of service experiences, does CEO pay factor into your decisions to support or not support a business?

If you knew that CEO A received total cash compensation of 6.5M, while CEO B was paid one dollar, would it affect your brand choice if the service experience was the same?

If the company with the high CEO pay was a worse service provider than the one with low pay, does that increase your level of frustration with the brand / make you less likely to tolerate failure?

Theoretically, it shouldn’t.

The pay of a company’s CEO is not an experiential aspect of a company’s offering.

But does it enter into an evaluation of value when our sense is that an organization with a sub-par experience takes for itself through rich pay before it gives to customers through a rich experience?

Open question. I'm interested in whether this topic impacts our behavior as consumers.

Friday, April 22, 2011

The service quality air travelers refuse.

When traveling, accompanying business associates tolerate my travel habits as much as I tolerate theirs.

See, most of my travelling companions are prototypical business pros when it comes to travel. You know the ones. You see them moving through the terminal like a mule train, with oversized laptop cases perched atop oversized carry-ons.

When I pick up my checked bags on arrival, they always grouse about the delay in getting to the rental car shuttle quickly. It’s about that time that I remind them that it was they, along with 50 similarly-intentioned travelers, who, in trying to fit a steamer trunk into the overhead bins, backed up the loading of the plane while they tetrissed their luggage into position, warped bin doors closed or had to have them gate-checked, inevitably making the plane late for departure.

Checking luggage is my own social contract. We can all take off & land on time much more frequently if we let airlines do a better job separating the loading of luggage from the loading of people.

Don’t believe me?

Check out this video from IBM about the baggage operation at schiphol airport in Amsterdam. 140,000 bags per day. 21km of conveyors. In-transit tracking. 50 million bags / year, expected to increase 40%. Runs like a Swiss clock.

Engineered service systems like this are making service processes more efficient while they are improving the likelihood of positive outcomes. Yes, this is an extreme example, but it has been years since I’ve had a bag misplaced or delayed. My track record for on-time flights is nowhere near as stellar.

You may not change your behavior (airlines imposing baggage fees are doing their best to make sure their operations continue to run as inefficiently as ever) but the next time you see a business traveler fight their carry-on for 3 minutes, only to give up and gate check, walking back up the plane aisle past 30 passengers waiting to board and unable to proceed to their seats, perhaps you’ll think about miles of conveyors and systems designed for the movement and loading of bags onto planes.

Sunday, March 27, 2011

How much work would you ask your customers to do?

On a recent trip to see a good friend, he and I went to dinner at a steakhouse he was excited to show me. The source of his excitement was their unique take on meal preparation. He described a flat stone heated hot enough to cook on and brought, with my steak, to me for tableside grilling. The twist: I get to do the grilling myself, preparing my steak to my own desired doneness.

This didn’t seem like a terrific idea to me as a customer. I go to restaurants to have professionals – better cooks than I – prepare my food for me. That I was going to play a significant role in my own service experience while I knew there was someone more qualified and paid to do it standing through a set of double doors didn’t excite me.

Still, I’m always up for a new experience, and I trust my friend completely. (military basic training followed by 4 years of college together tend to do that) So, I mustered up some excitement to accompany the anxiety that came with the prospect of cooking my own tableside meal.

An immediate benefit of this format was that I got to see the main ingredient raw. You can’t hide bad product when the inputs are raw, and this steak was spectacular. I grew a little more excited.

As I started searing my steak, I began to see the participation benefit. Rather than a distracting hassle, the experience let my friend and I share an experience along with each others’ company.
The quality of the product, the way every other detail was taken care of and the result created accomplishment satisfaction that surpassed what consumption satisfaction would have provided.

Customer role is often overlooked in development of the service encounter. Most businesses fail to realize the potential of the service-producing capacity that also pays the bill, and how in some cases, getting a customer to do more work may actually increase their satisfaction with the encounter.

As you way how to include the customer in producing your performance, be strategic, but don’t overlook opportunities to push the boundaries of how you can apply their service capacity. Like a restaurant owner that says, “I know! Let’s get customers to cook their own meals!”

Thursday, March 24, 2011

More service than is reasonable.

Give more service than our customers think is reasonable.

If you take one message away from Chris Zane’s new book “Reinventing the Wheel”, that’s it.

Service is fundamentally about making and delivering on promises. That means different things to different businesses. For Zane’s Cycles, that means the biggest, most audacious promises they are willing to make without scaring themselves. (And sometimes even when they do.) It also means delivering on those promises with exceptional reliability, continuously executing on fundamentals, finding defects and driving them out of the business. The promises that Zane’s makes are the kind that stretch well beyond customers’ own expectations. Its good theater and good business. The extent to which they’re willing to go amazes, but their ability to deliver on them wins them loyal customers while keeping the actual outlay on amazing promises to a minimum.

Zane’s pushes the envelope in providing service that others can’t or won’t deliver by using Customer Lifetime Value as their compass. As a service business, they make decisions based on the relationship - like we all say we should, rather than on the next transaction - like most of us do. One of the most refreshing aspects of the book is that they have chosen a service philosophy as a stern guide, but use trial and error more than a Fortune 500 would in finding ways to follow it. They don’t always get it right, but when it does, the results are spectacular levels of differentiation from their competitors.

There are other ways to run a successful service business - delight isn’t a strategy that anyone can or should follow. In fact, Zane’s Cycles relies on the fact that competitors that try to follow their service lead often hurt themselves financially trying to live up to a service level their people and processes aren’t prepared to support. Zane’s story demonstrates only how they did it and how they intend to continue into the future.

But while Zane’s success may not be a blueprint for everyone, the lesson that everyone can take from their story is that to develop true service business – customer relationships make service decisions based on the lifetime value rather than the profit involved in the next transaction. That logic applied consistently will make it feel to your customers (and competitors) like you provide more service than is reasonable.

Wednesday, March 23, 2011

What is Service?

As the service community active in social media rushes to define terminology that supports still emerging business models, (where SCRM begins and ends, how to make CX & CEM meaningful for everyone, and “now that we’ve got one, what the heck is a Chief Customer Officer supposed to do?”) I’m spending some time on a simpler question.

It’s not new, but one I see peers, academics, industry experts, even the Twitter #custserv group struggle with from time-to-time. The confusion is partially born out of our deep bank of experiences as consumers, which gives definitions for "service" a Potter Stewart, I-know-it-when-I-see-it kind of fuzziness.

Adding to the problem is that service has three accurate and potentially concurrently applicable meanings. We use any and all of them, based on our own experience and perspectives from within the organizations we work.

It can be a business model that relies on a performance or process to satisfy customers. In this sense, service can be the rough equivalent to a “product line” of intangible goods, or even an revenue model for an entire company.

It can be the process or performance act itself – either the entire operation that delivers an experience to customers, or a part of it.

It can be the support provided to customers that interact with a company’s products or services – what we tend to consider when we’re talking about “customer service”.

The distinctions between them are important, but only to an en extent.

Whether you’re speaking about an enterprise or a customer encounter, whether you use it for internal or external audiences, the core idea is simple, and it is the same: Service is the process of making and fulfilling promises to customers.

You can put the act of making and fulfilling a promise into each one of the definitions of “service” that are typically used, and they not only work, but are made even more distinct from each other.

I’ve said here that service is important because every business is a service business. What I mean is that every organization is in business to make and fulfill promises.

If you want to get better at service, one way is to take a long look at how your organization deals with promises. How you make them to customers, how you make it possible for them to be fulfilled, and ultimately how - or how well - you keep them.

Monday, March 21, 2011

A performance diner misses a note.

Traveling through Ontario last week, I unexpectedly came across a new restaurant location of a burger joint that served as a hangout in college. While it wasn't the original location from my youth, my wife (who frequented the same place in her collegiate days) and I stoppped in for some nostalgia.

The original was a great old diner with a vintage feel. Great food. The experience was made more unique by their tendency to sing out the orders in unison as they were taken from the customer. It wasn’t a necessary component of the experience, but it was a unique touch and a differentiator for those who appreciated the kitsch of the physical environment.

Fast forward ten years, and my college hangout has been somewhat successful. They’ve expanded goegraphically, including the location we patronized.

The experience is designed to be the same, but in a small single location remote from the original business, it didn’t come off as consistent with the original. The retro restaurant layout was similar, and the food was still exceptional. But the performance component of the experience that involved singing was half-hearted at best, and sometimes abandoned entirely. My guess is that remote location employees, who had never seen the experience effect of the original but been coached to execute it, failed to see what that aspect of the experience added.

Consistency of the experience is tough to maintain as a business grows and control over how the service is executed gets more & more remote.

As the business grows, revisit the service experience from time to time to see what components still fit with the overall service vision, which don’t and which, while they may fit, have become too difficult to execute.

If this business had done so, rather than just stamping out copies of the original model and expecting them to work in alternate locations with different management and employees, it would have noted that the singing component of the experience wasn’t core, that it was increasingly difficult to execute consistently as the business grows.

Its true that every service encounter is a performance. But if your performance contains elements that are tough to execute and are not critical to the experience, consider editing the routine to place more emphasis on elements that will create an impact.

Sunday, March 6, 2011

Changing customer behavior? Choose carrot or stick carefully.

I got an email from my insurance agent, informing me that I hadn’t signed up for electronic delivery of my bill. It turned out that I was still receiving paper bills and, sensibly, they wanted me to shift to paperless transactions.

But they didn’t just rely on an appeal to my sense of morality to get me to make the transition.

To motivate me to change my behavior, they told me that if I weren’t to change my billing to the paperless option, I would lose my 10% ebilling discount (that frankly, I was unaware I had.)

There are a lot of ways to get customers to change their behavior. In many cases, change is as easy as letting customers know what behavior you expect of them. In others, the only way to effect the change in customer behavior is align the customers benefit with it. Some companies gently make it worth the customer’s effort to change. Southwest Airlines is a master at this, for example, getting customers to the gate early through their unique boarding process and keeping them close by with comfortable chairs and electrical outlets.

Another way to align customer interests with the desired behavior is to punish the alternative.

In this case, my insurance company suggested that a benefit I already receive would be lost if I failed to act the way they wanted.

Whether the discount was real or not is almost immaterial. I was going to have to pay an additional 10% if I didn’t make the small change in behavior they were asking for - enough for me to go online and make the shift.

Both methods of changing customer behavior can be effective. Of course, Southwest’s behavior changes are subtle enough that most don’t even perceive them until they’re ingrained, and their efforts often win them fans along the way. My insurance company on the other hand? Well, the threat was definitely perceived. And while it didn’t upset me any (it might others) it certainly won’t endear them to me either.

Great Servicescapes: Shear Madness

I get bored during haircuts. Maybe it’s the boy in me, but I still see my regular trip to the barber as a necessary evil, something to be put off for any good reason.

I can’t imagine being 5, or worse, 2, and having to endure twenty minutes in a barber’s chair.

Luckily, my boys have a great service environment to have their haircut encounters.

Shear Madness takes what could be an almost interminable half hour in a young man’s life and turns it into enough fun to ask for by name.

The experience was created as seen through the lens of its customers. Chairs are various forms of transportation, from a Blue Angels fighter or NASCAR replica to a Malibu Barbie Corvette. Every station has a dedicated TV that plays a variety of children’s programming all day, every day. Kids don’t like Dora & Spongebob? TV’s are Playstation-equipped so that young customers can play video games while their hair is cut. Because we don’t have video games in the home, my eldest son thought until recently that the barber was the only place they existed. “I wish I could get my hair cut every day” is not a phrase I have ever said, much less when I was five.

It’s not revolutionary.

But if you can remember the excruciating experience of going to the dentist when you were young, having all manner of pokes, prods and poor tastes and then being “rewarded” with a sucker upon leaving, you’ll admit that it is innovative.

They’ve picked their customer - I can’t overstate how important that is - and oriented the experience to them, making the experience consistent from the front door to the chair and back. Their focus is resolute enough that they get their testimonials from their child customers and the parents who share the experiences - and pay the bill.

They’re not catering to everyone. I suspect by the time my guys are ten, they won’t care for it any more. Maybe they’ll think it’s too childish. (Though I wish I had entertaining distractions while tending to my regular grooming even now)

But there’ll be a lot of haircuts between now and then, and they’ll get most of them.