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.

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.

Domino's shows me my pizza.

Domino's may not yet be considered complete, but I’ve been a fan of the move to quality they've made in full view of their customers and the public.

Quality improvements are often made by companies that have had these issues, but Domino’s has addressed their public perception with a humility and sincerity that we can identify with and cheer for.

Whether through its public apologies for “the video”, public solicitation of feedback via showusyourpizza.com, or the dramatization of their willingness to win back customers one at a time through their advertising, Domino's has demonstrated transparency, personality and a connectedness with its customers trhat few service brands are (sadly) willing to risk.

Yet while I had admired Dominos' recent track record in addressing service quality, I still hadn’t used them in a couple of years, until my wife called me at work with an emergency, “we-left-the-baby-sitter-hanging” situation.

The selection & ordering process at dominos.com was simple. The menu was completely customizable and - even better - I didn't need to register as a frequent customer just to order a pizza.

But what happened after I ordered made me a fan and, more importantly, a returning customer.
After the order submitted, a timeline popped into the order confirmation screen, showing the order preparation & delivery process and the status of my order as it moved. The tracker might be dismissed as gimmicky, but it personalized the service in a unique way, particularly when stage 2 informed me that "Stephen began custom-making my order at 5:12 PM."

Adding a tangible personalization of the experience in the form of greater visibility to the service process, (including using the names of the people involved), are elements of the domino's experience that gave me more assurance over the quality of the outcome. It demonstrated in a for me that their responsiveness to their customers over the quality concerns is not just a marketing or social media response, but a strategy consistently carried out across service touchpoints.

On Encounter #2, Zappos Delivers. Early.

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

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

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

This time, they exceeded those expectations.

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

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

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

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

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

...but you can choose your business partners.

I wonder if AT&T is feeling the heat.

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

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

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

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

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

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

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

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

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

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

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

Evaluating experiences beyond "I know it when I see it."

I’m in the middle of an awful service experience with my local Volkswagen service location, one that has left me without my main mode of transportation for the last seven days and counting.

Though it hasn’t yet concluded, I’m taking a few minutes to go frame-by-frame through the experience in preparation for a debrief with the service provider. As I’m doing so, It’s obvious that if they were simply better at keeping me informed on the status of the ongoing experience, my perception of the entire engagement would be dramatically improved.

Quality of the services we produce and consume is difficult for all parties involved to measure.

Because of their intangible, emotional nature, consumers often use the “I know it when I see it” method to judge whether their experience was a good one or a bad one. Regardless of whether the evaluation was conscious or not, they’re evaluating their experiences on five service quality dimensions companies also need pay attention to:

• Assurance: the ability of the company / provider / experience to inspire trust in the consumer

• Empathy: the emotional labor, or caring, behind the actions of the service or its provider

• Reliability: the ability to perform the promised experience accurately and consistently

• Responsiveness: the willingness of service providers to help, and the availability of the offering

• Physical evidence: the appearance of the service environment and the tangible cues that the experience is adequately performed

In seven days of mistakes and omissions on the part of my Volkswagen service center, more than half of the quality deficiencies are of responsiveness. Their lack of follow-up or proactive information management eliminated any assurance I might have had, and I started evaluating everything else more critically, resulting in further failures on empathy, reliability and tangibles I might not have otherwise noticed. A failure on one dimension led to avoidable failures on the others.

Good service businesses know the relative importance of assurance, empathy, reliability, responsiveness and physical cues to their customers’ perceptions or the experience. They measure and manage performance across them, knowing that a deficiency in one leads to perceived deficiencies in others.

The Coming Death of “The Only Place in Town”

Just concluded a horrible service experience with a tailor in the small town where we’ve spent our family holiday.

With the pre-holiday rush, I didn’t have time to get hemming done before heading away on vacation. My wife, ever helpful, suggested bringing the pants with us, get the tailoring done in a day or two, potentially to have available for an event early in the New Year.

Always one to listen to the local / expert recommendations, I asked around and took my business to the tailor several friends & family members suggested was the best option.

The initial service I found was less than overwhelming. Unresponsive to an un-staffed customer desk, I finally wandered into the work area to find someone to serve me. They pointed me to a dressing room, and as I was being fitted, promised far less than what I was expecting or used to. The timeline on a simple hem was going to be a week, if I had it rushed. (My regular option gets me in & out in a couple of days in all but the most exceptional circumstances.) The cost, in a small Canadian town, was going to be twice what I was normally charged at my highest-priced home option, the local Nordstrom tailor.

Though all sense told me to take my things back and just have it done at home, I decided that not having to bother with it early in the new year was worth the effort during my current "down time", and proceeded.

I happened by the mall the tailor was located in six days after dropping them off. On the off-chance they had exceeded their promise and neglected to take credit for it, I checked to see if perhaps they hadn’t finished a day early. Not surprisingly, "my tailor" was the only store in the mall not open on a Saturday.

I finally retrieved my clothes, though in a rush to catch an outbound plane, didn’t have the chance to try them on. Not surprisingly, when I finally did, they didn’t fit as I had asked.

Through every touch, the attitude was, “We’re as good as we need to be – where else are you going to go?”

It’s poor business, but the “captive market” attitude and service approach still persists in a lot of geographies and industries. For small-town tailors as much as for legacy industrials, the approach is becoming increasingly less viable and looks increasingly foolish / shortsighted to outsiders.

Business entry costs are coming down across the board. Business process / back office management outsourcing is allowing garage businesses to look & act like FORTUNE 500’s at a fraction of the scaled cost. The internet is making easier quality service companies and customers to find each other, and social media is making it easier to find 3rd party assessment of the goods / services companies provide.

There are fewer barriers to hide behind, even for the small-town tailor. Companies not providing service and value will be found out, and punished accordingly by their market.

How many service businesses are unaware how little time they have left to change?