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.

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.

Not your fault, but your failure to recover.

On a busy travel day today, the lines everywhere were longer than expected – at the parking lot, at check-in, (though Southwest reacted well by bulking up on agents to service the rush) and at security. (The TSA contractors were not responsive to the unexpected demand level)

Planes flew on time, but travelers had to hurry more than they usually would, and those that usually had time to spare found themselves rushed.

As I sat in my “cattle car” seat in row 2, one of the last exasperated travelers boarded the plane in a sour mood.

When he was greeted with a pleasant “Good Morning” by the flight attendant, he looked past her, down rows of full aisle and window seats, and grumpily replied, “It doesn’t do any good to pay for premium boarding when there’s 900 people in the security line.”

A great example of how, in service environments, the mere presence of other customers can impact the experience.

In this case, a customer played his role, paying $10 for premium boarding so that he didn’t have to check into a flight at 6:15 AM on a Sunday to get the seat he wanted.

In this case, he found himself foiled by variability of demand for the service he was using. The unexpected volume of travelers (though not quite the 900 he claimed) put him far enough behind schedule that he wasn’t able to take advantage of the premium service he asked and paid for.

This led to a negative outcome that Southwest didn’t create. Still, the customer’s perception was one of unfairness of outcome. In his eyes, he paid for something and it didn’t work.

What is a service provider to do in this case?

Most hide behind fact that their process was fair, replying to these complaints that the service success is contingent on the customer playing their part in arriving early enough. Since he was late to the gate area, they couldn’t hold the seating option he desired and proceeded with boarding. In this case, the Southwest attendant hearing the complaint didn’t react at all.

Of course, whether the process was fair or not doesn’t much matter.

The customer has a negative perception of the value of the offering, and will be less likely to use it in the future. Given that this traveler is likely a reasonably frequent traveler, this is an opportunity to create long-term loyalty (and revenue) by delighting him - recognizing that although it wasn’t the fault of Southwest, the traveler started his day with a negative perception of the experience.

Extra care & attention to his needs while en route, a book of drink tickets, heck even a 5-pack of free premium boarding upgrades – given that their cost is essentially $0 – all likely would have improved a negative perception about a service failure southwest didn’t create.

Even though your service process may create fair outcomes, remember to pay attention to how you respond to customers who have negative results – whether you caused the issue or not, these are still your customers to help recover and delight.

To improve service, don’t play the percentages.

Many B2B and B2C companies market their service delivery rate – fulfillment, up-time or on-time percentages – as an indicator of how reliably they perform.

These external claims usually reflect internal service quality metrics, independent of whether they are important to consumers or not. But while helpful for internal comparisons that lead to incremental improvement, these metrics provide a false sense of security about service quality and may actually impede true improvement.

Consider the following:

99.5% up time sounds great. Even at 95% fulfillment success on your core promise, you feel pretty good about things, right? But if your business had 100,000 customer interactions, service encounters or “moments of truth” yesterday and your delivery rate was that “A” letter grade of 95% - you’ve failed to deliver on your promise to 5,000 people.

5,000 times some level of disappointment yesterday. And, if your service is consistent, you know today that you’ll fail for 5,000 more people tomorrow.

Take that pure failure number in your core operation and add the performance in the interactions you have with customers in your customer service channel and at the point of sale. Take that number and apply it over the week. The month. The year. How many customers, as a percentage, had a defect-free year in dealing with your services? And that’s just basics – your satisfaction core. It doesn't consider any effort or need to provide customer delight.

To create a sense of urgency around improvement, report the failures in real numbers at the time you report your service performance.

Would that focus managers on finding root causes of defects in the core offering? Focus the service operation on fundamental change rather than incremental improvement? Focus marketing on finding the right customers and promoting them while finding the wrong customers and managing them out of your business?

The false sense of security that the percentages provide is the reason a vast majority of companies feel they provide outstanding service, while an equivalent number of consumers feel that service performance is low.

Percentages are important, but appreciate the personalized perspective, that measuring your success and failure in pure numbers provides you business, and the subsequent urgency it creates.

If a service fails in the forest…

My power was out in my neighborhood from about 1:30 to 2:15 AM today. (I have a 4 month-old, so I’m up at odd hours every now and then. There may be a forthcoming post about what happens on your cable channels between the hours of 1:00 and 5:00 AM)

I made my call to the power company and settled back in to sleep.

Nothing was damaged as a result of the outage.

No one was adversely impacted, no morning alarms missed.

I’m willing to bet that I’m one of the few people that even noticed until they saw the microwave flashing 12:00 AM this morning.

So why was I upset?

My call to the power company. Like most service organizations, they have implemented an intelligent front-end interactive voice response (IVR). It took in some critical details (essentially, “Is your power out? If so, who are you & where do you live?”), let me know that the call had been registered and automatically ended the interaction. At first, I thought that it made sense. There really isn’t much they can do to respond to an individual customer when there is a neighborhood-level outage. Still, I felt unsatisfied with the whole experience.

The format of the IVR technically did everything it could to take in the information needed to address the problem. From a clinical standpoint, technology enabled the service compliant to be recorded and addressed.

What the IVR didn’t effectively do was acknowledge that there was an issue and explain what they were doing to fix the problem. Given the one-sided nature of the exchange, it made me feel like the power company was as asleep as its customers at a time when their service was failing.

It wouldn’t have required an empathetic human to give me comfort that the problem was being worked on to restore full service. Even a quick comment generically stating how “crews work around the clock to ensure continuity of service in the event of an interruption” would have given the comfort I needed.

Technology is used to enable service performance and make interactions more efficient, often concurrently. When considering where to implement it, empathetically consider the state of the customer, and provide that extra assurance that you’re addressing their root concern.

Service Rant: Another Reason to Skip the Gym

As a way to deal with the economic downturn and an ubercompetitive local market, my gym has reduced staff. Fewer trainers, smaller cleaning crew, fewer caregivers in the nursery. Not a surprise. Staff reductions are the easy fix to aligning costs with a reduced amount of revenue.

Here’s the problem:

To cope with a reduced nursery staff, my gym implemented a policy requiring parents with infants to make an advance reservation for nursery care.

When I discovered that Saturday mornings were booked solid until my 4-month-old is a university sophomore, I expressed my displeasure with the new policy.

A little irritated, I adjusted, switching from a prime weekend morning workout to a less-crowded weekend afternoon slot.

Next, I was turned away from the gym altogether when there was inadequate staff to deliver on the promise of the care for the time slot I had pre-arranged.

Now, I’m looking for a new gym.

I’m generally tolerant. I understand that service operations are tough in the current environment, where companies have downsized and are faced with demand for their services that has both diminished and gotten much more variable.

The first strike was diminishing the service value by implementing a reservation system that made it more difficult to use their services, regimenting when I would be able to access use the facility and made me pre-arrange my weekend schedule.

The second was not realizing that Saturday & Sunday morning are prime workout times for working parents and staffing to an adequate level for that 4-hour block to accommodate everyone.

The third was not having adequate capacity to deliver on the promise of care when I needed it.

They’re not out yet, but they soon will be. Then they can try to cover their costs with even less revenue.