Apparently February is for LUV-ers.

Anyone who follows this space knows I’m a fan of Southwest marries their business model with their service ethos.

But in the February issue of Southwest Spirit, Gary Kelly misses badly in his “Gary’s Greeting” section entitled, “The Meaning of LUV”.

In it, Gary states that February is meaningful to the LUV airline, and goes on to describe what LUV means to him (apart from the airport abbreviation for Love Field and the SWA stock ticker) as:

1. LUV is going the extra mile for our customers.
2. LUV is letting bags fly free.
3. LUV is having FUN.
4. LUV is giving back to our communities.

A critical piece of corporate symbolism stands for a fiscal reward differentiator that didn’t exist as recently as two years ago? I’m hoping Gary didn’t read this before it went to press and undermined one of the more tangible brand positions in any service market. Here’s my rewrite. It may seem “too honest”, but it reflects what Southwest customers know anyway:

1. LUV is running the most operationally efficient airline in the world. Sometimes that means minor inconveniences in the execution of the experience, but we think they’re worth it. With the money we save through sound execution, we take care of the people who matter to us. We pay employees well, make money for shareholders and pass savings along to you through lower prices.

2. LUV is co-opting our customers to co-produce the service experience. We’ll go the extra mile for you, but want you to go the extra mile for us too. We’ll ask you to do more work on our behalf than anyone else will, but you’ll get cheap fares, planes that take off and arrive on time, and the occasional drink on us. We think it’s a fair exchange.

3. LUV is having FUN. You can’t work is hard as we do and not be having fun. You work hard making our shared experience successful, so we’d like you to have fun too. Our atmosphere is as casual as possible because it is the most efficient way to get things done, and we’re not particularly fond of boring people, unless they pay full fare and don’t ask for extra peanuts.

Too straightforward? Maybe, but if the Southwest culture is defined on the pillars of A Warrior Spirit, Servant’s Heart, and a Fun LUVing attitude, this seems much more consistent than suggesting that the corporate symbol stands for a value-added service they don’t happen to charge for, a differentiation the fell into as their competitors made bad decision follow bad decision.

Service Rant: Sprint Wireless

Some service companies are exceptional at making customers productive resources (Southwest) and some are not. I generally place wireless companies into the latter category.

So when I activated my wife’s new smartphone this week, I was disappointed - though not surprised - at the experience.

My intuitive first act to activate the phone was to turn it on and dial “0”, assuming that the network would recognize that the phone wasn’t active and connect me with an automated service that would help set me up.

As so often happens when I assume an intuitive service interface, I was wrong. The network recognized that my phone wasn’t activated, but rather than taking me through an activation process as I had expected, it pleasantly informed me that to activate the phone, I would need to call Sprint customer service. Of course, while I was told to contact customer service, the prompt didn’t give me the customer service phone number. I hung up, perplexed. Luckily, just before hopping online to find the customer service number, I notices a small message on the smartphone screen informing me that customer service is “*2”. Thinking I had the answer to my problem, I input *2, only to be met by my familiar autoservice voice. This time, however, it informed me that I couldn’t activate my new phone from that phone.

Bewildered at the unnecessary complexity, I called Sprint wireless from my landline, and spent the next 26 minutes with a live agent activating my phone.

It was completely inefficient interaction, needing 3 calls on my part, requiring me to have a different phone to activate the one I wanted to use, and taking almost ½ hour of live customer service time that could have been completely avoided with technology enabling the right engagement process.

Wireless companies are amongst the most criticized service experiences. As businesses, they routinely struggle to retain customers and maintain profitability. In a single interaction, there were several opportunities for the customer to serve themselves and increase success and satisfaction while decreasing cost. And that was just the first interaction.

Service innovation wears a straitjacket.

Last night I watched a rerun of Anthony Bourdain’s No Reservations Vancouver episode, drawn in by images of familiar restaurants and street corners from my 4 years living in on Vancouver Island. In the episode, he visits Sooke Harbour House, a renowned restaurant unique in its commitment to local ingredients, sourcing 95% of ingredients from within a 30 mile radius.

Bourdain makes an interesting comment to chef Ed Tuson, observing that their self-imposed straitjacket must be creatively enabling. Tuson provides an example of having to "create" coconut for a dish using shaved carrots, ginger root, flavors from petals of some local flowers and a few other ingredients.

A severe self-imposed restriction forces him to see ingredients not as they are, but in new terms of what they could combine to become.

Businesses have the ability to do the same thing.

Yesterday I wrote about how great service companies win fans by choosing one service attribute to be absolutely obsessive about. Obsessive focus on that self-identified business model driver is the same sort of obsession that Bourdain talked about using to enable creativity.

Consider Southwest, whose early obsession with minimizing gate time by turning planes in 10 minutes forced them to look at their ground operations completely differently than other airlines. When Southwest had made all the productivity improvements they could from its employees, they turned to their customers as productivity coproducers. Cattle call seating, travelers helping tidy the planes, the online check-in process, even the plug-ins and club chairs – all are intended to get travelers to help Southwest turn a plane as fast as possible.

In return for productivity gains, Southwest is willing to provide coproducer value. Southwest knows that separating the loading of luggage and travelers speeds the departure process. In return for the inconvenience of checking, they reward travelers with no fees for checked baggage. (And flights that arrive on time)

It's likely that few of these innovations and productivity gains would have been realized if they hadn't obsessed about service model to the point that it forced them to think creatively about expanding their productivity resources.

For great leaps in service innovation, embrace the obsession straitjacket to creatively look at the service model the way that those without it can't.

Obsession is a service virtue.

Businesses have their own central tendency, moving toward the mean of the market they serve.

It makes sense. Capture the largest available market by making your service as good as possible in all aspects. Communicate how good you are at everything, and gain a large enough portion of the ‘everyone’ segment to make you successful.

But a service company representing ‘everything’ can’t represent anything specific, making them average and unmemorable. Presenting its bland, median self and demanding the same of line employees, companies make it impossible to engage customers on beyond a superficial level.

Great service companies, however, are obsessed about one aspect of their business. Maniacally obsessed. To the point that any 'good' businessperson sees their behavior as going too far. What outsiders don’t grasp is that they have chosen a service aspect representing the core of the problem they want to solve for their customers, and focus all their energy on it.

Southwest obsesses about the operational efficiency involved in turning a plane, deploying every available resource to that end – technology, marketing, employees, and even customers. Wisely, they use a casual, fun environment as the mechanism to make all the work you’re doing for them tolerable.

Ritz-Carlton obsesses about the individualization of the service experience.

FedEx obsesses about time, and what it represents in terms of reliability.

Early Starbuck’s was obsessed with the in-store experience of the “American 3rd place”. Late Starbuck’s seems obsessed with quarterly numbers. The interstate is lined with Starbucks off-ramp signs, and you can buy 20 branded products in your local supermarket. The people who wanted the experience long ago ceded the territory to freelancers who don’t want to conduct business from their basements.

Service is intensely personal. It can’t represent an “average of good” and expect to be seen as exceptional by anyone. For it to be meaningful, it has to discriminate. It has to be exceptional for some, and exclude the needs of others.

Great service has to be obsessive.

Service marketing SUCCESS in 60 seconds.

Super Bowl Sunday was advertising’s biggest night (I won’t go so far as to say it was marketing’s biggest night) and while ads were memorable for a good reason, for a bad reason or worst – not memorable at all, product dominance continued in Super Bowl ads.

The US economy is 70% service-based, yet by my unofficial count, just over 40% were for services. (I included the Census ad, but excluded the NFL ads and all movie ads. An argument could be made that some or all are services, though the latter were advertising the product rather than the experience.)

If we buy more services than products, use more services than products and are more likely to work for a service company than a product company, why the disparity?

Despite our familiarity and use of services, we still have problems effectively describing them because of their intangibility. It’s easier to effectively position a product around a set of desirable attributes than convey the feeling a consumer should have after using a service. As such, Super Bowl ads are tilted toward product positioning, but they don’t have to be.

Using the SUCCESS formula from the Heath brothers, writers of Made to Stick, I had Google's "Search Stories" as the best ad of the night. The message was so Simple that the ad really could have been considered a Google brand ad rather than a plug for their core search engine service. If there is a criticism, it that little in the ad was Unexpected as it progressed in straightforward fashion. It certainly was Credible. Google played to their core strength as the owner of the market for search, a fact everyone vaguely familiar with the service need would acknowledge. It was the most Concrete ad of the night, consisting of a full product demonstration. While it didn’t have the obvious laughs that many others did, it touched on Emotion through the development of a loving relationship, told as a Story through the mechanism of iterative Google search terms.

Super Bowl ads for service companies, are rare. Good ones even more so. Sticking to the SUCCESS paradigm, with emphasis on ways services solve problems uniquely – using people and processes in an experiential environment – would make for far more meaningful, and successful, service company ads.

Nontraditional value exchange, or a plain old good time.

Services come in all shapes. Some you pay for with money, while others you pay for with effort.

The components are universal. A promise is made, enabled, and kept. Both provider and customer have a role in successful production. The service is concurrently produced and consumed. The end result is more intangible than tangible, and the customer often has to look for visible cues as to a successful outcome.

Brainzooming’s Mike Brown asked me to participate in his hosted #BZBowl yesterday – a twitter-enabled live analysis of Super Bowl XLIV ads from a group of seasoned marketing, branding, and social media observers.

Being “more Bud than Bowl” as Mike puts it, I was happy to participate in what was one of the more pleasant service experiences I’ve had in my still brief venture into social media.

Mike’s event – his semi-public service – promised an opportunity to connect with some like-minded people, expand my network, share with them and learn from their perspectives on big-event marketing, branding and social media. Twitter and the Brainzooming site enabled what was a lively and engaging (not to mention exhausting) discussion about the Super Bowl ads as they appeared. Each of us involved produced commentary as we consumed both the ads and each other’s commentary. My takeaways – the value that I received - were unbelievably rich, having met an enormous number of like-minded marketing professionals in a very short period of time and learned from their collective perspective & experience.

Though a nontraditional exchange of value, Brainzooming promised everyone involved an opportunity to reach beyond their existing network in a fun environment and learn from the marketing perspectives of others. With the co-production effort of everyone involved, it was a tremendous success.

Social media-enabled business is making this type of exchange not only more valuable to businesses and individuals that use them, but much more common.

Does your marketing find high-performing customers?

Social media is making a long-standing marketing deficiency much more evident.

The objective of most corporate marketing departments has long been in getting more customers. Find a customer (segmented or not – you can always “fit” them to a segment later), make them aware of your offering, promote or incent trial, convert to a regular user, and work on increasing share of wallet.

Not nearly enough attention is paid to marketing that ensures a prospective customer will be presented with a offering that is right for them, or that they will be a right fit - a successful, and yes, productive, user of a company’s services.

With customer-company engagement ever more enabled by social media, poor company-customer matches stick out like a sore thumb, and marketing will be held accountable.

Service businesses – all of them – require the customer to fulfill a role as co-producer of a successful outcome.

All those role-related issues your marketing currently ignores – how difficult it is for the customer to learn their role, how much time you spend educating them, how willing are they to accept their role – today come back as frustration that your customer service or service operations organization sees firsthand. Your marketing research may have a sense of where these deficiencies reside in your organization.

Social media is changing that for good, and quickly. Poor customer performers – those unwilling or unable to be productive resources, those that do not contribute to service quality – are going to make themselves known. The court of public opinion will find you at fault for lousy service, when in truth you may have been providing outstanding service to someone who didn't fit your service model.

More focus than ever is coming to the quality of the customer fit that marketing produces. It is not a volume game anymore, so much as it is a value game.

The truth is that it always has been.

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.

Rumors of demise, once again exaggerated.

A great interview with Henry Blodget of The Business Insider on the New York Times’ conversion to a modified paywall for their online news service.



Much has been written about the death of the print news industry. (Enough that it makes me wonder if it would have been as well covered if it were impacting, say, teachers, rather than journalists.)

While the final outcomes remain to be seen, I’m more interested in how the New York Times is shifting their business model around their product / service mix to retain value in the offering:

Most of the value in the tangible good, the newspaper itself, is going or gone. The tangible product was only ever a source of value for a few, and those customers will continue to buy print versions of anything as long as they can.

The content is also a good, and while it’s value is somewhat diminished due to the ubiquity of free content via the web, there is still value in quality content, or at least content a specific audience perceives has higher quality than what they get elsewhere. The New York Times has the benefit of both, as do a handful of other print publications. (The Wall Street Journal, The Economist, The Washington Post have proven this as their subscriber base has actually increased through this period)

Where it gets really interesting is in the less tangible, service aspects of the offering.

The value that comes from conveying knowledge through information still exsists. It may be somewhat diminished because of free content, but again, the quality content is still a source of value overall, and particularly for the dedicated core.

The value to advertisers may not be diminished at all, as they get high-quality, segmented impressions from the loyal subscriber base, and large volumes of eyeballs from the casual readership. As quality content is often a reference point, they may find advertiser value actually grows as more sites point back to them as a proovider of quaity content.

It is the value in the delivery aspect of the service (that makes the content or physical good available & timely) that is most diminished. Internet delivery is much easier to execute and done in near-to-real time. On the flip side, the cost of physical delivery is also removed, making the distribution model efficiencies available to the New York Times every bit as much as they are to an Internet-only publication. With little incremental cost to distribution, this may turn out to be a long run advantage, if a distribution network with a wider range can built on the backbone of their quality content.

Only time will tell whether this is the right strategy for The New York Times. It wouldn’t likely be for a number of their lesser peers.

Still, good service businesses (or good anything businesses) will continue to thrive by knowing their customer & the value they provide through their offering. By using the components of the services and products they provide to make a promise that is based on that value, and consistently keeping it.

Follow-up: 2% additional effort, 100% customer impact

I’ve had a good run to start 2010. Or rather, the businesses I regularly interact with have, following up on recent transactions or past relationships, generally making me feel like a valued customer.

Of course, the company providing solid follow-up is usually the one that also provides the best service experience, hence (usually) the one I choose for an enduring relationship anyway, but the attention has been nice. Maybe 2010 will be the year business recognizes service as the critical differentiator after all.

Follow-up, inconsequential as it might seem as a service behavior, is one people pay for.

It improves assurance feelings by closing the loop on open interactions or by giving customers a feeling that a business is ‘thinking’ about them when not actively engaged in taking their money. It demonstrates empathy in recognizing how a customer would like to be treated and fulfilling that promise. Over time, it improves the perceptions of reliability, setting lasting expectations for a customer on how interactions are going to be handled. (This can be a burden also - if Nordstrom were to stop their regular and post-transaction follow-up, I'd definitely notice and see it as a dissatisfier.)

We all know of individuals in organizations who provide outstanding follow-up, and most of us can name a few organizations that have been able to institutionalize it in a “follow-up culture”. As much as follow-up works on an individual level, it is much more powerful institutionalized as a brand statement or part of the organizational culture.

So why do so few companies engage in systematic, organization-wide follow-up?

Follow up doesn’t have to be expensive. Sure, at the top end, it can be a completely CRM-enabled function, with all the capabilities to never miss an interaction opportunity. Still I’ve seen plenty of companies with expensive CRM packages fail on executing responses to unresolved service issues.

Truthfully, it can be as simple as the time to write an email or make a phone call, the card stock for a handwritten note and a business card, a 140 character tweet.

The investment comes in the form of a culture that fosters proper follow-up. The service orientation, the proper organizational / managerial support, tools, and time. It takes a willingness to step away from “measured behavior” - time spent on concrete operational tasks - and allocate it to fuzzier relationship-building.

Like most service, the tools can be relatively simple. It is the cultural orientation that is the barrier between average commodity interactions and those that are reinforced by positive follow-up.

Service Rant: January at the Gym

January at the gym – the month where “resolutioners” – those people who make the promise to get back in shape, commit to a healthier lifestyle, eat better, etc. for the coming year – come to the gym in droves on newly purchased or gift memberships.

It happens every year, and it makes January is a capacity disaster at the gym.

Lines are stacked 3-deep at many machines with people waiting for a turn. Personal trainers and nursery slots are booked weeks in advance, and you have to palm the cleaning staff a fiver to find an open treadmill. The gym becomes a mixture of expert and novice users, with the former waiting while the latter read machine instructions for proper technique.

Because it happens every year, the gym’s annual unpreparedness is inexcusable.

I’m not saying the temporary increased interest in fitness is a negative. If more people made the commitment and stuck with it, our country would be healthier, lives would be saved, healthcare costs would decrease, and all manner of positive societal benefits would ensue. But the truth is, that most of the resolutioners will be gone by the time the calendar turns to February, and the gym has to shoulder some of the blame for it.

If they wanted to keep the new clientele, they’d make it more attractive for them to stay. Dedicate capacity to the new users to show them how hassle-free gym services are the other 11 months of the year. Deploy more instructors to shepherd new clients through their first few trips. If permanent staff is fully allocated, they could get creative and use a compatibility service to assign a current power user customer to a guide the “newbie” on how best to use the services. They wouldn’t act as a trainer, but someone who can give helpful tips on when to go, how to use the extended services, general etiquette, and so forth. It could be a reinforcing relationship for each party, and at the least would make someone new find what can be an elitist environment more comfortable. If the current user needs motivation for their time, offer something – training sessions, tanning sessions, free protein shakes for a month – for their troubles.

At the same time, create capacity to serve all clientele. Consider taking loyal customers out of the gym – arrange for an alternate facility, or better, a loyalty experience such as a series of hosted events – a hike or climb, ski trip, a members’ triathlon, an adventure race – something that rewards the most loyal clients for their loyalty and gets them offsite in January. For those that stay and put up with the wait on machines, reward them with free training sessions (AKA a free service trial for a potential future stream of revenue) in December or February as a thank you for their patience.

My gym – and most I’ve ever used - manages the annual January capacity shortage awfully, and deteriorates relationships universally, frustrating loyal customers while alienating new ones. It all sorts itself out when most of the new customers cease using gym services, and a few of the frustrated loyal customers change gyms, and capacity turns to normal. But it doesn’t have to. The gym could use the capacity shortfall creatively to reward loyal customers, welcome new clients with positive first experiences and customer-to-customer interactions. Of course, customer retention would create an ongoing capacity problem, and then the gym would have to deal with more revenue, profits, need for expansion, and other such successful business headaches.

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?

Does your supply chain know what promises your brand is making?

A friend who knows me well gifted me a new service experience this holiday season.

He’d been telling me for some time about Bonobos, his favorite online men’s apparel retailer. While he was always pleased with the pants he’d ordered, it was their service that had won him as a long-term loyal customer. Early in his relationship with them, he’d had to return a pair, and was pleased at the ease and absence of cost of the return transaction.

Excited, I hit the site, ready for my service experience.

The first thing I noticed was their product line: few SKUs, simply arranged with mostly terrific classic styles, but a with some that offer much more flair than I’m used to wearing. As to the return process my friend had employed, Bonobos uses it directly as a positive experience tool, stating on the home page, “Any pant, any time, any reason. We'll pay for standard shipping both ways.” An acknowledgment that a certain amount of returns are expected in order to provide satisfaction on final delivery. Here they also set the expectation that the pants will be long and will likely need to be hemmed, and explain that it is more important

The next thing I found: They’re stocked out. Of almost everything. The site offered me the opportunity for one of their employees, (presumably customer service, though they go by the expectation-creating title of “Ninja”), to contact me when the product(s) I’m looking for come in.

I also noticed that their marketing is designed to be completely permission-based, and they structurally reward customers with savings opportunities for positive word-of-mouth. High marks for both activities.

I emailed the ninjas about their out-of-stock situation, and almost immediately I got a response from one of the ninja managers, essentially apologizing for their popularity and offering to inform me when what I want arrives in stock.

An exceptional service experience?

They're anticipatory in setting up-front expectations, make the experience simple for the user and are quick with an empathetic, personalized response. Those are core aspects of a tremendous service experience. So is day-to-day reliability. I’m also looking for fulfillment of the promise, and understanding and using your service supply chain is critical to creating consistency in the experience that creates a lasting brand impression. Even though I got what I was looking for, and will likely be a happy first-time and repeat customer, with so much out of stock, my experience had overtones of having had to settle.

Not likely what Bonobos intends as a business otherwise thoughtful about their experience and attuned to service and their customers.

(Personal Interest + Emotional Tie) x Simple Execution = Memorable Experience

Memorable service experiences happen when someone satisfies an emotionally-intense personal interest with in a unique way. 20x200, with the simple mission of providing art for everyone via a simple internet distribution, qualifies - at least for me.

I love great art, but my limitations are those of many: I appreciate it when I see it, but I don’t often have the time to look for it. When I do happen upon it, what I find is often out of my spending range for something so completely discretionary.

20x200 offers a simple formula for selling limited edition art prints online: only a couple features per week so as not to overwhelm, provided in three sizes with three corresponding price points. The smallest is a 200-edition run of a $20 print, and works up to a 2-edition run of a $2,000 print.

What ties my interest to an emotional trigger is a personal feeling that art, like design, has become elitist, counter to the idea great design makes the underlying good – product or service – more accessible rather than less. (Universal accessibility is as much what makes the iPod an iconic as the usefulness & simplicity of the interface.) Building from the beautifully simple motto “(limited editions x low prices) + the internet = art for everyone”, 20x200 embraces accessibility of art wholeheartedly.

Many online retail sites that could satisfy my personal interest in affordable art. 20x200 is a memorable experience by doing so while helping me easily find something I’m interested in, make it accessible, and link their mission to an personally held belief.

Apparently, it's the contract.

Verizon Wireless is defending the implementation of a $350 “early termination” fee for customers who purchase smartphones and switch service providers before the end of the agreement, explaining that the fee covers the costs and the risks of providing high speed internet.

I understand their perspective. All wireless providers have dramatically reduced the cost of phones and other devices to attract customers and get entice them to sign long-term service agreements. The service philosophy in play is that the cost to serve an existing customer is dramatically less than the cost to acquire a new one, and with a contract, they can count on users as a reliable stream. They get frustrated when this strategy is short-circuited by customers who aren’t as loyal as they would hope, leaving the provider without penalty for a better deal, better service or both.

Instead of customer behavior that needs adjusting through penalty, perhaps it is their retention model that needs correction. Rather than using contractual verbiage and fiscal penalty to retain customers, why not use outstanding service supported by compelling products to make people want to stay?

The strategy of holding a consumer to a contract is tough to enforce at the best of times, and it’s difficult to start charging for something that previously came free.

More suspect is the logic that justifies signing a client to a contract for service and holding them to their obligation not to defect, while not performing their own end of the agreement to provide a quality service. Effective service agreements (and client relationships) tend to work in both directions. If the company isn’t providing service levels customers expected when they entered into the service agreement, customer defection should be facilitated, rather than restricted.

If their ad claims are accurate, Verizon would have little to worry about.

Where is our Gift-Giving Pandora?

Gift cards have increased popularity as a holiday shopping alternative because they improve satisfaction on both ends of the vast majority of gift-giving experiences.

Immensely portable or even virtual, they reduce a giver’s search costs to almost zero. More importantly, they allow the giver to fulfill their desire (or social requirement) to give a gift while relieving them of the increased anxiety over having potentially given a bad gift, or even a suboptimal gift, as it transfers most of the burden of choice to the receiver.

Gift cards improve the satisfaction on the receiver end as they provide the receiver some personal choice over the gift, while allowing them an additional pleasurable service experience as they engage in shopping with treating themselves as the goal.

Traditionalists see gift cards as impersonal, which, to some extent, they are, but they're used so frequently because in a majority of cases, traditional gift giving is an inefficient activity requiring scads of time and providing suboptimal satisfaction results.

Before I’m chastised for that last sentence let me defend that I know it’s the thought that counts. But why can’t the thought and the result be equally exceptional?

Where is our Pandora for giftgiving? We can’t be far away. Between facebook updates, Foursquare mentions, tweets, LinkedIn networks, contacts and reading lists, Amazon and other sites’ compiled wishlists, we’re aggregating enough data points on ourselves to create a personal preference profile that will spit out timely, relevant gift choices and link people to a retail experience to obtain them. The music genome project attempted to “capture the essence of music at the fundamental level" using about 400 basic attributes to describe songs and an algorithm to organize them. I love Pandora because it takes what I know and suggests similar relevant material – some of which I know and some I don’t.

Surely we’re at the stage where there are enough data points on each of us in the social networking, online and offline retailing spheres to compile our personal preferences and do the same.

The Most Wonderful(ly Exhausting) Time of the Year

The holidays are busy for service businesses. People spend more time out of their homes rushing between appointments and finishing to-do lists. Engaging more frequently in retail experiences, but also in other service that support their schedules and social calendars – haircuts, dry cleaning and babysitting for holiday events, coffee & restaurants for refueling on the go, air travel – the list goes on.

It surprises me there aren’t more services designed specifically for the mega-event the holidays have become, catering to weary people as they as they get busier and have to contend with too many activities, too little time, and throngs of additional traffic everywhere they go.

My gym nursery has a “drop & shop” service for parents that need to shop for gifts away from the inquisitive eyes of their kids. Personally, I envision scores of 4-year-olds already hopped up on holiday candy turning into a Lord of The Flies re-enactment, but this is exactly the sort of service that I’m talking about to give just a little time and space to someone at the busiest time of the year.

Most malls & major department stores have a gift wrapping service, but how about a porter (a gift valet?) to shuttle purchases to my car as I make them. Extending the delivery angle, a service that takes my shopping from multiple places and aggregates a delivery at my home? (if ever a viable grocery delivery business were to launch, the holidays would provide the delivery density needed more than any other time.) How about a personal holiday concierge that acts as back office support for the holiday project, arranging schedules, picking up groceries & drycleaning, and acting as a temporary domestic personal assistant?

Perhaps this is just wishful thinking from someone caught in the same time trap we all face this time of year. Businesses do well during the holidays as people increase their use product and service companies alike, but is there an opportunity to make the time & effort of consumption easier on people as they engage in the production of the major domestic event of the year?

What your self-service technology says about your business.

An automated call directory experience from a company with which I’m about to begin a business relationship:

Press 1 to speak with someone in sales
Press 2 to for customer support
Press 3 to leave a message
Press 4 to dial your party by name.
Press 5 for the operator

So…you’re most interested in selling me something. If I’m not willing to be sold today and I don’t have a service problem, you’d prefer I leave a message for someone to get back with me.

Every touchpoint sets customer expectations for the service they receive. They indicate to customers, suppliers and partner what the organization is focused on and point towards their overall quality as a business.

Without ever having had a business interaction, this company told me they were more interested in taking my money than serving me, would rather I leave a message than conduct a live service interaction.

If they’re exceptional, they might recover, but the expectation has been set. For now, I’m just glad I’m not paying the bill on this one.

A service-recovered customer tells how many people?

Imagine you screwed up your most important business day of the year by shutting your customers out of your store at the time their demand was at its highest. That’s what Cyber Monday is to retailers, and that’s what outdoor apparel retailer MooseJaw did yesterday, when its “5X Rewards” promotion brought the entire site down.

Effective service recovery acts quickly, admits the mistake and acknowledges the appropriate level of consumer hardship, and presents a fair resolution to fix the problem. Going a step beyond is the company that makes a customer a little more than whole for their troubles.

Here’s MooseJaw CEO Harvey Kanter hitting all three. I didn't shop MooseJaw yesterday, but I'm in their database, and I got the email.

At Moosejaw, we're committed to making shopping as much fun as backpacking the Chilkoot trail or playing red rover. This morning, we didn't live up to that commitment when our site went down due to problems caused by our 5X Rewards Promo and high traffic volume.

Long story short, we've fixed the issue by removing the promo code. Now anyone who checks out WITHOUT entering a promo code will get the 5 Times Rewards Points when we process the order. The deal is still good until midnight PST, so if you missed it earlier today, there's still time.

Love the madness,
Harvey Kanter, CEO
Moosejaw

The paradox in service recovery holds that a customer well recovered from a failure is often more loyal than a customer that never had a failure in the first place.

It’s likely that MooseJaw lost a lot of revenue yesterday, but by correcting quickly and removing the requirement of the promo code in order to receive the benefit, hopefully they gained a few more loyal followers.

Where's the Loyalty on Black Friday?

From a services perspective, Black Friday is a tremendous loyalty creating / loyalty disrupting exercise. Companies lower margins and spend madly on advertising to induce trial from all customers, whether they’re loyal patrons or whether they’ve never passed through the doors before. Yet financial promises – the killer deal with a ticking clock – are the weakest form of linkage between a company & its customers. Like many, I hit Walmart with the precision and timing of a military operation. I checked my list off for nieces & nephews, bought nothing extra, and got out alive.

I also stopped at Nordstrom yesterday, though not because they had a once-in-a-calendar-year sale going on (they didn’t). Unlike the stores hit early, Nordstrom has developed a social bond, or relationship, with me. Kevin in the men’s department sends me a quick note when a new line comes in or when there is a sale, though there was no prompt for yesterday’s visit. I didn’t follow a script for this visit, but generally found what I was looking for, paid full price and still went away happy.

Going beyond social bonds, some retailers offer customization of the service experience. Some modify the experience through special “members-only” events where the store is open to serve the best / most loyal customers.

On Black Friday, the masses of customers are looking for a deal, and the transaction volume created through financial incentives rule. But these are temporary ties to a customer, until the next deal comes along.

I’m surprised more companies – the ones that can’t compete with Wal-Mart on price for the other 364 days of the year – don’t put effort into events taking advantage of stronger ties (with more margin) through relationship events or customized service experiences for loyal customers.

Recession Over? Check the Customer Satisfaction Index.

Most economists & business pundits agree that we’re slowly emerging from the current economic downturn, but that the turnaround won’t really accelerate until the consumer spending that comprises about 70% of GDP returns.

They suggest the reason for the reluctance of the consumer is the perceived frailty of the turnaround – jobs are still being lost, the housing market is still in a funk and equity markets are still not performing to pre-recession levels – but that once feel perceive security in their job, their home and their 401k, they’ll start spending again.

I’ll suggest an additional reason consumers have been slow to resume spending: a decrease in satisfaction with how companies treat their customer relationships.

There’s a perceived lack of equity & fairness in the customer-business relationship. Many don’t trust government (the dollar-for-dollar most expensive service we use) or financial institutions on Wall Street responsible for enabling economic growth through responsible lending. We’re suing our banks over credit card practices and ancillary service fees, and we don’t believe our news sources are representing anything other than a profit objective.

Particularly critical in service businesses, where customers give information and effort of themselves in the relationship, the public won’t resume full consumption until faith has been restored that they are not being taken advantage of by companies they trust with their time, effort and money.

The American Customer Service Index reporting satisfaction with financial services providers won’t come out until February. While it was trending downward in 2008, we could expect to see a greater decline in 2009 as twelve months of bank bailouts, suits over overdraft fees and the CARD Act are factored in.

Equity & fairness are basic requirements of the service companies we use. If we don’t feel we can trust our banks, healthcare providers, news networks, and government, we’ll choose not to consume beyond the basic requirement.

The consumer is the key to the turnaround, but to a greater extent than currently thought. While we’re investing as taxpayers in everything from financial institution to auto makers, business should also be investing in activities that result in customer satisfaction, starting with transparency, equity & fairness.

Arguing over “Adequate”

I don’t know which seems sillier – Verizon launching their national holiday ad campaign differentiating on the strength of a table-stakes service attribute, or AT&T going to the trouble to sue them over their representation of it.

Verizon is actively promoting their nationwide 3G coverage and pointing out a perceived weakness in the 3G coverage of AT&T, who has sued them in response, claiming “their use of white space in their advertisements misleads people into thinking that AT&T offers no coverage in most of the country."

Does any of this really matter?

Plotted against population density, the two networks are within percentage points of each other in terms of coverage.

Further, “coverage” isn’t a service delighter, or even representative of customers’ desired service. It’s an indicator of available service alternatives, or an identifier of adequate levels of service. If you have the coverage, you’re in the consideration set. If you don’t, you’re not. The more alternatives customers have, the higher the level of expected service.

For most consumers, this conversation is about nothing.

It’s easy for network-based services (airlines, cable, shipping, telecom) to focus on coverage, mostly because it is operational and tangible.

But of all the complaints people have about their wireless service providers, 3G coverage represents a minority. Follow either Verizon or AT&T on Twitter for half a day, and you’ll get an idea of how important 3G coverage is to consumers, compared to the themes of my phone doesn’t work / I can’t get the plan I want / my bill is never correct / I can never get through to a customer service agent that can fix my problems. I have yet to see, “I’m in the Tetons, and can’t get 3G coverage!”

By focusing on network coverage, Verizon & AT&T neglect the service their customers desire, and focus on who is doing a better job delivering on what is adequate. When adequate is the goal, I don’t wonder why churn rates in telecom are among the highest in any industry.

Who is developing the innovation you won't?

The only time most of us interact with our energy service providers is during the monthly billing cycle, though they have the ability to engage us more often using their knowledge – both of how energy is used and of our historical use of it – to offer tips on how to conserve energy, improve the survival chances of the planet and save money.

Mine has made some strides toward adding value beyond their core offering by helping turn the mountain of my personal usage data they maintain into useful information to help me understand and lower my energy costs. The functionality of their tools is a long way from what I desire or expect, consisting mostly of calculators that estimate usage based on my profile and compare it to mean users, while feeding me factoids I could generally get from reading my bill.

Their delayed action on service innovation lost them the advantage of the industry expert incumbent holding all the consumer usage data. (no small feat)

Two tech applications powerhouses have entered the market for virtual energy monitoring. Google PowerMeter is still in development stage, but looks to be a simple platform for collecting and sharing personal energy information. MicroSoft Hohm has energy company-provided usage information and smart sensors feeding a consumer’s Quicken-like energy management interface.
Because legacy service providers don’t know the emerging needs of their market, haven’t maintained innovation capabilities and got comfortable with their well-bunkered margins, they let companies who don’t know their industry innovate for them on their own terms.

The market need will get fulfilled, but I’d bet the Google & Microsoft apps are better, more quickly than what the energy companies ultimately produce. Companies that complain that their customers see them as a commodity seldom realize the extent to which they act like them.

Amazon: more reliable than a letter to Santa

Spent some time last night creating my 4-year-old’s Amazon holiday wish list for the out-of-country grandparents. For a family of expats, the combination of wishlists, universality of ecommerce, and the emergence of inexpensive / free shipping has been a lifesaver for people who care about us but can’t be with us for every holiday.

It got me thinking, however, about what a lifesaver wishlists are in general.

The holiday gift-giving traditionalists will say that wishlists are almost the copout that gift cards are. (and they’re right, to some extent)

Shopping for someone else intensifies every aspect of the retail experience, particularly for a major holiday event or a birthday. In these cases, our expectations as customers are reflective of the expectations of the people we are shopping for. We want the experience to go flawlessly, not only because we want the object of our gifting to be satisfied, but because the result of the service is a reflection on us as well.

Holiday shopping isn’t the only place this happens. Think of taking an out-of-town friend to your favorite restaurant and how heightened you are to every aspect of the service. Satisfaction and loyalty payoff in these situations is more that 1:1, as you get to satisfy two parties, one where the service expectations are at their highest.

More experiences than we realize are subject to these sort of heightened service sensitivities, driven by the expectations and perceptions of another customer present or downstream.

Much of Amazon’s success owes to consideration of the full consumer experience in the online retail environment. With service-enabling technology, they've solved problems of customer understanding that few retailers can in a bricks & mortar setting. The wishlist goes a step further, considering parties beyond the active consumer experience, using their input to improve the success of other customers’ retail experiences at the very time they have heightened expectations.

So many other service businesses would be benefited by taking a likewise step beyond the customer in front of us, to understand downstream consumers and others depending on the product of the service transaction currently taking place.

Score one for un-planning

I had my first taste of Chicago’s famous Manny’s Deli earlier this week. Proof positive that a service experience doesn’t have to be overly planned and positioned in order to be successful.

In simplest terms, if you know a customer you want to serve, create an experience they find compelling and execute consistently at a high level, people pay attention, and you will develop a following.

Manny’s provides high quality deli fare with deep Jewish roots in irreplicable atmosphere to the Chicago lunch crowd – from blue-collar to politico alike. If you don’t believe they are artisans, Google “Manny’s Deli” & see what comes up. From their website, “At Manny's you don't diet. You don't snack. You don't nosh. You come to this landmark lunchroom to pile your tray high and eat like there's no tomorrow.” They’ve been so focused on their target, it took more than 6 decades to open for dinner.

The bricks & mortar could be replicated. Melamine, formica and laminate aren’t hard to come by, even in 2009. But the atmosphere couldn’t be recreated anywhere. The staff (Manny’s is a 4th generation family business.) knows their clientele from decades of interactions. Even if you’re a newbie, they know why you’re there. The customer-to-customer interaction is great, everyone in a better mood because of where they’re eating.

It’s possible they’ve never had a planning session. Never touchpoint-mapped their customer experience, never ideated around core purpose and vision or what the organization needs to look like in 3-to-5 years.

Maybe they have by now. The website is professionally done, they’re active in social media, and they serve customer-fans by shipping nationwide. But they didn’t become a local and national landmark through countless hours spent in service development and market planning.

They did it though dedication to solid service fundamentals. Making a service promise that people found attractive, making the promise available, and delivering on it every day, for almost 70 years.

It’s that easy. And that difficult.

My Mistake, Your Problem.

What is an airline to do when someone ruins their experice for them.

The flight my spouse came home on was early, and I was late to the airport to pick up my exasperated wife and our beyond-tired 8 month-old. Reliability is equal parts precision and accuracy – it’s consistently doing what you say you are going to do. An early flight can be as bad as a late one.

I didn’t check the flight status from my smartphone, relying instead on an web update before after I had left the house for the day.

As part of my familial service recovery, I investigated what my actual options would be for future cases.

Of course, I can ask for flight status via the web, cell, PDA. These methods are all passive, as though the airlines are saying, “We’ll tell you if our flights are running late, but only if you ask us.”

I also could have subscribed to travel alerts. Or rather, my wife could have…well in advance.

With Northwest, you can subscribe to receive texts & emails of flight schedule changes as they happen. The downside is that you have to be a loyalty program member. You can then adjust your account settings to receive updates on your flights, and you can include someone else in your profile to receive them as well. (of course, I did not tell my wife it was her fault for not being a Skymiles member and not having signed me up to receive updates)

Here’s where holistic mapping of the experience would help.

I wasn’t either the paying customer or the service provider, but I had an impact on the experience. The service outcome was a failure, but the actions of a complete outsider to the encounter caused the negative reflection on the performance of the airline.

When looking at the service moments-of-truth where satisfaction or dissatisfaction occur, you often have to look beyond where your part in the service provision starts and ends. Include the actions of customers - and sometimes people not directly involved in the service at all - that need to use the product of your service to dowork of their own.

Several of these things are not like the others.

Last month, I posted on Children’s Mercy Hospital and how they effectively used the physical environment to create expectations, facilitate the service exchange and differentiate it from other care experiences.

Yesterday, I had the opportunity to visit a specialist clinic considered a branch location of the hospital.

Great care once again, but a completely different experience.

The physical environment of the main location was not nearly as evident as it was the main hospital. Though partly due to working out of a leased space vs. the owned environment sculpted to fit the strategic service vision, the effect was evident throughout. The staff was not visibly oriented to perform child health care, making it feel like a regular, every day clinic.

Providing consistency in service experiences is tough. Operating from multiple locations makes it even more difficult, adding differences in the experience from location to location. Even if the quality of outcomes is consistently high, an inconsistent experience diminishes the reliability of the brand promise.

To combat the effect that location-to-location differences have, the “keep it simple” mantra works well.

If the experience is going to be managed centrally, focus on replicable aspects. Standardize core service processes, while giving front line service employees the ability to work outside process to stay true to the spirit of the service. Create uniformity of the service philosophy through how internal service providers, performance measurement and front-line hiring principles, and consistent internal brand messaging. Where service-enabling technology is used, implement system-wide.

There was no outcome failure. The care given by the branch of CMH was consistently exceptional, but because the location had less focus on the unique needs of the child customer than the main branch, I left with a diminished opinion and future expectation of the brand.

If you love your customers, set them free.

LinkedIn and Twitter, two social media platforms I use to maintain professional networks and develop personal brand, have announced they will now have cross-platform connectivity for users. For now limited to the status update functionality, it is reasonable to assume that eventually, LinkedIn contacts and Twitter followers could be easily converted between platforms.

Both networks are immensely valuable to their users, and this development was embraced by users that now have an easier time doing business with both service platforms .

Service integration, driven by technology, is creating possibilities to improve experiences across the spectrum of B2B and B2C services. Driving this wave of innovation is the depth of engagement of the individual, enabling companies to provide better service than ever before based on an ever expanding understanding of customer needs and an equally expanding capacity to serve them. Like with the marriage of LinkedIn and Twitter, customers’ transaction costs are reduced and they become better performers of their service role.

But the new technology is also freeing. As more services are linked together, the customer becomes more portable, easier to migrate between businesses. Switching costs are reduced to the point where customers can leave as easily as they arrived.

The old mantra was to make your product or service as sticky as possible - that a customer captive to high switching costs was ideal. This notion is now challenged by the idea that the best way to keep customer is to provide more network value by linking them to as many complementary services as possible.

To the old guard of business, a scary notion. They can envision a mass exodus of customers to their age-old competitors.

Truth told, the only companies that have anything to be scared of are the ones who aren’t providing market value or better, and for the first time face the risk of their customers finding out.

Just give the kid a toy already.

In any child-oriented service experience where the objective is repeat business, the service provider should give their child-customers some tangible evidence of the positive experience.

It doesn’t have to be expensive – just a small token that prolongs the experience by making it tangible once the child is out of context and serving as a memory trigger of a positive experience.

Many companies providing service experiences for children line their walls with merchandise and wouldn’t think of giving anything away. I can almost hear them rationalizing that “It would interfere with their merchandise sales and suboptimize revenue from the retail side of the house.”

Chuck E Cheese gets this concept, as every child leaves with something. Something of nominal value, to be sure, but a reminder doesn’t have to be expensive. Even the dentist hands out a lollypop at the end of a checkup.

Too many companies miss this easy opportunity to create repeat business in young customers. Experiences that have separate service and retail operations (themed restaurants, child hair salons) are the worst. It would take almost nothing in incremental cost to add a memory device to extend the experience and provide a positive reminder.

A child won’t want to come back if they can’t remember how much fun it was to be there in the first place.

Are you ready for your customers to be your Marketing Dept?

In a service design group Slideshare presentation posted by UK design group Engine, I read the following line:

"The service economy is here, but it's just not very well designed yet."

True, but it’s quickly becoming an understatement.

Sure the service economy is here. >70% of GDP is represented by services. Even in product-based businesses, service and services are the differentiators that separate category leaders from the commoditized also-rans.

Here’s where I’d go farther.

In a service economy enabled by the connectivity of social media, companies need to put the best marketing tools in the hands of front line service employees AND customers themselves in order to prosper.

Unique to services is that the line of production also serves as a company’s primary marketers. The faces providing the service experience are the face of the brand. And because the “product” is intangible, customers’ only reference is the feeling they were left with after having used a service. What they say to others will be determined by the outcome of the service and how they were treated while receiving it.

Social media has connected us all. It has it enabled a greater depth of interaction between companies and the customer they serve, and a MUCH greater connectivity between past and prospective users of your service.

Instead of allocating marketing budgets to all of the traditional activities, companies need to be spending time, effort and capital on putting the best marketing tools in the hands of the people best suited to market the service - front line service employees and customers themselves.

The Importance of the Professors at Southwest U

The Southwest agent I spoke with at check-in today had just returned from a week’s worth of training in Dallas.

I asked her (and her more experienced peer also helping me) about the LUV-fest. Specifically, what immersion into the Southwest culture looked like.

Interestingly, they didn’t give much detail about the training itself, mentioning only that the environment was fun but VERY fast paced. What they did go into detail about was the role that leadership played in their indoctrination. Specifically, that Herb and Gary were all over the training sessions, and that Colleen was present as well. Even more interesting was that they mentioned Founder Herb Kelleher, CEO Gary Kelly and former President Colleen Barrett by first name, as though there was no doubt that I would know exactly who they were talking about – which, of course, was a correct assumption.

The agent that has seen more service also mentioned that she had multiple instances where Herb and Gary had hopped behind the agent desk to help move luggage at check-in and board passengers at the gate.

Service businesses are distinct from their product counterparts because they are fundamentally represented by people, working with a process and supported by technology, to serve other people.

In no other business are the business aspects of customer orientation, quality and engagement of the employee workforce as important.

Southwest does this as well as anyone in a big company setting, and it starts with the way senior leaders approach the business and the employees. Watching Colleen speak on servant leadership, it is no wonder that at any given time, Southwest has 10,000 pilot resumes on file.



They have the best employees because good people want to work there. Good people perpetuate good service, leading to good performance, which attracts more good people.

Easy, right?

TSA could be better, but so could their customers

I feel for the TSA and the service workers charged with providing a very important service in a difficult environment.

While as a service the TSA has its flaws, we’re not very good consumers of their services either. We don’t play our roles, or worse, actively try to subvert theirs. Travelers present some of the least high performing customers in any service environment.

The TSA could do themselves a favor by improving the physical environment where their service is performed.

We’ve figured out how to put advertising in the bottom of bins, but we can’t get people to put their shoes on the belt. Instead of the hopeless voice shouting over the din of travelers, why not paint outlines of a pair of shoes every few feet on the conveyor? Stencil, “place shoes here” if you have to.

TSA area signage generally consists of letter-sized memos topping waist-high rope-posts while the surrounding walls are covered in giant back-lit ads for consulting services. Bring the signage to eye level, make it larger, make the messages shorter. Even better - work with the airport to reclaim some ad space in order to improve service operations with really effective signage.

The metal detector alarms are too unobtrusive, and too kind to offenders. Why not switch out the generic alarm sound with something intentionally embarrassing, such as, “I still have metal,” repeated over and over. After a few embarrassing moments, people would conform.

The TSA has a great website geared towards preparing travelers for airport security, and they’re all over social media. This is great, but while most travelers go online for boarding passes, they’re not planning their trip through security.

For the most impactful results, TSA has some major work to do in understanding and improving their physical environment’s ability to convey the customers’ roles more effectively than they do today.

We know you have to follow a script, and we do not appreciate your apathetic delivery

Most airlines seem to spend much of their innovation effort actively undifferentiating their service, me-tooing every good idea anyone in the industry has. (Most of which – over the last 20 years at least – have originated from Southwest)

Today’s example: It seems everyone has co-opted a version of the phrase, “We know you have a choice of airlines when you fly, and we want to thank you for flying with (us).”

It was novel when we first heard it, but in replication, the effect has worn off.

The phrase itself has become a negative, partly because the deliveries are almost undistinguishable, and partly because we can associate poor air travel service experiences with the lifeless delivery of this now-hackneyed line.

If you’re going to thank customers for being with you, it HAS to be heartfelt, and it should feel different from everyone else who does it.

On some Southwest flights, flight attendants sing their appreciation. Sometimes good, sometimes awful, it at least shows that they feel strongly enough to not do it by rote.

Thank you doesn’t have to be said at the end of the flight. Midwest makes cookies as their calling card. They could say during the inflight service, “We like you so much, we baked you cookies”. Different, but the message gets across.

Airlines could visibly reward passengers randomly. “We love all of you, but we’re going to buy everybody in row 12 a beer today for flying with us.”

The execution of the message is almost irrelevant – the point is that an insincere “thank you” is as damaging in a service environment as it is in our personal lives.

Lose the line, lose the script. It doesn’t have to be creative, it just has to be heartfelt.

What am I being rewarded for, exactly?

Starbucks executes a lot of service aspects exceedingly well. Their rewards program is not one of them.

It’s too complex. Welcome, Green and Gold levels of differing benefits class customers on the basis of the number of “stars” they’ve earned. When the basis of reward recognition needs its own definition, they’re missing an opportunity to simplify the program dramatically.

It has benefits not valued by everyone. Two hours of free wi-fi is great for those that stay to do work, but a lot of people don’t – a fact recognized by the increasing number of drivethru locations. Likewise, free syrup and soy milk will be valued by some, but not by others.

It isn’t universally recognized. It’s recognized only if you use your registered Starbucks card, and only at participating locations in the U.S.

A loyalty program should be as simple as possible.

If a customer exhibits the purchase behavior, regardless of the circumstances of their purchase, they should get rewarded for their loyalty. Every time. With something they are certain to value.

Anything else creates confusion, makes the rewards program exclusionary and cheapens the loyalty aspect by caveating what behavior is recognized as loyalty.

Creating Relationship Bonds out of an Events Model

I get it that the music industry business model has changed, that the revenue streams and profits are more tied to live concerts than the direct sales of music in tangible product or data forms.

Still, not enough has been done to create a holistic experience in the new model. Concerts are still seen as standalone events, without linkage to each other, even though services like the iTunes Genius, Pandora and HD radio with iTunes tagging have made it easier than ever to expand the relationship listeners have with their favorite bands, similar bands, and bands their favorite bands like.

The concert promotions companies and ticket houses could take a cue from this and extend the relationship forward and backward to generate more interest.

How about every ticket to see a band gets a free song download of their music. Creates connections with the performers pre-event, aiding the event experience, and justifies those “convenience fees” customers are constantly up in arms about.

Better yet, how about a free download after the show, to a band similar to the one the concertgoer just saw, that, not by coincidence, will soon be performing live in the same city? Add in a small discount to that future show, and event promoters may just have begun developing relationships that extend beyond a single transaction.

Front Line Hires: Expertise vs. Service Orientation

I’ve been going to the same gym for 6 years, and I find it strange that I don't know any of the personal trainers by now.

I see them working with clients all the time. I’m certain that they would be able to help me improve in the areas I want to, but they’ve never approached me, struck up a conversation, corrected my technique while walking by, anything.

If a trainer is like a fitness consultant, whose goal is to grow their client base and make more money for themselves and the gym, you think I’d have been approached, or even spoken to, at least once.

It could be that the gym has told its trainers only to interact with clients paying for training sessions. Perhaps these personal trainers were hired for their expertise in training, human kinetics, dietetics and the like, and simply aren’t service-oriented individuals.

Regardless, the result is the same. A positive interaction would have convinced me to use the services of a professional trainer by now. I have an unexpressed need going unfulfilled. The gym loses money by not filling it, and worse, risks me taking my business to another gym willing to provide it.

The athletic club market is fairly crowded in my area, and my gym is not winning the market share battle. I’ve tried the other gyms, and while the facilities are marginally better than the gym I go to, not one of them has had the service-oriented training staff I’m looking for.

It’s clear my gym is not going to invest in the facilities facelift to compete in the local market. Even if it did, facilities improvement is a commodity answer to a service problem. Much more effective would be using the time of the training staff more liberally to differentiate the gym on the basis of the front line service providers. It may require more staff or even different staff, but it would be entirely worth it.

"How was school today?" is a Tough Question to Answer.

I caught a presentation by Dan Schawbel on Personal Branding.

Great topic, great speaker, great overall experience.

Judging success of service experiences is tough in general, but judging success in a learning environment may be the toughest of all.

Students, parents and banks pay vast sums of money to schools at all levels, despite the assurance of quality of the end result being based on more faith than measurable results.

Still, schools can point to established track records, standards and the academic credentials of the teachers as references. They reinforce experience quality through the admission-to-graduation progression, with grades, degrees & diplomas, and rite-of-passage ceremonies involving ridiculous costumes.

Evaluation of professional educational services is much harder, with a high degree of variability between the exceptional professional teacher and the too many marginally-credentialed presenters that poorly represent material that they’re not truly experts on.

Professional developmental education doesn’t have as much established history to lean on, but teachers like Dan Schawbel can still provide experiential cues that reinforce the value of the material.

Schawbel was set up for success with me before he ever entered the room, due to some postive interactions with another customer, BrainZooming’s Mike Brown, who in discussions before, during and after the Schawbel presentation enriched the material with his own extensive insight. Dan couldn't have known this, but it is enough to know that the experience of the audience will have an impact on each person in it.

Dan himself was an engaging speaker, but more, his presentation included concrete steps that, if taken would result in tangible near-term results. (He also walked his walk. After advising that you have to be willing to engage anyone, because one never knows who will hold the keys to your next phase of development, I tested his talk. A few hours later, Dan was my newest LinkedIn contact.)

It will still take time to evaluate success of the experience, but delivering applied practices that yield early physical evidence of results is a great step to validating the material and the teacher.

Unexpected Demand for Health Care in Flu Season?

I spent 20 minutes on hold for the pediatric triage nurse this morning. When I asked how she was, she responded, “busy”. No doubt. Cold & flu season isn’t even in full swing yet, but doctors’ offices are full of the unwell.

She asked me some basic questions about my children’s symptoms, and then gave me the, “monitor and report back” response. Relieved that neither of my boys was in immediate danger, I grew annoyed with their management of the demand for their services.

Pediatric care practices are all over-capacity right now. But with H1N1 having been telegraphed for 6 months, increased demand was not unexpected. Still, this office relied on the standard processes that are in place 365 days a year.

Why?

Variability of demand, coupled with the fact that in any process involving human service, capacity is difficult to bring on- and take off-line, combine to make service operations difficult to manage at the best of times.

Still, they knew this was going to happen. Where was the proactive response?

The on-hold messaging indicates that the response process is first-in-first-out (FIFO), but is that the best when demand is outstripping capacity? You don’t have to be visibly fair to customers in a telephone queue, so why not prioritize even before the call gets answered?

How about changing the IVR to automate triage and engage the caller in provision of their own service?

In the case: one line for flu, one line for everything else.

The flu line could ask qualifying questions such as temperature range, duration, and additional symptoms that could be aggregated on a desktop system that would allow the triage nurses to prioritize before answering a line, and respond most quickly in critical cases. If a parent is really only looking for the comfort of having spoken with a professional, they can wait awhile.

Managing demand better allows caregivers the ability to keep the community more healthy. It also lets them serve more customers and take in more money.

Thankfully, the first message in the on-hold system indicates that if this is an emergency, hang up and call 911. At least it is unlikely that response is delayed to a serious health issue because of the mismanagement of demand.

Paper Covers Rock. Service Beats Sales.

Just finished having some work done on the outside of my house. I chronicled some of the provider selection process, but wanted to provide an update on how the family finally made our decision.

The significant factor that determined who we selected was how the companies presented themselves.

Those that lost, lost because they were selling a product.

They sent salespeople who came equipped with sample-filled valises. They handed out glossy brochures with pictures of showcase houses that looked nothing short of aspirational for our humble home. They spoke about vertical integration with their suppliers and made every effort to make their companies look as big as possible. They used jargon to try and make what they did sound more complex. They used high pressure, car-dealership tactics that suggested that if I didn’t fork over money on the spot, I would lose out on a dramatic discount. They were (mostly, but not always) more expensive, likely because of all the product support they needed to fund.

The company that won, won because they provide a service.

They sent a project manager / job foreman, who wanted to talk about the state of my house and the work it needed. They gave me a single quote, and guaranteed it. They offered referrals of homes they’d done in my neighborhood, and gave me their URL for research, rather than a brochure.

The time of the product-based approach, supported by high-pressure sales tactics, has come and gone.

People know enough, are wary enough and expect enough that they don’t want to be sold to.

They want to interact with someone who is legitimately interested in their situation, treats it as unique (even if it isn’t) and provides quality work product in return for their money. Only a person or company that views what they do as a service can fulfill that promise.

Why Bother?

Tried to book an airline rewards flight lately?

My experience, spread over the last three days, has me ending my relationship with my otherwise preferred provider.

First, you need to get acquainted with the terms & conditions. This includes the standard blackout dates, limited seat availability, and a host of other rules designed to shift rewards travel to off-peak routes and dates, or to prevent you from successfully booking an awards reservation entirely.

Heaven help you if you are arranging travel for others, and want to share a trip with them. No one – not even Southwest – has the ability to combine an awards and non-awards booking in a single transaction. How difficult can it be to use the awards portion and leave a balance to be paid by credit card?

A terrific indicator of how likely you are to be satisfied with the encounter, the “awards travel tips” are, in order:
• Search alternate dates
• Search alternate times
• Search for alternate airports
• Search a different award level

In other words, don’t count on getting the time you want, the date you want, the city you want, for the price you want.

If this was an isolated incident on a single airline, I would chalk it up to poor customer service, ditch provider, and move on. Unfortunately, each rewards program is a virtual carbon copy of each other.

The unimaginative airline industry has mee-tooed their rewards offerings like they’ve mee-tooed every other aspect of their experience. (It always amazes me that they behave the way they do and complain about being commoditized by their customers.)

If the airlines are using rewards programs to develop a loyal customer base that could save themselves the effort and cost. Roll up the programs entirely, reinvest in making core operations work.

The Environment is Part of the Experience

A business' physical environment can create expectations about the service about to be performed, facilitate the service exchange and differentiate one experience from its competitors. Most often, however, environment is treated as afterthought, or modeled after benchmarks that may not be appropriate.

Children’s Mercy Hospital uses the physical environment to help in giving world class care to children.

Operating in the most complex of service environments, Children’s Mercy understands that the customers – children in various states of health – are dramatically impacted by their physical environment.

The experience starts before a patient has passed through the doors, with an edifice that more resembles a giant playhouse than a hospital. Inside, the layout and internal architecture plays to the fancies of children while guiding patients toward caregiving interactions. “Down the hall, 3rd door on the left” is replaced by, “follow the balloons to the balloon elevators.” Floor patterns and wall murals resemble fantasy play areas, and most directional signs pertaining to children are kept at their height-of-eye.

The carefully scripted environment puts children at ease in a time where they may be scared or in pain - in itself making the effort well worth it. From a service providers’ point-of-view, the environment also puts patients into a more comfortable state regarding the complex and somewhat scary experience that awaits, creating, even in small children, a customer much more capable of fulfilling their role in highly personal interactions taking place.

CMH is a great example of what so many other organizations could do to make their physical environment a contributor to service success.

The Cost of Lowering the Bar

We know satisfied customers leave. That the best way to keep a customer is to continuously delight them by exceeding their increasing service expectations in each interaction.

But rather than improving, I see companies using the current economic environment as an excuse to reduce the service quality in day-to-day interactions. It poses a danger to their bases of loyal customers and their brands.

In two months, I’ve arrived to an unmade room at a Fairmont, a Marriott, and the Flamingo Las Vegas. Because I’m a complainer, each hotel lost revenue in service recovery, but the greater loss comes from the reduction what they can expect in my lifetime value as a customer. They’re gambling that the reductions in service quality will go unnoticed or unpunished because their peers are doing the same. For the Harrah’s property in particular, they should know better.

Unfortunately for them, I also stayed at a Hyatt Place, a Hampton Inn, and a Kimpton hotel, all of which provided experiences completely in line with my expectations. Finding superior interactions at a lesser price means a lost wager for the three decreasing service at a time when my dollars are harder to come by for both of us.

These experiences are not unique in B2C services. I deal with B2B services and see the same corner cutting on critical service elements, even when companies know that dispassionate decision makers are measuring their performance on every transaction.

This economy will not last forever. When it ends, the choices we made to retain, reduce or improve service levels will be justly rewarded as we deserve.

In fact, I do want to see sausage being made.

I’ve been on a run of witnessing first hand the services being produced for me. Given the choice, I prefer to see the inner workings of the service experience rather than have them kept behind the curtain. It helps me be a high performing customer when I know how a service is produced, but mostly, it’s just cool to see professionals do what they’re good at.

Not every service environment is meant to be viewed in full, but opening the service operation to the eyes of the public can help create greater understanding of how the service works and the role customers play in service performance. It can also serve as a vivid demonstration of the value you bring.

Consider making the service employees more visible when:

- what you do is difficult.
- the service performers are talented. (compared to industry benchmarks or to customers performing the same task)
- your service requires customer input during production.
- the customer uses your work product post production.
- front line employees are part of the physical environment.
- your service process has traditionally been shrouded in mystery.

Many service businesses feature skilled performers completing complex tasks at a high level, yet these experiences are shielded from the customer's view in case something doesn't go quite right.

That thinking is usually too conservative.

Wherever possible, enjoy the benefit that comes with customers seeing firsthand the high level of work you do for them.

Leaving Las Vegas.

After 4 days of conferences, I just left Las Vegas. I couldn’t be happier.

Las Vegas should be ideal for a person like me. It’s arguably the U.S. capital of service businesses, hosting experiences that range from the most luxurious to the most illicit. Service interactions are happening everywhere you look, 24 / 7.

My problem is, I don’t trust Las Vegas. And I don't think I'm alone on that.

Every transaction I initiated came with hidden service fees. Several governmental branches are investigating banks’ use of service fees, when truthfully, the service fees in Vegas are much more egregious. Took money out of an ATM: A fee to the ATM service provider, and a fee to the hotel it was located, in addition to the fees I pay to my bank. Paid for breakfast with debit card, and got a $0.50 service fee added. Took a taxi, with a card reader conveniently installed in the back seat, and paid by visa: $3.00 in extra fees.

It extends beyond payment for services, to the point that you feel that every interaction is being manipulated for you to unknowingly spend more that you intended. It’s justified by otherwise reputable companies with logic of “Hey, everyone else does it. Not doing it would be leaving money on the table.” As a result, I’m constantly on the lookout for the next service scam.

Las Vegas is having a tough time, no doubt. An absolutely epic housing bubble and an economic downturn rivaling some of the worst in the country.

It’s easy to say that tourism revenue is down because of the economy in the other 49 states and around the world. I wonder if people aren’t slowly becoming tired of being nickel & dimed by scams & service fees attached to otherwise legitimate interactions, and looking to destinations where they’re not constantly on guard for someone trying to slide in a few more dollars of charges, just for the privilege of using their services.

Trust is the absolutely most important element, the foundation, of a successful businesses. When your offering is intangible, and the only thing people are left with is the feeling they had after using you, it is absolutely crucial.

I think that Las Vegas has developed an trust issue. Travelers expect that they will be charged more for interactions with no additional value added. They expect to be on guard against being “taken”.

I think travelers, concumers really, are looking for more forthrightness in their interactions - that the value they recieve will be reflected in the value they pay for. I think as the economy comes back, people will be slower to return to a place where there money is a target from the moment they get off the plane.

Maybe it’s time to change the “What happens here, stays here.” slogan. It might not be as good for business as they think.

Sometimes the carrot, sometimes the stick.

I commented earlier this week about the way Southwest Airlines understands the contribution customers can make to business productivity, and promotes that behavior in with incentives to make them more reliable as a service and more profitable as a business.

The online check-in process, asking customers to help clean up on late arriving flights, no fees for checked baggage, are all examples of this.

While these customer behavior modifications are often done using carrots in the form of rewards, today I experiences that they can also use the stick, when necessary, to suggest appropriate customer fulfillment of role.

I’ll preface it: I was not a good Southwest customer for today’s flight, starting with last night. I didn’t check-in online 24 hours ahead. I got busy this morning, and in fact, didn’t check-in until I arrived at the airport, 45 minutes before my scheduled departure.

I got the “C” boarding pass I had expected, but was surprised when the pass had no number. “Do you not give numbers to us delinquents in ‘C’?”, I asked the attendant who took my luggage. “Oh, that means that you’ll have to see the gate agent.” she replied. Faced with a new process, I was for the first time a little nervous about a Southwest flight.

At the gate, I learned that the last three boarding passes for every flight are printed without a number, so that the gate agent can inform late travelers about the merits of early online check-in, and that while not against the rules, counter check-in 45 minutes before a flight is frowned upon. They even went to the surprisingly honest extent of explaining that given the many flights that are oversold, Southwest likes to resolve the oversold situations as early as possible, and an early count allows them to do so.

Southwest works hard to make sure customers know their role in providing a quality service and contributing productivity while doing so. Usually, they use tangible rewards and monetary incentives to reinforce the behavior they desire. But it’s also refreshing to see them also reinforce the behavior by gently warning customers about what happens when they don’t participate fully as a Southwest customer.