Hohm Improvement.

I’m trying hard to use Microsoft Hohm, but someone is making it difficult.

Hohm is a home energy management service with a lot of potential to help people understand more about their energy use through measurement & analysis and change
their behavior to save money & be a better steward of natural resources.

What makes it “work” is data – specifically a periodic intake of the electricity & natural gas usage information from your home.

The theory goes that Microsoft connects with your local gas & energy supplier, who feeds monthly usage data to the service, and the analysis begins.

The problem is, neither my energy nor my gas provider is linked. When I first signed up for an account, I got a message that Hohm was connecting with new providers by the day. All I had to do was wait and mine would surely get onboard. Half a year later, they’re still not connected, and wanting to see how the service works and realize its benefits, I’ve started inputting my own bill information, manually.

I emailed each of Hohm, KCP&L (my power company) and Atmos Energy (natural gas) to see whether they were working on a linkage that would enable the service to work for me. I received only one response, from KCP&L, stating that they were evaluating a linkage, but had no commitment planned. They pointed me to some helpful energy-saving tips on their website.

There’s plenty of blame to share on this one. (Even ingnoring the fact that hat two of the three inexcusably declined to answer me at all.)

Of course, there is no incentive for my natural gas and power companies to link to a service that allows customers to analyze reduce their energy usage – it represents customers tracking their usage and making better decisions - essentially money out of their pocket. I don’t know which is worse – that the regionally monopolistic utilities so blatantly ignore the desires of their customers or that Hohm didn't have the foresight to see that the main value their new service provides required input of outside parties and working with them ahead of launch to gain their support.

I’m guessing I’m a lead user of Hohm – at least in my market. Microsoft should know that lead users of services aren’t typically as forgiving as they are for software products, where they’ll often tolerate, point out and even help fix problems. With a service, if the process doesn’t work and the customer has no way to fix it, there can’t be a successful encounter. If the failure looks unfixable – as it does in this case with the providers unwilling to connect – the customer will likely abandon it entirely, rather than live with something substandard while they “work out the bugs”.

If your service depends on an intermediary or a 3rd party for fulfillment, make sure that it offers more than a reduction in revenue for them, and if you haven’t fully worked out connectivity processes, don’t launch beyond where you have.

“Internal Revenue” I get, but “Service”?

I made a call to the IRS Friday, having received one of those, “we believe you made an mistake, here is an amount of money owe us, + interest” letters.

My service expectations were low – somewhere along the lines of the 7th level of IVR hell, followed by someone who either couldn’t or wouldn’t respond to my question.

I was pleasantly surprised when my call was answered, by a human, after about 45 seconds, which unscientifically put the IRS in the top 5% for shortest customer service call wait times on this past month.

The answering agent took a minimum of information & quickly found find my case. (Their customer indicator is this handy 7-digit “social security” number. Based on the ease of use, I’m thinking others may begin to adopt this as a standard record locator.)

We exchanged some information, and having identified the source of the confusion, the agent stated, “If that is the case, you don’t owe anything at all.” Some direction on next steps ensued – steps that exactly corresponded to the letter I was sent – and she pleasantly sent me on my way after a total of about 5 minutes on the phone, or, about a half hour less than I was expecting.

Views on fairness in what we pay in taxes & what they’re ultimately used for may vary greatly, but in my encounters, I’ve experienced great service levels from the IRS.

Believe me. I paid taxes for years in Canada. As a civil service organization, the Canada Revenue Agency is far less courteous about it they taking a higher percentage of personal income. While I’ve never compared the codes (too geeky, even for me) my perception through years of use are that Canadian forms are longer & less intuitive than the U.S. as well.

There is power in words used as brands or labels. Perhaps their treatment of customers stems from the differences in their names.

“Canada Revenue Agency” provides their exact purpose & intent. They’re an Agency. Whose purpose is getting Revenue. For Canada.

The IRS has no different an objective.

Yet by adding “Service”, they not-too-subtly remind themselves that the organization is far more likely to be successful by being competent, empathetic, and responsive to the people they take money from, and whom they ultimately serve.

The theatre gets a stadium-style seating upgrade.

I went to my local AMC Theatre for a rare mid-week date with my wife. Its been months since we’ve seen a movie, and we were surprised to be treated to a new part of the box office experience when the attendant has us pick assigned seats from a touch-screen theatre layout.

My wife asked whether ticket price changed based on what we picked, and when the attendant replied that it did not, she openly wondered why the theatre would bother installing this expensive-looking technology and changing the service. AMC claimed it as improvement to the experience, but I think my spouse correctly sensed a coming change, with movement to a pricing method that varies ticket prices by theatre section.

Truthfully, I’d be alright with it, and I’m surprised theatres haven’t made this change some time ago.

The theatre is improving their service process for their own benefit - extracting consumer surplus from the seats they believe people will be willing to pay more for. Sports & concert venues long succeeded in segmenting their audience by willingness to pay for various levels of seating. (Though scalpers do better at understanding & extracting consumer surplus. I’m waiting for the day when the venues "in-source" the scalper business model to gain even more revenue from scarce commodity seats.)

It’s well accepted that mid-theatre seats, centered on the rail seats are the best in the house, while the front row, side angle seats are the worst. Personally, I’d be willing to pay a buck or two more to sit in an area where I won’t have to call a chiropractor the next day.

Will it dissatisfy some? Of course. A majority of customers will be paying more for the same level of service as they received before the change. It may even offend the egalitarian sensibilities of those who prefer the model that rewards personal time investment with the best seats in the house.

But it is fair. Based on what a customer is willing to pay, AMC undercharges for some seats and overcharges for others. Changing the pricing of the seats to gain that revenue isn’t draconian, its good business.

Now, when I start seeing scalpers outside movie theatres, I may reconsider...

Service Rant: “Underpromise, Overdeliver.”

Under promise, Over Deliver.

One of the most common business refrains, it often goes by its alias “undercommit, overdeliver”, which is the same thing.

I hear it all the time, as a consumer of various B2B services, as a manager of service businesses working with other service businesses, and as a customer in my personal life.

As a management philosophy that doubles as a service philosophy, I hate it.
At its best, it prevents companies from providing the kind of mind-blowing experiences their people want to. At its worst, it is a major contributor to big-corporate groupthink ruining customer service overall.

Underpsomise / overdeliver originated as a way for managers to advise their reports to manage expectations as an internal CYA, ensuring neither they nor their bosses would ever have to face the embarrassment of a missed commitment - a self-protective, “how to fulfill what is asked without failing / casting a negative light on our silo.”

But it has extended as a way to manage customer relationships, and service promises. External application of the credo is as big a mistake as it is internally.

The problem is that the first part of the equation gets fulfilled. Under committing is easy – it just means that you don’t promise to do as much as you know you’re capable of. But faced with someone not complaining about the level of care they receive, they forget to over deliver. Conserve resources. Get satisfied (lazy) delivering what is “good enough”. Ride the self-created perception of satisfaction rather than putting forth the extra effort to delight & surpass what the customer is expecting.

As they deliver a level of service best described as “tolerable enough not to complain” these providers tout how they “exceed expectations”, when they’re truthfully only exceeding adequacy.

The entire premise of under commit / over deliver has become a source of pervasive mediocrity. It’s why 80% of companies believe they provide an superior service experience, yet only 8% of their customers agree.

The solution:

Invest – time, effort and money – in understanding what the customer expects, and how different that is from what he / she truly desires. Start by committing to no less that what they expect. (it shames me to say that in many cases, businesses commit to less than base expectations) Deliver. Use the learnings to improve. Commit more. Deliver on that promise. Repeat the cycle until you’re delivering in the neighborhood of customer desires, stated or unstated. Maybe even beyond desires.

There are other ways to get there, but undercommitting provides no path to exceptional.

Is Zappos the Anti-United?

Both companies have had service experience foul-ups that became publicly visible throughout the social media sphere.

United involved a single case of a damaged guitar handled poorly, but that spawned a video since played virally over 8 million times and chronicled as a case study by Harvard Business Review.

Zappos involved thousands of customers impacted by an incorrect implementation of a pricing change and ultimately the temporary shutdown of the site.

In recovering service, providing a fair outcome for the customer is the key, but almost as important is the speed with which the company reacts, usually driven by the ability of employees to make good on their service promise after it has initially failed.

United is literally a case study in how not to approach service recovery. By refusing to pay $3,000 for the damage to Dave Carroll’s guitar because he failed to file the damage claim within 24 hours, the company provided no fairness of outcome. They acted slowly, hiding behind process & red tape, hoping the customer would eventually tire of the claim process and simply give up. Along the way, they repeatedly showed their insensitivity through employees not empowered to act on the behalf of the customer.

Zappos, on the other hand, handled its service encounter miscue with fairness, honoring the purchase price of all items at $49.95, regardless of what they were supposed to sell at – a move that instantly cost the company $1.6M. They acted quickly in doing so, announcing within hours of the occurrence that they had made a mistake, that the mistake had been corrected, and that the purchase prices on the transactions would be honored. One could argue that as the CEO, of course Tony Hsieh is always empowered to make decisions. But part of empowerment is the ability for the line to make critical issues visible to leadership, so that they can act quickly and appropriately. (It’s likely that an organization without that kind of upward information unempowerment is the culprit behind the millions of gallons of oil still gushing into the Gulf of Mexico.)

If you ever wanted to draw attention to your fledgling luxury site, there are worse ways to do it than spending $1.6M in what amounts to free advertising that reinforces the offering, the service integrity, and the brand. On the other hand, while the ultimate cost of United’s flawed customer service wasn’t likely the 10% of market cap claimed by The Times, it probably cost them more than Zappo’s $1.6M in negative reinforcement.

We often speak about the power of word of mouth. With over 8M hits and an HBR case study, the negative WOM is evident. I still feel like we’re a viral video short here, but “Zappo’s Honors its Purchase Prices” is harder to fit to a rhyme.

Pearl Jam: better service marketers than most.

A problem service providers have with their good experiences is that they are, by nature, intangible. After it is over, you have no product to hold and often nothing remains but the memory of the event.

The challenge is to extend the emotion & feeling of the experience after it has ended. Often, this can be done through creative use of physical evidence – a tangible good the service provider gives or sells the customer that serves as a reminder of the experience and – in the best cases – a driver of desire for a repeat engagement.

Having attended one of their shows earlier this month, alt-rock pioneers Pearl Jam grasp this concept fully.

The Pearl Jam experience starts with value. They played 26 songs themselves, providing almost 4 hours of entertainment, counting the opening act – much more than you get at a typical concert.

They added tons of local customization to the experience, including hometown / Midwest nods to the Kansas City Royals, a local Iraq war veteran, and capped by Curt Tomasevicz, Nebraska native and member of the 4-man US Olympic Bobsled team joining the band for the final song in the ultimate fan dream fulfillment.

As an intimate, customized entertainment experience, I found myself almost immediately wanting to relive it. Fortunately, Pearl Jam knows this and makes it possible, through the production and release of every one of their concerts on an official concert “bootleg” endorsed by the band. I just picked mine up. Of course, I had to wait a couple of weeks for file processing & printing, but really, it’s a very quick turn on providing a quality live recording as memorable physical evidence of the experience that 20,000 people shared.

Start with value, provide customer-specific customization and extend the experience with physical evidence that helps customers relive the best part. Think of how many Fortune 500 service providers could learn from an anti-establishment rock band.

Tide takes competition to the cleaners.

I love the idea of consumer packaged goods masters getting into the service arena. Long considered the worldwide leader of the consumer packaged goods industry, how would it turn out if Procter & Gamble were to package a service experience?

The Tide Cleaners slogan is “A brand you trust. Quality you’d expect. Service you’ll love.” They’re right. As a trusted product brand, expectations of a Tide-branded cleaner are high. But the execution level-of-difficulty is higher in a service environment than for the product offering. The service delivery operation is more complex, while the experience is delivered through hard-to-control intermediaries.

Fortunately for Tide Cleaners, they're up against some easy competition in the drycleaning services market. The cleaners I’ve used provide the same service out of nondescript locations in strip malls, usually looking more like the failed business they’ve been converted from than any concerted attempt at a service environment. It always surprises me that as far as service environments go, drycleaners are amongst the least clean – not exactly confidence instilling.

Tide takes the traditional model and gives it a much needed infusion of service and brand experience.

The environment is clean, well-lit and with a fresh, coordinated paint scheme that reflects the brand colors. Signage makes the location look professional and provides a physical separation between backstage and service areas. Service employees are consistent with the environment, similarly branded and presented in Tide orange.

You can already see what we know about P&G at work. While I’ve always assumed my drycleaning service options included “clean”, “please see if you can remove that stain” and “light starch”, Tide has branded their experience with trademarked “Spotlift”, “Freshscent”, and “Color Guard”, while offering premium drycleaning services for restoring faded clothes of all types to their original colors.

Like every other dry cleaner in the local area, Tide Cleaners also has a rewards program. Unlike every other cleaner, they tell me what I receive beyond the free drop bag and a modest discount, to include special access services, members-only promotions and a “birthday gift”.

They’ve also advanced some service innovation, with a 24 hour drop off box, and 24 hour access lockers for after hours pickups in addition to their premium cleaning services. I don’t know how many times I have wished for both of these capabilities, and I can’t wait to use them. Finally, they commit to searching out and replacing broken or missing buttons free of charge. Missing buttons have been happening on my clothes for so long that I had come to accept it as a part of the cost of having clothes professionally cleaned.

The Tide brand carries heavy expectations as to what an associated service experience should feel like. On all counts, it delivers on those expectations in a way that not only reinforces my perception of the Tide brand, but has also resets what I expect from an experience with every other cleaner I might ever come into contact with, assuming I ever need to.

Things to tell people who give you money.

My Saturday routine starts by paying bills.

Regardless of whether I pay online or send a check in the mail, the companies I give my money to are missing an opportunity to send an important message.

A bill is another customer touchpoint, but one with a unique opportunity to reinforce the value that the provider brings me on a monthly basis.

Because they represent a personal cash outflow, monthly bills are seen as necessary negatives. But because cost of the services I use is tangibly quantified, it is a great opportunity to also quantify the value I’m getting out of the experience.

Why don’t companies do this? Because they’re afraid I’ll begin to question the value I receive? Because communications dollars are spent on attraction of new customers rather than improving the experience for existing ones? Or just that the billing process isn’t within the purview of anyone responsible for reinforcing the customer experience.

There are some easy ways companies could be using the billing process to reinforce the value they’re providing me:

Tell me how you performed. If the cable / internet were up 100% of the time for the month, tell me. If it has now been 13 months since I’ve had a power outage, let me know.

Provide some comparative analytics. Power & gas companies have started to do this, but not nearly enough. Power companies should have owned the space that Microsoft Hohm now occupies in energy measurement and assessment. They could still benchmark me against the rest of my street / block, or against similar houses in my neighborhood. Tell me how I should feel about how much energy I’m using, and I’ll likely modify my behavior and start using less.

Remind me how much you’re there for me. If I made a customer service call, remind me of the usage and ask me to rate the outcome.

Reinforce my role as a customer. If something I did led to a higher cost than I might otherwise expect, reinforce the behavior you want out of me.

The monthly billing cycle is the necessary interaction by which your company makes its collective living. Use the encounter creatively and positively. You should be proud to talk about the value you provide, and equally proud to collect money for it.

The kind of physical evidence you hide.

An important but oft-overlooked aspect of experiences is the role the physical elements of the service environment play in facilitating the experience, setting expectations and providing cues as to quality, while sometimes serving as a post-experience reminder of the recent service.

Lamar’s, a popular donut chain in my hometown, has a loyalty program called the “Lamar’s Lovers for Life”. Like most frequent purchaser programs, they register repeat customers with a program number, and give them a card or key chain tag to swipe with every visit, so that customers can conveniently accumulate rewards based on purchase frequency.

A significant problem in using this common execution of the purchase card concept is the negative perception created in many users minds by owning & displaying a key tag with a giant icing & sprinkle-covered donut on it, scribed with “Lover for Life”.

Now, the good people of Lamar’s have a passion for their craft, and they make terrific donuts. But if I'm conscious of the message I send others via the brands I wear & carry with me, “Power Consumer of Donuts” is not likely one that I’m going to choose, regardless of the truth that may or may not lie behind it. As a loyalty program, Lamars’ may be the greatest on earth, (And it is pretty good) but if I’m embarrassed to have the tag, I’m not going to have it on my keychain, and so not going to use it.

Something to consider when developing loyalty programs for services with potentially negative associations is how they should be executed through the recognition, physical evidence and redemption encounters.

In this case, I would consider using a more subtle recognition mechanism. The "Lovers for Life" name should be changed, and the physical evidence downplayed or eliminated, so that we “donut lovers” don’t have to be so declarative every time our keys come out of our pockets.

Not your fault, but your failure to recover.

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

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

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

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

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

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

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

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

What is a service provider to do in this case?

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

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

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

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

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

Are you grocery shopping, or sharing an experiential gift?

As consumers, we love giving recommendations.

Even more, we love sharing our outstanding service experiences with others, as an experiential gift, so that people who haven’t tried the services we love can experience what we do.

Of course, a shared experience changes the dynamics of the encounter completely, particularly when an expert customer is accompanied by one experiencing it for the first time.

The expectations of the expert increase as they want to show off their recommended service experience at its best. At the same time, the productivity of the expert declines as they have to explain details and nuances of the experience to the novice. Most often, however, the enjoyment level of both parties is extremely high, the expert satisfied in giving the gift of experience and the novice satisfied with a new experience.

So it was when I took my mother to Whole Foods for the 1st time this week.

Faced with the abundance of quality ingredients, in no time she had me running up and down aisles looking for obscure items for the week’s meals. I’ll admit with no shame that I had to stop mid-process for a coffee break.

She was clearly enjoying the experience, but I tensed just a little when she sent me to the butcher with the instructions, “see if they’ll bone a couple of chickens.” I love customizing the experience, and Whole Foods does it routinely and well. Yet I was anxious, given that I didn’t know whether they would or could fulfill this special request. My anxiety level increased when the butcher claimed she was willing, but had never boned a chicken in-store in 15 years of work. Still, I wanted to help Whole Foods deliver a special experience to someone I had brought to them, so we decided it was worth a try.

Of course, when I triumphantly returned with 2 two fully boned chickens, my mother proclaimed, “Impressive. At home, my butcher would never do that.”

On the way out, after an hour and a half spent on what would usually be a 20 minute trip, she declared Whole Foods to be her favorite store in the whole world.

Shared service experiences are tremendous gifts for the giver, the reciever, and the company providing the new service encounter.

What I seldom see are examples of companies effectively making customers want to share their experiences with others, making the shared experiences more productive, and creating delightful outcomes in these special, but frequent, types of encounters.

Big companies should learn to fail like the little guys.

In hurry between work and an evening engagement, I called my favorite local pizzeria and ordered pizza from my car. The order was taken, customized when I was asked whether I wanted thin crust, double dough, or pan, and I was given a 30-minute pick-up time.

Arriving roughly 30 minutes later, I met with the counter server and had the following exchange:

“Are you Chris?”

“Yes I am.”

“Just pulled your pizza out, realized it was thin crust when you ordered double-dough. I’m sorry about the mistake. I knocked $5 off the order, but I can get them to fire you another one if you don’t mind waiting.”

“No thanks, that will work.”

There was a service failure, but it was effectively recovered when the provider handled it by:

• Identifying the problem himself, rather than waiting for me to discover it.

• Offering an apology.

• Proactively providing service recovery with an outcome that exceeded my level of dissatisfaction.

• Despite providing recovery, recognizing that I may want the initial promise made good upon, and giving me a reasonable outlet for full recovery of the initial promise.

• Displaying an attitude that made the interaction, though a failure, a pleasant one.

In less than 50 words of dialogue, he took full ownership for the failure and provided a fair outcome and a clear process for full remedy, all before the failed service ever became an issue.

Small service businesses have an advantage over larger ones. They’re closer to the customers they serve, smarter about what commitments they make to whom and enable front line providers to keep the service promises they’ve made.

If big business was able to execute on the 5 simple components of recovery my pizza guy did, they’d spend less on service, less on recovery, and less on replacement of revenue from lost customers.

Form follows function, even for experiences.

The service environment plays a lot of roles, giving tangible cues about the experience about to occur. In the most effective environments, the servicescape facilitates the experience itself, contributing to successful service outcomes.

I was at my semi-frequent local sandwich stop to pick up some lunch on the go. They make great sandwiches, and as part of the experience, have given them pithy names based on geographic origin.

A large menu board and several smaller signs provided the name of each sandwich and identified the ingredients in them. But they recently changed the signage, leaving the sandwich names but removing the ingredient listings.

It’s a bad idea, unless your products are universally known to the market you serve.

We’ve all developed enough familiarity with the Big Mac that you seldom hear someone standing at the McDonald’s counter ask what’s in one. But until you’ve sold a billion of them, list the ingredients.

Worse than just a marketing problem, in a service environment, lack of product awareness adversely affects the interaction.

Before the removal of the descriptions, I could order my sandwich, have the order taken, prepared, pay for it and be on my way.

Now in the same interaction, I ask the server the ingredients because I can’t remember whether a “Siciliano” or a “Toscano” should rightfully have pepperoncinis. The server spends extra time explaining the sandwiches, and gets visibly frustrated with the added step to the process, a product explanation that she seldom had to conduct when the signage did the work for her.

Marketers fall in love with their products, want them have a recognizable name. More important than universal recognition is to use names to facilitate the service experience, describe to customers what they should expect, how it should work and how they should feel using it.

Likewise, the signage and other environmental aspects should be looked at not only for what they add to the ambiance, but more importantly how they can be used to facilitate the service encounter and make it operate more smoothly, remove steps, or improve quality.

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

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

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

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

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

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

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

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

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

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

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

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

For service, dial the wrong number.

Ever dial the wrong number into a company looking for service only to get passed around from department to department as people who “aren’t responsible” for serving you struggle to find the individual that is?

Worse, have you ever dialed that wrong number, only to be asked to call back in, been routed back to a main service line or “accidentally” cut off?

This happened to me this week, as I called a company I do business with and ended up being transferred into the voice response dead letter office.

In most cases, it’s a telling sign of the level of service you can expect to receive from front line providers in that company.

As mentioned in this space yesterday, a front line service team will only be as good at keeping promises as the central support structure is at making the right promises and in enabling them to be kept. The mark of an organization that realizes this and fully supports their front line providers is where employees not in direct service roles know several correct paths to a service provider, or even better, are capable of owning a customer problem through resolution.

The Army makes a point in training that every soldier is an infantryman first. In your organization, is every employee a service provider first, or would most staffers look upon a customer call with confusion and embarrassment at not being able to serve them? If they don’t have direct service skills, are they oriented enough around internal service that they are capable of getting a customer problem to someone that can help in a single step?

Consumers don’t distinguish between parts of the organization that serve customers directly and parts that don’t. The company is the company is the company, and anyone should be able to address my need, answer my concern, and in return, take my money.

That is the standard that your company is being held to, whether you realize it or not. With fewer barriers than ever to “protect” internal employees from the need to interface with customers directly, companies that can’t provide service from inside will be penalized in the market for their lack of all-organization service orientation.

Employees first or customers first?

It is hotly debated whether it better business to serve customers as the company’s #1 priority or treat employees right and let them do their best work. Rather than frame debate as a conflict of service management philosophy – impossible to argue to conclusion – the timeline for executing any service experience provides the answer.

The answer is “yes” and “yes”, in that order.

A company’s ability to serve its customers is a direct reflection of the internal service those charged with providing front line service themselves receive.

Service businesses are fundamentally promise businesses.

Front line employees are in the business of fulfilling promises. But while front line providers are responsible for fulfilling promises and creating the experience, they don’t often carry the full responsibility for making service promises. These come from many sources, but they’re mostly made by the company through sales and marketing efforts.

After the promise is made, the support organization is responsible for enabling those promises to be kept by the line providers. Starting with leadership, through staff organizations in marketing / technology / service operations support / finance / human resources, and ending with line managers, all have as the primary objective (though staffers often forget this) of making it possible for line service staff to keep the right promises to the right customers.

Think about the last time you were agitated enough to raise your voice in a conversation with a front line provider who knew what to do in order to give you the service you expected, yet still wouldn’t.

It most likely wasn’t that they wouldn’t so much as they couldn’t. A lack of enablement – a failure of leadership, centralized support, line management or all three – produced that result and your reaction.

The debate will rage on about whether it is better business to make customers the #1 priority or whether it is better to treat employees best. But customers cannot be the #1 priority if the people designated to keep the promises the company is making aren’t enabled to make them #1 by world class support.

Signs we love: 5 Guys Burgers & Fries

Servicescapes – the physical environments where experiences take place – give the customer cues about the service encounter about to be performed. What actions will take place, what role the customer themselves must play, and what quality they can expect. Good ones also take an intangible experience and use physical evidence to make it more tangible.

It’s not officially “burger week”, but today’s example of the service environment giving a tangible cue to the quality of the experience comes from 5 Guys Burgers & Fries.

Like In-N-Out Burger, the 5 Guys experience relies heavily on exceptional execution of a simple experience.

To communicate their simplified service model and their commitment to quality inputs, they proudly display the location the potatoes come from that will become today’s serving of fries.

Customers get a reassuring sense that 5 Guys has a simple enough service model that they both know where their ingredient inputs come from and care about their quality. That kind of volunteered accountability provides customers up-front confidence in the quality of the experience. It also makes the experience more tangible. They may not know where Shoshone, ID is, but the information creates in customers' minds vivid imagery of the life of their produce on an Idahoan potato farm.

Think about your physical environment, and what cues it provides about the quality of the experience you’re about to provide. Do you have a Mercedes experience in a Yugo wrapper? What could you do to enhance how customers perceive the quality of the experience they are about to receive? What could you do to make it more tangible? Could you, like 5 guys, promote the high-quality inputs to your experience as proof of the service quality they can expect from you?

In(siders')-N-Out(siders')

In-N-Out Burger may not be a household name, but it's as close as possible without being a national chain.

Their business model is based on keeping everything unbelievably simple, from their supply chain, to their service operation, to their marketing.

They execute relationship marketing simply and well, having identified a base of committed, profitable customers, and focusing almost every communication on this critical group. But their core customers have been highly leveraged by In-N-Out, making them a national cult brand by spreading positive word of mouth.

What you’ll notice at In-N-Out Burger is that the experience is different for their base than it is for casual or new customers.

Where Outsiders see a small menu with few options, Insiders see familiarity. They feel trust in their adherence to a basic menu and confidence built by years of consistent service. In-N-Out has never compromised on quality ingredients, and never tried to sell their customers a pizza or a snack wrap.

For Insiders, In-N-Out provides social familiarity and the perception of special treatment provided by their “secret menu”. Like the Starbucks customers who recognize in others the ability to properly order a complex coffee beverage, In & Out customers acknolwedge an informal social circle for customers who order “animal style” or recognize a “Flying Dutchman” when they see one. The secret menu provides an experiential privilege to Insiders able to customize their experience using knowledge in a way that Outsiders who simply read the menu cannot.

In-N-Out treats their core well, and in their core returns the favor through loyalty, profit and word-of-mouth advertising. They pay nothing to market to me. In fact, they're completely absent from my market, yet they're top-of-mind as a meal destination when I travel to California because of their ability to get paying customers to be their word-of-mouth marketers.

As far as experiences go, I don’t appreciate In-N-Out to the level that their many raving fans do.
Yet I still stop every time I’m in California, mostly because of the word-of-mouth and the promise of a consistently good experience. With enough of these consistently delivered experiences, social benefits and special treatment, I too may in time become an Insider.

Kindle douses flame for sharing.

My father knew promote desired behavior through incentive. As a youngster, like many kids, I had an allowance. But Dad had always wanted me to read and be interested in books and learning. To provide incentive to acquire books (we lived in a small farming community with no public library) and read, book purchases didn't count against the allowance. Since they were "free currency", I indulged often, and a lifetime love of reading developed.

It is because of that background that while I have purchased and owned many books, I possess relatively few. When I read a book, I'm usually only a few chapters in by the time I decide whom I'll give it to when I'm finished.

Which brings me to the experience issue I’ve developed with my Kindle.

I received a Kindle a few short months ago at Christmas. I love it. I love the weight, love the readability, love the interface which makes the Amazon bookstore open to me 24/7/365, regardless of whether I'm riding my couch or riding down the actual Amazon.

(As an aside, the downside of the Amazon Kindle bookstore is that the long tail of the internet got shorter. BA (Before Amazon) I was limited by the inventory of the bookstore. If I wanted greater selection, I needed to find a bigger bookstore. Amazon gave me limitless access to every title - new, used, or out-of-print. AK (After Kindle) my selection has been reduced again, with not every title available.)

What I don't like about my Kindle experience, is that I'm no longer able to share the joy of what I read with others the way I used to. Sure, I can recommend that someone read a book, or buy them a credit or a hard copy version, but it's not the same as finishing a book and giving it away with my regards to someone I feel will appreciate it.

I'm guessing that this scenario was well evaluated by Amazon. After all, with readers not able to give away their product-based books, logic would suggest that revenue would rise as the would-be recipient of a free book has to buy one themselves. I’m skeptical, thinking it more likely that a positive reading experience from a gifted book (essentially giving away a product being the highest form of word-of-mouth advertising) leads to future purchases from the same author.

Either way, when considering a dramatic change to an experience, particularly one like the Kindle that turns a product experience into a product-service hybrid, you have to consider all possible touchpoints of the product model and where value might be added through the experience, whether it was intended or not.

An alternative? How about the ability to gift a title once? The argument against is that a grey market for digital books develops, but truthfully, this already existed when books were tangible products. The difference is that now, Amazon could use the gifting information to refine its customer-preference sensing algorithms and promote relevant product suggestions in an entirely new way.

Books & literature are turning into an exclusively paid for experience and we’re unable to either receive or create surplus value through enjoyment and learning. The economic incentive my father so ingeniously used to foster a love of books and a thirst for knowledge has been greatly diminished for those unlucky enough to have the otherwise excellent e-reader experience.

Does GEICO need a newsletter?

I’m a GEICO customer. Not because of geckos or cavemen, but because I had been referred by several other customers on the basis of what they described as exceptional service. Luckily, I haven’t ever had to experience much of it, other than bill payments and renewals.

As a customer, they send me a regular enewsletter, entitled “GEICO Connection”.

Trapped on the tarmac in between flights this week, I read it for the first time in my relationship with the company.

The content made me question whether the organization I was doing business with was as customer-centric as I had heard:

A quiz on recall of the television ads. I’ll dismiss the value of the quiz out of hand.

A new site for educating teen drivers on safety, complete with blog, YouTube channel and Facebook fan page. I can appreciate that educating teen drivers is a major factor in keeping them out of accidents, keeping GEICO expenses and my premiums as low as possible. But is this the way to promote the customer behavior they desire? How about a discount for successful completion of an online test (putting that quiz technology wasted on the gecko to good use) or a service premium for those that don’t complete it? Rather than trying to make automobile safety a hip topic for teens (I can just imagine the social pariah one becomes once their Facebook updates that they’ve just become a fan of GEICO Safe Teen Driving) appeal to the real decision maker – the parent footing the bill for insurance.

A chat with some of GEICO’s most loyal customers – 43 year policyholders that have been with GEICO so long they lack perspective on auto insurance alternatives and what makes GEICO the best alternative for them or anyone else.

A sales plug for the American Express Auto Purchase Program, a 3rd party vendor for which GEICO surely gets some referral revenue.

I’m not saying a service provider shouldn’t work to develop a dialogue, or even a relationship with me.

But spending valuable touches on activity that doesn’t create financial incentive, social / relationship, or service customization bonds with me is a waste of resources that could be better used in other retention development platforms.

If GEICO just wants to remind me that it is still around, the gecko and the caveman fill in what reminders my monthly bill leave wanting.

Sit back, relax, and enjoy the service.

I took two flights today on the same airline, but the cabin crews were dramatically different service providers.

I heard an early, subtle indicator of the difference between the experiences the two teams provided.

Upon departure of the first flight, the flight attendant, while giving her standardized exit speech, concluding by saying, “Enjoy the flight”.

A completely different speech was delivered on the second flight. Almost all of the same words were used, yet it was delivered in a with feeling and humanity that told us that we would be taken care of. The only difference in verbiage between the two, was that on the second flight, the flight attendant didn’t ask us to enjoy the flight, substituting instead, “Enjoy the service.” The experience matched the early promise

It’s a small change with a dramatic difference.

No one enjoys the necessary physical act of airborne transportation - at least not commercial transportation. The in-flight service associated with it, however, can be enjoyed or not, and it’s the most significant attribute a cabin crew can control that causes travelers to choose one airline over another.

The words we use are physical evidence, every bit the cue to the coming experience as a rusty aircraft with broken seats would be. While you can only script so much before the delivery becomes impersonal rote, focus instead on how you talk about your experience internally, when no one else is around.

Are you managing flight ops, pushing tin, or are you putting care teams in operation to serve traveler guests?

Are you measuring revenue passenger miles, arguing that it's standard industry convention, or are you measuring the number of traveler guests served and their net promoter score?

They way we talk internally, when no one else around, absolutely comes through in service delivery.

It's the difference between the unlikelihood of enjoying a flight and the possibility of enjoying the service.

Welcome to the age of co-creation.

It was hardly coincidental that a 140-character message from like-minded service tweep Barry Dalton launched a post on co-creation of service experiences.

He had suggested risk in the proliferation of customer communities for products and services, in that they potentially put the message, delivery and operation of the service out of ‘corporate control’. Further, inaccurate usage information from the customer community could actually create service / product failures.

Barry’s astute observation is part of a developing shift, with both tremendous risk and opportunity, around the experience co-creation that the web in general and social media in particular has enabled.

Customer co-creation is a critical part of any experience. Whether it requires a low level of customer input or deep co-production on the part of the customer, the critical component for a service experience to work is that customers both know their role and are enabled by the service provider to perform it.

In that regard, the internet and social media is almost entirely about co-creation.

Internet channels were first used as ecommerce channels and self-service sites – simple forms of co-creation of a purchase or service experience. But co-creation has developed beyond those simple applications, with service / product user communities, on-demand video “how-to” capabilities, and deep product & service reviews assisting pre-through-post-purchase interactions. With help now everywhere, customers are developing a better understanding of their role than ever before.

At the far end of the spectrum, Twitter and Facebook enable the experience directly through their technology and the aggregation of the networks. Then they get out of the way and let the customers do the rest. Users self-align based on shared interest, debate & advance knowledge subjects self-chosen, and largely self-police the community. With a large number of social media outlets, customer co-creation is the product (service).

The result? Social Media is enabling experience co-creation in ways never before thought of. Customers are becoming higher performers through self education, peer-assisted education through vast user communities, and the proliferation of online service channels.

This shift can be scary. The company now hands a large portion of control back over to the consumers, where the product or service usage information may be incorrect. But tightly linked user communities mean that the information is fairly contained. If it isn’t self policed by other users, the opportunity still exists for the company to monitor and correct misinformation. It makes the product or service stronger to have a user community of 3rd party commentators, even if not every comment is positive.

This shift can also be liberating. Users are developing self service capabilities never dreamed of. As customers become more highly productive in their use of services, they make the company more productive. As their part in delivery increases, so too can their level of satisfaction with a successful outcome. Users have more of a direct hand in the service / product development than ever before, enabling the companies to inexpensively tap into the collective knowledge of those who care most about it.

Customers are already moving on this, so co-creation of your experience is not a choice. The only decisions companies face is how much they can enable, how productive customers can be, and what development they can take away to make the experience that much better.

Mundane tasks: great opportunities to create unexpected delight.

I just finished a four-night stay at the Hilton Orlando. Overall, very good, but not spectacular. Clean rooms with modern amenities, good facilities, reasonably priced, and helpful staff - even if the concierge’s restaurant recommendations came directly out of my GPS’ index of national chains.

The remarkable thing from this stay: The bill.

Slid under my door undetected as every bill does, this one came much more elaborately than the tri-fold or single-sheet invoice. It was folded and placed inside a simple thank you card. It seems Hilton Orlando knew I was on a convention rate (good use of on-hand information to serve me better). They wanted to thank me for using the hotel and invite me to spend my own dime to stay there with my family during a 2010 holiday, offering me what I’m assuming is a modest discount to stay during a slow season for a convention-oriented property.

Every customer experience map has touchpoints that are so routine, they’re taken for granted.

“Slide invoice under door” is as mundane / routine a service task as they come.

This execution was a great reminder that by looking at all touchpoints – especially the ordinary ones – creatively, you can get much more out of them, using committed resources and processes to create an unexpected customer interaction that delights.

Punch-up in 1st class.

Okay, it wasn’t that bad, but it got close.

On my flight into Orlando last night, the crew who had been doing the Florida turn for two days informed the passengers that the flight would have moderate-to-extreme turbulence the whole way, advising travelers to use the facilities before boarding as there would likely be no in-flight service.

Great example of taking a service experience variable and setting expectations for customers, and kudos to US Airways for it.

The announcement also put passengers understandably on edge, which amplified the effect of what happened next.

A passenger missed the “turn cell phones off” cabin message and was reminded by the crew to turn his iPhone off. When he didn’t, it was apparent that he didn’t just “miss the message”, but had no intentions of complying.

Reminded again by a now-frustrated crew member, he turned the phone off and set it aside until the attendant was out of site, at which point it came on again, all while we’re taxiing toward our takeoff. Now another customer became involved, telling the man to comply with the rule. “iPhone man” was responsive, only to say that he didn’t intend to listen to another passenger, and an escalating argument broke out, involving at various stages profanity and a polite request by one party to finish the conversation in the parking lot upon arrival. Again, all happening while we’re taking off.

In stressed service environment where the experience was going to be diminished with a rough ride and a reduced service level and people already had feelings of anxiety over a natural fear of flying in bad weather, one emotionally unintelligent customer made the experience worse for several others.

The Cabin Crew missed the exchange, though I don’t know how.

What could US Airways have done to deal with a problem customer at a sensitive time?

The first step in getting the customer to play their role in effective service delivery is letting them know what it is. In this case US Airways (and every other airline over more than a decade of this announcement) has done this job adequately.

Secondly, they should let the customer know the negative impact of their noncompliance on the service experience – in this case, WHY the passenger needs to turn off his cell phone. This is a tough one, because I don’t know that anyone believes that consumer electronics interfere with airplane avionics enough to cause a negative outcome, so relying on that explanation might create more disobedience. In this case, it likely would have been enough to restate that FAA regulations require it, and therefore we’re all going to need to comply.

But, if the customer knows their role, knows the consequences of not performing their role, and still refuses to do so, then the service provider has to deal with the problem.

Given that causing an in-flight disturbance these days seems to give airlines carte blanche to do anything, up to and including restraint, removal and incarceration, US Airways had a lot of leeway here.

They could have incented the passenger to turn off the phone. “If you turn off the iPhone, I’ll bring you a Dewars & water once we’re airborne.” That might reinforce a negative customer behavior, for all of us passengers within earshot included.

They could have turned the plane around and removed the passenger from the flight. They were well within their rights, and it would send a very clear message as to appropriate behavior. The negative would be that at this point, the experience for the rest of the passengers would be substantially diminished through what would end up as hours of delay time. The airline would incur thousands in costs for delay time and added expenses. And given the general attitude of the traveler, might escalate the episode to the variety tweeted & blogged about.

Personally, I think a quick announcement from the captain that if all electronics weren’t off, we were going to give up our place in the flight line until they were, and that everyone could thank the passenger in 3D for the delay, would have worked just fine.

Public embarrassment isn’t the most mature way to create customer conformity where needed, but it’s usually effective.

I go back to Kindergarten.

Friday was “Kindergarten Round-Up” for my 4-year old, where he and his parents began the indoctrination process into the elementary school system. It was our shared first experience in what will be decades worth of education services.

Education is a different kind of service experience, but one of the most important that we ever have.

It is also one of the most complex, requiring vast input of time, effort and money on the part of the student / customer. It demands inputs of outside parties and influencers. Much of the experience is unsupervised. The extremes of time, input and intangibility make it very difficult to evaluate success, a fact at least partially borne out through our national 'dialogue' on education.

As first experiences go, the result was mixed.

Most importantly, my son loved it – he learned something, had fun, got familiar with surroundings, met stewards of his education experience / the authority figures he’ll be involved with in a very short time, and came away unbeliveably excited about returning in a short 5 months.

As for me? I filled out forms. Forms I could have filled out online, during time that didn’t have such a premium on it.

First experiences are the best time to establish expectations. In this case: What we should each expect of the education experience. What the student’s role is. What the parent’s role is in making the student and teacher effective. How the co-production process works.

If an institution took the encounter as what it was, a critical first service experience where at least a year and as much as decades of expectations could be established, how differently would they approach it?

I’ve often heard teachers express frustration feeling that parents aren’t involved enough in the education process, don’t commit enough of themselves and act as though it is the educational system’s job to do parenting. The opportunity to properly set role expectations came and was missed while I was transcribing various personal identification numbers.

The most important service experience – that of making a child student comfortable and confident in their future education surroundings, was carried off exceptionally well.

That said, major opportunities were missed in setting expectations and enlisting the active early support of a key co-producer, the parent.

Trainers with no sense of (business) balance.

My gym has some issues managing service capacity when it comes to adequately staffing to meet the demands of their clients.

For the 3rd time in the last 6 months, I’ve been a negatively impacted guest when they’ve closed the nursery early and without advance notice. In each case, as I’ve arrived with a pair of little ones in tow, for an all-too-infrequent workout, I’ve found the nursery locked tight.

Since I’m too cheap to leave - I have one of those grandfathered monthly rates that would see me increase my exercise expense by about 200% - my options are to either deal with the inconvenience or make some suggestions to management on what they might do to overcome a severe operational shortcoming.

Fulfill existing capacity commitment. Satisfies the client base by maintaining the capacity levels needed to keep the nursery running as scheduled, and likely has negative profitability implications. It certainly would have fixed my issue with them.

Use customer understanding to change the schedule to reflect demand. This should happen anyway, but some inexpensive research to understand the clients who use the nursery, how they use it, when they use it and what they value when they do. Based on that, scheduling decisions (and other operating changes) could be made that would increase satisfaction and efficiency by matching the operation with the desired usage of the clientele.

Communicate to reset expectations. If the policy is that no kids in the nursery means they will close early, communicate that. Better, post for parent guests when the busy times and slack times are, so that we may select our service times accordingly.

Let the guests co-create the experience. Establish a network of gym member-parents whom are regular users of the gym. Using any number of electronic scheduling, the clients themselves could coordinate nursery use so that the gym seldom has excess capacity.

Flex labor to create capacity. It may horrify some to think of their personal trainer in charge of their little one for any period of time, but consider that many trainers have designs on management. Understanding how an effective nursery operates is a skill-building endeavor for trainers. Cross train some gym staff so that the nursery can flex capacity up and down as demand needs.

Increase demand to fit current capacity. This should only happen after multiple of the above have been successful, but recast the gym experience so that it becomes the destination of choice for “health-conscious families” (rather than “just something we offer because every other area gym does”) and spend the time & effort promoting the positioning to attract the segment.

Likely multiple, if not all of these solutions could be used in different measures in order to balance a critical need to fulfill on guest commitments with the need to match service-supplying capacity with demand for a specialized service within the operation.

That said, what did I miss?

Thanks for the follow!

Twitter is a service model build entirely on the strength of the relationships of the community. They’ve enabled the conversation with technology, and effectively stepped aside to let the users completely co-produce the experience. Very few companies have the courage (or the ability) to get out of the way and let clients produce the experience, and in that regard, Twitter (and social media) is revolutionary for us all.

But as with all co-creation efforts, if the co-creators have different agenda, they can subvert the experience, undermine its overall effectiveness and leave people feeling unsatisfied.

Ironically, it is the marketing people that are doing this on Twitter. The people who advocate building close, one-to-one relationships with customers, are, by their actions doing the opposite – resorting to the mindless bullhorn as an attention grabber.

When I choose to follow someone, it’s because they’ve either said something interesting or are mentioned or referenced by someone in my existing network. In other words, through direct advertising or word-of-mouth, I’m saying I’m committed to trial of what you have to contribute to my experience.

Sometimes I get followed back. Great. Reciprocity is a good thing, though it’s no loss if I’m not. Other times, I get an auto-generated direct message, something along the lines of “Thanks for following. I'm a tech blogger making money from blogging and tweeting. DM me anytime.” or, “Thanks for the follow, I look forward to Tweeting with you. Check out my website and let me know how I can help.”

That’s at least a warning sign, and depending on the message, may be enough to get me to unfollow. I haven't reported anyone yet, only because I've been too lazy to read up on the ettiquette. I'm sure I've had the opportunity.

Instead of purposefully building a relationship to contribute meaningful context in areas I’m interested in, they use automated tools to expand their reach, make themselves seem more personal than they are, and setting me up for what they're selling me next.

It’s the very behavior we rail against – marketers casting a wide enough net to live off of the trickle of relevant respondents, disregarding the flood of annoyed people who aren’t your consumers.

These people & companies treat Twitter like a popularity contest, hoping to build the biggest brand as defined by followers. But the dynamics of value creation in social media are pretty much the same as everywhere else: create your position – what value you have to contribute – and craft its message. Work at finding those people for whom that value and message is relevant, and then work at providing enough relevance to them that they find your offering compelling and engage you meaningfully.

Resorting to the bullhorn to create that trickle of relevance may seem like a shortcut, but it is counterproductive waste. It diminishes the service experience of my fellow cocreator customers, and is the sort of thin that turns people off to entire media.

The Postal Service accelerates its demise.

The United States Postal Service, like many service organizations facing reduced demand in a downturn, is trying to cut costs.

Like the masses of unimaginative service businesses, their “best idea” for cost reductions is to reduce service levels. In this case, they’re considering shifting to a 5-day delivery service from the current 6-day operation, eliminating Saturday deliveries.

It’s a bad idea.

Three major service components differentiate USPS from its primary competitors, UPS and FedEx:

They’re inexpensive. Though it now known as “snail mail”, USPS is very reliable, given what are usually substantial price differences between its offering and that of the parcel carriers.

They serve outlying areas. UPS and FedEx place enormous charges on deliveries beyond their core service areas, because they lose money delivering to places without density of stops.

They deliver Saturdays. Before the recession forced the elimination of shifts, an increasing number businesses were conducting Saturday operations. With the growth of ecommerce, Saturday is looked on by many companies as needed fulfillment day.

By eliminating Saturday deliveries, USPS eliminates a key reason businesses use them. Add in that they’re considering reducing service to rural areas and increasing the prices on parcel sized shipments, and they may actually be in the process of killing all three of their service differentiators at once.

It has been suggested that the USPS should be run more like a standalone business. Some go so far as to say it should be privatized. While that idea may or may not have merit, changing core elements of the service to replicate their closest competitors – ones much more nimble and far less bureaucratic in decision making than they are – is exactly the wrong sort of service model change.

Let’s all differentiate together.

Forrester's State of the Customer Experience, 2010 found that fully 80% of companies want to use the customer experience as a differentiator.

Is this possible?

80% seems like a lot of differentiating based on the experience, but it depends on what companies mean when they make the statement. If “differentiated” means a company’s customer experience is demonstrably better than their competitors, the concurrent improvement of the competitors’ experience ( at least the rest of the 80%) would mean that as all experiences get better, they would remain every bit as undifferentiated as before. The bar on table-stakes service levels would be raised considerably and the customer would win, but the companies would add cost for the same revenue opportunity.

So should this 80% of companies abandon their objective of differentiating on the customer experience?

Not necessarily, and not because a dramatically smaller percentage than 80% will correctly pursue differentiation along the customer experience.

Differentiation doesn’t have to mean a better experience for everyone – it just has to be a better experience for someone. If a company were to select a customer that represents their ideal and change their business model, the service operation, marketing and support processes to attract and serve that customer better than anyone else possibly could, then would be achievable, more difficult to replicate and worthy.

Every market would have a customized set of offerings in every space, and customers would choose the type of experience they prefer, rather than most current markets where choice consists of extremely similar variations of the same service. In air travel, for example, you might have “the singles airline”, “the families airline”, “the business airline”, “the green airline”, “the exclusive airline”, “the low-cost airline”, and so on, with service experiences tailored to the specific travel scenario.

The problem is, most companies are undifferentiated because they serve the “everybody” market. For these companies, the intention to “differentiate on the basis of the customer experience” is meant as revenue growth initiative in their current model, not the selection of a new service and business model that would truly allow to carve out a sustainable, defensible market and serve it better than anyone else. This kind of experience differentiation would require companies to downsize service operations, intentionally cull customers and expend service enablement and marketing dollars in order to attract and better serve their ideal customer.

The service business willing to identify their market in real terms and size to it is also the one with the freedom to change their service model to differentiate on the basis of the customer experience.

Thousands of loyal customers in just minutes a day.

I was at my local bank branch yesterday, and while engaged in discussion with an associate, I caught a glimpse of the mousepad on her desk. It had been designed as an internal communication piece – the type (usually distributed by corporate marketing) that takes an important business concept and creates a mnemonic device out of an associated word by aligning a meaningful phrase on a specific topic from each letter.

This one spelled S-E-R-V-I-C-E, with appropriate phrases meant to remind associates how they must keep the customer at the center of what they do.

It might be the cynic in me, but these communications devices are usually a sign of an organization that is not service oriented. For my bank, it certainly applies.

They’re a marketing response to a service problem, and are usually devised by a senior exec who, after reading a report on the positive impacts of loyalty, determines that a shift to a customer-centric organization is the key to retaining and growing revenue. They decree that all that needs to be done to create competitive advantage through outstanding service is to engage marketing to educate the front line how important customers are and what types of behaviors they should exhibit, through the chosen medium of boxes of $.065 mousepads sent to every branch.

(It is also these people that, years later when another executive suggests a similar tactic, inevitably says, “We tried internal engagement around customer loyalty and it didn’t show any results.”)

These tactics are the customer service & loyalty equivalent of “seven-minute abs”, “make $7,000 per week from home using the internet”, or “get thousands of Twitter followers in days” – easy, no commitment promises that ultimately fail to deliver.

There is no marketing solution to organizational service deficiencies.

Marketing – particularly internal marketing – can be a key component of a whole-company solution to service orientation and improvement, but the leadership, support and line management must be equally committed to helping the service organization make the right promises to the right customers and enabling those promises to be delivered by front line service providers.

Anything less is a waste of effort and resources.

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.