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.

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

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

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

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

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

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

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

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

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

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

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

Service Rant: January at the Gym

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

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

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

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

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

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

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

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

The Coming Death of “The Only Place in Town”

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

An exceptional service experience?

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

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