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Lessons In Leadership Feeling The Customer’s Pulse How to know when customer service requirements are being met By Robert L. Bailey Companies that succeed and prosper always give great customer service. Always. No exceptions. But giving great customer service consistently is never easy. In many cases the boss is not aware that customer service requirements are not being met—until it’s too late. Most customers don’t complain, or at least they don’t make a federal case out of it. They may make a few uncomplimentary remarks to an associate and then vote with their feet by moving to a competitor. Of the hundreds of agencies and several companies (both insurance and non-insurance) I’ve worked with through the years, I’ve never talked to a principal who said that the company’s service to customers was poor, even though I know that the company sometimes gives poor service. I know because I often receive poor service when I’m a customer. And other customers tell me that they’re unhappy with the service the company provides. How can we feel the customer’s pulse? How can we know if customer service requirements are being met—before it’s too late—when customers show their disapproval by moving to a competitor? Too often we make the job harder than it should be by using formalized techniques that simply don’t work. A good example is focus groups. More and more companies are finding that focus groups don’t necessarily reflect the views of customers, and a number of large companies—including Yahoo!, AOL and Pepsi—have stopped using focus groups. They have found that most participants don’t give honest views. Many ramble on endlessly, trying to impress other members of the group, or trying to astonish the people conducting the discussion with their brilliant insight, forgetting that they’re supposed to be customers. Too often the group consists of people who simply have time on their hands and want $50 and a free sample. Several years ago my former company conducted several focus groups to help us develop pay plans for a new nonstandard auto product. We asked CSRs to participate who were most familiar with pay plans of competitors. After viewing CSR input following several meetings, we could find no common viewpoint. One would say, “Just do what Company X is doing. They have the best pay plans in the business.” The next would say, “Whatever you do, don’t do what Company X is doing. They have the most horrible pay plans that any human could possibly conceive.” Finally we realized that our CSR “customers” liked the plan with which they were most familiar. So our challenge was to develop a pay plan that was so easy to understand and use that it would be readily accepted. What is R&D worth? The field of research and development often produces questionable results. Booz Allen Hamilton found, after analyzing six years of financial data of America’s top 1,000 publicly traded companies, that greater spending on R&D had no effect on growth, profitability or shareholder return. My preference is to spend money on D and not on R. When someone suggests what may be a good idea, develop it and try it out in a small geographic area or a minor market segment. If it doesn’t work, call it R. If it does work, fine-tune it and expand it to the entire market. In our business we found that it was less costly to develop an idea and try it out with real customers than to test the idea with focus groups. Once we tried it with real people in a real market, we could be assured that the market acceptance was legitimate. Customer surveys likewise tend to be misleading. When phoned by a marketing company asking if the service received was “excellent, satisfactory, less than satisfactory or unacceptable,” many customers are eager to get the caller off the phone and don’t give helpful answers, especially when the call comes at meal time. Sometimes customers are asked the wrong questions. Recently we received a restaurant check with a notation that we could get $2 off our check on the next visit if we would call an 800 number and respond to a customer satisfaction survey. Being an unemployed senior citizen always looking for another $2, I decided to call. Two things at the restaurant were especially annoying, but the questions were so general that I didn’t have an opportunity to tell them how they might improve their customer satisfaction rating. To feel the customer’s pulse, it’s important that everyone in the company be alert to the world around them. Keep an eye on your competitors. When customers make a favorable comment about a competitor, or when you see a competitor enjoying extraordinary growth or success, check to see what they’re doing right. Be the “second mover” In our industry—as in most industries—there is clearly a second-mover advantage. Let others be on the “bleeding edge.” Then emulate what’s good and what’s working. Change or fine-tune what’s not effective. In preseason sports, it’s almost a curse to be ranked No. 1 or No. 2. Everyone is gunning for you, and few teams that are highly ranked early in the season end up in the No. 1 or No. 2 slot by the end of the season. So it is in business. A business that is alert to the needs of customers and that remains attuned to the actions of top competitors usually achieves great success over the long pull. Keep in mind, however, that second-movers that become No. 1 can be infected by the same disease that others in the No. 1 spot have experienced. They tend to become complacent and become a target for other competitors who want to knock them out of the top slot. The real experts in reading the pulse of customers are your own employees. They deal with customers every day. They know what customers like, and they know what customers dislike. Employees know right now what should be done to improve relationships with customers. But too often employees are reluctant to share this critical information. They are fearful the messenger will get shot. Several times early in my career I was chastised by my boss when I suggested that customers liked a certain feature offered by a competitor. “If you like Company Y so well,” I was told, “why don’t you work there?” With that particular boss, I became reluctant to make suggestions, and I know many other employees share that fear. Open up communication with your employees. They can tell you what customers are thinking—what they like—what they don’t like—what frustrates or annoys them. Now put it to work by fine-tuning your operation. This information is far better than can be gleaned from focus groups or customer surveys. After all, your employees are the real experts in reading the pulse of customers. * |
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