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Customer Service

The essence of competitive advan-tage resides in an organisation’sability to consistently deliver valuethrough an appropriate andattractive service value proposi-

tion. One must, however, be aware that allbusiness results, and therefore the ability todeliver value consistently, are functions of

people working through processes. If any aredysfunctional, you’ll never achieve the endobjective of competitive differentiation orfinancial results.

One of the fundamental components ofbusiness strategy should be to create value- for key stakeholders and for achieving

Why Senior ManagementCustomer Service

After All These YearsStill Doesn’t Get it

differentiation in the market. However,the creation of value means nothing if itcannot be delivered on a consistentbasis. In the end, it is your people, as theresearch has shown, who will do themost to create a “win-win” situation ineach customer engagement day in andday out. It is your people, who evenfaced with dysfunctional businessprocesses will still make heroic effortson behalf of the customer and yourorganisation.

Service excellence

So what does “excellent service” looklike? After all, most of us know what itfeels like, don’t we? One of the fewmemorable experiences I have had hap-pened at a Ritz-Carlton in Buckhead,Georgia outside Atlanta. I had justreturned from a run on a very hot day.I was exhausted - looking, I guess, a littlelike “death warmed over” and wantingdesperately to cool down before goingback into the hotel and up to my room.As I collected my strength I heard avoice, looked around and saw a figurecoming toward me carrying a towel anda glass of what appeared to be water.The young lad simply said, “It looked as

if you could use this right about now!”.As I picked myself back up off theground (after passing out from thissheer unexpected beautiful experience),I thanked him. He said,“No problem. Ifyou would like another glass of icewater, just let me know.” WOW!Needless to say, I filled out a form tocompliment the young man. Within 72hours I had a personally signed letterfrom Horst Schulze, CEO of RitzCarlton thanking me for complimenting

the young man and simply saying that itwas all about “ladies and gentlemenserving ladies and gentlemen”. I feltgreat! Would I ever stay at a RitzCarlton again? Need you ask?

After spending time looking at Ritz-Carlton, Southwest Airlines, FirstDirect, Direct Line, Fed Ex and a fewothers, there are some things that comeclear. First, these organisations are notin business for the short-term profits -or for making themselves look great toinvestors per se. They are in it for thelong haul - much the way DaveMcCamus was at Xerox Canada manyyears before. Just having this perspec-tive changes the way an organisation

operates dramatically.

Going on a bit regarding one of theseorganisations, do you know that I actu-ally look forward to telephoning FirstDirect! Can you guess why? Becausethe telephone is answered promptly -I’m never put in a queue, I am treatedwith respect and as someone whosebusiness relationship has value and thestaff are always so very positive, knowl-edgeable and responsive. I know withcertainty now that any issue I call aboutwill be handled then and there - fullstop. It’s simply a marvelous experi-ence! Regarding Direct Line, I have agood friend who’s daughter-in-law wastraveling up by motor car from Londonwith her baby and had an accident alongthe way. Direct Line was so responsiveand helpful to her that I switched mycover to them as well!

Delivering results

In all my years of facilitating culturalchange in global organisations on bothsides of the Atlantic, it is clear that thefour most important determinants ofcompanies’ ability to deliver results tocustomers are people, process, relation-ships, and culture. Think about it. Allbusiness results are created by peopleworking through a business process.Even if the business process is dysfunc-tional, the right people will find awayaround the situation and exhibit heroicbehaviours to pull the day off in spite ofenormous challenges. Clearly, if the busi-ness processes are right, then the rightpeople will be able to excel. They willwork hard to ensure value is delivered.Unfortunately they still will not be ableto reach their full potential unless thevarious functions, departments, loca-tions (plants, sales offices, or others)communicate, coordinate and collabo-rate effectively. These internal working

18 STAKEHOLDERMarch2004

Process

ServiceExcellence

IT

IT

IT

Relationships

Characteristics/ScopeBenefits

Innovation

Easy to do business (simple)Responsive/Short cycle time

Capability

KnowledgeSkills

BehavioursAttitudes

HR SystemsAlignment

Culture

People

Service

Customer Service

Service Excellence: People, Process, Relationships and Culture

relationships (as well as key externalones with suppliers or business part-ners) are critical. If people don’t coor-dinate, don’t communicate orcollaborate how can any businessprocess be effective? It’s all about thepeople engaged in that business processworking together as “all one team”. Andthen there’s the culture. Who is the“keeper” of the culture? You guessed it- none other than senior management!Either they act as effective role modelsor they don’t! Either they “live” thevalues of the organisation or they don’t!It doesn’t take most employees long tosee if management does not “act as theysay”.

Adding value

The diagram indicates the key elementswhich will result in adding value to thecustomer and providing a competitivedifferential in the market. The keys againare people - the right people. Who’sright? Those with the right attitude!Hire for attitude - not knowledge andskill alone. You CAN train people -especially if you have the right peopleand provided you have the right trainingprogrammes - not just those that haveemaciated due to relentless cost cut-ting! Make them fully capable of reach-ing their potential. Gain theircommitment to your organisation’sfuture success. Involve them. Createtrust. Empower them. Align your HRsystems (recognition, performanceappraisal and compensation) to rein-force the desired behaviours. Providethem with the information they need tobe effective by ensuring the proper ITsystems are in place.

The magic here is that by making it easyfor your customers to do business withyou, you will simplify and improve theefficiency of your own processes - thus

improving productivity and reducingcosts! Nirvana! Being responsive andfocusing on reducing the cycle time is acritical success factor. Your customershave less and less time to do morethings including doing business withyour organisation. Focusing on cycletime will also help drive innovation inyour organisation. Think about it.When was the last time you offeredyour employees a chance to reduce

their department’s budget? Did theyjump for joy and shout, “Oh, Boy!Another chance to reduce cost! Wow!”Or was it something a bit less than that?Do you think that during the processthey really thought “outside the box”for new ideas on how to reduce cost?Please!!!! Now imagine a small group ofemployees being asked to cut in half thetime it takes to resolve a customer’scomplaint as the research indicates thatby doing so, customer satisfaction canbe increased by 25%! Will they be ableto stay inside the box with their think-ing and come up with an answer?Probably not. If they do things the waythey always have, guess what? They’llget what they’ve always gotten - namely

complaint resolution time twice as longas the customer expects!

Staff development

You won’t add value and deliver resultsto customers unless you continuallyinvest in the development of yourpeople. After 18 years of working inthis area, I would offer up the followingsuggestion for training and development

as it represents what we now include inour Service Excellence programmeoffering.

Creating a Foundation for ServiceExcellence

Aligning people with your businessand service strategy

Knowledge and Skill Building toensure Capability

Critical interpersonal skillsSkills for building and maintainingexcellent relationshipsUnderstanding your customersInternal organisational relationships

- focus on cooperation

Service Excellence: Adding Value

Service Excellence

Recovery

Prevention

StrongerRelationships

Understand

Be anAdvocate Assess

Negotiate

+

ApplyQuality

Techniques

Prepare

Be anAdvocate Listen & Learn

Be a Resource

What training is available in these areas?

March2004STAKEHOLDER 19

Customer Service

20 STAKEHOLDERMarch2004

Aligning your business processactivity with your customers(internal and external)Everyone’s telephone skillsComplaint handling and servicerecovery

Appropriate training can make a hugedifference to service recovery. Torecover, you must first determine thereal issue or issues the customer iscomplaining about. Some times, as weall know, if the customer is in an emo-tional state, you must first defuse thoseemotions utilising appropriate tech-niques so that you can carry on arational discussion. Do your peoplehave these skills? Then you must assessthe severity of the issue from the cus-tomer’s perspective. Just how bad is it?Put yourself in your customer’s shoes!Then negotiate a solution! But what

question must always be asked beforeyou can negotiate an appropriate solu-tion? I hope I’m not giving away anysecrets here, but it’s simply asking thecustomer, “What would you like us todo?” By asking this simple question, youare NOT saying you will do exactlywhat the customer wants - although Imust tell you that in 18 years there havebeen few customers who have wantedas much as management thought theywould!! Pleasant surprise, right? Youmust be very careful not to assumewhat the customer wants. Let me giveyou a simple example. Let’s say I am justcoming back from a run on a hot day asin the Buckhead, Georgia situationdescribed above with Ritz-Carlton. Let’ssay I had the foresight to take somecoins with me so that I could obtain acold drink at the hotel from the vendingmachine as I went back up to my room.I put the coin in and nothing comes out!I’m upset and terribly thirsty. The man-ager of the hotel happens to walk byand sees my plight. He says, remember-ing my name, “Mr. Marra - sorry aboutthat. Here’s your money back!” I say tohim, “Well, thanks for that, but I’m stillthirsty!” The Manager, unfortunatelymade an assumption which was incor-

rect. Then, of course, you must follow-through to take action on any promisesyou make to the customer -again actingas an advocate on behalf of the cus-tomer in your organisation to get thejob done.

Leadership

So where do we go from here? Well, Ibelieve the answer lies with Leadership.They will either “make it or break it” inthis arena. Here is a short-list (pleasedon’t get me going on the long-list!) offailings as I see them. Not all of themapply in every situation. Together theyhelp to explain a little of what has andhas not happened in the past 18 yearsregarding customer service and whymanagement still doesn’t seem to get it.

1.Management still views service as acost rather than a benefit - somethingthat has to be done because they sell aproduct that sooner or later must beserviced or repaired. The cost of theservice clearly eats into the profit mar-gins of the product! Warranty costs andothers can be horrendous. Around1987 or so, I recall that the warrantycosts of the largest Division of the

Ted Marra is aninternationallyknown ManagementConsultant and hasdeveloped a leading-edge systematic andcomprehensiveprocess whichintegrates “best

practices” to complaint and enquirymanagement, call centres, customerrelationship measurement and management,customer “value”, internalcustomer/business partner relationshipsand more all designed to build customerand channel loyalty.

Having been a lead assessor,Ted utilisesMalcolm Baldrige and EFQM Excellencecriteria as a foundation for all his conceptdevelopment.As a result of his extensivework in this area,Ted has been labelled a‘thought leader’ in Europe on this topic.Over the past 18 years,Ted has worked inNorth America, Europe and Asia helpingwell over 100 different organisations.

email:tedmarra@leadershipfactor.com

Business Strategy

People Capability

Know

ledg

e

Skill

Support(including

alignment ofHR Systems)

AttitudesBehaviours

Flowto the

Customer

ValueCreation

Value Delivery

People & Process

Customer Engagements withYour Organisation

................................

Customer Service

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leading (market share) U.S. automotivecompany were reaching $1 billion peryear! That would certainly get some-one’s attention

2. Some companies excuse poor serviceby suggesting that they are the “best ofa bad lot”. But honestly, doesn’t anyonehave any worthwhile aspirations? Is itenough to just “get by”? How long canyou last with that attitude? This is thecase among the Logistics organisationsin the U.K. for example

3. For others, excelling in service is a“nice to have”, not a critical successfactor for achieving competitive advantage.

If you are a product driven organisation,allow me to put this myth to rest rightnow. If I recall the customer satisfactiondata of many companies 10-15 yearsago, it clearly said that the product alonecounted for 80% of what determinedcustomer satisfaction. Today, I’m afraidthat number is 20%! What’s the rest?You guessed it - all the soft, squishy stuff!People, relationships, service, supportand so on. So why do these managerscontinue to live in the past? Wake upbefore its too late!

4. Poor service will end up costing farmore in the long-run than good service- guaranteed! Why doesn’t this message

get through? Because managementthinks increasingly “short-term”. Todaywe need to reduce cost to deliver ourprofit forecast and support the share price.

5. Many managers just lack sophistica-tion in their thinking. They need to beeducated. The Service-Profit Chain hasbeen around now since about 1994. Apowerful and compelling concept. Yet,somehow, it has eluded most managers.

6. Management is often too “aloof”.They do not interact with employees orcustomers or they are victims of “fil-tered” information about what’s reallygoing on. They are out of touch - plain

March2004STAKEHOLDER 21

Customer Service

22 STAKEHOLDERMarch2004

Ad

and simple. They are operating in astate of unconscious incompetence -they don’t know what they don’t know.

7. Service is viewed by many managersas strictly operational - not strategic!

8.Their customer satisfaction measure-ment approaches are either inadequateor dysfunctional. They measure thebasic needs of customers only - qualityproduct, at a price he/she is willing topay, available when he/she needs it alongwith an accurate invoice! Please! If younever get beyond this, you’ll never besuccessful. You must move to under-

standing customer “wants” (their wishlist) and ways of adding value.

9. Customer service management areoften treated as second class citizens inmany organisations and customer serv-ice is viewed as a dead-end place withfew if any opportunities to get aheadunless you can find a way to escape orhave a mentor looking out after you!Some of the best organisations, howev-er, bring in their best and brightestwhen first hired and put them into a callcentre. In this way, over 18-24 months,they gain customer skills, knowledge ofthe organisation - key people, the prod-

ucts, services, policies and so on. Theycan then go out to fill positions in otherparts of the organisation and act as“change agents”.

There may well be many more. Possiblyyou can add some to the list as well?Why not give it a try and see what youcan garner from your own experience.Hope it turns out a bit better thanmine. To end on a positive note, let’s tryto look forward to the next 18 yearsand hope that customer service is final-ly recognised as a key to organisationalsuccess! S

Best PracticeComplaints Management

one day seminar

For a full agenda please contact Ruth Colleton on01484 467000 or email on

ruthcolleton@leadershipfactor.com F A C T O R

T h e

L E A D E R S I N S AT I S FAC T I O N M E A S U R E M E N T

This seminar covers:

• The role of complaint and enquiry management to effectively manage yourcustomer relationships

• Key components of an effective complaint and enquiry management process

• Critical Incident Modelling

• Critical success factors for an effective process to ensure customer loyalty,profitable growth and service improvement within your organisation.

Manchester Wednesday 26th May 2004 Presented by Ted MarraLondon Thursday 10th June. 2004

Customer Service