Customers Wired and Dangerous

8/6/2019 Customers Wired and Dangerous

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W y C u d S v C vM d Cu m

W d D g u chip r. bell& john r. patter on

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T v v has been aroundor centuries. It has always been grounded in the concept o the direct or implied pledge o

air bartering: a merchant provides a service in exchange or some type o remunerationcoins,coconuts or chores. Energy might be spent on either side o the covenant on the airness o

the exchange. The server might spend energy on promoting the value o the service and customers

might spend energy on getting perceived worth. But the essence o the agreement is a promise

implied on both sides o the encounter, just as in the product covenant.

Beyond the essential promise, the covenant or a product is di erent rom the covenant or a service.

Customers give the product provider license to make the product without their direct participation

or even observation. As customers we do not need to watch the manu acturer make our dishwasher;

we can trust it will be as promised. The tangible, actual nature o a product or object makes deter-mination o quality much easier.

As customers we have expectations the product will be as described and we have recourse i it does

nottypically the object can be returned or a replacement or our money re unded i it ailed to

meet the value promised. Replacement means another object like the one we purchased (hope ully

without a glitch) is taken rom inventory and given to us. Bottom line, through either replacement

or re und, the broken product covenant can be restored.

The service covenant is similar in some ways. Like the product covenant, there are expectationso eatures and bene ts and value or value. Energy around promotion and price are similar.

However, since a service, unlike a product, is largely an outcome with an experience attached,

it cannot be stockpiled, inventoried, or sent back or a replacement when the covenant is broken.

Displeasure with your haircut might get you a discount on your next one, but there is no way

to get your hair back like it was.

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So, what recourse is hardwired into the service covenant? The customer derives some com ort orsecurity rom the act that service will be delivered through an experience which the customer

co-creates with the service provider. The inclusion o nods, clicks, murmurs and sighs, both romcustomer and service provider during the co-creation process, provides customers a way to bethe guardian o their side o the transaction. As a haircut customer, one can say, Not so much onthe sides early enough in the experience to prevent the outcome rom being a disappointmentone is then orced to wear.

Unlike a product, a service is produced at the moment o delivery. You cannot create it in advance.You cannot send the customer a sample to be inspected and approved. Unlike a product, the receivero a service gets nothing tangible, and value depends on the receivers experience and perception.

As the service provider, you might be able to plan presentation, people-manners and processes,but or almost all services, it is not deemed a service received until it is experienced by (or with)the customer.

Should a product provider opt to change the way a product is manu actured or redo the mannerin which inventory is organized, it can all be accomplished with minimal impact on (or involvement

rom) the customer. However, alter the way the service experience occurs and the covenant isundamentally altered.

Lets examine a simple metaphor. When banks got the bright idea o using ATMs instead o ateller, they encountered sizable resistance. ATM use was less than 15 percent even ten years a terthe machines were introduced. Compare that to the speed o the adoption o smartphones orNetfix. The ATM undamentally altered the nature o the service experience. Now, dont pushthis ATM metaphor too ar by examining it in light o todays use. We all know todays customersenjoy the convenience o the ATM plus the warmth o dialogue with Peggy or Paul inside i theychoose. However, ATM acceptance changed only when tellers stood outside the bank and taughtcustomers how to use them, allaying ears about the security o a deposit placed in an uncaring,automated machine.

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Progress requires change. And, change provokes resistance. However, customers do not necessarily

resist change itsel . They accept change when they get a vote; they embrace change when they

can participate. They resist the perception or prediction o being controlled or coerced withouttheir involvement.

Migrating customers toward sel -service, or example, can bring an array o time-saving bene ts to

everyoneservice provider and service receiver. But the manner in which that migration typically

occurswithout infuence rom customerscan be viewed as devaluing the co-creator, thus adding

another spark to the fame o their opposition. Todays customers are already picky (all about value),ckle (reluctant to show loyalty), vocal (quick to comment on poor or indi erent service) and vain

(only interested in tailor-made o erings). Armed with a computer and a network, the new normal

customer becomes wired and dangerous i rustrated.

Bottom line, give the customer a great service outcome with only a mediocre experience and you

will get a yawn. Outcomes are table stakes. The service outcome is what the customer expects:

hospitals are clean, banks are sa e, and airlines land sa ely, on-time and in the right city. It is theexperience that separates one service provider rom another.

A m d w m u d w k, w m us m m w d

d d g u f f us d.

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Why the Service Covenant Became Corrupted

Many organizational leaders are struggling with the concept o customer experience as a critical

success actor to monitor and manage. Only the very best service-providing organizations

Ritz-Carlton Hotels, Zappos.com, USAAmake customer experience in ormation a topic o discussion

when meeting with their boards to review nancial per ormance. Ask an attendee o the last board

meeting o a utility, manu acturer, bank, or high tech company just how much air time was devoted

to how customers eel about their experience!

The challenge is not that leaders are unconcerned about customers. You can always count on them

to join the banquet, banter and brass band during customer service week. I prompted, they visit

call centers and hold town hall meetings with ront line service providers. At the urging o their CCO

or VP or customer service, they circulate articles about customer service or kick o a new customer

service training class. And, these symbols o interest are important. But, rarely does a customer

complaint, unless rom a dignitary, keep them up at night.

Part o the problem with leaders disconnects between their spoken passion and actual practice is

the paradigm rom which they are most com ortable operating. Way too many leaders try to drive

a nail with a B-fat when it comes to changing to customer-centricity. Now, dont get us wrong.

We are music lovers and big ans o B-fats. They are just not that use ul when it comes to carpentry.

Think about it this way: Many senior leaders climbed the ladder o success because o their nancial

and/or technical prowess. It gives them great credibility with stakeholders interested in winning in

the marketplace through skill ul balance sheet management or having the latest whiz bang product

rst to the market. But the nancial and technical paradigms rom which they lead contribute to

the dehumanizing o the service covenantan implied or actual promise with customer participation

as its cornerstone.

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A paradigm is a way o viewing the world. A paradigm not only shapes what we see (or notice), it

infuences our language and, most importantly, our thinking. Far more than simply a point o

viewlike being a Democrat, Cowboys an or early adoptera paradigm strongly infuences theway we process in ormation in our brains. We think through the lens o li e that we learned.

The great news is that di erent paradigms, blended together, provide a rich and meaning ul

understanding o the world. The downside is that attachment to a single paradigm creates myopia,

bullheaded correctness, and even blindness. The result is much like the three blind men and

the elephant. Was the elephant a giant snake? It sure seemed that way to the blind man holdingthe elephants trunk. Or, was it a rope? The blind man holding the tail was convinced it was.

Perhaps it was the tree reported by the blind man holding the elephants leg. All were correct.

Yet, none were accurate.

Many years ago a riend o ours, Tony Putman, suggested the idea that all organizations operate

with three paradigms: the logic o numbers, the logic o machines and the logic o people.

The nancial world is obviously ruled by the logic o numbers, the technology world by the logico machines, and the people (including customer service) world by the logic o people.

Be ore we go too ar beyond our B-fatnail-driving analogy, it is important to note that most

leaders have their eet in more than one paradigm. And, while our description is designed to be

a generalization, we would be the rst to acknowledge that paradigm spotting is very complexbusiness. Where we are heading is to outline how B-fat thinkers bring that particular paradigm

and perspective to a scenario requiring hammer thinking logic. More importantly, we willexplore how to bridge the gaps in order to see the whole elephant.

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Missing rom their understanding o the service promise is the customer experience part o the

equation. Both outcome and experience are important in the customers assessment. But o ten the

outcome is, to the customer, simply the antethe givens o the service provided and not whatdistinguishes it.

McDonalds is an excellent hamburger actory, one o the best in the world. The CEO can no doubt

tell you the average speed o service per car, the precise amount o time required to make a Big

Mac, the pace o the credit-card transaction versus cashessentially, the arithmetic o the service

encounter. These are all metrics almost completely controllable by McDonalds. But the customeris evaluating their trip to Mickey Ds based on the personality o the server, the hospitality o the

setting and the respect they are shown throughout the entire process. These are metrics controlled

jointly by McDonalds and the co-creator o the experiencethe customer. The organization maycontrol the selection o servers and the orchestration o all the details in the setting and process,

but the customer determines i the entire experience made the grade expected.

When organizations rely on pro essional shoppers to assess the experience o the customer (ratherthan asking the customer directly), they exhibit a product-making mentality. Mystery shoppers

are actors trained to watch or adherence to standards, much like the quality control unit does in

a actory. Real customers have a broader view, a memory-making perspective, which considers

both outcome and experience.

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The Machine Paradigm Takes ServiceOut o Customer Service

We were participating in a panel discussion at a con erence o Fortune 100 CIOs. One senior leader

rom a major bank asked us, How can we maximize the pro tability and e ciency o our call

centers while minimizing the customers involvement?

Something about the question le t us momentarily con used. One o us said. You want to remove

all o the service out o customer service? He responded, Actually, Id like to take most o the

customer out as well!

The undamental characteristic o the leaders with machine logic is their belie that all problems

can be solved with technology. The quest is to take the people out o the mix since they are

non-programmable, unpredictable and an aberration in machine-like exactness. Technologists

view customer service as a way to let automation and sel -service do the work

Sel -service and automation have had a positive side. Shi ting the lions share o the work o the

service experience to the customer has lowered operating costs. With the rising cost o wages

or people, cost-saving is accomplished by taking people out o the service equation. The shi t has

reed up people to be used in roles and unctions truly requiring a human touch. Sel -service has

also made customers more sel -reliant as do-it-yoursel has replaced Ill take care o that or you.

Learning to end or onesel can trigger less dependence and ar more customer competence.

But, there is clearly a downside to taking service out o customer service. Remember the Wendys

Wheres the Bee advertisement? The nal line in the ad is a prophetic one: I dont think theres

anybody back there. It epitomizes the potential one-sidedness o sel -service. Be ore sel -service, we

could infuence, critique, a rm and help guide the service experience as it un olded. The service

deliverer could adjust, respond, slow down or leave us alone. It all seemed quite air. Now, without

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the capacity to quality-control it in the moment, customers are more cautious and skeptical o the

value they receive. It explains why 63 percent o e-commerce customers rate live web chat as the

most satis ying channel. Live chat says that sel -service can be quickly trans ormed by the customerinto ull service i the customer determines theres no bee , just a very big bun.

Putting the Customer Back into the Service Covenant

Customers (and employees) reside in the paradigm o people. The realm o people is a paradigm

that recognizes humans can be logical, but also illogical and emotional. People can be rational,

but also irrationalespecially when they eel the anxiety o uncertainty or disappointment or the

apprehension that comes when what is predicted does not match what is expected. Customers

come into a service experience with expectations shaped by past disappointments and successes,

perceptions shaped by sensory and interpersonal inputs, and practices infuenced by a li etime

o value-shaping events and habit orming tensions.

The numbers world has the predictability o the scienti c methodsomething matters only i it is

concrete or can be logically proven. The machine world enjoys the certainty o outputs that ollow

what is programmed. But, the people world is squashy, irreverent and chaotic. It cannot be con-

trolled, only managed. It cannot be herded, only infuenced. And, it de es the serenity o a board-

room or the tranquility o a ormula. Great leaders in organizations that make people logic a part

L g f d f f gg d d d f m us m m .

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o their DNA are o ten e ective at instilling pride, encouraging high per ormance, nurturing passion

and stimulating innovation.

What makes Southwest Airlines, Zappos.com, Four Seasons Hotels and Enterprise Rental make the

best service provider lists year a ter year? They have created and sustained cultures that embrace

the power o the three-legged stoolpeople, customers and nancials. Take care o people; they

will take care o customers. Take care o customers; they will take care o the bottom line. While we

all know that price, product, location, strategy, technology, nancial management and the like play

an integral role in growth and pro ts, what keeps the service-champ leaders up at night the mostis keeping the culture customer-centric. It starts with understanding the experience side o the

service covenant.

Take a look at award-winning Zappos.com. They took a simple businessonline buying o apparel

and added the experience enhancers that make them the talk o the neighborhood (and cyberhood).

Sure, you can do all your buying without communicating with a soul. But, every Zappos web page

has a deliberate invitation to interact. And, when the customer clicks to talk, they get over-the-topattention, customized communication and a live rep who wants to be your new best riend. It is

the per ect blend o sel -service with ull service that respects the customer while bolstering conve-

nience and cost-savings. And, how has the market rewarded them? Their pro ts went rom zero

when they started to over a billion dollars ten years later.

T k f ; y w k f us m . T k f us m ; y w

k f m .

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The Tenets o a Healthy Service Covenant

In his new book, Bold: How to Be Brave in Business and Win, author Shaun Smith describes the strongcorrelation between the core values o the leaders and the core values o the enterprises they lead.Southwest Airlines CEO Gary Kelly embodies the un-loving character that fight attendants model onboard. Zappos ounder and CEO Tony Hsieh conveys the strong allegiance to leading with purposethat call center reps show in how they serve with purpose. And, the warm, yet re ned elegance oundin the Ritz-Carlton Hotel experience is echoed in the style o President Simon Cooper.

Leaders that model the tenets o a healthy service covenant create and sustain cultures in serviceorganizations that help them become the exemplars o great service.

Always Tell the Truth

The Delta regional jet was packed. As the plane backed away rom the gate, the fight attendantbegan her ritualistic sa ety spiel about seatbelts, sudden turbulence and smoking. She endedby saying, The fying time to Grand Rapids will be two hours. . . no, it will be an hour-and-a-hal . . .no, actually, I dont know. The cabin erupted with laughter and applause. What jolted thehal -asleep plane- ull into cheering? Unscripted, raw truth-telling. We all loved her total candorand con dent authenticity!

The truth-seeking component o the healthy service covenant is that which values candor andopenness. It is the dimension that honors authenticity and realness. It includes a commitment to aconversation with customers rather than unilateral action. It begins with asking or input. It continueswith enlisting others in problem resolution rather than positioning yoursel as the sole answerperson. It involves operating with the aith that wisdom lies within us all and that by tapping thecollective brainpower o customers and associates, the organization is stronger, more responsiveand more adaptive to the ever-changing requirements o customers and employees.

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Close the Trust Gap

A healthy service covenant is one that closes the trust gap. We live our lives on promises. From

the time a child can grasp the concept o cross my heart and hope to die, there is a orever realiza-

tion that anxiety can only be reduced through proo o trust while waiting or a promise to be

kept. The trust gap is the emotional space between hope and evidence; between expectation and

ul llment. Trust is the emotion that propels customers to the other side o the gap.

The manner in which an organization manages the trust gap drives every other component o

the service covenant. As one requent fyer said, No matter how riendly the fight attendant,

how delicious the meal or how com ortable the seat, i the plane lands in the wrong city or

our hours late, I am not a happy camper. Granted, great service recovery can turn an aggrieved

customer back into a satis ed customer. But the residue o betrayal will leave a disappointed

customer perpetually on guard or the time a letdown re-occurs

The trust gap is also closed by demonstrating trust in customers. Airport concession stores some-

times put the morning newspaper purchase on the honor system. Instead o standing in line

just to buy a USA Today, customers pick up a copy as they put a dollar through the slot in the money

container above the papers. When store operators are asked about the end-o -the-day shrinkage,

they will tell you that, while they may lose a paper are two, it is more o ten due to customers

accidentally picking up two copies instead o one. The trust practice bene ts the in-a-hurry customer

trying to catch a fight. And, it helps the store to manage e cient tra c fow with customers

buying more items or items less common than a newspaper.

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Create a Great Experience

A healthy service covenant is one biased toward creating great experiences. Todays customers

want sparkly and glitter; a cherry on top o everything. They want all their senses stimulated, not just

those linked to the buyer-seller exchange. Features have become ar more titillating than unction;

extras more valued than the core o ering. It means that attracting customer loyalty today requires

thinking o service as an attraction. Examine how Cabelas and Bass Pro Shops decorate the service

experience. I your enterprise was choreographed by Walt Disney World, a Lexus dealership, MTV

or Starbucks, how would it change?

Think o the service experience as a box o Cracker Jacks. What can be your ree prize inside?

The power o surprise lies in its capacity to enchant, not just entertain; to be value-unique, not just

value-added. Service innovation works best when it is simple and unexpected. Hotel Monaco puts

a live gold sh in your hotel room; Sewell In niti dealership programs in your radio stations rom

your trade-in and lets you discover it; servers at Macaroni Grill introduce themselves by writing their

name with a crayon upside down (right side up to the customer) on the butcher paper tablecloth.

Invite Customers to Be Partners

Customer participation is a core component o a healthy service covenant. Harley-Davidson created

the Harley Owners Group (HOG) as a orum to bring Harley loyalists together or education and

recreation. Build-A-Bear Workshop with their interactive build-a-stu ed-toy experience has grown

to over 400 stores around the world in less than 15 years. Bose sends their head phone customers

a stack o courtesy cards to give out to other people who inquire about their head phones

cards containing every conceivable way to contact Bose.

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Threadless.com invites their website community to vote on the coolest t-shirts designed by ellow

amateurs. The winning entries become their product o erings, providing great exposure or budding

designers and a sense o ownership by the community. Jackdaniels.com has a an club called theTennessee Squire Association. They asked Squires in Texas to vote online or their avorite color (red,

white or blue) or the Jack Danielssponsored race car to run in the annual Texas 500. Mountain Dew

created a user-generated movement to launch a new product. The process (called Dewmocracy)

involved more than 3 million customers in various phases o the design, development and marketing

o a new drink ultimately called White Out. Collaboration is the core o the service covenant.

And, Nurture a Community

Social media like blogs, Facebook and Twitter provide concrete evidence that customers are changing

the way they defne marketplace. In some ways the Internet is a return to the old- ashioned village.

While the new village is a global community, it nevertheless has many o the eatures o the village o

yesteryear. In a small town, merchants knew you and catered to your specifc needs. They acted on

history, patterns o previous purchases. Theyd even open the store a ter hours i you needed some-

thing. Over the last f ty years commerce has become distant, impersonal and one-size-fts all as the

service covenant has altered. The Internet in general and social media in particular have helped connect

customers with businesses in ways that are more personalized, open, around-the-clock and valued.

Another eature o the old- ashioned village was generosity. The village is where the concept o

the bakers dozen originated. Kids got a ree taste at the candy shop; merchants gave away secret

recipes, and adults got a take it home and try it assurance behind products. There was no need

or a written money-back guaranteethe merchant was the guarantee. The closeness o shared

space required varied means to maintain relationship balance. Customers and merchants relied on

neighborly practices. A spirit o abundance was a way to start and maintain valuable relationships.

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Like the old- ashioned village, the Internet is a world under a microscope. Value must be real

and look real. The eye candy o websites must be interesting, easy, ast and imaginative, or the

cyber traveler will only be a drive-by window shopper or a targeted bargain hunter with littleintent o sticking around (called being sticky) or coming back. It makes generosityproviding extra

to value, not thinking o value as tit or tatan important means to ensure a genuine partnership.

How can B-fat lovers be encouraged to pick up a hammer when carpentry is involved? Asking

leaders to abandon their a nity or logic, order and rationality is like hoping a zebra will

change its stripes. Great leaders add to their leadership prowess by embracing new perspectivesand experimenting with new practices. Just as innovative leaders surround themselves with

mavericks and unconventional thinkers, leaders in pursuit o customer-centricity spend quality

time with customers. They invite customers to key meetings to ensure their perspective isincluded. Instead o prototyping only in the lab, they take pilots to the eld or the inclusion

o customer beta groups.

When CEO Bill Marriott was asked by a group o Marriott hotel managers whether the companysguest satis action index scores keep him up at night, he answered, No, but their comments do.

It spoke volumes about a leader who understands what keeps the service covenant uncorrupted

and healthy, a leader who stops guests in the lobby to inquire about their stay and solicit their

ideas or improvement. Sam Walton summed it up well: T s l ss. T st m .

A a f v t m a m t a ma w , s m l s g s m s m w ls .

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AbouT The AuThorS

Chip R. Bell and John R. Patterson are customer loyalty consultants and the authors o Wired and Dangerous:

How Customers Have Changed and What to Do about It . They can be reached at wiredanddangerous.com.

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