July 22, 2014 by Speakers' Spotlight
It’s Not About Customer Service…It’s About The Relationship
Paul Bridle has studied effective organizations and the people that lead them for over twenty years. His research unpacks good practice and allows people to take a fresh look at issues or challenges they face. Below, Paul writes about the importance of the customer relationship:
The term “Customer Service” has become overused, and in many cases becomes an excuse to explain frustration when something goes wrong. Organizations have started using different terminologies in an endeavour to appear better than competitors or to rally their people and breathe new life into their customer approach or activities. New phrases have appeared including, Customer Excellence, Customer Engagement, Customer Journey, Customer Satisfaction and many others.
In all sectors, and most specifically in the service sector, the relationship a business has with its customer is very important. In fact it is vital to the success and performance of the business. The problem is, every industry is different and their customers have different expectations. Added to that is geographical and cultural differences, which all have an impact on the way a business is run.
A study done by Bain & Co asked senior managers in selected companies to rate their organizations customer service. 80% of these senior managers believed that their organization gave excellent customer service. When the customers of those same organizations were asked about the level of service they received, only 8% believe they received excellent customer service.
A study by Michigan Business School compared the performance of a S&P general tracker fund with that of a general portfolio of S&P companies awarded high American Customer Service Index (ACSI) ratings. The results show the dividend returns per dollar invested in each fund as consistently higher in every case in every year, for the 5 year period over the recession.
If organizations are going to deal with their customer relationship, they need to differentiate the terminology in a meaningful way that allows an organization to consider what it is seeking to achieve and what relationship it wants with its customers.
What is Customer Service?
If you take time to think about it, the term customer service is non-descript. It does not say if the customer service is good, bad, adequate, dynamic, or any other descriptive word you wish to use. It simply implies that you give a service.
Customer Service is the way you interact with the customer. It is what the customer gets at a basic level with no definition or further description. If any person or organizations have a relevant product, service or skill, provides an acceptable environment or physical appearance and meaningful dialogue with the customer, then a service can be provided for a customer. Of course, cost or value for money could be included, but even these are a bit above the basic three needs to provide a customer a service.
- Relevant product, service or skills In order for there to be customer service, there has to be a product, service and/or skill that the customer may want or make use of.
- Environment or Physical Appearance There has to be a place that the service is provided. It can be a physical place but it also be virtual by being on the web or in the cloud.
- Meaningful Dialogue The interaction with the customer has to happen to transfer information and possibly make a sale.
The important point is to understand that most of the above can be achieved by good systems and processes, and hiring the right people. In fact, a lot of it can be scripted. For example, in a restaurant the script can require the server to ask if your meal is ok within three minutes of receiving your food. This is an example of customer service being scripted.
So, provided you have a product, service or skill to offer, a place to offer it and the means to have a transaction with the customer, you are providing customer service. It is up to the organization to decide the level of that service by ensuring it has the right systems, processes and people to deliver what is desired.
What about Customer Satisfaction?
Of all the words used in relation to dealing with customers, “customer satisfaction” is the most misused, misrepresented and misleading in most cases. In fact it is often a misnomer. The reason is because it often assumes that we all desire the same level of satisfaction. What would satisfy one customer may not satisfy another. People are different. It also assumes that the customer knows what they want. Working for customer satisfaction is probably a worthless goal because it is too general.
Henry Ford: “If I asked the customer what they wanted, I would have tried to create a faster horse”
In many cases it is largely nothing more than random feedback. Typically an organization collects data through a questionnaire/survey completed (normally with some sort of grading) by their customers. However, the organization does not know what those customers expectations were in the first place! So the data is random data with no sound basis to enable meaningful improvements.
As a result, it becomes a useless method for the organization to use as a differentiation with their competitors. It does not provide comparable data that can help identify areas for improvement.
Worst of all, this means that it is not meaningful as a means to drive a business or improve performance. If data cannot be used to differentiate or improve performance and drive the business forward, then it has to be asked….why do it?
So customer satisfaction is an overused term that creates the wrong impression in most cases. This does not mean that surveys should not be carried out and feedback should not be obtained, it means that approaching it with the terminology “customer satisfaction” is misleading when what really is needed is feedback that ensures improvements.
By taking the time to examine how effective companies approach the relationship they have with their customers, we have managed to identify the meanings behind the words being used. These successful organizations understand the value they offer and the way they want to relate to their customer.
Customer Excellence: Customer Excellence is where an organization seeks to differentiate its basic service. It may be driven by a desire to create a differentiation from their competitors. It may be that the product, service or skills have a unique element or feature that takes it to a level of excellence. It is about providing what your TARGET customer wants, in the order they want it.
Customer Experience: Customer Experience is where the organization focuses on aspects of the service they deliver so as to create something for their customer that manages the customer’s perception. It may be that the organization identifies touch points that it wants to ensure an experience for the customer. It can be a series of touch points. It is about ensuring that at a certain point (or series of points) the customer perception is guaranteed or exceeded.
Customer Engagement: Customer Engagement is different from anything else. In this case the organization has a different view of the customer altogether. The organization is seeking to develop a relationship with the customer by setting the customer as an equal. This is not a serving relationship, it is about where your value meets the customer’s needs in a way that surprises them. It is about delivering the value you offer in a way that takes the customer along with you. It can include training and educating the customer in a way that improves their life. Customer engagement is about the relationship that your staff and the customer are allowed to have.