Customer Service part 1

I recalled my keynote speech at The
EFQM learning Edge Conference in
Paris about a year and a half ago. I began
the speech by asserting that “in spite of
all that has been said and done in the
interest of the customer, far more gets
said than done. Many thought I was
humorous. I suppose for some, it was.
That was not my intention obviously. I
went on to say that I recently had heard
that there were some 8 trillion or so
unclaimed frequent traveler miles
according to the airlines. It seemed to
me that in the past 18 years I had possi-
bly heard about 4 trillion empty state-
ments made by senior management
regarding the importance of customers
to their business. Statements, as we all
know are quite “cheap” to make. The
tough bit is following through - making
the important trade-offs, decisions,
resource allocations and investments
which are a true manifestation that a
customer ethos is alive and well in the
organisation. And that’s where things
seem to fall down because for all the
empty rhetoric I just begin to wonder if
some senior managers are out of touch
with reality, wear green eye shades or
are just plain brain dead. After all, isn’t it
plain easy common sense to realise that
without customers you have no busi-
ness? How hard can it be? No rocket
science there.
Another critical point is that even today
there are many managers that seem to
hold the opinion that employees are
“tools” hired to do a job. If the tool
doesn’t work or is “dull” - replace it. I
was confronted with that mindset as
soon as I started doing work in the U.K.
more than six years ago. I was shocked
to see this sort of draconian thinking
still in existence in what was supposed
to be a civilized and advanced nation!
People can just be abused, ignored and
shuffled about like office furniture and
still be expected to perform fantastical-
ly and if they don’t they won’t get the
reward of being allowed to come back
in tomorrow and do it all again! Heaven
help us all!
Quite frankly, the more I thought about
it the more disillusioned I became. Do
you realise that 18 years ago there was
but a mere handful of organisations that
one could point to who had a reputa-
tion for exceptional customer service
and now here we are 18 years later with
still just a handful? What’s happened?
Or should I ask, “What’s NOT hap-
pened?” Actually, as it turns out, it is a
combination of both - none of it partic-
ularly good by the way and all of it dis-
appointing.
In my radio interview the first question
I was asked was if customer service in
the States was on the wane as a result
of business conditions deteriorating. My
retort was that what I saw happening,
globally, was a failure in leadership to
appreciate the value of customer serv-
ice. That in this era of intense cost
reduction seen virtually everywhere,
management, in it’s infinite wisdom, has
seen people, training and customer
service simply as “targets of opportuni-
ty” or costs to be minimised. Such a
myopic view I’ve not seen for ages. In
fact I believe this type of myopic thinking
is what led to the demise of the railways
Well, it has finally happened. I was invited to speak as a “expert” on Customer
Service for the BBC Radio 4 “You andYours” programme just recently. An expert?
Someone once told me that an expert was anyone who is more than fifty miles
from home and carrying a briefcase. Nonetheless,I ventured forth undeterred pro-
ceeding to amass my thoughts on a topic with which I have had the long acquain-
tanceship of more than 18 years.
tiAfter All These Years!
WhySeniorManagement
CustomerService
StillDoesn’tGet
1 STAKEHOLDERDECEMBER2003
CUSTOMER SERVICE WHY SENIOR MANAGEMENT STILL DOESN’T GET IT AFTER ALL THESE YEARS!

in the States as they viewed themselves
only in the narrowest sense as haulers
of freight and not in the transportation
business! This type of thinking has also
led to the massive rethinking of what
executive development should be in the
U.K. Clearly lots and lots of managers
have gone through executive develop-
ment programmes, but the findings have
been incredibly disappointing - namely
the quality of leadership in the U.K.
hasn’t improved at all.
Does anyone in their right mind think
that the wholesale export of call centre
jobs to India has one iota to do with
providing better quality service? In your
dreams! Its all about money. Why pay a
“warm body” £25,000 per year to
answer the phone in the U.K. when
something goes wrong when you can
pay some other “warm body” in
Bombay “ £7,500 to do the same thing.
Never mind for a moment that when
you ring up for support that you are
unable to communicate with the nice
person in Bombay as I have done trying
to get technical support from Dell, only
to give up in utter frustration realising
that we can’t possibly understand one
another.
In fact, I’m utterly convinced that, fol-
lowing Peter Senge’s model of a learning
organisation, there are many senior
managers that live in a state of “uncon-
scious incompetence” when it comes to
customer service. They don’t know
what they don’t know and, quite frankly,
they don’t care to know.
Not to become too Biblical, but the
Bible does say that the love of money is
the root of all evil. Could it be that
focus on financials is the root of all cus-
tomer (and employee) discontent? In
my mind, no question about it! Make
the company look good on paper to
investors, provide dividends to share-
holders while slashing and burning goes
on throughout the organisation to the
point that management literally cuts off
their nose to spite their face! You think
I’m joking? I’ve just been speaking with
a major division of a global organisation
that has engaged in intense cost reduc-
tion for so long that the employees are
thoroughly demoralized, customers are
ticked off and the business has about an
18 month lease on life unless a miracle
happens - all in the interest of making
EBIT targets!
Look at the hiring practices of organisa-
tions. I am convinced that 80% of organ-
isations that exist today (thank you
Francisco Pareto!) still hire people
based entirely upon their knowledge
and/or skills - never on attitude. Well,
let me share the real truth about this
practice. It will never work and has
never worked. We now have research
to support this fact as well. You can’t
train for attitude! Attitude drives
behaviour! You can play games and run
a ship based on fear and intimidation
and get people to behave the way you
want or drive them out or you can do it
right. Why do you think there have
been and still are many call centres
where employee turnover is running at
50% plus? Bring in a warm body that
can answer the phone,don’t provide any
training to speak of, don’t provide any
information regarding the organisation
or how it works, squeeze it for produc-
tivity and pay it nothing and what do
you get? Just what you’ve always gotten
- massive turnover of employees!
Another question I was asked on BBC
Radio 4 was, “Can the U.S customer
service approach be exported around
the world”. The short answer to this
question is NO! The long answer to
this question is still NO. The “touchy
feely” culture of the States just doesn’t
transfer I’m afraid except possibly to
those “downunder” in Australia.
Everywhere else it would be a dismal
failure I’m afraid. My experience in
Europe has been that there are many
countries where people desperately try
to even avoid eye contact let alone
physical contact. In fact,physical contact
of any sort other than a handshake
would be considered a gross invasion of
privacy. People in Europe, for example,
to a far greater degree than other
places I have traveled, have an expecta-
tion which is steeped in tradition and a
desire for almost a sterile professional-
ism devoid of any blatant displays of
genuine caring, empathy or other “soft-
ness”. Those in service roles are expect-
DECEMBER2003STAKEHOLDER 2

ed to serve - quite literally!
Do companies generally underestimate
how much a customer is worth to
them? No question. Most organisations
are clueless on this. They see 20-25%
turnover in customers annually (if they
are fortunate) and think nothing of it.
This is normal churn for the industry!
What is the customer’s period of loyal-
ty? How much is the customer likely to
spend during that period? What would
the benefit be of extending the period
of loyalty by another 25%? What would
it be like to reduce the advertising
budget in half because existing cus-
tomers were giving so many positive
references in the marketplace? Who
knows? Besides, this all requires longer
term thinking about how a business
should be run. In today’s predominantly
“transaction” oriented environment, it
becomes almost irrelevant. The fact
that it costs 5-20 times more to get a
new customer than keep and existing
one gets lost in the shuffle of trying to
make the balance sheet look good this
quarter. The fact that in most organisa-
tions, 80% of the time and effort is
placed on getting new customers and
only 20% on keeping them (and that’s
where customer service comes in - the
short end of the stick!) is of little conse-
quence. Hey, we can lose a few! We’ll
just replace them with new ones! I
recall a very successful (if you measure
success only in terms of economics) car
dealership outside New York City. The
owner had a simple philosophy. “Just let
me “hit” on a customer once and I don’t
care if I ever see them again!” The
truth? Anyway you look at it the forgo-
ing is poor economics - plain and
simple. You know they said Einstein was
so brilliant that he great difficulty adding
2+2 and getting 4. Maybe that’s it!
Possibly management are such incredi-
ble geniuses that they are incapable of
thinking in simple common sense terms!
Eureka!
The disappointing thing, of course, from
a customer perspective is the incredible
inconsistency in service that one
encounters from company to company
or even from person to person within
the same company. One begins to
wonder if organisations have ever heard
of service quality let alone service
excellence! Most are still struggling just
to provide what might be called the
minimum requirements for customer
service even though hitting those flaw-
lessly is the equivalent of “table stakes”
- allowing organisations to stay in the
game as it were.The funny thing about it
is that management does really think of
customer service as a way to competi-
tive advantage! The problem is that they
look at it exactly in the opposite way
that they should. By that I mean, the
competitive advantage comes through
being able to offer the least costly cus-
tomer service in their industry there-
fore giving them a cost advantage rather
than investing and utilising customer
service to add value for true competi-
tive advantage based upon differentia-
tion. What is so amazing is that if you
look at the diagram below, relevant to
virtually all organisations today given the
increasingly dynamic nature of their
business all the customer facing func-
tions - sales, repair service, technical
support and customer service become
like “listening posts” to help organisa-
tions gain fast insight into emerging
trends, changing competitive conditions,
evolving customer requirements,oppor-
tunities to build relationships, drive
innovation and more. Let’s take a call
centre, for example. Few organisations
have a point of contact with the volume
of a call centre. Some organisations
receive 10,000 calls per day. Here are
two scenarios. The first one: The cus-
tomer hangs up and goes,“Wow! I sure
like those people. They always have atti-
tude of service, they are professional,
responsive and provide me the answer
or solution I need! “ In the other sce-
nario, the customer slams down the
phone and begins to tear their hair out
while yelling,“Ooohh I hate doing busi-
Stable
Rapidly Changing
Rapidly Changing
Changing Market Conditions
Technology
MarketConditions
(customers&Competition)
Where is your organisation today? How fast is your operating and
market environment changing?
Stable
Increased need for
“real” time
data & information
Customer
Market
Competition

ness with those people! Every time I
call it the same thing. First I can’t get
through or I’m on hold for ever. Then
when they do answer it’s like an inter-
ruption to their busy schedule! All I
ever get is either a statement of what
they can’t do for me or a statement of
policy!” So which one do you want hap-
pening in your organisation 100? 200?
400? 1000? 2000? 5000? 10,000? times
a day?
So why, in the case of the journalist
Gary Younge, whose column was the
source of the recent BBC Radio 4You &
Yours broadcast of which I was a partic-
ipant did he write his scathing column??
It was the seven month effort it took
him to get his cableTV installed proper-
ly in his new home. Well, frankly, in my
18 years experience there have always
been and still are industries that are
notorious for their inconsistent or poor
levels of customer service. Included
among them, in general (and if you think
your organisation is the exception, I
want to hear from you!) are airlines, car
hire firms, utilities (electric and tele-
phone particularly but not exclusively),
cable TV and banks. There may be
others, but those stand out certainly in
mind as having granted me some of the
most horrific moments as a customer
year after year after year. They try to
excuse themselves by rationalising that
they are possibly the “best of a bad lot”.
Unfortunately that brings little solace to
me as a customer.
For example, two and half years ago I
got quite upset with the fact that BA
would not honour my seating prefer-
ence. I’m quite tall, their leg room was
deplorably poor unless you want to
assume the fetal position. They also had
an informal policy of treating economy
passengers as second class citizens who
should consider themselves fortunate
that BA let them actually occupy space
on one of their planes. So I finally com-
plained. I asked the at the ticket count-
er how to voice a complaint. I was
handed a card with the Customer
Relations toll free number to call. I
thought, fine! I’ll just give them a ring to
express my displeasure. I rang and
immediately encountered a recording:
“Due to the unusually high volume of
complaints, we are currently requesting
that all contacts regarding a complaint
Peak Performance Training
Peak Performance Training was founded in 1995 by Rachel Davies and specialises in management
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be handled by mail or fax”.
Aaaaarrrrggghh! Talk about adding
insult to injury! Right - just put the
burden on the customer! Typical isn’t it?
So I took out an hour of my time and
prepared a fax. I sent it and to my sur-
prise received a “boiler plate” acknowl-
edgement within 24 hours. As to a
response to my complaint? Well, here I
sit two and half years later still waiting!
Oh, and then there’s the Royal Mail. By
comparison, this issue has only been
going on since 5 May 2003. It was at
that time that I sent 10 parcels each
specially designated by a process called
“M-Bag” from Boston to my office in
Huddersfield. They were to arrive at
their destination in two weeks I was
told. While I thought that might be just
another case of over promise and under
deliver, it’s gone down hill dramatically
since then! My dossier continues to
grow with each contact I make to the
Royal Mail Customer Service helpdesk
or Parcel Force or the local
Huddersfield Post Office. When will it
all end is all I ask? When will I be put
out of my misery? How much more
emotional pain do I have to experience
before I have my parcels. In all honesty,
I have to admit that my efforts to date
have paid off, I suppose although proving
any true cause and effect may be a bit
challenging! At present, after 10-15 calls
all over the Royal Mail and Parcel Force
system, encouraging customer service
personnel to establish a case, having
them send emails to other locations
where my parcels might be still be sit-
ting in some dark and dingy corner
gathering dust, I now have 9 of the 10!!!!
Only the last one remains and I vow
that I will fight to the death to recover
it! Today a minor breakthrough. The
transport manager in Huddersfield was
able to translate the hieroglyphics on
one of the shipping tags of a parcel
received. I now have a lead. All I need
do now is try to get a telephone
number for the Dover facility where all
Canadian and U.S. mail/parcels initially
come. Then track from there to the
Doncaster rail head, then to Bradford if
need be. I’m feeling lucky! Wish me the
best -please!. I will have probably
wasted about a total of one day of my
time fooling around with this. And at my
daily rate it adds up quickly.
Let’s talk about fundamentals and why
things don’t happen. Aside from hiring
“warm bodies” or selecting only those
who have knowledge or skill but the
wrong attitude and then not training
them, informing them, recognising them,
setting appropriate performance expec-
tations and appraising them to these on
a regular and consistent basis, nor
paying them anywhere close to what
they are worth, what could possibly be
wrong?
First off, organisations fail to have a look
at their customer engagements - those
moments of truth or points at which
their organisation and the customer
come together to do business. You may
think that is odd, but I can tell you
unequivocally that over the past 18
years, I have worked with far fewer than
18 (out of well over 100) organisations
who have actually mapped these out.
The diagram below shows the situation
for a typical retailer.
What are the decision points? What
Managing the Consumer Relationship:
Consumer Engagement Map (B2C)
Consumer
Consideration
Advertising
Message and
image
Attract or
Connect with
Consumers
Communication
Consumer
Decision 1
Arrival
Travel Location
(logistics
convenience)
In-Store Experience
(avoid unpleasant
surprises, e.g., not
having advertised items)
Find Item
Consumer
Decision 11
Purchase
Item
Consider
Other
Items
Decisions 11
Checkout
Process
After Sales
Experience
Product
Usage
Service
Delivery
(installation)
In-Store Assistance
(visible/available, accessible,
professional/knowledgeable,
courteous/respectful)
Decision IV
Should I
return in the
future based
upon this
experience?
Where are the “Points of Pain?”
The Customer Promise,
Keeping Commitments,
Meeting Expectations
Convince & Convert to or
strengthen loyalty
Resolving problems or complaints

drives them? Where do employees
have the greatest difficultly satisfying
customers and why? Where are cus-
tomer most unhappy and why? How
does competition compare? What are
the needs, wants and ways of adding
value in each engagement? Which
engagements are most important to
customers and the continuation of the
relationship? Are our processes work-
ing or are they dysfunctional? Well, you
get the idea. Simple basic “blocking and
tackling”. It is the foundation on which
better things are built.
However, if your business philosophy is
simply “keep your finger in the dyke”,
who needs it, right?
Damn the torpedoes, full speed ahead!
We’re making money! Well, at least for
today that is. Why worry about tomorrow?
What about a B2B situation? Well
here’s one from the telecommunica-
tions industry. The company is a
“household name”. Below is what it
looks like:
In some respects this appears simpler
than the consumer engagement map,
but under the surface are far more
sophisticated processes and require-
ments for success. One of these critical
success factors again is people! Where
are your people having the greatest dif-
ficulty satisfying your customers - day in
and day out? What is it that is frustrat-
ing your customer facing employees
most in their tireless efforts to service
your customers? Often, as our
research has shown over the past 15
plus years, employees become frustrat-
ed most of all by three things:
Their inability to do what is in the best
interest of the customer either because
they do not have the skills and knowledge
or empowerment needed - well, after all,
why did management in its infinite wisdom
put “policies ‘ in place if they weren’t to be
followed to the letter. The result is that
Presented by Ted Marra
For a full agenda please contact Ruth Colleton on
01484 467000 or email on
ruthcolleton@leadershipfactor.com
This seminar covers:
• The role of complaint and
enquiry management to
effectively manage your
customer 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.
London 15th January 2004
Manchester 31st March 2004
Best Practice
Complaints Management
one day seminar

Finally, however, I am happy to report
that research and best practice have
been joined at the hip! They do actually
reinforce one another. Organisations
like First Direct, Southwest Airlines,
USAA insurance and others have been
vindicated at last! Through the use of
service-profit chain modeling (put forth
by Heskett et al) , it can be proven that
employee satisfaction and commitment
are the single most important drivers of
customer satisfaction that exist -full
stop! Doing this right results in
increased profitability. It’s not rocket
science. Employee satisfaction and cus-
tomer satisfaction are inextricably
linked. I recall having worked with
Xerox in Canada during the mid-1980’s.
Dave McCamus was the forward think-
ing visionary MD running the company
at the time. I was leading a customer
inspired organisational change effort for
him. At the kick-off meeting of the“core
group” hand picked to lead this change
effort he drew the chart below. His bril-
liance and understanding of how things
worked showed through quite dramatically.
Here is an actual example from Sears
Roebuck in the States, showing the
results that can accrue at an individual
store level. Please note that there was a
six month lag between improvements in
employee satisfaction and customer sat-
isfaction and about the same between
improved customer satisfaction and
improved profitability.Now let’s say you
are Tesco with 2000 locations. Just
think, if you could increase revenue
growth and profitability by 0.5% per
location, what might that be worth?
Suppose you could repeat that process
a number of times while simultaneous-
ly reducing the cost of employee
turnover. In many retail organisations,
it is not unusual to have a 50%
turnover in staff per year. In the U.S.,
Wal-Mart has 1.3 million employees
employees are often in a position of having
to tell customers what they can’t do rather
than what they can do - or worse, just echo-
ing the blood curdling words,“Our policy is
.....”. Management has always been so afraid
of empowerment. Oh, they say, employees
will just give away the farm if we empower
them! Yet in empowerment programme
after empowerment programme which we
have successfully implemented, the truth be
known at last! Its MANAGEMENT that
gives away the farm - not the customer
facing employee, who is closest to the cus-
tomer and follows an extremely rational
decision making process whereas the
Executive reacts with emotion saying, “Do
whatever you have to and make it go away!
Give them whatever they want!”
These same customer facing employees
often see the same problems occurring and
re-occurring day after day. No one takes the
time to take corrective action to prevent
their re-occurrence. Wasting employees
time and most of all costing the company
dearly in terms of lost customer satisfaction
and negative references to say the least!
Management whose actions and words
regarding the customer are not aligned.
Management professes the importance of
the customer, but clearly only focuses on
one thing - short-term bottomline financial
results. Employees are not as stupid as man-
agement thinks I’m afraid. They do see very
quickly though management’s attempt to
“snow” them! The end result, of course, is
demoralised, demotivated staff.
Managing the Customer Relationship:
Customer Engagement Map (B2B)
How we do business each day
“Telecommunications”
Customer
Purchase
Consideration
Customer
Purchase
Decision
Customer
Purchase
Consideration
Purchase Cycle
Where are the “Points of Pain?”
Sales Process
System Design
Delivery Installation
Training
Order
Submission
Credit
Review
First
Invoice
Service Maintenance
Technical Support
Account Maintenance
The Leap of Faith
Employee Satisfaction
Customer Satisfaction
Shareholder Satisfaction

Ted Marra is an internationally known
Management Consultant and has developed a
leading-edge systematic and comprehensive
process which integrates “best practices” to com-
plaint and enquiry management, call centres, cus-
tomer relationship measurement and
management, customer “value”, internal cus-
tomer/business partner relationships and more all
designed to build customer and channel loyalty.
Having been a lead assessor,Ted utilises Malcolm
Baldrige and EFQM Excellence criteria as a foun-
dation for all his concept development.As a result
of his extensive work in this area, Ted has been
labelled a ‘thought leader’ in Europe on this topic.
Over the past 18 years,Ted has worked in North
America, Europe and Asia helping well over 100
different organisations.
email:tedmarra@leadershipfactor.com
approximately and hires 500,000 each
year - 200,000 to fuel new growth and
300,000 to replace those who have
left! Imagine the hiring and training
costs associated with such enormous
numbers of people?
S
Corporate ID
Company brochures
Stationery
Flyers
Contact us now for a hassle free and quick quotation
01484 467002
judenottingham@leadershipfactor.com
or www.leadershipfactor.com/design
Design
The Leadership Factor
Taylor Hill Mill
Huddersfield
HD4 6JA
Tel: 01484 467000
Fax:01484 467020
For all your direct marketing communications problems
A Real Example:
The service-profit chain at Sears
A COMPELLING PLACE
TO WORK
Attitude
about
the job
Attitude
about
the company
Employee
behaviour
Employee
retention
5 UNIT INCREASE
IN EMPLOYEE
ATTITUDE
DRIVES
Service
Helpfulness
A COMPELLING PLACE
TO SHOP
Customer recom-
mendations
Customer
impression
Merchandise
Value
Customer
retention
Return on assets
Operating margin
Revenue growth
A COMPELLING
PLACE
TO INVEST
DRIVES
1.3 UNIT INCREASE
IN CUSTOMER
IMPRESSION
0.5% INCREASE
IN REVENUE
GROWTH

Customer Service part 1

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Customer Service part 1