How to deliver extraordinary service

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Breakaway ServiceBreakaway Service
PerformancePerformance
John McKean, Paul KellJohn McKean, Paul Kell
Center for Information Based CompetitionCenter for Information Based Competition
www.informationmasters.comwww.informationmasters.com
johnsmckean@att.netjohnsmckean@att.net
1-937-427-88751-937-427-8875

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Customers Don’t Want
Relationships…
never have, never will…
Voted – BEST SESSION at Largest Banking Conference in the World
“This guy must have felt like Gandhi at a Soldier of Fortune rally. But he was factual, he
was blunt, and he hit it right on the screws, as we say on the golf course. For my
money, the best presentation of the week”
Compared with 54 presentations plus keynotes from Richard Branson (Virgin), Lou
Gerstner (ex-IBM CEO), Jamie Dimon (CEO Bank One)

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Customer Service Basics
Don’t want Relationships, but consistent human
treatment…
“Give me the best product, at the right price (not
cheapest) and treat me like a human being in
the process of selling and servicing that
product”

4. What Customers rememberWhat Customers remember
Product/PriceProduct/Price 30%30%
Sales/MarketingSales/Marketing 15%15%
Repair/ServiceRepair/Service 30%30%
Initiation/InstallationInitiation/Installation 10%10%
BillingBilling 15%15%
100%100%
70%70%
What they remember…
……determined bydetermined by
treatment duringtreatment during
interactionsinteractions
……fromfrom
product/priceproduct/price
30%30%
1.1. Customers remember interactionsCustomers remember interactions
2.2. Specifically, how “human” they were…Specifically, how “human” they were…
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Bell Labs Scientists’ study ofBell Labs Scientists’ study of
300,000 customers300,000 customers

5. What they remember
Resolving ProblemsResolving Problems Excellent RatingExcellent Rating
Average excellence ratingsAverage excellence ratings 51%51%
Fix within 2 hoursFix within 2 hours 81%81%
Takes longer than 2 hoursTakes longer than 2 hours 74%74%
Takes longer than a dayTakes longer than a day 46%46%
Fix within two hours, tell afterFix within two hours, tell after 84%84%
Fix within two hours, tell duringFix within two hours, tell during 90%90%
AT&T/Bell Labs
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It’s not what “Westpac does”, but howIt’s not what “Westpac does”, but how
what Westpac does… makes them feelwhat Westpac does… makes them feel

6. Few companies explicitly address “high order” human touch
experience elements as a consistent, company-wide
science rather than intuitive art practiced randomly
Top sales people don’t sell better, they treat better…
The Human Interaction Factor
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Resources applied to
"Humanness" of Interaction
Buying Influence of "Humanness"
of Interaction
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7. Human Touch as a Science
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1.1. Behavioral - Identify Buying Emotions that mostBehavioral - Identify Buying Emotions that most
influence decision to choose one company overinfluence decision to choose one company over
anotheranother
AAcknowledgement,cknowledgement, RRespect &espect & TTrust (ART)rust (ART)
2.2. Operational – 4 High Order Human Touch SciencesOperational – 4 High Order Human Touch Sciences
a)a) Communicate more humanlyCommunicate more humanly
b)b) Execute as definable processExecute as definable process
c)c) Consistency across business functionsConsistency across business functions
d)d) Technology that humanizes, not dehumanizesTechnology that humanizes, not dehumanizes

8. High-Order HT CommunicationsHigh-Order HT Communications
7 Steps of Customer Service
(start & end is human, middle is business)
1. Thank you – recognize their effort & concern
2. Sorry - acknowledge emotion is valid
3. Listen carefully – collect/clarify facts
4. Fix problem now or come to agreement
5. Ask for suggestions – engage in solution
6. Administrative - log complaint & reimburse
7. Follow-up – ensure closure
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Wendy EggletonWendy Eggleton

9. High-Order HT ProcessesHigh-Order HT Processes
Customers felt Ritz-Carlton didn’t care because of slow room
service orders - #1 customer service complaint
1. Room service was slow
2. Room service deliverers had long waits for elevators
3. Houseman who supplied Maids w/linen tied up elevators
4. Linen shortage required them to steal from other floors
5. Initial hotel budget created linen shortage (2 years ago)
6. Decision to cut linens by Founder and CEO
7. Solution – ordered one more “parr” of linens
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Horst SchultzeHorst Schultze

10. Human Touch and the Bottom line
By studying human interactions as a process…
• If fulfilled guests went from 92% to 97% over 2 years
– 4 million room nights a year
– If 5% previously dissatisfied guests (200,000) did not leave
the hotel unfulfilled and didn’t tell others of dissatisfaction =
8% additional occupancy
– +8% occupancy rate = $300 mil. in additional profit
– $300 mil. could never be achieved by cost-cutting w/o
significantly affecting customer satisfaction
High-Order HT ProcessesHigh-Order HT Processes
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11. High-Order HT Consistency
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Share Of Wallet Vs Relative Customer Value
0%
20%
40%
60%
80%
100%
1 2 3 4
Relative Customer Value
%ofWalletShare
90% 95% 100% 130%
AT&T/Bell LabsAT&T/Bell Labs
Consistent High-Order
Experience Elements
Inconsistent High-
Order Elements

12. High-Order HT Consistency
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Actual Bank Likelihood to Recommend Model
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
1 2 3 4 5 6 7
Customer's Perception of Interaction Humanness
Probabilityto
Recommend
AT&T/Bell LabsAT&T/Bell Labs
Inconsistent High-
Order Elements
Consistent High-Order
HT Elements

13. Market Share and Customer Satisfaction
85%
95%
67%
61%
80%
90%
100%
CustomerSatisfaction
20%
30%
40%
50%
60%
70%
80%
90%
100%
MarketShare
Customer Sat. 85% 95%
Market Share 67% 61%
Year 1 Year 2
High-Order HT Consistency
Risk is that Westpac underestimates Competitor reactionRisk is that Westpac underestimates Competitor reaction
to Customer Satisfaction gainsto Customer Satisfaction gains
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AT&T/Bell LabsAT&T/Bell Labs

14. High-Order HT TechnologyHigh-Order HT Technology
Fatal Technology Assumptions
• We’ll “save money” by pushing customers to
technology channels and lose nothing
• A single view of the customer is not critical
• Asking for personal info before trust is OK
• Design w/o considering emotional content
• Expecting they'll tolerate a few “bugs”
• Design for our efficiency, convenience, and control
and they won’t lose theirs
• Design for task execution alone, not to enable more
human interactions
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15. The Employee Connection
“Treat employees as you would have
them treat customers”
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HumanizingHumanizing
BehaviorBehavior
LeadershipLeadership
DehumanizingDehumanizing
BehaviorBehavior
HumanizingHumanizing
BehaviorBehavior
EmployeesEmployees
DehumanizingDehumanizing
BehaviorBehavior
ProfitableProfitable
BehaviorBehavior
CustomersCustomers
UnprofitableUnprofitable
BehaviorBehavior
80% How
they treat /
how they are
treated
70% how
they treat/
“Decision to
Buy”

16. Treatment-Chain Economics
Based on 50,000 Employees, 6 business units, over 2-3 yearsBased on 50,000 Employees, 6 business units, over 2-3 years
Quarter lag on stock priceQuarter lag on stock price
Employee = Customer = Shareholder Fulfillment
$41
$43
$45
$47
$49
1st
Qtr
2nd
Qtr
3rd
Qtr
4th
Qtr
1st
Qtr
2nd
Qtr
3rd
Qtr
4th
Qtr
1st
Qtr
SharePrice
65%
70%
75%
80%
85%
90%
%Fulfillment
Share price Employee Fulfillment Customer Fulfillment

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• 90% of Westpac change effort (SPP / Pinnacle / Reach / Red Power / Ask Once) is addressing 30% of buying influences (customers as consumers)
• Westpac will get 70% of return by addressing the last 10% that impacts buying influences of customers as people (actual customer behavioural change: stay/buy more/tell others)
• Therefore, need to hardwire “high-order human touch” elements into the evolution of change programs to drive a dominant leadership position
Achieving Breakaway
Performance
+9% Rev.
0-2% Exp.

18. Does Westpac have advantages in its DNA
that are underexploited in becoming the
Bank with the “human touch”?
The Human Interaction Factor
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Resources applied to
"Humanness" of Interaction
Buying Influence of "Humanness"
of Interaction
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$25 Share Price ?