Diagnose Your Customer Culture

Harvard Business Review:

I hope you enjoy our post from the Harvard Business Review Blog Network

Originally posted on HBR Blog Network - Harvard Business Review:

What happens when you deliver poor customer experiences and get complaints? You might ignore your customers —  or worse, blame them — and lose them for life. Or you might fix their problems and earn their loyalty. What you and your employees will do depends on your customer culture.

In truly customer-centric companies, all individuals (regardless of their roles) base their decisions and actions on the belief that what’s best for the customer is best for the business. New evidence shows how a strong customer culture drives future business performance and supports market strategies. Our research, based on a quantitative study across more than 150 businesses, spanning various industries and functions, identifies seven cultural factors that drive customer satisfaction, revenue and profit growth, innovation, and new product success. These are important predictors of future results and early indicators of risks and opportunities related to retaining customers and acquiring new ones…

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Some of the best research ever done on customer centricity

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We are often asked about other research that has helped shape our view of creating customer cultures.

Here is a list of a few of our favorite research articles and books the influenced us deeply when writing “The Customer Culture Imperative“:

Kotter, John P. and Heskett, James L. (1992), Corporate Culture and Performance, New York, Free Press.

Homburg, Christian; Pflesser, Christian (2000), “A Multiple-Layer Model of Market-Oriented Organizational Culture: Measurement Issues and Performance Outcomes,” Journal of Marketing Research; Vol. 37 Issue 4; 449-462

Basch, Michael D. (2003), Customer Culture: How FedEx and Other Great Companies Put the Customer First Every Day, New Jersey, Prentice Hall.

Kirca, Ahmet H.; Jayachandran, Satish; Bearden, William O. (2005), “Market Orientation: A Meta-Analytic Review and Assessment of Its Antecedents and Impact on Performance,” Journal of Marketing; Vol. 69 Issue 2; 24-41.

Enjoy!

How Zappos makes sure customers get a great experience everytime

customer service image on blackboard

You see countless articles every day that claim improving a single part of your customer service strategy is the “key” to something. Experts promise how listening to your customers, delivering more timely service, improving employee training and many other things offer a path to providing a better customer experience. The reality is that your customer service is like a machine with many moving parts. These parts include your call center’s hold times, your field sales teams’ ability to make an emotional connection, the helpfulness of information available on self-service portals and more. They all need to function well, and – most importantly – function well together in order to offer an amazing customer experience and rank among the best names in stellar service. Ultimately this requires a customer culture (read more in our new book here)

The most well-known companies in customer service have earned their reputation by recognizing and executing against this reality. This is demonstrated in call center reviewer Ashley Verrill’s recent article, which examined how Zappos perfects quality assurance management for a better customer experience. QA is not typically showcased as a big part of the “machine,” but the Zappos strategies she highlights do more than improve the accuracy and fairness of agent scoring. They also involve the voice of the customer and service reps to improve the experience for all parties involved:

Quality Assurance and Customer Service Reps Join Forces: Each QA team “advocate” is required to spend at least five hours on the floor, taking calls. This helps them stay connected to the real challenges and opportunities reps face on a daily basis and promotes active participation between the two groups.

Scoring Weighted to Reflect Zappos’ Values: (which you can view here): The scores that have the greatest impact on the overall quality assurance score are those in categories that do more to deliver the “Zappos Experience.” The most important factor for Zappos is forging a personal emotional connection with every customer. Also important is the solution to the issue. Knowing what’s most important to your company helps you evaluate your reps based on what matters most.

Self-Check Sessions: Every six months, Zappos evaluates its QA form and asks agents to grade their own calls. This not only helps continue the improvement of QA evaluation – it also empowers agents to voice opinions and innovative ideas.

Involve the Customer: Zappos manages call quality using traditional methods such as traditional Net Promoter Scores, as well as more unique strategies including “sharing great calls” and “customer props.” Again, this empowers the agent to tout an exceptional connection they made with a customer and also gives a voice to the customer, who is invited to give his or her take on the experience.

Custom Coaching with a Clear Path of Progression: Although Zappos has certain standards in place for measuring QA, team leaders are encouraged to personalize training exercises to best fit the learning style of the rep. Providing customized coaching optimizes the agent’s learning potential, interest levels and excitement. Zappos’ leaders take it a step further by outlining exactly how reps will move to higher-tier roles – creating an incentive for reps to continuously be improving their service quality.

You’ll find a pattern with the majority of Zappos’ tactics for quality assurance management: they are constantly creating opportunities for feedback. Whether that feedback comes from the customer, the agent, the QA team or management, all suggestions are welcomed as vehicles for innovation. It doesn’t matter which part of your customer service “machine” you’re working to improve – when you incorporate viewpoints of all parties involved, the closer you get to providing stellar customer experiences.

Why empowerment and trust are crucial to creating great customer experiences

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Many of the most-used customer service buzzwords focus on delighting the customer, proactively providing a good experience or making a personal and emotional connection – but what about trust?  How would your business’s customer experiences benefit from trusting your employees a bit more? 

Holly Regan of Software Advice recently wrote an article highlighting a discussion with Carmine Gallo, who interviewed Richard Branson on his customer service tips in this May Forbes piece. The article covered Richard Branson-like ways to empower customer service representatives, with one of the key benefits of trusting your employees being a significant improvement in the overall customer experience. Even if your organization doesn’t have a formal customer service strategy, here a few tips on empowering employees that are worth integrating into your standard operating procedure for happier staff and happier customers.

Give employees the freedom to decide: This starts with hiring the right employees whose judgment calls you trust. Minimize the risk of an employee deciding to do something he or she shouldn’t do by setting clear boundaries of what can be improvised by the customer service rep, as well as what rules and procedures must not be deviated from.

Create an environment where reps work together to solve issues: Encourage your teams to consult with their fellow reps to agree on the best solution before bringing an issue to senior management.  How? By role modelling this behavior, is the leadership team is demonstrating collaborative behavior it will catch-on.

Encourage staff to incorporate their personalities: Empowering customer service reps to show off their personalities in their interactions not only increases confidence of your staff by allowing them to solve issues their way – customers will like this much more than the typical customer service “robot.”

Educate all staff members on the company mission: Providing a big-picture look at what your company hopes to accomplish with excellent customer service lets reps know they are on the frontlines of executing overall company goals.

Create an open-door policy: Give your employees the direct opportunity to bring up what is working, what isn’t working and provide suggestions to senior management.

Basically, employees are much more likely to enjoy their jobs if they are trusted to be themselves and act according to their own best judgment. This is where employee engagement and customer experience intersect.

When employees enjoy their jobs and understand the experience the customer expects, great things happen. This in turn produces another desired end result: customers who really like interacting with your staff.

Every employee has a role to play in creating great customer experiences, leadership’s role is to create the right culture and environment for them to really make great things happen.

How DollarShaveClub.com created a disruptive customer experience

If you think about what’s happening in the men’s shaving razor market it’s a little like a cold war era arms race. Each year more and more blades are added to the humble razor. The giants of the industry Gillette and Schick continue to add more and more features to their products but are they creating more value?

Michael Dublin from DollarShaveClub.com doesn’t think so. In a mere 12 months he has built an online subscription based razor business with more than three hundred thousand customers.

How? Michael recognized three major pain points for men when it comes to buying shaving equipment. Firstly razors are expensive! and they keep going up in price. Rather than getting more for less consumers are getting more for more…. Secondly the experience of buying a razor is far less than ideal (to put it politely). Razors a usually locked behind a plastic cage at the back of a Walgreens store and it take 20 minutes to get someone back there to let them out! Finally who really needs 5 blades? How close a shave do men really need?

How about a world where razors are bought online at low cost and sent to you each month – a just in time subscription model. Not only that but they are provided by a company with a sense of humor, that doesn’t take things too seriously (apart from disrupting the existing business models).

A great value proposition is worthless if no one knows about it so to overcome the inherent challenge facing any new business or new idea, Michael developed a video to communicate what dollarshaveclub.com is all about…

While it certainly is not a video that will appeal to everyone, it does a great job of speaking directly to his target audience – men fed up with spending a fortune just to keep up with the latest shaving technologies.

The Customer Insight Lab of the Future

Uncovering customer insights

Telstra, Australia’s largest telecommunications company, like other large organizations has a powerful research, analytics and insights hub. Liz Moore, who heads that group in Telstra says

“You need deep seated curiosity to develop insights.”

So she has hired people with those characteristics and developed an operating model that links the data supplier with an “insight manager” and the stakeholder (decision-maker) to solve a particular customer problem and gain real insights into current and future customer needs.

This group provides insights from customer value analysis, churn analysis, market share changes, communication effectiveness of the company and its competitors’ marketing campaigns, financial modeling of key competitors as well as analysis of qualitative customer feedback.

Liz says “In research we have changed from the rear-view mirror to headlights” and with access to a panel of 15,000 consumers whose behavior is tracked, she can put together focus groups within a day of the request. Her group proactively shares analytics and insights on customers and competitors throughout the company using weekly bulletins. It also reacts to requests from decision-makers in the business to research, analyze and develop insights on particular customer and market situations.

Above all this group is action oriented. Liz says “We don’t build anything unless there is a pathway to execution and measurement.”

This really is a great model for the customer insight lab of the future. Rather that seeing this as an isolated research function, forward thinking companies are building a multi-disciplinary team of people focused on using deep customer insight to help move business forward.

Does your organisation know more about customers than your competitors?

How stupid companies hold their customers hostage

customer hostages

It never ceases to amaze me how some companies continue to make it hard for customers to leave. As though making it difficult for customers to leave will make  them want to stay. Why do you think businesses continue with such short sighted practices?

In my experience businesses that rely on monthly membership fees are the worst offenders. Of course there is the notorious case of AOL that lit off a firestorm online a number years ago and continues to be talked about today.

This is clearly a leadership and corporate culture issue. It happens when leaders behave in a way that suggests it is ok to make it hard for customers to leave. They probably say things like “what ever you do don’t let a customer go without doing everything you possibly can to keep them!” This is great in theory but in practice not every customer wants to stay and its not necessarily because they don’t like what you are offering.

Sometimes customer’s needs change, they grow out of using your product and need to move on. Don’t you think it would be a good idea to let them go on a positive note rather than kick them on the way out?

Why do you think this still happens?