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The Top 5 Customer Service Mistakes Companies Make

A client recently asked, “From your observations and consulting work, what do you think are the top customer service mistakes companies make?” I thought about it and listed five organizational mistakes that I feel are at the foundation of most service issues:

  1. Not clearly defining what the customer experience is supposed to be.
  2. Designing processes for the company’s convenience, not the customer’s.
  3. Hiring the wrong people.
  4. Not making customer service a significant part of new-hire training as well as ongoing training.
  5. Tolerating poor service performance from employees at any level within the organization.

There are certainly other mistakes companies make, but these five seem to show up over and over. Any organization that successfully addresses these five mistakes will set themselves apart from ninety-five percent of the competition.

I’ll focus on each of the mistakes individually in my next five blog posts and offer solutions. In the meantime, assess your organization’s performance in the five areas and ask others to do the same. Where do you feel your organization’s greatest opportunities lie?


A Request

I hate to use this blog to ask for a favor (but I’m going to anyway). An important element of selling books on Amazon.com is the Customer Review section. Many potential book buyers, me included, often take a look at the reader reviews to see what others are saying about a book before deciding to buy.Lessons Cover

If you’ve read my new book, Lessons From the Mouse, and feel so inclined, I would certainly appreciate a brief review. Don’t be intimidated by the length of the review currently appearing with my book, most reviews are only a paragraph or two. Clicking on the book title above will bring you right to the book on the Amazon site.

Whatever you decide about writing a review, I hope you are finding the information in this blog to be useful. Please feel free to let me know if there are particular topics you’d like me to address in future posts.


Customer Service, Not Price, Remains Top Cause of Customer Churn, Accenture Study Finds

When proposing a customer service improvement plan for your organization, one of the questions you’re likely to get is, “What will it add to our bottom line?” So many factors influence the actual impact of a service initiative that it’s hard to give a specific number. I can point to past successes, but even then it’s hard to make a prediction. What’s happening in the economy? How well does the organization follow through on the initiative? What’s the competitive environment like? What other operational and financial issues is the company up against?

So, while it’s hard to say “if we do this, we’ll add $X to our bottom line,” we can point to a lot of data that supports the role service plays in a company’s bottom line. Gallup, Bain & Company, Press Ganey, and a host of other research organizations have validated the importance of quality service in generating customer loyalty as well as its impact on an organization’s financial results.

The most recent data comes from a global study conducted by Accenture, a management consulting, technology and services and outsourcing company. The study resulted in an article titled, “Customer Service, Not Price, Remains Top Cause of Customer Churn, Accenture Study Finds.”

The Accenture study presents figures that are consistent with studies conducted by other organizations (which, for me, helps validate the data’s credibility) and further makes the case for making customer service improvement a core component of any organization’s business strategy. While price will always play a role in purchasing decisions, the study shows that customer loyalty is more service-driven than price-driven; even in today’s economy.

I like the fact that this is a global study and shows that people world wide make purchasing decisions that are influenced by the service they receive. Consumers around the world, including developing markets, are as likely to defect to a competitor due to poor service as consumers in the U.S.

The results show that consumers are most likely to defect based on four service issues:

  • Whether service representatives were polite and friendly.
  • Whether their issues were resolved in a timely manner.
  • Whether service representatives took ownership for resolving the customer’s issue.
  • Whether customer service was available at convenient times.

If you’re in the position of trying to convince others in your organization that customer service should play a key role in your company’s business strategy, take a look at the article, “Customer Service, Not Price, Remains Top Cause of Customer Churn, Accenture Study Finds” and pass it along to members of your organization. You could also include some of the findings in your company’s communications tools such as internal newsletters, intranet, team meetings, etc.

The more we can make the case for service excellence, the more likely the organization will embrace the tools for delivering excellent service. In today’s economy, many organizations are looking for ways to cut costs. Information like that presented in the Accenture research can help ensure your organization doesn’t cut in all the wrong places.


Customer Service and Accountability

My publisher, Dennis McClellan (DC Press) sent me a blog post yesterday that stopped me in my tracks. It’s written by Quint Studer, who is one of the premiere consultants in the healthcare industry, and brilliantly addresses the issue of accountability.

I could elaborate on the article here, but there’s nothing to add. Please check out (and pass along) his article, “What You Permit, You Promote.”


From Completing a Task to Creating an Experience

Not long ago I received a comment from a program participant stating, “I’m tired of hearing Southwest Airlines, Nordstrom, and Ritz Carlton examples in every customer service speech. Why do all speakers seem to highlight the same companies?”

The answer, of course, is that these companies consistently do the things that make them good examples! It’s hard to argue with success and these as well as a few other companies have pretty good track records. Why not learn from what they’ve done to reach the point where they’re regularly held up as examples of excellence?

This is all a build up to another Southwest Airlines story – without apology. Last Friday I was waiting to board a Southwest flight from Orlando to St. Louis. I observed the gate agent boarding the flight leaving before mine and noticed that as she took the passengers’ boarding passes, she greeted every one of them by name. I mean every one of them. “Welcome aboard, Mr. Jones,” “Hello Sarah,” “How are you, Ms. Smith?” And she wasn’t doing it in a mechanical manner, she was offering sincere greetings. Then she did the same thing when my flight was boarding.

Southwest Airlines BoardingWhat a great example of turning a routine task into an experience. It took no additional time, didn’t cost a penny, but positively reflected on her and the Southwest Airlines brand. All it took was some initiative on the gate agent’s part to do something people weren’t expecting.

Her simple act of courtesy resulted in hundreds of customer smiles in the course of about fifteen-minutes. Talk about a positive cost-benefit ratio.

Take a look at those routine tasks in your organization and ask, “What can we do to turn those tasks into experiences?” Most of the time I believe you’ll find the answers aren’t rocket science; it’s just about taking the time to ask the question and implement the answers.

So, why do I often use Southwest Airlines examples? Because they regularly turn tasks into experiences and have made the experience mindset a part of their culture. And now they fly more passengers than any U.S. airline. Not a bad track record to emulate.