Dennis Snow Blog

The number of ways consumers can make a purchase today is amazing. The option I find most interesting are the Best Buy vending machines found in many airports since their introduction in 2008. Being comfortable spending a couple of dollars for a drink from a vending machine is one thing, but the fact that consumers are now willing to spend several hundred dollars purchasing electronic equipment from a vending machine is a true paradigm shift.

Consumers are placing great value on convenience and have demonstrated a willingness to spend large sums of money as long as sellers make the process easy. And it doesn’t get much easier than a vending machine.

Another example, Redbox, is shaking up the video rental industry by offering video rentals via vending machines at the low price of one dollar for a one-day rental. I recently spoke at a company meeting for Family Video, one of the largest video “rentailers” in the industry.  One of their executives made a profound statement about why they place such a strong emphasis on exemplary customer service in their stores. He said, “Customers are choosing NO service over POOR service. They’d rather simply put money into a machine than having to deal with employees who either aren’t knowledgeable or don’t care.” Family Video has been successful in differentiating themselves because of their service (record profits and continued expansion), but we all know companies whose service is so bad we’d just as soon not have to talk with anyone who works there.

The vending machine phenomenon is a symptom of the much larger issue of how businesses are commoditizing themselves more and more each day. A machine can take money and dispense a product quite efficiently, and at a much lower cost than a bricks and mortar location staffed by employees.

What machines can’t do is make  customers feel welcome, valued, and unique. A company’s employees are the only ones who can do those things. Employees are the only ones who can provide a truly personalized experience. But if a company’s employees and service aren’t adding value to the customer experience then why wouldn’t customers prefer to just deal with a machine?

I do believe that having a variety of purchasing channels is a smart approach to business. Letting people buy things in the way they like to buy them is a good thing. However, when customers intentionally avoid dealing with a company’s employees because the experience is usually poor, automating the purchasing process moves the company and its products one step closer to commoditization.

I think Best Buy’s vending machines are cool, although I admit I haven’t purchased anything from one – yet. The point, however, is the fact that they even exist. That fact should make any employee in any organization look over his or her shoulder to see if a machine is able to perform the same job function with no loss of value. And with the advances in technology today, value can’t be based on completing a transaction efficiently; machines can do that. Value must be based on creating an experience that makes the customer feel valued.

Tags: Commentary by Dennis Snow
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When asked to describe their corporate culture, business leaders sometimes struggle to answer. Responses often run the gamut from vague generalities such as “we have a culture of putting the customer first” to recitations of the company’s mission statement.

I believe that you can see a company’s culture simply by watching what employees are doing and how they do it. In short, a company’s culture is defined by what people do within the organization.

The critical point of course, is to have a culture by design rather than by default. Many organizations simply allow their culture to evolve with no plan or direction and then wonder why there’s no consistency of performance and no anchor for accountability. A much better strategy is to understand exactly what you want to happen within the organization and build the culture accordingly.

While an organization’s culture is made up of many elements, my focus is helping organizations define the service component of their culture. And the process for doing so is quite simple, consisting of two questions:

1. What we want our customers to say about their experience with us?
2. What employee behaviors would lead them to say those things?

For question number one I recommend crafting three statements you want customers to say about their experience. These statements can come from survey data, focus groups, observations, or from a variety of other sources. But coming up with three statements forces an organization to define the customer experience in terms of outcomes that lead to customer loyalty.

At Walt Disney World for example, the three statements that lead customers to want to return and to also talk about their experience in glowing terms are these:

• It was a magical experience.

• They paid attention to every detail

• They made me and my children feel special.

Certainly Disney wants guests to say a lot of other things about their experience, but these three statements are at the core of guest loyalty.

In my business as a speaker and consultant, I want my clients to say:

• He knew our business and customized the program content to our unique situation.

• He didn’t just provide concepts; he provided specific tools to help us apply what we learned.

• He made learning fun.

These three statements came from reviewing testimonials from clients that have either had me back a second time and/or referred me to other clients. In essence, these are the statements that lead to customer loyalty in my business.

After defining what I want clients to say, pinpointing the behaviors that would lead them to say those things is pretty straight forward. For the first statement, for example, it’s important for me to talk with members of the organization, research industry data, and connect every learning point to their situation. As I prepare for a client engagement, the behaviors I need to demonstrate to achieve these statements guide my planning process. And those times when I don’t feel as successful as I would’ve liked to have been, it’s usually because I violated my own rule.

Ideally this approach should be used at the organizational level. That way you have consistent behaviors across the entire organization. It can, however, be used at the department level and even at an individual level. It all depends on what your sphere of influence is. As a bank teller for instance, what three things do you want your customers to say about any interaction with you? What behaviors would lead customers to say those three things?

While this approach may seem overly simple, I think simplicity is what makes it work. Leonardo da Vinci said, “Simplicity is the ultimate sophistication.”

What three things do you want customers to say about your organization?

What employee behaviors would lead customers to say those things?

Tags: Leadership, Tips for Better Customer Service by Dennis Snow
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I hit the “Publish” button too soon on yesterday’s post, Toyota Recall – The Brand Challenge. Today’s news reports that Toyota executives admit they knew about the gas-pedal problem for over a year before taking action. In fact, evidence about unexpected acceleration has been mounting for six years. The firestorm has just begun.

Toyota completely blew Step 1 of how to handle company screw ups:

1.     Admit to the mistake quickly

2.     Accept responsibility

3.     Apologize

4.     Say what you’re going to do to fix the problem

5.     Explain what you’ll do so the problem doesn’t happen again

(For details of each step, link to Toyota Recall – The Brand Challenge)

While Steps 2-5 are in motion, it appears Toyota failed miserably at Step 1: admitting to the mistake quickly. So the perception will be that they took action only because they got caught. It would be one thing if the company didn’t know about the problem until the National Highway Traffic Safety Administration notified them, and they immediately took action. But that’s not what happened. They knew.

Toyota’s credibility is now shot – certainly in the short-run and likely in the long-run. In fact, the company’s recall of 437,000 hybrids because of problematic brake systems, announced although the recalled cars “meet safety standards,” is being met with skepticism in light of the sticky gas-pedal debacle. Customers are wondering if the recall came quickly only because of increased scrutiny. What could’ve been a feather in Toyota’s cap for quickly admitting the problem is now another dagger in their reputation for quality. Projected hard costs to Toyota for the recall repairs is projected to be in the $billions. The cost to the brand is unknown, but will likely dwarf the cost of repairs.

I’ve said many times that a company’s brand is fragile, built over years and even decades. Trust is the foundation of successful brands. When trust is knowingly violated, the brand (so carefully built) is compromised. Winning back trust is a long, long road.

Tags: Commentary, Service Analysis by Dennis Snow
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The Toyota recall has been dominating the business news lately. Every day it seems a new piece of information regarding the “sticky gas-pedal” issue comes out – some of it indicating that Toyota is handling the situation quickly and effectively, and other information indicating that Toyota has known about the problem for a long time and took action only after being forced to. I’m sure that new information will continue to come out, and it remains to be seen how all of this will affect Toyota’s reputation and future.

While no one knows at this point how the Toyota story will play out, I do know this: an organization’s brand is fragile. Brand is all about what customers think about a company and say about a company. For years customers have connected Toyota with quality, and that image brought them to the top of the automotive industry. Now customers are wondering if they’ve been wrong all along. Has it all been smoke and mirrors? I don’t think so, but a seed of doubt has certainly been planted. And if it turns out that Toyota knew about the problem and took no action until forced to, regaining trust will take years (if it can be regained at all).

Two years ago I posted an article, “What to do When Your Company Screws Up.” Based on what’s happening with Toyota, I think it’s worth running the article again, with a few minor tweaks. While you may not often run into the same challenge Toyota has – at least I hope not – every organization, department, and employee screws up at some point. How you handle the screw up will determine the level of trust you lose, retain, or gain. The article below highlights five steps for managing through potentially debilitating screw ups.

What to do When Your Company Screws Up

The public is never at a loss for examples of high-profile com pany screw ups. Some companies handle mistakes very well. The Tylenol tampering scare in the early 1980s was handled immediately by Johnson and Johnson and to this day the company is recognized for its excellent response. Others companies have created huge problems due to poor handling. Firestone Tires and Ford, for example, handled their defective tire situation by pointing fingers at each other and both companies got fried by the press.

So, what do you do when you make a big or even a small mistake? No matter the size of the problem, there are steps you can follow. The complexity of each step will depend on just how big the mistake it is; but the steps are the same.

1.     Admit to the mistake quickly – Trying to cover up a mistake will come back to bite you. Someone is going to find out and it’s best to assume they will find out sooner rather than later. When we come forward ourselves to admit a mistake, customers are more forgiving. It appears that Toyota may be particularly vulnerable on this point.

2.     Accept responsibility – In the case of the Firestone/Ford tire debacle, neither Firestone nor Ford accepted responsibility for the problem, and they paid a stiff price for it. Accepting responsibility may seem dangerous in the short run (lawsuits, etc.) but the organization comes out stronger because of the willingness to own up to the problem. In fact, costly lawsuits can be even more likely when the company takes a belligerent stance.

3.     Apologize – We all appreciate a sincere apology. Saying you’re sorry that the situation occurred can take the sting out the mistake. I think that Toyota has effectively apologized for the problem, although some disagree. The argument, however, that the company’s president, Akio Toyoda, didn’t bow low or long enough when apologizing is just looking for something to complain about in my opinion. But, some people do feel that way, and if some feel the apology is insincere it will affect their perception of the company.

4.     Say what you’re going to do to fix the problem – If the wrong meal was delivered, say how you’re going to make it up to the customer. If the phone bill is wrong, say how you’ll handle it. Clearly communicate that you are taking ownership of the issue. If the tires are defective, tell us how you’re going take care of the situation and don’t waste time pointing fingers. I think Toyota has clearly communicated what they are doing and how customers can go about getting the gas-pedal problem fixed.

5.     Explain what you’ll do so the problem doesn’t happen again – This step may not be necessary for some errors – you don’t really need to explain to the customer how you’ll make sure to deliver the right meal in the future. Bigger issues, like defective tires or sticky gas-pedals, seriously erode customer trust. In that case, customers want to know that you are putting in processes to ensure the situation doesn’t happen again.

If more companies and employees would follow these steps, customers and companies would be better off. Everyone screws up and most of us can accept that as long as the organization handles the screw up well. Most of us are willing to give a second chance; maybe even a third. But if the situation is handled poorly, it may be one strike and you’re out.

We’ll see what happens with Toyota. I’d love to hear what you think about how they’re handling the situation.

Tags: Commentary, Service Analysis by Dennis Snow
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Fellow consultant and blogger Mari Pat Varga recently asked me to be a guest blogger on her site. Specifically, she wanted me to discuss the customer experience improvement tool that I call “Service Mapping,” which helps organizations design their processes with the “lens of the customer” in mind.

In the blog post (the link is below) Mari Pat also included a clip from one of my presentations in which I describe how to get the most from the Service Mapping tool.

I hope you find the tool to be valuable in your service improvement efforts!

A Tool For Creating Outstanding Customer Experiences

Tags: Recommended Resources, Tips for Better Customer Service, Unleashing Excellence by Dennis Snow
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