C of Customer Service
Working in consumer goods, one develops a passion for brands and learns to appreciate the importance of investing in building consumer value. It is important to manage these costs diligently, as the hidden cost, over time, will exceed the visible costs of investing in the customer. Be careful in treating them as 'discretionary' because not spending will impact future revenue and customer loyalty. The purpose statement of Procter & Gamble articulates this powerfully: "As a result, consumers will reward us with leadership sales, profit, and value creation." They see it as their true purpose to deliver superior customer quality and value and that - leadership - financial results will follow. This is easier said than done.
A few weeks ago, we had to travel back to Holland with the family. Two of us had our flights canceled twice on very short notice (after check-in, just before boarding). Customer service was simply not available to offer credible options. I had to fly to a different location and was forced to give up hand luggage which got lost. While the website looked amazing, it provided no option to report the missing trolley as the tag number given was not recognized. Calling customer service neither helped, so I went back to the airport the next day. There, I was told that my luggage could be picked up at belt 6 within 20 minutes. After a few hours, and going back to the customer service desk twice, it was finally acknowledged that they had no idea when our luggage would be delivered. No, I was not the only person waiting for nothing.
This is just one example. We all probably have experiences with customer service. It feels like customer service is mostly managed as a cost center, without an eye for the consumer. Or putting the financial goals before the consumer. Moments like "lost luggage" or any other difficult experience should be leveraged as pivotal moments to build loyalty to drive future revenue. Especially now that persistent inflation is weighing on consumers' wallets, it is a good time to rethink the role of customer service.
So, what can we learn? First, accept that adding the cost of customer service without delivering a positive customer experience creates no value. Second, ask a few new questions and apply some different thinking:
? Losing a customer is never a good idea: winning is not losing. The cost of losing a customer means foregoing future revenue or having to spend money to win them back. The two moments of truth for a customer are when "buying" and "using." As mentioned, the airlines missed the opportunity to create the "AHA" moment to drive loyalty, repeat purchases, or create new brand ambassadors. So, how do you measure the success and outcome of customer service? What should be on the customer service scorecard beyond cost (savings) to define the user experience to be delivered? What are the lead, or predictive, KPIs, which ensure the business delivers the customer value for the financial results to follow? Like the P&G mission statement: define and operationalize "customer value" with clear milestones. This comes before the budget.
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? Refresh the fundamentals of total quality management and LEAN. I felt sorry for the customer service people who were not equipped to help. The digital work environment seems to not help either as the truth has become what is visible on the screen. Websites feel like they are built from "a desk," offering fragmented, disconnected solutions which lead to ineffective customer service and unclear roles for the people who interface with the customer. This feels like the manufacturing issue of the 70s with unreliable quality as an outcome. Back then, new competition from Japan came and took market share (e.g., Toyota, Sony) as they applied the logic of TQM (Total Quality Management) and LEAN thinking. This is about making sure that everything adds value to the customer (if not, it is identified as waste to be eliminated). It simplifies and improves processes with a focus on "first time right" and less checking. A key element is performing "huddles". Huddles bring people from different functions together to create better customer solutions. Before COVID, we used to go to the plant, distribution center, or store to "huddle" and solve issues together in a multi-functional setting, listening to the people who do the work. Huddles must take place where work actually happens (with our own eyes and ears, not from a screen). Such an approach also fosters constant innovation and new ways to become more productive. The approach of LEAN and TQM were key curriculums at universities and companies. They were widely applied across consumer goods companies. The question is, are we using these proven tools today to improve customer service?
? Make technology work for the customer with 'end to end' solutions. Trying to rebook the canceled flight or find my luggage seemed impossible using the websites. They all look "nice and shiny," yet did not have the functionality needed. And please let's forget the customer chat box: they are truly lost. As discussed before, it seems that in designing the key use cases, they are not worked out "end to end," which is a simple outcome of a fragmented approach and not using TQM. The best thing was the (automatic) customer survey email the next morning to ask how we felt about the flight experience. That feels like oil on the fire. Reviewing and testing with real customers all use cases would make a huge step in customer service and create websites that do work and solve issues.
? Train your people: be there for them so they can be there to serve the customer. Companies say they are short of staff. Training people and making them part of the solution will make them more engaged and productive. I saw five people behind the customer counter dealing with symptoms, not offering solutions. This is cost without value and can be eliminated using LEAN. How can you send us to a luggage belt and say it will come in 20 minutes while you know it won't happen? Training people, including on TQM and LEAN principles, and they will solve the problems. They will be more productive and engaged. This reduces costs and improves customer service.
A final word to the airports. Once you are through security, it feels you are trapped. You can only buy what is offered. Unhealthy food at high prices or a "glass" of wine offered in a coffee cup. Airports should not be more expensive than the inner city. The picture is the positive highlight of hope. An airport offering free water savingplastic bottles shipped with diesel trucks (and sold at crazy prices).
Remember, disruption is everywhere. Consumers will forget you when you have forgotten them. Toyota came like EasyJet. What will be next? Now that inflation is impacting consumption, it feels like a great moment to rethink the role of customer service. From cost to customer. It will improve the bottom line by higher revenue from more loyal customers with lower costs because all activities will add true value with people having more rewarding jobs.
Supply Chain Executive: Supply Chain all-rounder - Strategic Transformation Lead - Organisational and Talent Architect - Resilient Entrepreneur
7 个月I wholeheartedly agree with you, Hans, that customer service is an investment rather than a cost center, and that many companies fail to see the value of creating a positive customer experience.?We all experience this as consumers daily.?From the airline companies to the car rentals and communication providers all the way to the (chain) hotels or restaurants we visit. You raised an interesting point about the lack of integration between the different functions (marketing, sales, finance, supply chain...) in many organizations (the huddles). I agree that this is a major challenge that prevents customer service from being designed into the product or service. When companies adopt a value chain approach, where they consider the entire process of delivering value to the customer, from the initial idea to the post-purchase support, their products and services are valued much higher. This however requires a cross-functional collaboration and alignment of goals and incentives across the different departments. Do you have any examples of companies that have successfully implemented a value chain approach to customer service? How did they overcome the barriers and silos that often exist in large organizations?
échte verandering begint met een goed verhaal.
7 个月A lot of attention, time and money is spent on acquiring new customers, while most brands have the back door wide open for them to leave. It takes less effort to retain a customer than to acquire one. Thanks for sharing Hans!
Creating Sustainable Performance Improvement | Empowering Employees Through Lean Six Sigma
7 个月Great reflection, Hans. There are in my experience not nearly enough executives who understand the value of delivering ‘basic customer needs’ first, before focusing on ‘extras’. You’ve always been passionate about LEAN and customer value!
Strategic Thinker, ESG conscious, Business Developer, seasoned energy and plant construction expert.
7 个月Hi Hans, can only fully agree and thanks for sharing in such well thought through way. When recently my luggage got lost on a late evening flight, firstly all seemed finally ok when first thing in the morning the happy text message "Good news! We have found your luggage and will organise transport!" came in. Yet, it took them finally 3 days to send this piece within Europe with multiple flight connections between the respective cities every day. This was a "right in the face" message that you as a customer are not important but only cost optimisation of within which flight some spare transport capacity was available. They seem still to build on the fact that at the end when you want to fly, you will fly regardless. In such situations wondering always how people with less travel experience shall succeed to get their rights.