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A Tale of Two Stories (continued)
Where Is The Customer?
There are probably two dozen conclusions you could draw from those two stories. Too big, too impersonal, too little training, uncaring employees, improper expectations on my part . . . jump in anytime with your own thoughts.
To me, the only meaningful difference in the stories was in the actual interactions. The service manager at the local bank was pretty unhelpful. Not rude, but not nice either. And not helpful. Conversely, the salesperson at AT&T did her job. She was just betrayed by the system. It wasn’t her fault that I wasn’t a residential customer. She just had bad data.
Without exception, everyone I spoke to at AT&T after the first sale was unfailingly courteous. They all opened and closed the call with the words and phrases they were taught or that were on their screen. Two of them really went the extra mile to be helpful and to make my AT&T experience a good one. It almost worked.
Beyond those differences, I’m more struck by the overwhelming similarities. In the end, both AT&T and the big bank are hamstrung by at least two linked dynamics:
A business design that doesn’t deliver the brand promise, customer focus, and customer experience that senior management is selling to the analysts, media, and customers.
A customer relationship management infrastructure that doesn’t deliver the information customers, sellers, and service providers need to deliver a great customer experience.
The problem in both cases, for the bank and AT&T, is that I have bought the promise of anytime, anywhere access to a complete basket of services that are priced to reflect my loyalty and value to the brand and the institution. And I’m not getting what I’ve been promised.
In the case of AT&T, the failure of the system to identify me as a business customer from the very beginning set in motion a chain of woe that has taken me untold hours to unravel.
The fact that AT&T has no ability to see that I am a user of virtually every service they sell other than cell phone further diminishes its capacity to understand my value, to customize offers, and to justify over and above the line service to try and hold me in the midst of what is obviously not a good experience.
What’s true for AT&T is true for banks and a lot of other businesses as well. The cost of acquiring customers is prohibitively expensive unless you can do one of two things:
Keep customers for a very long time in order to amortize the cost of acquisition.
Sell customers a lot of products and services in order to spread the cost of acquisition.
AT&T made the grade on the second dimension, but not because I was happy with AT&T. In the end it won’t matter. It will not have the opportunity to keep me as a customer for anything other than broadband, and maybe not even that. Buried in the accounting somewhere is the fact that AT&T just lost a bunch of money acquiring a customer (several times I might add) that’s right in its sweet spot and who is now gone.
In the case of the bank—and it’s not just this bank, it’s virtually every large bank in North America—it is simply not able to get a one-look view of me and all the business I represent. There are just too many unlinked systems. Despite a keen interest in cross-selling, it is also not able to do true relationship pricing. Instead, each product line and channel of distribution seeks to maximize its performance against the metrics promised to investors. So while I’ve been a customer since 1986 and I keep very healthy balances on deposit in various checking accounts and savings accounts, I don’t show up as someone important. In my case, no one piece is big enough, and the pieces don’t add up to a whole that anyone can see.
Is There Hope for the Customer Experience?
It’s not like executives at big service providers like banks, utilities, phone companies, and airlines don’t think about these issues. They do, and they’ve spent big money on branding and marketing to sell a promise of great service, and technology, training, and incentive compensation tied to sales and service to deliver it. So what’s going on here?
It’s possible my experience was out of the norm, that things really are much better than they were. The problem is, neither side of that statement seems plausible to me. The research I’ve seen on customer satisfaction with these types of companies suggests that customers just aren’t that happy. A large bank like mine has millions of customer interactions a month. Tens of millions. Even a small fraction of bad ones, say one percent, still adds up to a lot of unhappy customers (and the numbers are much worse than that). More to the point, even if things are better, the problem is that my expectations are even higher because I was promised so much more.
It’s also possible that the huge variability inherent in service business, versus selling a can of soda for example, make it nearly impossible to deliver a consistently wonderful customer experience. Every interaction by definition is custom. The folks on the front line are almost always the newest, least well trained, and least well compensated people in the company, often judged and incented on production and efficiency, not on customer outcomes. Many of the interactions start out with a crabby customer. It’s tough.
I tend to discount that theory as well. Southwest Airlines, Commerce Bank, The Ritz Carlton, and Orange (the mobile telecom provider in Hong Kong) are just a few examples of companies that are noted for their terrific, and terrifically consistent, customer experiences in industries noted for so much less.
It’s possible that there is something about bigness and oldness that conspires against delivering against a great customer experience. This one might have some merit. The companies I just listed are relatively smaller and younger than their competitors. They were built from scratch with a strong service culture in mind. More importantly, they are wild eyed about the customer experience and everything, starting with how they recruit and onboard, is designed to support their customer-centered values. They train more. They coach more. They do everything that directly supports delivering a great customer experience more that do their competitors.
Having said that, there are some very large and old companies that score very well on the ACSI index (www.theacsi.org), for example Southern Company and Duke Energy, both large utilities, score higher than the aforementioned Southwest Airlines, Target Stores, or Nordstrom just to pick a few well known names. And Federal Express and UPS turn in pretty gaudy numbers as well. So it’s not bigness or newness.
Maybe it’s simplicity. The more complex the business, the harder it is to deliver a great customer experience? There may be some truth to that. Commerce Bank, the reigning poster child for a great banking experience, has a comparatively simple business model in comparison to Wells Fargo or Bank of America. But I’m sure the people at any of the companies I just listed would kill themselves laughing at the thought that what they do is simple. It only looks that way to us customers which has got to be at least half of what goes into making the customer experience great: never let them see you sweat unless it’s part of the show.
The only conclusion I can really come to is that like everything else, this one comes down to leadership and business design. If leadership doesn’t believe down to the tip of its collective boots that a great customer experience is the path to above market rate profits, returns, and share, delivering a great customer will live only in the realm of branding fluff and executive-speak. If the business processes and information systems aren’t configured to deliver the brand and the customer experience (vs. all the other things they’re designed to do), people will try their best, but in the end will be defeated by the friction of frustration of fighting “they system.”
At the risk of oversimplifying the problem, here are some of the solutions I see:
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You can’t fix everything all at once. What you need to fix is what goes on with what I call your “value anchors,” the customers that contribute the disproportionate amount of current and future profits and value. Usually this is the top ten to twenty percent of your customers. The good news is that means fewer customers to worry about. The bad news is that they usually want everything all the time everywhere. Nobody said it would be easy.
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Figure out a way to deliver a simple value proposition really, really well, to everyone. This is either in addition to the value anchor strategy, or instead of. It’s okay to have wild complexity in other parts of your business. But find a way to deliver something core and useful to all of your customers better than anyone else.
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Figure out a way to relationship price. Even if you can’t fix the customer experience all at once, or maybe even ever, you can at least keep the switching costs high by making the economics of staying so attractive that customers will put up with the glitches and groans in their experience.
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Invest in plumbing, which in this case is some sort of customer relationship management technology. You have to be able to see the total customer value and activity anytime and anywhere across your business.
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Invest in creating business intelligence. These can turn into wickedly expensive projects with limited utility, but that’s more an issue of bad design than some immutable law. You’ve been asking your customers for all sorts of data for years. They assume you’re using this information for some purpose that is useful to them (like better prices, more tailored offers, better configured products, etc.). They’re getting more and more cranky that this is not the case.
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Whatever you’re spending on coaching and training probably isn’t enough. At least according to the U.S. Bureau of Labor Statistics (http://stats.bls.gov/news.release/sept.t02.htm), about a quarter of the people out there receive some sort of sales or service related training. More revealing, the BLS figures indicate that the amount of time spent on sales and service related topics in companies larger than 50 employees is about a day a year, maybe less. Is that a lot of training? A little? A company like The Ritz Carlton delivers nearly 300 hours of training to every cook, concierge, and clerk every year. How much do you do?
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Don’t forget that a great customer experience is as much about the show as it is the substance. The kind of businesses I’ve mentioned here—banks, telecoms, airlines, utilities, hotels, delivery services—are selling services that are largely indistinguishable from those of their direct competitors. There is no durable competitive advantage other than the customer experience. What is differentiating is the ability to consistently deliver a show at the point of contact that is better, more branded, and more pleasing than what your competition can do.
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Bake your brand promise into everything that touches the customer. Not the words, but the essence of the brand. When the customer walks out, hangs up, logs off, or otherwise goes on to whatever’s next, he or she needs to think, “I just had an xxxxxx [your name] experience.” Not just generically good service, but something distinctively yours.
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Find ways to involve your customers, to engage with them. Big providers of services are driven by a need to find new sources of operating efficiencies. Every year they need to squeeze another Five to seven percent out of the cost of doing business, and that just barely keeps them even. Often the number is higher than that. One of the unfortunate side effects is that those firms make it harder and harder for the customer to interact and to spend any time with the brand (vs. the service). Want an example? Try to find a phone number for your phone company on its website. Try dialing the number you do find, if you find one, and see how difficult it is to talk to a real person. Yes, they’ve driven costs out. And yes, they’ve diminished opportunities for customers to become emotionally invested in the brand.
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Find ways to encourage your customers to share more information with you, this assuming you have the ability to capture, analyze, and use that information. Use this information to build trust and value by offering back better pricing and better offers. This will build more perceived value and trust which will cause your customers to share more information in a virtuous circle.
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Become a customer. If you’re an executive, you’re probably too well known by your people to be a customer of your own company. That’s too bad. You’d learn a lot. Lacking that, go be a regular retail customer of your competitors so you can experience directly what it’s like to be just a regular person.
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Don’t try to eat the elephant in one bite, but do eat the elephant. Just because it’s hard, doesn’t mean it’s not worth doing or that it can’t be done.
To that last point, there’s a wonderful interchange towards the end of the movie, A League of Their Own. It occurs between the reformed drunken ballplayer turned manager, Jimmy Dugan, planed by Tom Hanks, and Dotty, played by Geena Davis. Dotty has just had a blow up with her sister/team mate and has decided to quit baseball and go back home. It goes like this:
Jimmy
Quitting. You’ll regret it for the rest of your life . . . Baseball is what gets inside you. It’s what lights you up. You can’t deny that.
Dotty
It just got too hard
Jimmy
It’s supposed to be hard. If it wasn’t hard, everyone would do it. The hard is what makes it great
It’s possible that a great customer experience is a nice to have, not a must have. Despite all the books and rants like this one, customers really don’t care, or don’t view the competitive choices as being different enough to matter. In that case, “the hard” doesn’t matter. It’s also possible that the rotten scores most large service providers like my bank and AT&T turn in do matter, and that someday customers will just say no. It’s possible that it’s going on right now. What’s your bet?
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05/03/06