Category Archives: Customer Management

Self Help

“I love those automated attendants, recorded voice answering machines and the endless opportunities I get to push my own buttons whenever I make a call looking for someone to help me.”

Said no one, ever.

It has been well documented for some time that customer satisfaction is adversely affected whenever a customer has to deal with or must navigate through one of those automated phone answering systems. Normally when they call, they have a question, or need help with an issue. They want to talk to someone. Otherwise they would have just sent a text. Or accessed the company web page and sent an email. But no, they had hit a threshold where this type of technological linking was not good enough. They wanted to ask another human being to help them. And yet despite their need for support and desire for human interaction, they are denied.

The problem is so rampant that there are now commercials by certain companies appearing on network television espousing the point that when you call them, you actually get to speak to “a real human being”. Some companies now feel that it is now a competitive differentiator that they will have a real live human being answer your call and that you actually get to talk to them when you call them. It is interesting how quickly times changed initially to the automated systems, and then just how quickly they are changing back. There can only be one reason for this service technology whiplash.

Money.

Companies originally saw these systems as opportunities to reduce the cost of support by in effect making the customer responsible for some of their own issue or support request. They would need fewer support people if they could make customers work a little bit in the identification of the type of issue they were calling about. Fewer people needed for support equated to reducing the cost of support. This is always thought of as a good idea for the bottom line.

What they learned was that for the most part customers didn’t really like this type of automated system. It may have saved the company money in their support costs, but it made their customers unhappy. And unhappy customers were not as likely to buy more equipment or products from the vendor that made them use an automated attendant system when they needed support. This is normally thought of as a bad thing for both the top and bottom lines.

Companies learned, or actually relearned the old adage:
“Penny wise and Dollar foolish”. (It is actually “Penny wise and Pound Foolish”, but, I live in Texas, USA, so I have taken a foreign exchange liberty here.)

They may have saved a few pennies with the automated systems which enabled them to reduce the number of people required to deliver customer support, but it ended up costing them many dollars in lost sales from their customers who were not particularly impressed or happy with the support that they got.

Now we have companies advertising that they are using people to answer their service calls, just like everyone used to do thirty plus years ago. Go figure.

While it is interesting to discuss the migratory aspects of the types of customer service and support, I think it might be time to discuss a group that may not have fared so well in the evolution of support: The Employee.

It is no secret that companies must spend significant amounts of money, time and effort supporting their own communications and networking needs. Every company has a corporate network. Every employee has a Personal Computer. The employee productivity gains that have been created are enormous and well documented.

It has also put an enormous strain on and demand for corporate Information Technologies (IT) teams for support by these employees. Security and the ability to keep hackers out has almost become an industry unto itself. Requests for networking, applications, upgrades and support continue to grow as the complexity of what is required by the corporate knowledge worker increases. In the age of Virtual Offices (VOs) the demand to deliver these services to locations outside the classic organization structure or office has boomed.

And what is the diametrically opposed force that companies must deal with in this time of burgeoning employee technology demands?

The desire to reduce, or at least limit the growth of Information Technology support costs.

Companies are facing explosive demand for new and innovative Information Technologies applications and services by their own people in order to continue to generate ever better productivity, but are having to temper responding to this demand due to a desire to keep their IT costs in check. There are many innovative ways that companies are dealing with this issue, and unfortunately there are also several ways that may not be considered quite so innovative.

When I was in college, I once had a physics professor who was preparing us for a rather extensive round of midterm exams. He informed us that once the test was passed out that there would be no talking. He also said that if we had any questions we would be encouraged to raise our hands. He noted that by raising our hands above our heads, blood would obey the laws of gravity and flow out of our arms. This would in turn increase blood flow to our brains. This in turn would cause an increase our brain activities in the firing of synapses and neuron transmission, which in turn should enable us to solve the problem on our own.

I am not sure, but I think the gist of his comments were that we were not to ask him questions, because it was a test.

I am concerned that many of the IT leadership of many businesses today seem to ascribe to the same school of thought when it comes to staff support. If you don’t believe me, try and find the internal organizational phone number to call and actually talk to someone real time if you need IT help with you technology based connections. Emails and instant messaging are by far the preferred mode of communication if you need help. And if by some chance you do locate the telephone number for IT support, I think you have guessed it: You get to deal with the corporate IT automated attendant.

It seems that what was once done for you as a valued productivity asset of the company, when it comes to new applications and upgrades, are now being pushed down to you to try and do on your own. The new definition for employee service seems to include unlimited numbers of IT based emails with directions on how to update, upload and upscope the many new, mandatory or desirable IT capabilities.

Sort of a raise your hand and hope for increased blood flow to the brain when it comes to IT support.

I think part of the reason for this internal support shift is that the cost of IT and support is a very identifiable amount. There are direct numbers, budgets and staff associated with it. In budgeting and costing terms, it has become a very identifiable target. There is a defined amount being spent and as such becomes a prime candidate for cost reduction.

The issue that arises is that for every identified and quantified dollar that is saved from the IT budget, there is not a specific quantifiable amount of incremental time or lost productivity that can be identified or captured by the employees, as they are forced to pick up the slack. The measurable IT budget is reduced and a real dollar cost reduction is recognized. But it is far more difficult to measure how much is “spent” when all the additional hours that all the individual employees must now spend completing these IT tasks are totaled up.

An extra hour or two, here and there spent by each employee doing what was once an IT task gets lost in the count. The employee’s work load doesn’t decrease to accommodate this new additional effort. The deadlines aren’t extended because there is now more to do. It’s just another issue to deal with.

Just like happy customers are known to buy more products, happy employees are known to be more productive. However, employee productivity is something of a subjective measurement where IT budgets are very quantitative. This leaves the decision in the realm of reducing a measurable budget, known quantity at the risk of reducing an unmeasurable, unknown employee satisfaction and productivity quantity.

When the cost of cost reductions is reviewed in such a manner, it is best to expect continued pressure on corporate IT budgets for the foreseeable future.

I think it is probably safe to assume that there will be a point where there is a recognition of the value of supporting employee satisfaction and productivity via increased, direct tool and technology support. My guess is that corporations are probably getting close to that tipping point.

When bellwether companies such as Yahoo! and IBM have already decided that there is in fact greater value to the company when employees interact with each other in the office as opposed to the convenience of working via Virtual Offices, it probably isn’t too far a leap to think that they will also recognize that the small, but highly visible investment in the IT resources to support them is also probably money very well spent.

The Customer Pendulum

Customers are interesting things. They are the source of all business’ survival. They are hard to find and easy to lose. Many times they don’t know what they want and are almost always not willing to pay for what they need. They are fickle with their allegiance and occasionally are not entirely forthcoming about their preferences. They are part of and are sometimes caught up in a changing environment that most of the time they may not be prepared for. It would probably be possible for a vendor to solve the customer’s problems, if only those problems would remain unchanged for any sort of measurable time.

But they don’t.

Customer’s problems change. The very act of solving one problem invariably creates, or at the very least reprioritizes another problem.

Please don’t get me wrong. This is the way of business very much in the same way of Darwin’s Theory of natural selection. I’ll use the evolutionary speed race between cheetahs and gazelles here.

Faster gazelles mean that only the fastest cheetahs are selected to survive as they are the only ones that can catch the gazelles. This means that the next generations of cheetahs are based only on the faster bloodlines.

Now, the next generations of faster cheetahs mean that only the fastest gazelles will be selected to survive as the slower ones will fall victim to the cheetahs. This means that the next generations of gazelles will be based only on the faster bloodlines.

Now only the fastest of the faster generation of cheetahs will survive.

And the pendulum continues to swing from one side to the other.

I am going to focus on business services here because I think it best illustrates the changing focus, and the swinging pendulum of customer desires. In the business world of services there are no gazelles and cheetahs, but rather there are prices and service levels. There may be those that may try to interject other variables into the service customer equation, but the reality remains primarily associated with these two variables. The interesting part of this price and service level relationship is that only one of them seems to vary at any given specific time.

In the initial stages of the vendor to customer relationship the primary variable will be price. (There may be times where this relationship may be referred to as a “partnership”. This would be inaccurate. Partnerships of the sort implied here take time to evolve. Particularly when there is an ongoing service based relationship.) When a customer is looking to enter into a business services relationship, they are initially looking for a vendor.

This is due in no small part to how most customers go about entering into a services relationship. They will invariably set a minimum required performance level for the services they want, and then look to the vendor that agrees to provide them the greatest cost reduction from their current spend level at the selected service level. That means they are looking for the vendor that bids / quotes them the lowest price.

Of the two variables previously noted, price and service level, they have fixed the service level and are trying to vary the price to the lowest level possible. If the price for the desired services is low enough (as opposed to the total attracted cost that they are currently paying) they will select the vendor and sign a contract. If it does not return sufficient savings the customer will usually stay with the service arrangement that they currently have and avoid any service provision change event issues.

Once the service contract is signed, the price for those services is now fixed. The customer focus will now shift to the service levels associated with the service. Requests for incremental service or services and faster solutions to issues and problems will become the focus.

It is at this point that a relationship can begin to become a partnership.

Businesses want to help with and solve their customers’ problems. That is the value they bring and why customers buy their services. One of the things to remember is that customers associate value with that which they pay for. That means if you give them something for free one of two things will happen. They will either associate no value with what you have given them (since it was free) or you will have established a new service baseline where what you have given them will be incorporated into what they expect going forward. You will in effect raise the service baseline performance expectation going forward.

And once the new increased service level baselines are set the next generation of discussions (or contracts) will once again be focused on the price of the new service level.

And the customer pendulum will continue to swing, price, service, price, etc.

The point here is that despite their best intentions, vendors need to resist the urge to provide quick and cost free solutions in an effort to engender customer gratitude. There will always be times where quick support decisions will need to be made to support the customer, but it is always in everyone’s best interest to go back and revisit them after the issue has passed. Providing “freebies” provides some credence to the customer perception that once the price is set, they can continue to push for a greater scope of work to be provided.

A partnership has to have more of a connotation of a peer to peer relationship instead of a customer to vendor relationship. That means that there is a give and take instead of just an ask and take oriented relationship. If something is provided, then something should be asked for in return. It does not need to be strictly quid pro quo, but there needs to be some sort of cost or consequence associated with each request and action in a business services relationship.

Contrary to what we might feel, without some sort of cost consequence for their requests, many customers will only more deeply ingrain their vendor type perception of the relationship. The customer asks, the customer gets and it is up to the vendor to figure out how to provide it and continue to survive in the relationship. Businesses need to remember that making a customer happy by giving them things does not create a partnership. It usually just creates an expectation that more can and will be given in the future.

One of the best ways to stop the customer pendulum from swinging and creating a business partnership is to focus on the customer’s business service needs while remembering your own business needs. Being responsive as well as empathic regarding the customer’s issues will go a very long way in this regard. It is also necessary to educate the customer on the supply side issues in the service equation and the requirements that are required for a viable business relationship going forward.

I don’t know that you can ever get a customer to be fully empathic about the issues and costs associated with solving their service problems, but educating them about what it takes to provide them service can probably go a long way toward getting them to acknowledge and accept the bill that should be presented to them after the issues have been solved.

Show Them the Data First

I went out to visit some customers recently. I learned, or should I say I relearned some basic tenets about dealing with customers. Our customers were concerned about the performance level they were receiving. We were concerned about the incremental work that we were doing that was not in scope that we were not getting paid for. With this kind of a build up, we were all expecting an interesting and potentially spirited meeting.

I was prepared to go into the meeting with a strong review of the contract and definition of the agreed scope. We wanted to make sure they understood our issues and concerns regarding our out of scope functions. It sounded like the right approach to me. It would provide the basis for our future discussions about who would do what going forward. It would provide all the basic groundwork for our positions and planned negotiations about how we would both go forward.

I am glad we didn’t conduct the meeting the way I was planning on doing it.

When we met the night before the meeting to go through the slides and plan our meeting strategy, the sales team was almost apoplectic when they saw the slides. I should say that they were not entirely against the content of the slides. They were against the order of the slides.

The sales team’s position was that the customer understood what the scope of the agreement was. The customer was unhappy with our performance regardless of what the scope of the agreement was. If we were to start off with reminding them of what we signed up to do – meaning worrying about our position, instead of worrying about what the customer was concerned about (our performance) we would have set up a significantly adversarial situation.

Let me repeat that. We wanted to address our issues before we addressed the customer’s issues. That is always a major mistake. I think we would have failed.

Fortunately, we didn’t do that. We changed the order and focus of our slides away from what we wanted to talk about (scope) to what the customer wanted to address (performance).

We started the meeting by going through the metrics, performance measurements and demographics of the types of functions we were performing for the customer. Robert McNamara in his book “The Fog of War” stated that the first thing you do was “get the data”. He was right. We got the data out in front of the customer first. We set the stage by telling them what we were doing for them.

We listed it out by function and quantity/effort. We also made sure to show our performance measurements, both the good and the bad. The customer was right (as usual). We were not meeting our performance commitments. However, the data showed that we were doing so much more than we (or they) had planned on us doing, there would have been no way for us to meet the performance targets.

The customer then understood the issues.

By approaching the contentious issues from the perspective of the customer, and providing the data on how we were trying to do measurably more that we were supposed to do for them, we were able to defuse the customer’s performance issues, while also delivering the message (indirectly) regarding our scope issues. We never even had to review the agreed scope.

The end result was that we were able to turn a contentious and possibly negative customer perception into a positive. By providing the data, both the good and the bad, we were able to set a stage that addressed both the customers and our needs for the meeting. We also ended up getting an up-scope commitment from the customer to cover the cost of the incremental work that we were doing.

I have to remember that customer first thing in the future.

Sun Tzu, Competition and Customers

Sun Tzu was a Chinese military general in approximately the 5th century, B.C. He is renowned for never losing a battle. He wrote a treatise on conducting campaigns called “The Art of War”. It is an excellent book and I highly recommend it.




Most people apply what Sun Tzu wrote to the on going battles with competitors, and this may in fact be a very good application of some of his axioms. Most people apply Sun Tzu’s writings from the point of “winning” that battle, when in fact he wrote about “not losing” the battle. He was renowned for never losing a battle. He didn’t win them all. Many times he chose not to engage the competition because he felt he did not have a sufficient enough advantage to assure his victory.




Sun Tzu wrote;


“If you do not know your own capabilities, and you don’t not know your adversaries capabilities, you can not win.


If you do know your own capabilities, and you don’t not know your adversaries capabilities, you can lose half the time.


If you do not know your own capabilities, and you do know your adversaries capabilities, you can lose half the time.


If you do know your own capabilities, and you do know your adversaries capabilities, you can not lose.”




This is very interesting stuff, and I have written about it before. The question I would like to address here is how this relates to Customers, not competition.




Once the engagement with the competition has been won, a new engagement begins with the customer. Once the customer has been won, they are not guaranteed to be your customer for life. The idea here is to follow the idea of “not losing” the customer. If you know your own capabilities (and you probably do because you won against the competition) you must now learn the customer’s capabilities in order to be assured that “you can not lose”.




Over time (either short or long term) your corporate / business / group focus can change. These changes may not be perceived as congruent with the directions and desires of your customer. Over time the people and requirements of your customer will also change. These changes may change their perception of the value of having the current business relationship with you. The key is to be aware of and adapt to these changes in both your and the customers “capabilities”.




Research shows that it is 5 times easier to sell a new product or capability to an existing customer than it is to sell to a new customer. Every customer that is lost out of your customer base takes 5 times the effort to replace. What this shows is that winning customers is great. Not losing the customers you have is 5 times better.




Once the competitors are beaten and the customer is engaged, it stands to reason that you can modify Sun Tzu a little to read;



“If you do know your own capabilities, and you do know your Customer’s capabilities, you can not lose.”

Great Expectations

A colleague of mine had been working with a difficult customer for some time. He was making good progress with the customer and their issues. Late on a Thursday he sent me a request for support with a customer deliverable for the following Monday morning at 7:00 AM. This request would require essentially a one business day turnaround, or the team to work over the weekend.

 
Now sometimes a customer request should and does require the weekend work. After a little discussion with my friend it was determined that his request was a “nice to have” not a “have to have” capability for the customer. I then asked why we wanted a “nice to have” deliverable in a “have to have” time frame. He responded by saying he was trying to show our responsiveness to the customer.

 
I explained that my concerns were multiple: I didn’t know if we could scope the work (estimate the time effort and complexity of the request), and implement properly it within the time frames he was trying to set. I also told him I thought that there was a significant risk that our demonstration of responsiveness could backfire on him. He asked how.

 
Customer satisfaction is based (in my opinion) on economic expectation theory. Simply stated that means if you set your customer’s expectations at a specific level, and then meet those expectations, your customer will be satisfied with your performance. In this instance I pointed out that if he set the customers expectations for receiving this incremental functionality (nice to have) in an achievable time frame, and we in fact were not able to deliver it in the desired interval, we would not have met the customers expectations. This would have turned a potential opportunity to build customer trust and relationship into a negative experience for the customer.

 
It would not have mattered that we were trying to do something for the customer that might have been above and beyond the requirements of the contract. What would have mattered is that we would have committed to providing something to the customer within a certain time frame and then not delivered on it. The point here was that when you commit to providing something, even something you are not contractually required to provide, it becomes an expected deliverable and is viewed as such by the customer.

 
What we instead did in this instance was commit to providing the desired incremental functionality for the Monday a week later than my friend wanted. This provided us with the time required to properly scope and perform the desired tasks. We ended up providing it on the Thursday of the week that my friend wanted (not the Monday) and were able to be perceived by the customer as both providing incremental functionality and providing it ahead of our commitment – a two for one on the customer satisfaction score card. More over we were able to set a reasonable expectation by the customer and then meet it.

Are They Really Buying?

In a previous post I noted that customers associate value with that which they pay for. That means, in my opinion, that if you give a customer something for free, the customer will not really recognize it as valued. I would like to address the concept of customer value, when it comes to sales. I will relate a story to illustrate my point.

 
Several years ago I was dealing with a customer users group. As with every good users group they were in the habit of prioritizing their product enhancement desires and requests and presenting those requests to us at our joint user’s group meetings (which actually occurred twice a year). A specific request for a specific enhancement started to appear regularly at these meetings.

 

As time passed and other issues were dealt with, this request continued to rise in priority on the request list.

Soon it became a point of contention. The customers wanted to know why the feature was not being made available (despite the availability of “work arounds”), and the sales teams wanted to know when they would be able to sell the capability to the obviously pent up demand.

 
It became time to deal with this topic directly. During an open forum meeting with the users group, they were asked how many of them wanted this capability, even though there was a work around. All hands were raised. They were then asked how many of them would be willing to pay for this capability, since incremental development and work would need to be expended by the manufacturer to create it.

Despite the popular concept to the contrary, we were in fact a “For Profit” institution.

Several hands went down. When it was shared with them what the actual price of the capability would be, to cover costs and provide profit and on going support, almost every hand dropped.

There are always those things that are “nice to have”. Those are normal items that customers do not associate value with. If they did, they would probably be categorized as “need to have” instead of “nice to have”. Need to have items can, should and normally will be paid for by the customer in association with the value they bring the customer. Items that are classified more as “wants” instead of “needs” may not.

The quickest way to separate the “wants” from the “needs” is to associate a price with the request. If the customer recognizes the value, there will be a negotiation / agreement. If the customer doesn’t recognize value, you will know very quickly and can then move on to the next topic.

Deliver the Bad News

We have all seen it, and probably even done it at one time or another. A customer wants something. It is a logical request. They are a good customer. We really want to make them happy. The problem is that we are just not able to provide them what they want. It is now somebody’s responsibility to tell them.


 


It may be too expensive to develop the capability or to do. You may not have the resources available. The product or service may just not be technically capable of delivering what has been requested. It may be so far outside the contractual arrangements that you just can’t do it.


 


It is bad news.


 


Our first response is to try and soften the news. We naturally look for some way to get around the issue. We want to leave some feeling that there may be some way around the problem or a potential solution in the future. Don’t defer it, avoid it, or assign it to someone else.


 


This is only digging the hole deeper.


 


Business is about setting expectations and then meeting them. If you can not meet a customer’s request, you need to deliver that position and set the expectation that the request will not be met. It is business. People understand that they will not always be able to get everything they want. If positioned properly and honestly, it will be known that it is your desire and position to provide the best service and capabilities available, but that sometimes you are not able to fulfill every customer request.


 


In the future, if a solution to the customer’s request is found or developed, they will be pleased as their expectations (of no solution) will be exceeded. Whereas if you have positioned for a potential review or solution at sometime in the future to avoid delivering bad news, you have delayed meeting their expectations and created frustration. Customers understand a “yes” or a “no” answer, but a “maybe” will almost always frustrate them.