Service excellence is rocket science!

The Biggest opportunity companies have to gain a competitive advantage is to get to know their customers better. Dr Ian Brooks explains what drives service excellence.

For the past six months, I have been talking about how poor customer service is throughout the English-speaking world. Studies show customers are not just disappointed; they are outraged by the way they are treated. As one New Zealander said in a recent survey, "You can understand how people become violent!"

What is staggering is not what upsets customers but the number who are upset. For example, 77 percent of all British consumers had at least one major problem with a product or service they purchased last year. Eighty-three percent complained and 90 percent were unhappy with the way the complaint was handled!

Similarly, a New Zealand banking survey by customer service expert Paul Linnell found that approximately half of all bank customers had a problem with their bank last year and of those who complained, 58 percent were dissatisfied with the response to their complaint. Forty-four percent said their problem was still not resolved. For one bank, the figure was as high as 68 percent! Companies should worry about these results. In the U K and US 50 percent of customers change at least one major supplier every year because of poor service and in New Zealand, the figure is 42 percent.

When customers cannot get through on the telephone, 31 percent hang up and try another company and 24 percent give up altogether. One study found poor experience with a contact centre caused 56 percent of callers to stop doing business with that company.

Customer service also impacts on the bottom-line as overseas research shows there is a direct link between service quality and the prices people will pay.

In New Zealand, Linnell estimates that the problems Kiwis have with their banks puts 29 percent of banking customers at risk of defecting, creates a 23 percent drop in customer loyalty and puts between eight and 12 percent of a bank's profits at risk. After hearing how badly customers believe they are being treated, managers often come up to me with a forlorn look on their faces. "But it's not rocket science," they say shaking their heads. "Why are companies providing such poor service?"

Because service excellence is rocket science! There is far more to being able to create a great experience for our customers than getting staff to smile and be friendly. And much of what needs to be done takes place behind the scenes.

Driving service excellence
Based on research I have just completed (visit www.ianbrooks.com/servicenz), I believe there are 17 activities that drive service excellence and doing these well is essential to competing effectively in today's marketplace.

My study suggests five of these activities are done well by 50 percent or more of the New Zealand organisations I reviewed. They are:

Make your customers feel welcome and comfortable. Help them decide what to buy so they get the best value. Manage the sales and purchase transaction well. Look after your staff so they are willing and able to look after your customers. Understand your customers' needs.

Of the 50 companies studied, 71 percent excelled in the first three activities, 59 percent were good at looking after their staff and only 57 percent excelled at understanding their customers' needs. The last finding is of concern given this is one of the most basic components of business success.

Clearly, these are important activities to get right. Nevertheless, they are what is traditionally considered to be good customer service and are nothing more than what all customers would expect to see. If you do not get them right, you are not in the game.

My research also suggests that 12 key drivers of service excellence are being done poorly by 40 percent or more of the companies studied:

• Eighty-one percent do not tell their customers the kind of experience they will have when they do business with the company. Consequently, their customers have no idea of what to expect, thus increasing the chances of them being disappointed.
• Fifty-nine percent do not tell their staff how their customers wish to be treated therefore making it difficult for staff to know how to behave. This increases the chances customers will be dissatisfied.
• Fifty percent do not have policies, processes and procedures that enable staff to create the experience their customers expect. This is probably the major reason why customers are so outraged and staff feel helpless to do anything about it.
• Forty-five percent do a poor job of inducting new staff. If staff do not understand the products and services they are selling or how their company operates, customers will be dissatisfied.
• Forty-three per cent of companies are poor at putting themselves in the customers's hoes. In most companies, people think about the customer, not like the customer. Imagine what would happen if business managers and staff put themselves in the customers' shoes before they allocated resources, set policy, made decisions, took action or even opened their mouths!
• Forty-one percent of companies are poor at following up to check if the customer is happy. An after-sales follow up call is smart business. It allows you to correct any problems the customer has had and it shows you care. It also helps you stay in touch and strengthens the relationship you have with your customer.
• Forty-one percent are poor at ensuring their staff meet the needs of their internal customers. For the paying customer to have a great customer experience, you need a structured and disciplined approach to providing excellent internnal customer service.
• Forty-one percent are poor at involving staff in improving the business. Staff have good ideas and people who deal with customers know what customers want. Smart companies make use of this knowledge.

In my view, companies are weak in these areas because they know little about their customers. In a survey by the National Association of Purchasing Managers in the US, 75 percent of their members said their suppliers do not understand their business. Can the same be said about customer preferences and expectations?

Put yourself in your customers' shoes
In my experience, companies are focused on internal issues and spend very little time in their customers' world. Thus they cannot put themselves in their customers' shoes and have policies and business processes that prevent staff from delighting customers. The biggest opportunity companies have to gain a competitive advantage is to get to know their customers better.' Companies need to learn about their customers' businesses and to understand how their customers want to be treated. It is not hard to do. Your customers will tell you everything you need to know. Just ask the right questions, listen to the answers and then do something with what you have learned.

Once you understand your customers, turn your attention inwards to ensure you are hiring the right kind of people and inducting them properly; that your policies and processes enable your staff to delight your customers; and that internal customers are looked after properly.

Is all of this worth doing?

Yes, because 100 percent of your profits come from your customers!

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