We shouldn’t even think of the term “customer service” as being about something that is valuable to customers. In fact, customer service is worth next to nothing. The reasons are simple. We live in a service-focused age, and the people who buy from you know they’re customers. So the term “customer service” does not describe anything customers don’t expect and it certainly doesn’t envelope anything of particular value to them.
Secondly, and more importantly, customer service is actually the means to the real goal: sustained and profitable customer relationships. Please note that distinction. Customer service is how brands deliver customer experiences. It is the process and the framework whereby a brand looks to engage with prospects and buyers. It’s how a proudly distinctive and likeable brand forges relationships with customers through actions that mirror its core values and set it apart from its competitors. And it’s those experiences that count. Not the process itself.
You’d think we’d all agree on that. You’d think everyone could see that experiences are everything these days given how similar products are, and that developing and delivering unique experiences is the logical basis for preference. Yet so often, too often, distinctiveness and experiences are the last things that customers get.
And I suspect that’s because, for many brands, what customers do get continues to be organised as a numbers game internally, oriented around technical and operational capability.
Every business is a service business in some sense these days.
There’s nothing wrong with numbers of course. They make the process efficient. They allow things to be measured. But while customer relationships based on best practice metrics might be technically correct, they’re often devoid of personality. And because everybody’s serving by the book rather than from the heart, what customers are really getting is efficient variations on the same tedium. That doesn’t make for a likeable or memorable brand. In fact, cut out the brand name, and they could be dealing with anybody.
This is why that matters. Products for the most part come with a money-back guarantee. People don’t. If a product is wrong, it can usually go back. But if you get it wrong with customers, or not even very right, chances are they won’t. That doesn’t necessarily mean that customers have received bad service. It simply means that the encounter was not enough to distinguish the experience from others, to excite them and therefore to secure their continued loyalty. The process can be right technically. It can tick all the boxes in terms of what had to happen. It can achieve all the digits. And yet it won’t necessarily lead to the vital and elusive outcome.
Enduring relationships with a brand pivot these days on customer encounters that really do need to be experienced to be believed. They are astonishing – at a human level, not a metrics level. Forming and sustaining relationships with people is not about world-class customer service or carrier-level or benchmarks or any of the other abstract qualitatives that are freely bandied about. Because, when you think about it, customers do not go around congratulating themselves on having received a best-practice anything. That’s an internal measure. And it’s not about percentages of good either for the same reason. Again, people don’t make buying decisions based on 85% satisfaction, or any other number. Another internal metric. They are loyal to a brand because they really liked what happened. Loyalty is not a percentage decision, it’s a personal decision made by each customer one action at a time.
When their expectations are exceeded, they respond enthusiastically and in marked contrast to how they greet generic customer service: the prevalent, boring and forgettable catch-all that too many brands expect their customers to settle for.
If any of this sounds like a beat-up on process and the operations teams, it’s not. Processes and systems provide order and structure – and both consistency and the ability to deliver what you undertook to deliver are mandatory for brands in every sector today. Without the right customer processes, there would be chaos. Without the left-brained attention to detail that logistics, supply chain, ops and frontline people deliver, there would be no brand because there would be nothing for customers to depend on. Without someone paying attention to legal obligations, the court system would be clogged with commercial litigation.
But, at the same time, you can’t allow the tail to wag the dog. In the traditional marketing environment, brands allowed process and promise to develop separately. Today your marketing plan and your operational plan must be much more closely aligned because your target audience see themselves as having relationships with who they think you are, not how you choose to see and organise yourselves.
“What sort of customers do we want?”
A pivotal issue is that experiences and customers have become separated as cause and effect. If you ask most brands which customers they want, they’ll say “as many as possible” or “people who spend a lot” – but that may not be who they really want at all. It’s likely they have no idea who they want as customers. They’ll take anyone whose buying. And that’s fine at a transactional level. But if you want to form and build relationships that work for all parties, you need to know and to define who constitutes a successful customer for you. And therefore you also need to be able to clearly define who you don’t want to do business with. You also need to know what experiences they will require to keep them returning and generating margin.
Counter-intuitively, that decision doesn’t necessarily revolve around volume. As Professor Robert Kozinets rightly points out, customers can be very loyal and buy little or buy lots and not be loyal at all. It depends entirely on the function of the product, and therefore how often it needs to be purchased, as well as whether customers view what they are buying as a transaction or as an exchange of money for pleasure. Different dynamics will work to varying degrees of success for different customers in different situations. What brings one customer back for one product may or may not be enough to bring another back for another product. And that mix will change across all the brands people buy, depending on how important each brand is to an individual.
Offer any kind of customer relationship you like. Conditions apply.
Success doesn’t necessarily revolve around quality or luxury either. In fact, what you offer your customers can be as rudimentary or as sophisticated as you like. As long as:
- What you deliver aligns directly with how you are structured (physically, operationally and financially) so that you can afford to operate that way and you have a competitive reason for choosing to pursue that course.
- It aligns with who you are as a brand and the core values you represent.
- You explain those terms of business to your customers very clearly, so that they really understand what they are getting.
So surprise, surprise – experiences should vary, just as brands should vary, because price points and expectations around those price points should vary. People’s motivations, expectations and priorities are different. You just need to be very clear with customers about what they can expect, why that’s motivating and how it aligns with their priorities.
That happens surprisingly seldom. Because, as above, the cause and effect equation of experiences and customers has been lost in translation. The relentless hunt for quarter-by-quarter revenue seems to me to have pushed the pursuit of sustained customer loyalty down the corporate priority ladder. The time and money required to keep customers engaged is perceived as another process that interrupts short-term profitability. Efficiency dicates that companies do enough to meet their obligations, but no more: “build it – and they will come” has been replaced by “deliver it – and that will do”.
For too many organisations “customer” is now an adjective for by-the-books service.
That’s how customer service becomes enough. And how customer service becomes a formula. A formula replete with short-term numbers and limits. For too many organisations “customer” is now an adjective for by-the-books service. It’s a way of thinking about the target audience that has little or nothing to do with people, never mind customers, nothing to do with experiential events, and everything to do with only doing what has to be done. Funny isn’t it? No customer wants to feel resented, and yet so many organisations deliver resentful customer service – only up to a point, only in certain conditions, only as it suits them, only with the information they have at hand … only, only, only.
What have customers done to deserve being looked upon as the obstacle to the delivery of an efficient service, as opposed to the focus for that service? They haven’t done anything. What the brand has done is talk itself into believing it can’t afford to be nice – and, by extension, that perhaps given its margins or other pressures, it shouldn’t have to be.
That isn’t a relationship. In fact, in some sectors, it’s closer to a legal encounter. It’s a situation where policies, systems and terms and conditions can be used not as a means to define what is being delivered but rather to not deliver or to extract cash through fees for anything that steps outside that strict framework. Process in this context has become the new bait and switch. The terms and conditions are not there to clarify the offer. They are there to capitalise on a situation or to close down discussion. “I’m sorry Sir, our policy is …”
Moments of truth in this context quickly become moments of disappointment. Brands in this context apply “turnover” in both senses: they churn customers to make their numbers; and hope that scale is enough to keep filling the top of the sales funnel.
Tapping the power of habit
So if enduring customer relationships are not based on volume and they’re not based on a single level of quality, what should they be based on? The clue is in the word itself. The root word in ‘customer’ is custom – which on one level refers to trade and on another refers to habit forming. Both apply here. On that basis, the people you should be working towards having a commercial relationship with are those who are going to want to come back, and customer service should be a service process that is good enough to generate such a habit, whether it’s hours, days or years between occasions. The problems are that many brands do not have an active retention approach to bridge those gaps, and therefore the process that feeds that, their customer service, is not specifically designed to be habit-forming.
Part of the reason why customer relationships continue to be so depersonalised I suspect is because buyers have been reduced to “the customer” – an amorphous form, referenced frequently inside bigger companies. By contrast, likeable brands take ownership of the people who buy from them. Even though they may not know the people who buy from them specifically, they do their best to get to know about them. There is a palpable sense of interaction. And that’s why likeable brands engage with their target audience in ways that are interesting, relevant and that bring a very human aspect to the brand’s core values. They’re liked, and they continue to be liked long after the transaction is over, because what they deliver aligns with the impressions that people have in their minds about that brand. Good memories linger. Good memories are shared.
And here’s the interesting part. I have yet to see a cost of service model that shows it costs a brand more to employ people who smile, are helpful and clear, and who believe in the brand-customer relationship. I have yet to see a cost-per-serve model that proves friendliness is not worth it. In fact, I’ll go so far as to suggest that the downside economics of human interaction in this context are non-existent; it’s the mindset driving and measuring those interactions that is at fault.
When process drives the culture, process becomes the culture. People become operational in their view of everything because that’s where the emphasis and the measurements and the training lean. By contrast, as Zappos have shown, if you build a high-EQ business from the inside out, you build a company that is powerfully and distinctly customer-focused where humanity leads and guides processes. As Rebecca Ratner, the company’s director of human resources, once pointed out, “We can’t ask anyone to wow a customer if they haven’t been wowed by us.”
I like to remind people that when you have a strong relationship with a customer, it should feel like the most natural thing in the world – because increasingly what’s at play is a meeting of minds that takes place over a transaction. Customers buy from you and continue to buy from you because it feels like you share a philosophy. It feels like you understand each other. And that’s habit-forming. It’s a bond worth coming back for.
Most relationships don’t get better with time – but they should. Often the sales process, if there actually is one, doesn’t help. And that’s because most organisations think about how they want to sell their products, not about how their customers would like to buy them. They have processes that give them comfort and reassurance, not ways of working that relate to, and align with, how people purchase. My advice: learn to sell the way your customers would like to buy … and keep buying.
Three questions from McKinsey
In a McKinsey article titled “The human factor in service design”, authors John DeVine, Shyam Lal, and Michael Zea set out to establish what it takes to effectively balance the trade-offs between the cost of services and enduring and profitable customer relationships. “Many companies,” they say, “lose sight of what makes human beings tick.” The authors distil their findings down to three interrelated questions that they say senior executives should always be asking themselves.
- How human is our service?
- How economic is our service?
- Can our people scale it up?
Companies, they say, should apply principles of psychology and behavioural science to service designs in order to really get to grips with what motivates and irritates customers as people.
Their key findings include:
- Get the awkward stuff out of the way early
- Help customers feel more in control, by adding simple choices to the conversation rather than issuing instructions or directives.
- End the experience on a high note, with a nice surprise or an incentive.
- Avoid unexpected changes and let people stick with habits during interactions that they feel comfortable with.
- Look for opportunities to add delight by listening carefully to feedback.
They go on to point out that mastering the trade-offs between service levels, revenues, and costs is complex. Companies need to develop an integrated view of the economics across a range of customer touch points and use tools such as breakpoint analysis to determine cost and margin against receptivity.
Their findings parallel my own in that they found surprisingly wide variations in service levels were acceptable if they were clearly framed. Simple enquiries and orders, for example, were expected to be processed instantly, but people would wait for a more complex or more comprehensive answer, providing they were told there would be a delay and the reason for the delay was clearly explained.
Equally, there is a distinctive sweet spot in customer interactions that satisfies criteria for efficiency and for generating goodwill from customers. Optimising for service better than that wasn’t worth the additional cost. So yes, just as brands can lack a commitment to delivering experiences, they can also go too far the other way and deliver experiences that are literally not worth the effort.
Thoughtbreaks: Transforming by-the-book customer service into profitable customer relationships
If customers are going to form strong, habit-forming relationships with you, what you say, what you offer and what you do needs to align. If your brand and your processes are not on the same page, chances are you are foreshortening your customer experience. And ironically, that will probably kill the very relationship operational people are tasked with servicing. That may make you more efficient – but there’s a good chance it will in time shutter your brand.
Recently Salesforce put out this infographic on what it takes to build customer trust:
Click To Enlarge
7 questions I think you should ask
Your customers should not report to your processes, because your processes are not their business. They’re part of your business. Here are 7 questions I suggest you ask to fix that.
1. What did you say as a brand that you would do? Are you as good as your word?
2. What can you afford to deliver and what can you afford not to deliver? In other words, are you cultivating relationships with your customers that are financially viable? If you can’t afford your cost per serve, change your model and reshape the promise. There’s no point in efficiently losing money or inefficiently losing customers!
3. Does everyone in your organisation know who your most valuable customers are, and what they expect to receive? How loyal are your people to the people who are loyal to you? Are customers people or a funding source?
4. Does the service you offer your customers make sense emotionally to them as well as logistically? Is it in keeping with their understanding of your core values?
5. How do you know you’re doing right by your customers – what have you been asking them? Not about whether they’re “satisfied” but whether they actually “like” what they receive.
6. Who manages the overall development of relationships (in other words how you expect your brand to interact and engage with customers into the future) on an ongoing basis? Anyone?
7. When was the last time you updated your infrastructure to make the relationship better for your customers as opposed to just making it more efficient for you? Did your update result in a tangible experience upgrade as well as cost savings? – because that’s the Holy Grail.
