FOUR TYPES OF CUSTOMER SERVICE STRATEGY PROPOSITION, WHICH ONE ARE YOU?

We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better. ~ Jeff Bezos

One of the biggest challenges in the world of customer services is understanding what type of service proposition you have. What proposition have you developed and delivered? What value – both in terms of services revenue, as well as customer retention, renewal and growth – you are going to have over the medium term. Many times, when I pose the question “what type of service strategy proposition do you have”, I am greeted with a blank stare.

Let me explain what the four types are; their key attributes; what challenges you have to focus on to stay in the race and you will then recognise the value of understanding which you are. In addition, which proposition you aspire to have – as I am sure that may think you are in the wrong “box” – as it were. Let us start at the entry type and in reverse order:

Type 4.  Price Driven, High Turnover services

Attributes: Commodity-like proposition.

This is where the race to the bottom in terms of costs is key. You are in a race to deliver the service with the lowest possible costs. As a commodity, the customer regards you simply as a provider of service, much like a utility company such as one that provides electricity or gas.

Challenges: Cost leadership and economies of scale is key to survival.

You have to be ruthless in managing costs and driving out waste. Scale is also key and this is where people will seek to develop shared service capabilities, such as off-shoring into a shared service centre, that delivers remote services to multiple customers.

Type 3.  Feature Driven, High Turnover services

Attributes: Slightly better perceived benefits, normally SLA based, high performance

This is where you have sold and are delivering a “rich” mixture of services – remote, on-site, regional, international, reactive, proactive, project-based, etc. For many of these, as part of the contract, you will have agreed Service Levels [called SLA’s] with the customer. In fact, you will probably have set up internal agreements on service across your organisation [often called OLA’s – operational level agreements].

Challenges: Deliver beyond “just the SLA” and Constant pressure to add extras. There are two challenges here. The first one is to deliver beyond just the SLA. The “water -melon” effect where you might have green SLAs and yet the customer perceived service is rubbish is something you have to consider. I have previously written on this. “Customer Service, what do you measure when SLAs don’t work? Processes, outcomes, and benefits” http://martinsummerhay.livejournal.com/53367.html

The second challenge is that the customer is expecting you to constantly be delivering incremental and additional services – not necessarily free of charge, but you have to demonstrate their value. Often, customers will refer to this as “innovation” and you have to actively demonstrate this, else, you will be judged just on the SLA performance alone. A place you do not want to be in.

Type 2.  People Driven, Relationship-Based services

Attributes: Long-term personal relationships, but limited value proposition. For this type, the engagement and relationship is based on long-term personal relationships, at very senior levels in both the service provider and the customer. However, there is generally a limited ability to differentiate on value proposition of you as a service provider, but this is not important so long as the relationship remain strong.

Challenges: Understanding and addressing specific customer needs & relationship management. One of the major challenges is how you identify and co-create solutions with the customer. This requires extensive and deep knowledge of the customer and the customer’s medium and long term ambitions and how services can add value to these ambitions. The other challenge is to continually build and maintain strong relationships. Don’t forget this is a relationship, person based type and you can not rely on just the existing relationship you might have in the organisation. You have to extend the relationship network so that you are not reliant on just one or two people. After all organisations change and so do the people in positions of authority.

Type 1.  Brand Driven, High-Value Added services

Attributes: Compelling value proposition & solves complex service challenges. For this final type, this is brand driven based on both your brand as a service provider and also tied into the customers brand proposition as well. The services are extensive and add value to the customers business by solving complex issues that are recognised by the customer to support their business outcomes.

Challenges: Deep customer knowledge, globally consistent services & unique knowledge. To be able to compete and deliver the services, you have to have deep, extensive knowledge of the customer’s business and how your services compliment and add value to their business. To be able to deliver the complexity of services, you will generally have to have both local and global service provision and it has to be consistent – especially if it is a customer that is based in more than country, or you are working across their complete supply chain. You will have to proactively promote the customer experience you are delivering, going beyond the service descriptions and SLA’s and talk in the customer’s own language about the outcomes you are delivering.

Successful Service Strategies drive incremental margin:

To give you some idea of the revenue growth and margin you get from these different types of services, the list below compares the predicted margin levels for each type.

  • Price Driven – generally zero or 1-2% margin
  • Features Driven – up to 5% margin
  • Brand Driven – up to 10 – 15% margin
  • People Driven – over 15% margin

The conclusion is, that the two most successful service strategies are Brand and People Driven. THough you have to balance the amount of effort and time to develop these types of strategies. I have not touched on investments needed as they will be unique to each service provider and how much change is involved to develop the correct strategy.

I leave you with this quote as always….

You’ll never have a product or price advantage again. They can be easily duplicated, but a strong customer service culture can’t be copied. ~ Jerry Fritz

Customer Service and the rise of Millennials, part 1 of 2 posts

Each generation imagines itself to be more intelligent than the one that went before it, and wiser than the one that comes after it. George Orwell

I was asked to take part in a discussion on the impact of the Millennials on the service industry by the Field Service Magazinehttp://fieldservicenews.com/. What on earth are Millennials you might ask? Well they are a group of people that can be best defined as:

Millennials (also known as the Millennial Generation or Generation Y) are the demographic cohort born between 1980 to 2000. They follow Generation X, my generation, who were born between 1965 and 1979.

Other names for Millennials include: Generation Y, Generation WHY, Generation Next, Nexers, The Digital Generation, and finally The Gaming Generation

They are the first generation of humans to have been born and brought up in a digital world. If you think about it for a moment you will realise that before the 1980’s there was no digital TV, no smart phones, no public internet, no Personal Computers, nothing of the Internet of Things, no Facebook, no Twitter, no 24*7 multi-channel TV, etc.

If you wanted to phone someone you either used a public phone box or called from home. If you were working on your homework, researching a topic or revising for exams, you either used the school or college library, the local public library or if you were rich [and we were not] a set of Encyclopedia Britannica books. There were only 4 terrestrial TV channels – BBC1, BBC2, ITV and Channel 4 [launched in 1982]. Satellite TV was only launched in 1990! Games were restricted to Atari and Space Invaders, or ping pong.

In the IT service industry, we have seen the technology shift more than anywhere else. When I started in the industry, the kit I used to repair were terminal’s, impact printers, and computers running Basic, Pascal, Fortran or proprietary manufacturer operating systems. Now it is Laser printers, PC’s, Intel Servers and a mix of Microsoft, Android, Linux and Apple OS operating systems – much more standard and non-company specific.

In the IT service world, the challenge is that our customers have equipment that may be very new, or up to 25 years old. This means that you need to have the skills and capabilities to be able to manage and repair a set of products that spans such a wide technology platform. In effect bridging two or more generations of knowledge.

This is the challenge all technology providers and supporters face. How do you have the skills and capabilities that you need to maintain a service for 25 years? We have a workforce that is now more than ever aging. A recent report stipulated that the average age of a customer field engineer was over 40 years of age. That 60% of companies currently report that they are understaffed in their technical positions. We are recruiting new engineers all the time and in a lot of cases, they are under 30 years of age with a Millennial view of the world. So what are the typical attributes of a Millennial generation are:

# Always Connected…24/7 and expect that the technology they use is as well
# Extremely self-confident and assured
# Optimistic and hopeful of the future
# They are very independent and are comfortably self-reliant
# Determined and goal oriented, you need to set challenging goals and reward them
# Highly success driven, they do not like it when failure occurs and seek to question why
# Lifestyle centered which means they are not indoctrinated into a 9-5 office world, work-life flexibility is key
# They live and breath diversity and inclusiveness and do not, in general have the same types of hang up and prejudices as the previous generations
# Every single one I have worked with are passionate about global, local, and community social support and activities. They are at the forefront for any charity or positive social actions
# They partner well with mentors, as they value guidance and support. However, they also expect respect
# They thrive on flexibility and space to explore and develop, so find time bound and structured sets of activity frustrating.
They are comfortable with speed and change and are flexible
# Finally, they are great at working together and you might find this surprising, very service oriented.

Why, would they be more service orientated than the previous generation? It is because of the world we live in and the growth of the service sector over the past 20 years. Since 1995, service sector jobs have grown 2x’s versus non-service sector jobs. In fact, over 80% of the jobs now in both the UK and USA are Service sector jobs, versus less than 15% that are traditional manufacturing type jobs. You only have to walk down the high street to see the plethora of cafes, restaurants, coffee shops and the like [for example Costa, Starbucks, Pret, Yo Yo sushi, and Subway just in the food sector].

In the next article, I will share the Q and A that was the outcome from the interview I did.

I leave you with this quote in homage to Christopher Lee who died on the 7th June this year.

He was one of the outstanding actors that spanned the Baby Boomers [1946 – 1964], Generation X [1965 – 1979] and even was recognised by the Millennials [1980 – 2000]. Think of the Lord of the Rings and the Hobbit series. He started his film career in 1948 and his last film was this year, 2015 – 67 years. He stared in over 206 films and 65 television appearances. Many a Friday evening I would stay up and watch a Hammer House of Horror film with Lee starring in it ….

What’s really important for me is, as an old man, I’m known by my own generation and the next generation know me, too. Christopher Lee

Take the fluff out of your ears. What on earth is the benefit of Active Listening?

“The most basic of all human needs is the need to understand and be understood. The best way to understand people is to listen to them.” — Ralph Nichols

Customer service involves interacting with customers, positively engaging with them and having a dialogue. A dialogue involves at least two people and the conversation that happens means that you have to listen as well as speak. This is even more important if you are having that dialogue over the telephone where you can not see the reaction to the words that you are saying on the other persons face. This is whereactive listening comes into its own. By the way, active listening is one of the key skills that is needed and often used in change work. It is also used in conflict resolution and often in tense situations such as where there is a hostage. I would also suggest that the best doctors and consultants in the medical profession use active listening techniques – though most don’t!. It was one of the courses that I was able to participate in when I worked in the Met Police, which initially sparked my interest in it.

Listening is one of the most fundamental components of interpersonal communication skills. Listening is not something that just happens (that is hearing), listening is an active process in which a conscious decision is made to listen to and understand the messages of the speaker, not just the words and phrases that the person utters.

So what is active listening?
Listeners should remain neutral and non-judgmental, this means trying not to take sides or form opinions, especially early in the conversation. Active listening is also about patience – pauses and short periods of silence should be used where you can reflect on the words spoken to you. I would encourage you to try a little experiment right now.

Hang on a moment!
Stop reading this and go find someone to talk to. But before you go, remember this, during the conversation, when there is a pause and the other person expects you to immediately respond, pause, just for a moment and see what happens. Humans by our very nature can not cope with silence in a dialogue. Those long pregnant pauses drive people nuts. People fill up those silent elements in dialogue. But it is those pauses, that also demonstrate that you can be listening and actively so. When you have tried it, come back for the rest of the article.

You came back, great. Let’s continue.
Listeners should not be tempted to jump in with questions or comments every time there are a few seconds of silence. Active listening involves giving the other person time to explore their thoughts and feelings, they should, therefore, be given adequate time for that. Did you find that you were experiencing a heightened sense of engagement with the other person? Great if you did. If you did not, don’t worry. It takes time and practice to get it.

Active listening also requires listeners to paraphrase what they’ve heard and restate it out
loud to make sure the other party understands what was said, the meaning and intention of the words spoken. At its heart is a three-step communication technique helps ensure both sides fully grasp the issue and both fully understand it.

Step 1. Really listen. No, really really, really listen.
Most of us are passive listeners, multitasking and surface scanning the dialogue as someone speaks. We get the gist of something and assume that’s good enough. it is not. Active listening requires that you are not distracted or inattentive; you must focus on the other person and try to comprehend everything they’re saying. Listen for emotions as well as facts. Try to hear why the customer is having a problem, what they are feeling and how they are presenting the information. These details can shape the entire interaction. If it seems like the issue is complex or includes several parts, it may be helpful to take notes while you’re listening. This applies to both the business, personal, social and counselling worlds.

Step 2. What is the key pieces of information and the feelings they have?
Now that you’ve done your best to fully engage in the listening process, you can begin to process the information. Review what you’ve heard — both the facts and the associated emotions — and list the key pieces. If you do not have all of the information you need to really understand the facts and the other person’s feelings, now is the time to ask the right questions. What are the right questions? For starters, focus on them, not just the problem. By understanding their perceived state of mind, you can provide the right answers to help meet their needs and expectations.

A good example of active dialogue is where you will rephrase a piece of information already provided with a confirming question attached. In effect, you are playing back part of the dialogue with a further qualifying question.

Step 3. Finally, Mirror back to the speaker.
Now you need to replay everything — both facts and emotions — back to the other person in a summary of the issue and problem they have

While active listening and its key parts — focusing, comprehending and reflecting
are great for all areas of life especially in the change work arena; one of the areas that can really benefit from it, is telephone technical support. What does active listening do for technical support?

You solve the person’s problem, not just the problem itself!
Active listening puts you in the customer’s shoes and focuses your attention on them.
If you’re only paying attention to the problem, you weren’t actually listening and may inadvertently come across as condescending or rude. You may still fix the problem, but you have irritated your customer in the process.

You can build relationships with people, even over the phone.
Active listening in technical support shows that you care about and truly value your customers’ feelings and time. You want to really help the customer, rather than just fix the problem at hand. Too often I hear of the fact that the technical agent may fix the initial issue that the person has, but does not resolve the overall problem.

So the next time, you have a problem and phone someone for support and advice, see if they are using active listening skills to try to help you. The next time you have to visit the doctors, see if they are actively listening to your problem, or surface skimming the conversation and prejudging the outcome. You will be surprised how few people really, truly, actively listen.

I leave you with the following quote. One day, I am going to ask someone to take that bit of fluff out their ears and really listen!

“If the person you are talking to doesn’t appear to be listening, be patient. It may simply be that he has a small piece of fluff in his ear.” ― A.A. Milne, Winnie-the-Pooh

Customer Experience Design is unique to your companies customers, you can’t copy other people’s

“In the innovation age customer experience is key. Your impression defines their expression” ― Fela Durotoye

I have been a passionate advocate of Customer Experience Design for many years. As a process; as an approach to changing your customer service; as much as an ethos – the idea of consciously and thoughtfully thinking though how you are going to design the experience that your customer have with your organisation – be it public sector, private sector, large or small – is one I feel passionate about.

I have designed organisations and processes around a set of key Customer Experience Design principles; as well as been on the receiver of other people executing a customer experience scenario.

Every single day of our lives, we are both consumers and providers of customer experience. You fill your car up with fuel; buy groceries at a store; go shopping in a mall or shopping centre; go out for dinner / cinema / brunch; or interact with any other human being or via technology [web sites, portals, or online purchase / complaint / ordering systems] and you are a consumer of Customer Experience Design.

Think for just a moment on the last purchase or engagement experience you had. Do you even remember it? If you do, was it positive or negative or just plain bland. Yes, I’ll challenge anyone, that we seek to please through bland and “sameness” of service, rather than seeking to be different.

if you are in the product, produce, or service business, this applies to you. Hang on one minute, I would even go so far as to say, tell me a job that does not involve Customer Experience Design. I find it hard to think of one. But please feel lt to suggest some.

So, what is Customer Experience Design?
Customer Experience Design or CED, is the explicit processes, tools, technology, people and approach you use, to place your customers at the heart of your business, to deliver the experience YOU want to deliver to YOUR customers, that delivers value to your customers, employees and if successful, shareholders.

I stress the words YOU and YOUR as this is a reflection of your organization’s feelings, emotional connection to and way you want to interact with your customers. It is all about you.

you can not and must not seek to emulate, copy or fudge your customer experience design principles. Annette Franz stated it really clearly by saying:

“…..are you more focused on what your competitors or other companies are doing than on your own business, customer and customer experience strategy? I feel like some companies are dumbing down their customers and the customer experience.“

I completely agree. Companies are not looking at they own capabilities and seeing where excellence in their own organisations is. Rather, they are recycling the same excellent examples where previous thought leading organisations have developed their own Customer Experience narrative. I doubt any of those companies deliberately set out to be the exemplar, rather they said:

“what do we need to do to be different; to stand out; to be the leaders in our field; to be the best we can possibly be; to be the company our customers never want to leave?”

Perhaps it is these types of questions you need to focus on instead?

Thanks again to Annette Franz for the post that inspired these thoughts.

http://www.cx-journey.com/2015/06/cx-journey-musings-are-we-dumbing-down.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+CxJourney+%28CX+Journey%E2%84%A2%29

I leave you with this quote….

“Companies that were paying attention understood they were witnessing the birth of the “self-directed consumer”, because the internet and all the other tools for the flat world had created a means for every consumer to customize exactly the price, experience, and service he or she wanted.” ― Thomas L. Friedman