800-CEO-READ Blog: Customer Service

Our first Milkshake Moment

This is just a short post to give a shout out to our friend Steve Little. Today at lunch, when the waitress took our drink orders, Michele asked for hot chocolate. It's getting to be fall here in Wisconsin, so hot drinks are common requests. She said, "I'm not sure if we have hot chocolate, but I'll check." She came back a few minutes later and said no, she was sorry, but the restaurant wasn't offering hot chocolate, yet. That's a seasonal drink, and they're still serving summer drinks.

After she left, we all turned to each other and said "Milkshake Moment." Here's why.

What to Say to a Porcupine

This cute, recently published, little book came to my attention the other day when a company called in to place an order for books to give to their staff. I was taken aback by the title and wondered what kind of a book this was, until that is I pulled it up on our website and found out that the subtitle was: 20 Humorous Tales that Get to the Heart of Great Customer Service.

What to Say to a Porcupine is a book that contains twenty different tales all centering around customer service and it offers topics for group (or single) discussion at the end of each fable. Some chapters include: My Big Fat Greek Chorus, Chilly Willy, The Knight Shift, Going to the Dogs and Sloth is Not a Vice.

Richard S. Gallagher, the author of all these little vignettes, has created such a great way to emphasize the fact that customer service is so important to companies and great service makes everything run more smoothly, intelligently, etc. In fact, What to Say to a Porcupine ends with the Gallagher saying that customer service is more than just another fable.

This book is great for any company that needs a little kick-start or even a reminder of how customer service should be like. It's thought-provoking in a very interesting way! I hope when you get a copy - or even copies for your whole staff - you'll enjoy it!

Have a GREAT weekend!!

It's Quite Fashionable

This year, 800-CEO-READ became painfully hip. We really didn't mean to, it just sort of happened that way. You know how it is...just minding your own business and suddenly you're thrust in the limelight. Sort of like being asked one of those problem solving math questions in 6th grade and getting brought up to the blackboard. Well, in this case our "black board call" was Fashion Week. Yes, you heard correctly: we were picked to provide materials for goody-bags at Fashion Week. It does not get more chic than that, right? I took the call about a month or so ago, thinking they were just a regular customer checking to see if we handle bulk orders. "Of course we do," I assured the client and that we can get them during a certain week in New York. I wasn't sure of it but by the time they ordered the book that they wanted: The Grown-Up Girl's Guide to Style - Instinctively I thought that this wasn't the regular business convention or author signing. It turned out that we were to be part of a popular woman's magazine package that they were handing out to some elite individuals of the fashion world.

This little introduction to another realm made me do a little think about business and fashion and the fashion of business. There are more and more people working either full or part-time from their homes. This means that the culture of most companies is in a state of flux. Co-workers are now wearing PJs, slippers and robes while corresponding to emails, trouble-shooting computer problems or booking lunches. It makes one wonder where this is all going and how it is effecting the work environment. More people are finding that they can bring their personal style to work. This means cute stuff on the desk to what they wear. Fashion Week may be the tip of the iceberg for 800-CEO-READ. We may get requests from Janice Dickinson and Tim Gunn fans now. Who knows, we just might get another audience that is both concerned about what they wear and how they do business ...

Of course on the other hand, this could just be another fad.

Other books that deal with business and fashion to keep you as painfully hip as 8CR:
New Woman's Dress for Success
Details Men's Style Guide
Beyond Business Casual
Fit In!: The Unofficial Guide to Corporate Culture
The End of Fashion

Speaking of New York: More Information on the Strike on Broadway.

More NYC food

We have eaten at some incredible restaurants on this trip. Yesterday was Balthazar for breakfast and Bouley for dinner.

I had to take a break from all that fine dining and eat lunch today at the Shake Shack. This is another establishment run by Danny Meyer's Union Square Hospitality. The burger joint is located in Madison Square Park and was quite popular today with the sunny, 80 degree day we are having in New York City today. I waited in line for 30 minutes to place my order and waited another 15 minutes to get my Shack Burger, Fries, Coke, and Strawberry Custard Shake. It was really good.

P.S. It was awesome to see Milwaukee-based Usinger's bratwursts (aka Wisconsin Bratwurst) on the menu.

You Can't Win a Fight with Your Client

Tom Markert, the author of You Can't Win a Fight with Your Boss, yesterday came out with another little book of encouragement and advice, this time for the hard workers who deal with keeping clients satisfied. It's called You Can't Win a Fight with Your Client: & 49 Other Rules for Providing Great Service. Each "rule" is a short entry on how to manage your relationships with clients - large accounts or small.

We pride ourselves on great customer service; in fact, it's one of the few things that makes our company stand out in such a competitive market. So it came as no surprise, as I paged through it, to find that we've already implemented much of Markert's advice. For instance, these three rules resonated with me:

Rule 10: Be a Client Advocate
Rule 28: Speak the Truth
Rule 36: Find Ways to Make Their Lives Easier

I especially liked the entry for Rule 46: Roll Up Your Sleeves.

There is no work that is beneath anyone. If a project needs to get done for a client and there is no one at the right level to do it, then roll up your sleeves and tackle it yourself. Jumping in on a project or task that is not yours demonstrates leadership and commitment.

Your staff will see you doing it and will take in a valuable lesson. And of course the client will have a better experience with the company because the work got done. Everyone comes up a winner.

And in the same style as You Can't Win a Fight with Your Boss, Markert ties in clever ways to present his message: Rule 13: Win Over Frosty; Rule 14: Be Switzerland; Rule 43: Get Sticky.

NYT Book Review on Setting The Table

I picked the Sunday New York Times yesterday and saw Setting The Table (written by Danny Meyer) was reviewed by Sara Dickerman. Her review shows she likes the book, but Dickerman thinks Meyer gets a little cutesy:

But Meyer is not giving advice to would-be restauranteurs: his book aims for a broader business audience. Whether his model of "hospitalitocracy" can expand beyond the service industry is hard to say, but Meyer certainly tries hard. This book wants to be a business parable of sorts--the kind populated by metaphorical parachutes, cheese, and sharks. Meyer apparently can't resist the genre: he thinks of staff members "not as servers, but as surfers"; he imagines businesses as moth-attracting light bulbs; and he refers to the press, somewhat predictably, as a shark.

Meyer is more persuasive and interesting, both as a storyteller and as a business adviser, when he sticks to concrete examples from his working life instead of spinning them into catchphrases that might work in PowerPoint presentations...When Meyers slips into generic business-speak, that all-important narrative gets lost.

What is the right question?

The folks over at execuBooks spend each week talking about a book on their blog. They normally bring in a guest writer to ponder a variety of aspects about the book. This week they are talking about Fred Reichheld's book The Ultimate Question.

In a post titled There is an even better question, Phil Dourado talks about the book and suggests a different query:

Fred's ultimate question is "Would you recommend us to a friend?" And it's a great question. He recommends scrapping all your satisfaction surveys and replacing them with this one ultimate question. Enterprise Rent-a-Car has done something similar, and to great effect.

But, it's still a question about intention. And customer intentions are slippery beasts.

I heard Chris Pilling, the CEO of the UK bank First Direct (highest levels of customer satisfaction for a retail bank in the UK consistently for the past ten years, the world's first telephone-only bank, some of the highest satisfaction ratings for a bank in the world...ever), say that they ask this question instead:

"HAVE you recommended us to a friend?"

We at 800ceoread are pretty big fans of NPS and The Ultimate Question. We use it weekly to find out how we are doing with customers. Our propaganda piece (i.e. marketing brochure) has two pages devoted to it.

Given Andrew's good question we decided to go to the source: Mr. Fred Reichheld himself. This is from an email Fred wrote me today in response to the post I sent him:

I agree that it is useful to gather the number of referrals a person claims to have made--but that is looking in the past, while growth is about the present/future. Someone who made six referrals over the past year but recently had a lousy experience (or found a better supplier) is not a promoter. I think the top priority should be to focus learning on the current (or immediate past like last week) and the near future--thus, the ultimate question works best as it is formulated in my book.

This made me think about Pfeffer and Sutton's Hard Facts, Dangerous Half-Truths & Total Nonsense. They say you should be careful of the past. It is amazing how quickly you color it with the circumstances of today. Use current data and constantly experiment rather than relying on what worked in the past.

I think that is what Fred is getting at as well.

Thoughts?

Business Books: Fall 2006 Preview

I am starting to get asked what the big books for the fall are, so I thought I should get a list up here. As always, there is something for everyone.

September

• A Leader's Legacy by James Kouzes and Barry Posner (Jossey-Bass) - This is a follow-on to the best-seller The Leadership Challenge; alot of people like Kouzes and Posner's take on leadership.
• Hoopla by Crispin Porter + Bogusky (Powerhouse) - Powerhouse has been doing the Lovemarks/Kevin Roberts books and I have been looking forward to seeing what they do with another ad agency.
• Success Built to Last: Creating A Life That Matters by Jerry Porras et al. (Wharton School Publishing) - Built to Last author Porras this time asks what people rather than companies need to do to find success.
• Bangalore Tiger: How Indian Tech Upstart WIPRO is Rewriting the Rules of Global Competition by Steve Hamm (McGraw-Hill) - The senior writer goes inside this Indian phenom to find out what has brought all the success.

October

• Mavericks at Work: Why The Most Original Minds In Business Win by Bill Taylor and Polly LaBarre (William Morrow) - Bill and Polly created business conversation in the 90's at writing Fast Company magazine. If you have missed that passion and energy, you'll love the book.
• Tough Choices by Carly Fiorina (Portfolio) - This is going to be a big book. The former CEO of Hewlett-Packard tells her rise to the top and what happened when she got there.
• L.L. Bean: The Making of an American Icon by Leon Gorman (Harvard Business School Press) - Word has it that HBSP has been bugging the folks at L.L. Bean for years to do a book; it finally here and expect to see lots of cross-promotion in other L.L. Bean communications.
• Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage by Daniel Esty and Andrew Winston (Yale) - This title shows how companies can use green issues as a competitive weapon.
• The Starfish and The Spider: The Unstoppable Power of Leaderless Organizations by Ori Brafman and Rod Beckstrom (Portfolio) - What do Alcoholics Anonymous, Napster, and al Queda all have in common? No one runs them. I love this book and highly recommend you check it out.
• Setting the Table: The Power of Hospitality in Restaurants, Business, and Life by Danny Meyer (HarperCollins) - Meyer knows something about delivering service. His restaurants occupy four of the top twenty spots on Zagat's.
• Tailgating, Sacks, and Salary Caps: How The NFL Became the Most Successful Sports Franchise in History by Mark Yost (Kaplan, Nov.) - This is about the business of football in all its glory.

Check Out My Website for Your Free "Reality Check Audit"

My goal is to make it easier for customer zealots and leaders to do this work and to advance the cause for customer experience and customer profitability. If you go to my website www.customerbliss.com, you’ll find a toolkit that outlines the key things I’ve learned this past 25 years of pushing the rock up the hill. And if you click on “Reality Check Audit�, I’ll send you a complete summary of your ‘to do’ list for driving customer focus and customer leadership. It’s an audit of the actions your company should be taking to drive the action. You can take it yourself, have your leadership take it and your company…and in doing so find out where to begin your quest, identify the potholes and get the action moving.

I wish you all the best in your quest to drive the focus on customers inside your organization. My goal is to keep providing you with support and help and in that way – have my hand in the small of your back prodding you on.

Jeanne Bliss
Customer Crusader
Redmond, Washington

To Get More Information and Help...

Please check out my book: Chief Customer Officer: Getting Past Lip Service to Passionate Action. It is packed with real-world experiences you’ll recognize and practical and realistic actions you can t ake right from the page to action.

Also take a look at Fred Reichheld’s Book - The Ultimate Question: Driving Good Profits and True Growth. Reichheld advocates using the “Would you Recommend?� question to customers as a key indicator of driving profitability. You’ll find th at my book complements and agrees with his concept…and puts forth some concrete ideas on how to execute on the concept – in the real world of the corporate machine. For example; one thing to watch out for is to ensure that you don’t just use the referral question to get a good Net Promoter™ score. My concern is that companies are already getting precariously close to using this powerful tool to game the system and work for the score rather than where it should drive companies to improve and change. Asking the question without going back and clarifying the issues with customers on why they did or did not or would not recommend you won’t get your company to change. I’m already hearing of companies out there who are starting to prod their customers, “call us if you can’t say you’d recommend us.� It would be a shame for this to fall into another number that’s “gamed� – rather than used to get the company to drive action for customers.

My other favorite book that complements and gives meat on the bones to the concept of customer profitability is Managing Customers as Investments by Sunil Gupta and Donald R. Lehmann.

If your goal is to take action to drive your company closer to customers …these three books click-together well to give you strong concepts, real-world advice and practical application for driving customer focus yielding customer profitability for your corporate machine.

Do You Need A Chief Customer Officer?

Some CEOs are considering the creation of a C-level position to drive the action for customer experience and customer profitability. However, beyond the notion that it’s a good idea, not many know how to structure the Chief Customer Officer role and its place in the organization. Here are some thoughts to help you proceed.

Suggesting a CCO may seem frivolous to leaders who believe they already focus on customers. There’s often a proliferation of tactics and projects underway…the problem is they don’t amount to anything significant for customers. So first decide: will leaders be okay with someone (other than themselves) driving consensus on customer strategy and deliverables? You may be saying, “We have consensus now.� I’m sure that you’ve had some good meetings, but how much of it stuck? When they were over, did everyone return to their respective corners and business as usual? Getting company alignment is tricky. You may need someone full time to ensure it exists for your direc tion with customers.

What about sustaining the work? After the first and second meeting of what I call “the funky task force� on the customer work, people start to lose interest. You know these meetings. The kick-off has forty people at the table, some who clamored for an invite. One month later, six regularly show up. And the person who got the job to run the task force layered on top of his/her “regular� job? Well, they’re losing interest fast. Driving this work needs hard-wired participation. Do you have headcount and staff time commitments to drive it forward?

Now to the roadmap and action plan: let’s discuss the sticky wicket of “how� to move past the hoopla of meetings and empty commitments. Do you have a central roadmap that everyone follows on how you’ll drive the customer work and measure progress? I didn’t think so. How about consistent metrics everyone agrees to? We have metrics galore in our companies and of course the ‘customer’ is now on our scorecards. But these are typically neither clear nor connected down to the operational level. Roles and responsibilities and holding people accountable are a slippery slope in the customer work. This is about the hand-offs between the silos. Most companies need a task list that clearly states what each part of the organization will do and when to get the priorities accomplished. But most don’t have one. Do you?

Is funding customer projects like pulling teeth? This may be due to duplicate spending across the organization. Everything is pitched as an individual program from inside the silos. At planning time these investments are often vulnerable in the first round of budget cuts. Why? Because each project shows up as a one-off tactic. There’s rarely an annual plan for understanding and managing customers as a key corporate asset - determining how many were lost and why and pooling resources to keep and grow profitable customers. Why? Because it’s no one’s job to do this job.

And finally, does the hoopla have any chance of sustainability as things stand now? Are leaders committing to customers, but not changing the metrics or the motivation to realign business priorities? Is the back-up position still about counting sales but not counting customers? For what actions are the most “Atta-boys� doled out? The customer work will not emerge as a priority of the organization until people’s success and career paths are tied to their accountability for how their actions impact customers. How far along are you with this? Are you heading in the right direction?

Most leaders wouldn’t refute that any of these actions are important. They want them to happen. They’ve always wanted them. Their failure has been in assuming the company could miraculously defy the l aws of the silos to make them a reality. Separate motivation, the metrics and the mechanics have stayed firmly rooted in each silo. And they will continue to stay there until someone duct-tapes the silos together in a unified and executable customer plan. Is it time you established a Chief Customer Officer to connect your company for customers?

Guerilla Metrics

Can you hear that? It’s the shot being fired into the air by CEOs the world over saying that they want focus on the customer. CEOs now know that customer profitability is the ‘Promised Land,’ the final frontier of validation that they’re running their business well. However the quest for how to get there remains elusive. Frequently the CEO hasn’t thought through how accountability for customer experiences and customer profitability will be wired in. In the absence of clearly redefined metrics and methods for accountability, nothing changes.

See if you recognize your company in this example: A home builder declared its mantra to be “customer partnership.� Customer revenue, it was predicted, would dramatically climb as customers would come to rely on the builder for services such as move-in support, spring cleaning, fencing, security and ongoing warranty and maintenance. The revenue upside and future rates of customer profitability were calculated. Only thing was - accountability metrics didn’t change to direct focus of customers and customer partnerships. They were still home sales, quarterly sales goals on upgrades and costs of running the business. Customers were lost in the shuffle.

Besides the standard sales goals, that home builder should have also been asking for the “Guerrilla Metrics.� That’s because the “Guerrillas� give CEOs five questions for driving the business toward customer relationships and customer profitability:

1. New Customers; Volume and Value?
   Ask about the volume and value of your incoming customers as often as you ask about sales goals. You may find that you are tracking incoming customers across a multitude of company areas - with conflicting definitions of what it means to be a new customer. The wild card here is if you have achieved alignment in how customers are classified inside your system. The part that’s not likely tracked is the quality of incoming customers.
2. Lost Customers: Volume and Value and Reasons
   The volume and value of lost customers needs to be paired with the new customer information to lay out the true situation for your company. You must reconcile “Customers In� with “Customers Out� to know how well you are doing with managing customers as an asset of your company. In addition to knowing which customers left, you need to know the reasons why they don’t care to do business with you anymore so you can drive change across the business.
3. Customer Renewals with Reasons
   For this to have relevance for your company, you’ll need to define customer behaviors that constitute renew or the commitment to continue doing business with you, according to your business model. The key is to understand patterns which indicate loyalty based on continuous purchase habits. You must ask for reasons why customers are staying with you to ensure that you personally know what you are delivering to customers that they value – and to ensure that there is awareness when these reasons shift or begin to erode, and actions are taken to reverse the trend.
4. Revenue and Profitability by Customer Group
   Getting to this classification of customers is not a trivial project. You need to understand the movement of customers from one profitability group to another so you can strategically lead the customer agenda. Your goal should be driving efforts that cause your costliest customer groups to decline and those most profitable to grow. If you are not demanding that the business be tracked this way and if you do not ask for accountability around these metrics in the regular language of meetings, it won’t happen.
5. Referrals by Customer Group
   If your customers are willing to stick their necks out vouching for you, they have become your marketers. Keeping these customers, growing them and developing other customers like them are the key. If you can track the rate of referrals in general and by customer group, you’ll know the strength of your ongoing revenue stream before you even spend another dollar on marketing. Companies completely focused on customer profitability will learn how referral rates differ by customer group and reasons for not referring.

This is the elusive CEO platform that’s missing for people after the big focus on customers is announced. These questions power the customer on to the corporate agenda. What do you think of the “Guerrillas?� Let’s talk about how they might work for you.

The Power Core

For customer zealots, it’s important to know what the company power core is…And if the power core is committed to customers.

Common sense, right? Not so much. Because this is often the muck that’s stepped in as brave zealots charge ahead into the corporate fray determined to make things right for customers. I’m sure you’ll recognize this…

Every company has a power core. It is usually the strongest skill set in the company, the strongest strength of senior executives. Information Technology (IT) for example; is a central base of power in many organizations now because of the pull they have in defining the corporate agenda due to budget and how dependant the corporate machine is on what they deliver. So the way that IT prioritizes things will have an impact on where the ‘customer stuff’ falls on that list. Let’s say you have a product power core company. This is where product development is the most important – product resources and product leaders get the most play, the most glory, the most reco gnition and the most resources. Customers…well, sure they get the products. But are the products built from the customers’ point of view? Is the experience of receiving the product and the post-product experience the right one? A product power core may only be thinking of the product itself…not the customer who buys it or uses it or the field force who has to service or explain it or the operator who must field calls about it. The insular nature of the company power core often gets in the way of building an experience for customers that is meaningful.

Knowing what the company Power Core is and engaging those whose finger is on the power button is critical to driving and transforming a company to have lasting customer focus. Why? Because customer focus will mean tampering with the normal flow of priorities from the Power Core. Those leading the customer effort MUST ask the Power Core to the transformation dance. Heck, the Power Core has to take a lead in actively redefining the priorities of the corporation for the corporation.

Most people leading the customer charge don’t think this through. Often the customer effort begins when bad survey results came in, or the President decides it’s now (finally, at last, or once again) a major priority. This audible from leadership is assumed to be important enough to be the driving force to get people to line up and take action. But it’s not. Everyone will salute the flag all right. But real change won’t happen until the impact of how company priorities need to shift, how resources need to be reallocated, and how success needs to be redefined is agreed to by those in the Power Core who are currently calling the shots. And THIS is one of the maj or reasons why many, many customer efforts crash and burn. The Power Core hasn’t been asked to the dance.

In most companies the power core lies is one of these seven:

1. Product Power Core
2. IT – information technology Power Core
3. Sales Power Core
4. Marketing Power Core
5. Vertical discipline (such as doing the business of a bank, or health care, or insurance) Power Core
6. Customer Power Core

Let’s talk about your company Power Core and how it is impacting your company’s ability to focus on customers and customer profitability.

What The Book Will Do For You

My book is called Chief Customer Officer: Getting Past Lip Service to Passionate Action. Here’s the deal about this book: it’s about reality. How to get the customer thing (you know, the public proclamation to focus on customers, followed by mass confusion on what to do) done beyond the lip service, T-shirts, coffee mugs, and big kickoffs. It’s about how to push the customer rock up the hill by turning the focus on the obvious: customer experience and customer profits. It’s about how to figure out how big that hill is. And it’s about how to keep that rock from falling on your head . . . as little as possible. It’s about figuring out if you’ve got the leadership chops to take this effort on, and it’s about navigating the corporate machine to figure out how and where to best leverage this effort from.

What This Book Will Do for You…

Executives and CEOs:
Use this book as a platform to evaluate your organization and your personal role in driving the customer agenda. You may be wondering why you just can’t get traction on customer management and customer profitability even though you’ve named it as a corporate priority. Through this book’s evaluations and outline of the issues, you can understand why the impasse exists. There is information to assist you in determining if the answer is a single position or a whole host of conditions, attitudes, and actions that must change in your organization. Hiring or appointing a chief customer officer will require a personal commitment by you. This book will outline what yo u need to be ready and willing to step up to doing before you put a name on that organization chart.

To the new and existing chief of the customer effort:
This is your comprehensive handbook packed with ideas on how to get this vital work accomplished. The tools, approaches, stories, and empathy contained in it will arm you with a place to start and a methodology for how to proceed in the first month, the first year, and those that go beyond when things really start to take hold. You’ll get ideas for how to manage across the silos, where to weave in accountability, and how to engage the commitment of top leaders in the journey. Most important, it will provide ideas on how to break the work into segments so you can advance the organization down a specific path of improvement.

Senior leadership and functional leaders:
You may be trying to crack the nut on how to deliver a comprehensive customer experience. You may be at the point where it’s obvious that all of the factions you’re trying to bring together to get that project done have different agendas. Or perhaps you’re the service vice president with vast amounts of customer information that could drive the company forward, but people just aren’t lining up to participate. You may have joined forces with another functional vice president to get the company to make some tough cross-company changes required to manage customer relationships. In your passion, you may have found yourself the de facto leader for this gnarly compa nywide effort. This book takes and translates the issues you’re experiencing but may not have had time to articulate. It offers tools to move the logjams you’re experiencing and tactics for how to proceed with your particular brand of challenge.

Good Morning!

Good morning everyone. I’m Jeanne Bliss. For 25 years I arm-wrestled 5 major US corporations to get them to focus on their customers and customer profitability. Today I’m here to share and discuss the ecstasy and the agony of driving customer focus and customer profitability. My goal is to discuss what I’ve learned abou t what makes customer efforts wildly successful, and what makes them crash and burn. At the end of our conversation today, you should have some concrete ideas on what you can do to thrive, survive and drive the customer agenda ahead. Along the way, I’ll throw in a few personal tidbits about how my role of ‘chief customer zealot’ often required being as annoying as the sound of fingernails on a chalkboard – to get the attention of the ‘corporate machine’ …and often the president who hired me.

So let’s begin. What’s on your mind about how to get your president and corporation to focus on customers, customer experience and customer profitability? Hit me with your best shot…I’m ready for it! Heck, I’ve probably lived it.

Defining a customer

I just wanted to highlight Steve Yastrow's (at the Tom Peters' blog) defintion of a customer:

Anyone whose actions affect your results.

I think it's an interesting and simple definition. The comments on both Steve's entry and Tom's reminder are also worth a look.

Five Picks by Paco

In Saturday's WSJ (registration required), Paco Underhill highlighted what he deemed the "priceless" "studies of consumer culture".

Here are Paco's five picks:

1. Bobos in Paradise by David Brooks
2. Cheap by David Bosshart
3. Not Buying it by Judith Levine
4. Futureshop by David Nissanoff
5. Design for Effective Selling Space by Joseph Weishar

Measuring Customer Satisfaction

Out of curiousity, how many companies would you recommend to someone else? Have you ever had an outstanding, memorable customer service experience? I'd love to know what you define as an excellent customer service experience.

Every Tuesday we have a 8cr-wide meeting. It's not your regular corporate meeting; rather its a bring your pillow, share your opinions and write them on huge post-it notes. During these meetings, anything can be discussed (within reason). Last week Todd asked us a version of the above questions. In turn, we each answered.

Being the lucky person sitting next to Todd, I answered first. It's sad to say that I can't easily think of a really, really good customer service experience. There's nothing that pops to the top of my head leading me to be -- as Ben and Jackie would say -- a customer evangelist.

I do think that whether you would recommend a company does play into loyalty. Customer recommendations are the base for Fred Reichheld's new book The Ultimate Question. It's an interesting new way to get a measurement for just how satisfied your customers are. Of course, there will always be the pessimists and optimists but Fred provides a strategy for understanding what your customers are thinking.

The Washington Post had a review yesterday morning on his book (registration required). It's brief but it hits the main points of Fred's book:

In The Ultimate Question (HBS), Reichheld draws the distinction between unsustainable bad profits, which are generally the result of taking advantage of customers in some way, and self-reinforcing good profits, which come about because delighted and satisfied customers keep coming back, bringing their friends with them. He uses a few case studies and a succinct set of recommendations to show how any company, of any size, can build a successful business around asking the "ultimate" question and responding to the answers. Among management books, this one's a keeper.

While Fred's measurement may not be for every company, we've found it to be a useful insight. It's something we can do every week and keep benchmarking our results. We've been doing it since December and it's one of the things we talk about regularly at our "Tuesday meetings".

Are we too altruistic? An inside look into customer service

There appears to be a new trend in customer service. Companies are actually starting to work towards the long term goal of customer loyalty rather than the short-sighted goal of month-to-month (and even quarterly) profits. Call it a relatively newfound focus on lifetime value and loyalty; this new focus benefits both parties -- consumers and companies.

Perhaps corporations and businesspeople, alike will stop being placed in the negative, profit hungry category and start being placed in the "they actually care" category. Don Peppers and Martha Rogers, authors of Return on Customer, pose the question, "Are U.S. firms going soft, suffering from an excess of altruism?" No, they have not. They've come to realize the value of treating customers well and in the competitive U.S. market, this is not only a good idea but its essential to any long-term success.

It's something that we've all known makes a difference -- superb customer service -- yet, implementing it isn't as easy as pie. According to Peppers and Rogers, "What customers value more than anything in today's complex world is to buy from a company they can trust to respect their interests, even if it means giving them a better deal than they might otherwise have known about, or letting them compare competitive offers directly."

One example they gave, Air Canada -- their customer "advocacy department" works to fix each complaint to the benefit of the customer. My example -- Harry & David -- my favorite delicious fruit provider, even if a little pricey. The two times I've had problems with the quality of their fruit (which is usually extremely delicious) they've always fixed it in a timely manner and with an appropriate response.

One interesting customer service note was on W hotels. They're new intiative is the "appropriate use of eavesdropping." (Under the on the beat section; registration required). I really enjoyed my one-time stay at a W hotel in San Francisco and am curious to see how this intiative will play out. According to the vice president of human resources, they're trying to make an "extra, unique customer experience that you'd only find at the W."

Are your customers humming along to the Rolling Stones?

Do your customers sound like Mick Jagger at Superbowl halftime singing "I Can't Get No Satisfaction"? I've still got that song playing in my head from last night.

Alright, they may not actually be singing that. There is a new book out on customer satisfaction called Satisfaction -- and as far as I know, there are no references to Mick Jagger in it.

You may be more familiar with the book than you'd guess. The author, James D. Power IV is from the J.D. Power and Associates -- the company that measures customer service.

Here's what James says about customer service in a recent interview with Inc. magazine:

You know you have a customer service problem if...

"You're spending more money to acquire new customers compared with competitors or compared with internal standards. Employee turnover is another indication."

If you have a problem....
"Consumers aren't expecting perfection, but they want problems to be dealt with in a forthright way."
He gives an example of Lexus. When they were first starting, there were a few "minor problems with its cars". So "they rushed a letter of apology to every customer, then had the dealerships pick up the vehicles and bring them in for repairs."

James said that Lexus' actions helped to improve customer satisfaction ratings and "it had a positive impact on brand image."

Books To Watch For - Spring '06

We did this last fall and thought you might enjoy another look at the season ahead.

So, here are the books we think you should be watching for in the first part of 2006.

• The Number by Lee Eisenberg (1/06, Free Press) - If you have walked into any Barnes & Noble since New Year's it would have been impossible to miss this book. We think it is a great book. Eisenberg takes Gladwell-like look at the complexities of retirement. As I said in my prior post, this one had me on an emotional rollercoaster. It is a great book and one everyone should read.
• The Wal-Mart Effect by Charles Fishman - The long-time Fast Company editor writes an amazing book on what drives Wal-Mart and how that drives our economy. He has firsthand accounts from employees who started some of the company's biggest businesses. He also talks with suppliers about what it is like to work with the retail giant. What Fishman does best is shed some light a company that the public really doesn't know much about.
• Silos, Politics, and Turf Wars by Pat Lencioni (2/06, Jossey-Bass) - We have just started reading this one, but it is hard to bet against this author after the classics of Death by Meeting and Five Dysfunctions of A Team.
• The Ultimate Question by Fred Reichheld (3/06, Harvard Business School Press) - Reichheld has been writing books on customer loyalty for a number of years. He has done the research to show that you can ditch all the 47 question satisfaction surveys and ask your customers one simple question - "Would you recommend us to someone else?"
• The Radical Edge by Steve Farber (4/06, Kaplan) - Jack just got done reading the manuscript and he says he may like it more than Radical Leap. Many of the familiar characters are back. This time, it is about taking personal responsibility and living life on your terms.
• Questions of Character by Joseph Badaracco (4/06, Harvard Business School Press) - The subtitle says it all -- "Illuminating the Heart of Leadership Through Literature". The book is based on a class taught by the author at Harvard Business School. He says that fiction offers a unique way to teach leadership. It is possible to truly know what the characters are thinking, versus learning tools such as interviews and case studies. I think it is brilliant.

Boss' Quote of The Week

"For me the hiring is the easy part. I don't run a multi-national corporation, so I'm right here all the time. For me the hard part is letting go and avoiding the temptation to micro-manage everything they do. You've got to keep telling yourself you hired them for a reason, and then give them the freedom to go out there and do what's right, even if it means making a mistake now and then."

Bill Mossontte
Mission Hill Bowl
Mission Hills, California

From Satisfaction: How Every Great Company Listens to the Voice of the Customer by Chris Denove and James D. Power IV (Feb. 2006)

The Power of the Purse--Sony Joins the Ranks of Marketing to Women

The great thing about women and marketing is there is never a dearth of great stories and ideas to keep the conversation going...and that goes for the companies featured in "The Power of the Purse." All of the companies are continuing to update and improve upon their efforts toward women. McDonald's is moving ahead with plans to put Wi-Fi into many of its restaurants and renovate decor to be more inviting to women. It's rolled out several new products as well like more robust coffee and a new apple-walnut salad. Nike has launched a smart, sassy ad campaign about women's bodies that proclaims the beauty of bodies--no matter what their size. One goes like this: my butt is big and round like the letter C. My butt is big and that's just fine and those who might scorn it are invited to kiss it." You can check out this ad and others at www.nikewomen.com and download them to your computer if one of them inspires you.

Plus, more and more companies are joining companies such as Nike and McDonald's in radically rethinking what women consumers want and what they will buy. Sony has joined the ranks of technology marketers such as Kodak, which found success in focusing on women for its EasyShare camera. For the launch campaign of its Bravia brand of flat-screen television it rolled out the tagline: Introducing Bravia. The World's First Television for Men and Women." The tagline isn't all that enlightening. But the ads, especially online, are attention-getting because they break from the crowd of flat-screen television screen manufacturers who often tout megapixels and size. The size--some of these TVs boast 60-inch plus screens--were often the cause of arguments between men and women. I met a furniture maker who said he was doing a great business in creating cabinets that would hid these big flat screens. He says his male customers told him their wives would only agree to their buying a big tv if they also bought something they could hide it in.

Sony is countering that battle of the sexes with some humor that also plays up the beauty of the Bravia design. The ads go on to say the television will "be coveted by men and admired by women." Sony needs to break away from the crowd--and women might just be the way to put the big electronics company back in the black. As MSNBC pointed out, Sony has been hit hard by consumers' quick shift from the old "cathode ray" television to plasma screen technology. We'll have to see if a woman's touch will help Sony as it did Kodak.

Passionate and Profitable

Companies are paying lip service to their customers. We call it lipstick on a pig because what’s going on today, cleverly disguised as “customer relationship,” is nothing more than a shrewd way to make more money from the customers at the lowest value possible. It is an attempt to create efficient relationships. A concept that was tried many times by executives who thought they were smarter than their customers. But more often than not, the efficient relationship has lead to accelerated commoditization of products and services. Let’s face it. Customer programs are usually a cosmetic fix and are most definitely NOT a long-term, for profit, strategy.

Consequentially, it’s no surprise that companies are failing to get their customer relationships on the right track. In our recent global customer experience study we discovered that 59% of executives surveyed did not even believe that they deserve the loyalty of their customers. They’re on to the truth and know that their good is not good enough.

To be fair, companies and customers are inherently at conflict. Their agendas, concerns, hopes and ambitions, are all fundamentally different. The problem is that most companies refuse to admit this conflict and therefore can not address it. To put it more plainly, companies reside on Mars, seeking quick gratification through end of quarter results and customers are from Venus - requiring commitment and investment in the relationship.

In my book Passionate & Profitable, Why Customer Strategies Fail and 10 Steps to do them Right (John Wiley & Sons, 2005), I contend that successful customer strategies require that companies make some tough choices and critical decisions. For the organization focused on operating an efficient, cost-cutting company, this will be even more difficult. Things to ponder include:

• What is the customer job description in your company?
• When was the last time you fired a customer?
• Who paid for your cost reduction program?
• Are you still obsessed with market share as the path to success?
• How many of your employees actually love your products?
• How long do you plan on milking your products?
• Do you believe in consistency? (Consistency is boring)
• Can your customers see the value you deliver?
• How many customers ideas did you implement recently?
• Are you pursuing best practices strategies or Next practices?
• Still managing the business by the old 4 P’s of marketing?

So take a serious look at your customer strategy. You are not fooling anyone if you think that the superficial, short-term customer “program,” “initiative” or “campaign” you’ve got in place is doing the trick. You only fool yourself. Today’s customer is far too sophisticated and will absolutely call your bluff. If you want to accelerate commoditization, however, please continue with business as usual. On the other hand, if you’re ready to get serious, and ready to get to Venus (where the customers are), then it’s time to make some serious strategic trade offs. As you venture on this journey toward your loved customers, remember commitment and passion go hand-in-hand. Passion is profitable and this book presents a prescriptive approach to getting it right.

Connecting the dots between failed Follow Through and Customer Defection

Somewhere between 32 and 94 per cent of your customers are right this minute thinking about switching to your competitor.

If you’re in the insurance industry, about a third of all your clients are ready to make the leap. Over half are at risk if you provide mobile phone or banking services. In a department or specialty apparel store, four out of five customers are contemplating a change. And if you run a fast food franchise, you’re on verge of losing 94 out of every 100 customers who bought a burger last week.

It’s no better in professional and industrial sectors. 55 per cent of enterprise software solutions buyers are antsy and 61 per cent of executives who outsource some part of their operation say they’d “love to find someone else to outsource to.”

How do I know? Customers who are on the edge of defecting (or reducing their purchases year over year) don’t say so in satisfaction surveys. So I had to read between the lines and connected the dots. You can too.

There are several factors that can push clients to think about defecting. Curiosity (when your client asks himself, “Am I getting the best deal?”), inducement (when a competitor asks your customers, “Would you like to see a much better deal?”), or even chance (when circumstances put your clients and your competition in the same place at the same time) – all are known to prompt customer defection.

But one factor is the gateway for all the others. It’s disappointment – the feeling of outrage and regret a company creates when its regulars don’t get what they expected. Disappointment is the catalyst for defection.

Think about it. You are bombarded with about 3,000 advertising inducements every day. They mostly go in one ear and out the other. But the day your credit card company disappoints you, you will actually stop and pay attention to the ad offering a zero percent finance charge on balance transfers from another financial institution. The same goes for your phone service, your software supplier or any other commercial relationship.

Now, everyone knows it’s very expensive to replace an existing customer. Not only does a company have to pay through the nose to find fresh prospects, but also the discounts or other give-a-ways necessary to get people to switch take a big bite out of any organization’s current operating margins. Then, as any employee from the front lines will tell you, that new customer will ask more questions and demand more attention, straining already stretched customer support budgets to the breaking point.

It’s an undeniable fact – new customers cost more and pay back less than existing clients. That’s why the most effective cost-saving, profit building change a manager can make is to stop doing anything at any level that causes current customers to feel disappointed.

So connect the dots. You can’t stop people from being curious or keep your competitors from dangling a carrot. But you can stop all the dropped balls and unforced errors that disappoint your good customers (or key employees and best investors), any of which could become the straw that breaks the back of your long-term, profitable customer relationships.

Following through isn’t critical because of the “Golden Rule” or any high ethical standards. Following through is a way to stem the waste of resources and build revenues by reducing the rate of customer defection caused by disappointment. It’s a profit building, better ROI strategy.

More on the importance of customers

Jack put up the quote on Monday from the new Peppers/Rogers book and Tom had the Drucker quotes yesterday. Both of those reminded me of a slide from the Tom Peters Re-Imagine Summit in December.

Tom was on kick about strategy and the put-up a slide about Hardball by George Stalk and Rob Lachenauer. The mantra of the book is "The winners in business have always played hardball" and like any business book, there are four things that illustrate the strategy.

"Unleash massive and overwhelming force."
"Exploit anomalies."
"Threaten your competitor's profit sanctuaries."
"Entice your competitor into retreat."

To make a point, Tom went to the index of the book looking for some words. Out of the ~640 index entries:

• Number of entries with the word customer (also included service, retention, and loyalty) - 4
• Number of entries with the work people (also included employees, motivation, worker(s) - 0
• Number of entries with the word innovation (also included product development, research & development, new products) - 0

We have written alot on Hardball. If you want out find out more about the book, you can check out the entries here and the excerpt here.

How to Feed Friends and Influence People

The first book is catch my attention this year is How to Feed Friends and Influence People. The book is written by Milton Parker, the owner of the Carnegie Deli, and Allyn Freeman.

First, I thought the title was pretty clever. I think it plays nicely off Dale Carnegie's How to Win Friends and Influence People.

When you open the front cover, you find the complete menu as you would find it at the Deli. From there, I think there is a great narrative about the history of the deli and what has made it a success. Throughout the book, there are recipes for favorites like Matzoh Ball Soup, Corned Beed Hash, and their world famous cheesecake.

Like any good business book, you need a list of the 10 things that made you successful. Here are the Carnegie Deli's:

1. Keep It Simple
2. Do One Thing Better Than Anyone Else
3. Create a Family Atmosphere Among the Staff
4. Promote from Within
5. Have an Open Ear to Staff and Customer Comments
6. Make It Yourself
7. Own the Premises
8. Management is Always Responsible
9. Do Not Be Greedy
10. Have Fun Working

Fast Company Book Mentions - Dec. 2004

I expanded my ongoing column on the business books mentioned in Fast Company to include all books. You'll see why.

• In the Fast Talk section, they talk with Asya Muchnick, editor of Little, Brown.
• There is a feature article by Sylvia Nasar, author of A Beautiful Mind. It is titled What Makes Beautiful Minds - "Some forms of creative genius seem unfathomable. But that doesn't mean we can't learn from them."
• Human Resource Champions by David David Ulrich is the Can't Go alternative to the Human Resource Executive Program held at University of Michigan.
• This month's Readers' Choice is Clued-In by Lewis Carbone. You can read Charles Decker's review and an excerpt from the book.
• Nominees for February include:
  • Blink by Malcolm Galdwell
  • Hardball by George Stalk and Rob Lachenauer
  • Nation of Rebels by Joseph Heath and Andrew Potter
  • Survival of Savvy by Rick Brandon and Marty Seldman
  • Time Off for Good Behavior by Mary Lou Quinlan
  Vote here for your choice.

Ben Franklin Awards

Named in honor of America's most cherished publisher/printer, the Benjamin Franklin Award recognizes excellence in independent publishing. This year's winner in the business category was Magnetic Service: Secrets of Creating Passionately Devoted Customers by Chip and Bilijack Bell, published by Berrett-Koehler.

There were two other finalists The first was Sun-Tzu's Art of War Plus The Art of Marketing by Sun-Tzu and Gary Gagliardi, published by Clearbridge Publishing. The second was Writing the Breakthrough Business Book: The Ultimate Guide for Consultants, Entrepreneurs, Executives, Experts, and Writers by Tom Gorman, published by Content Publishing.