Evolving Excellence

Just Observing, Sir.

By Kevin Meyer

I'm a fairly simple and frugal guy, but there are three, maybe four, luxuries that I do indulge in.  When I travel on business I just need a clean bed and I love Marriott's Courtyard chain.  When I travel on vacation I want more - and that's why regular readers know I'm a Four Seasons junkie.  If they have a hotel anywhere close to where I'm going, I'm there.

That's because the "more" that I want while on vacation is actually less.  I don't want to wonder if the hotel will be clean, if the bed will be comfy, if breakfast will be tasty, if the hotel will be in the right part of town, if the internet will be reliable, if I can get something to eat at 3am when recovering from jet lag, and especially if the room will be quiet.  Four Seasons does this - everything is perfect, and perfectly consistent, every time.  In years I have yet to have a single complaint.

And yes, like with most top tier hotels, I could tell you stories that would amaze you, even if they don't necessarily add any intrinsic value.  Such as being met by Four Seasons at the gate (INSIDE security) at the Hong Kong airport, whisked through a special immigration line while your fellow travellers are asking what rock band my wife and I must belong to, and out a side door to their limo so we're at the hotel before most people have cleared customs.  Or arriving at their Singapore hotel, checking in in the room (like at most Four Seasons), going straight down to the bar and having the waiter greet you by name - literally 5 minutes after check in.  At their Costa Rica resort last April a pool boy greeted me by name and told me how one of the medical products my company makes has helped his daughter.  I learned the staff reviews Linked In profiles of guests while on the bus into work.  Value?  Maybe not.  But still pretty cool.

For that perfection I do pay more - sometimes double or even triple.  But while on vacation it's worth it to me... to think less.  There's compensating value to me.  As a bonus I also almost always learn something about service - or even about lean - so I'm tempted to write off part of the bill as a business expense. Note to IRS auditors reading this: I've never actually done this.

Finally to the real story of this post.  I'm having a quiet breakfast this morning at the Four Seasons in Bangkok after arriving late the previous evening after a long day of traveling from the US.  My table is at the side of the open atrium so I get to watch the staff in action.  I've always been amazed by how the staff at their hotels - whether at the restaurants or elsewhere - will be at your side exactly the instant you need them, but are also never annoyingly intrusive.  Now I know.

Amidst the flurry of wait staff running around, I noticed that there was always at least one person just standing - and watching.  Not always the same person, but there was always one.  Just looking around the room at all the customers - and the rest of the staff.  If a customer looked up and looked around indicating they needed something, instantly that wait person went over and another person took over the watching and looking.  If a line started to form (ie, more than one person) at the front of the restaurant, the person would head over and help with the seating.  And someone else would take over the watching.

Someone was always standing, observing, and watching.

So I looked up and to the side, and instantly a waiter was at my side.  I asked what he was watching for, and his response?  "Just observing, sir."  Yes, "just" observing.  That "just" has become one key to their exceptional customer service.  I wanted to ask if process improvements were identified and acted on, but that's when the language barrier kicked in.

Taiichi Ohno would be proud.

Lean types know of the "Ohno circle" concept.  Go to the gemba, and "just" stand and observe.  15, 30, 60 minutes - whatever it takes.  In fact, he would tell people that if they haven't observed something that needed to be improved, they should go out and stand longer.  How often do you, and your team, take the time to simply observe?  How often do you go out to your shop floor and just stand and watch the process?

When you rush around focused on firefighting and fixing things, you miss the nuance of the process.  Or, in the case of Four Seasons, a tiny shift of a customer's eyes that indicate they might need something.

Take some time to "just" observe.  Better yet, make it part of the ongoing routine of you and your staff.

The value of quality trumps the easy buck

By Kevin Meyer

WIthin the space of five minutes I came across two articles on two companies that have placed quality ahead of easy short-term profits.  First we have Dogfish Head, a specialty brewer.

Here’s something you don’t hear every day. On the heels of a nationally-acclaimed Discovery Channel television show that boosted an already growing demand for its beer straight through the ceiling, Delaware-based Dogfish Head Brewing Company from has decided to STOP expansion and will be pulling its products out of some states entirely.

Unwilling to compromise quality or flexibility by growing too quickly, and unhappy with all the empty shelves at retail stores across the country, Calagione made the difficult decision to pull his beer out of four states that have cherished his beer since 2004 or before: Tennessee, Indiana, Wisconsin and Rhode Island. On the flipside, the brewery’s home state of Delaware will see a greater supply of their favorite brews once again.

With the notoriety from the TV show driving demand through the roof, Dogfish Head could have just pumped out the volume and made some big bucks.  But they didn't.  Instead they decided to protect quality and therefore the brand, which will create long-term success.

Zappos has a similar story, unfortunately at the expense of our friends to the frozen north.

We have made the difficult decision to shut down the canada.zappos.com site and stop shipping to Canada. One of our core values is to “deliver WOW through service”. That means the best selection of brands and products that can meet just about every individual’s needs as well as fast, free shipping and free returns, all at competitive pricing. Our Canadian customers know that we have not lived up to these service levels.

Product selection on canada.zappos.com is limited due to distribution agreements with the brands we sell in the United States. In addition, we have struggled with general uncertainty and unpredictability of delivering orders to our Canadian customers given customs and other logistics constraints.

I've bought all of my shoes through Zappos for the past three or four years and can vouch for their quality of service - and that is specifically why I keep going back.  Here they recognized that they could not live up to that value due to other circumstances, and instead of continuing to make money but potentially sacrifice the customer perception of that value, they are abandoning that market.

We often hear a definition of a "core value" is something so deeply important you'd be willing to sacrifice the company for.  Maybe that's the wrong perspective.  Holding to a core value that is also a value to the customer will create long-term success.

AT&T, I'm Begging You to Take My Money!

I try not to use this blog as a bully pulpit to vent personal frustrations, but over the past couple days I've experienced about the epitome of poor customer service - to the point that it has become a lesson.

It was very similar to the experience I had at a local Starbucks over four years ago (holy cow... I've been writing that long??).

Upon approaching the counter the clerk told me that her cash register wasn't working, therefore she couldn't serve me. 

You're kidding me, I thought.  I pointed out that her register was literally surrounded by a dozen or more Albertson's cash registers, but apparently the partnership between Albertson's and Starbucks doesn't allow each company to help the other out in a bind.  So I offered cash.  Almost exact change, but round up just to be safe, and keep the change.  Nope.  How about an extra buck or two just so I wouldn't have to go search for a coffee elsewhere.  Sorry.  She refused to take my money... while the fresh coffee brewed right behind her.

I wanted to give Starbucks cash business, even with some additional profit.  I wanted to take some of their excess, perishable inventory off their hands for significantly more than it was worth.  But they didn't want it.

I still think about that experience every time I go to that Starbucks.

Now I will think about a similar experience whenever I use my phone.  You see, I'm sort of roped into using AT&T for my cell phone since the tech geek early adopter in my insisted I get an iPhone.  Don't get me wrong- I wouldn't trade the iPhone for any other phone.  But having to deal with AT&T really pushes me to my limit.

All I wanted to do was add a second phone to my account, a basic cell phone for my wife.  I went to my online account at AT&T and there was a nice clear link for "add a line."  How simple!  I selected a phone that would be free with a typical contract, picked a nice cheap rate plan, hit checkout, and BOOM!  Something bombed and I got a "transaction cannot be completed" message.  Did it two or three more times.  Then I called the customer support number displayed in the message.

Customer service at that number is only available during business hours, and it was after 9pm.  You have got to be kidding me.  So I dug around and found another toll-free customer service number and got a human.  They walked through the same process I had just gone through online, and when it came time to checkout I was told the phone was only free if I used the online system.  Grrrr.... so I explained that the online system bombed, the customer service person got a supervisor, who refused to override the price to match what AT&T was offering online. 

I asked for another supervisor.  After another 15 minute wait that one did override the price, acted upset that I had been working on this problem online and on the phone for two hours at this point.  And then BOOM!  To add a phone I'd need a credit check.  You have got to be kidding.  I've had automatic bill pay for three years so every payment was on time, with the iPhone being one of their more expensive plans.  She could tell that I'd paid every bill on time.  But she couldn't authorize the credit for me to get a FREE phone.

And, you guessed it, the credit check people were only available during business hours.  Bam, hit the wall.  She did offer to call me back in the morning to handle it.  I said ok and went to bed.

No call the next day, so I called, and there was no record of any of the activity from the prior night.  I gave up, decided to cool it for a couple days, drink some wine, and chill out.  That's where I am now.  I just can't handle another mind-bending phone call for another day or so.  I've got better things to do.

AT&T, I want to give you money.  I want to enter into a two year contract that guarantees you money from a current customer that always pays his bill on time.  

Instead you're making a high value customer question the value received.  And you're making him vent on a blog with several thousand readers.  Pete Abilla over a schmula calculated that impact while telling his own story of Home Depot hell.

Never, ever make it difficult for a customer to do business with you.

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UPDATE:  I have been contacted by a regular reader who happens to work in the "Six Sigma Process" area at AT&T.  He has activated their internal escalation system, which resulted in several calls to me to help resolve the problem.  It took a while, but it now looks like it was resolved... the supposedly simple process of adding a new phone line... and giving AT&T some money!

The Gift of Complaints

By Kevin Meyer

Most people fear receiving complaints about their product or service.  But as Amy at Another Wine Blog suggests, a complaint can be an opportunity.

But instead of just processing the return I started talking to her, asking if there was something else she might need. Turns out she was taking her teenage daughter on a cruise, and she needed lots of things. And to make a long story short, what started as a $20 return, ended up being an $880 sale, and a repeat client. Why? Because I listened to what she was saying, and turned a complaint into an opportunity, a “gift.”

If one person complains, it's likely that several times that number are also experiencing the same problem but choose not to say anything.  And sometimes the solution to the immediate problem is simple, at least in the mind of the customer you are hopefully trying to retain.

For those who did complain, the most important concept in future business from that customer was whether or not she received an apology, a resolution, and a promise it wouldn’t happen again.

This doesn’t just apply to sales, but also how to handle negative product reviews, concerns about value, shipping issues and website glitches. A positive response can bring you a bounty of goodwill and word-of-mouth marketing. A negative response, and you not only lose a customer, but risk that one complaint turning into a viral word-of-mouth marketing “campaign” that only benefits your competitor.

Amy goes on to describe three experiences with three different wineries, and how their response to a problem created a long-term perception.  The moral?

Joe used to work with a woman named Julie who was fabulous at customer service. The running joke was how she felt (and sounded to the other AEs) when she was dealing with complaints; “Why yes, it is all my fault. I’m terribly sorry; how can I fix it?” But customers loved her. She was the positive face of the company. She made things right, and retained the customer. Because she treated every complaint as an opportunity — a gift. Even when she had nothing whatsoever to do with the error in the first place.

Embrace complaints... but do something about them to make the customer happy.

The Little Things of Brand Image

Brand image is very important to most of us, especially those who work at companies and organizations vitally dependent on direct customer loyalty.  Last week I realized, again, just how important the little things can contribute to that brand image.

I'm not a hotel snob, and when I travel I generally don't bother to pay the extra for full-service hotels with fancy restaurants and extravagant lounges.  But I do value a nice comfortable bed.  Westin is my first choice, but usually more than I want to pay, therefore I tend to frequent Marriott's Courtyards and Hilton's Hampton Inns.  The same bed as their high-end hotels but without all the fluff downstairs.  They are also incredibly consistent, no matter which city I'm in.  Occasionally I also try a Sheraton, and up until recently I had considered them a small step below a Marriott.

But Sheraton needs to put some focus into quality and consistency as two of my recent stays, one in Palo Alto, CA and one in Newton just outside Boston have been seriously below their norm.  Or at least I hope their norm hasn't fallen so low. 

The Newton Sheraton is an interesting creature, literally built on an overpass over the Massachusetts Turnpike.  I applaud the creativity of using otherwise unused vertical space without having to destroy more trees, and they did a fairly good job of muffling the noise from one of the most-traveled highways in the state.  Before I begin my rant, I would suggest that the following two statements on their home page are just a little incongruous.

Uniquely situated over the Massachusetts Turnpike...

Whether you’re searching for the perfect wedding venue...

Ah yes, a scenic wedding over the Turnpike...  But I digress.  Although the bed was fairly comfortable, and  because of that sole point I would usually rate the hotel fundamentally acceptable, there were several small problem areas.  Let's start with the jumbled and even scribbled numbers on the elevator buttons.  Then you're met with frayed carpet as you walk into the room. 

The doors are seriously dinged up, there are stains on the hallway carpet, and wall molding doesn't exactly look flush.

Does any of this directly affect the comfort of the bed, my primary concern?  No.  But I have to wonder if they pay such little attention to the cleanliness and upkeep of the hotel itself, how much attention do they pay to cleaning the sheets?  Ick.  This is a Sheraton, not a Super 8.

Little things do matter, and even if they are unrelated to the primary decision-driver, they can still have considerable impact on that decision.  Frayed carpet, dings in doors, and jumbled elevator buttons will mean I probably won't consider a Sheraton again, especially if there are other choices.

I excercised my consumer power, checked out early, went a couple miles down the Charles and finished my stay at the Marriott Courtyard in Cambridge... clean, comfortable, with a great view of downtown Boston.  For the same price.

American's "Improved Access" Strategery

Sometimes you just have to wonder if the right hand is talking to the left hand.  The other day I received an email from American Airlines announcing the following:

Today American Airlines, British Airways and Iberia signed a Joint Business Agreement (JBA) to cooperate on flights between North America and Europe, and announced that we plan to expand our global cooperation. We will cooperate more closely to improve travel choices, offer more convenient schedules and give customers more opportunities to earn and redeem frequent flyer miles.

Today's announcement represents good news for travelers. Our customers will be able to travel more easily on a oneworld network that includes nearly 9,000 daily departures to 663 destinations in 134 countries via flight schedules that will be coordinated to deliver more conveniences and choices. As an example, here in the U.S., customers and communities will gain improved access to 207 new international destinations just by our ability to link our networks.

This was just a few days after the following appeared in the local paper:

American Airlines and Delta announced this week that they are cutting all flights from San Luis Obispo County Regional Airport. American will also close a maintenance base there for its American Eagle operation.

American Eagle currently operates four daily departures from the airport. The move will eliminiate about 100 jobs as the nation’s largest air carrier moves to curb capacity by more than 10 percent in the face of soaring fuel prices and a weakening economy.

So... I now have "improved access to 207 new international destinations"... if I could get a flight out of my own nearby airport.  Which I won't be able to now.  Interesting strategy.  I've got the United Mileage Plus "golden handcuffs" so I don't fly American very often anyway.

A United Pilot Remembers the Customer

Airlines have been cutting back on all kinds of services, ranging from removing pillows to charging for aisle seats and even peanuts.  Yes, rising fuel costs are creating a perfect storm that threatens their existence, but the ultimate success of the airlines, or any business or organization for that matter, still rests with the customer.  Luckily at least a couple people in that industry still remember that fundamental concept.  Coincidentally I was reading that article on a United flight from Chicago to San Francisco.

Gerrity, 46 and a pilot with United for 16 years, is one of several commercial pilots who have taken it upon themselves to make flying more enjoyable for passengers who often view air travel as a less-than-pleasant means of getting from here to there.

Gerrity credits United colleague Capt. Denny Flanagan for his inspiration. "I was a co-pilot with Denny 12 years ago, and he showed me some neat things to do for the passengers that just end up making everyone feel good. I jumped right on the bandwagon. It's a matter of treating people with the same kindness and respect that you would show guests coming to your home."

So just who is this Flanagan fellow?

Flanagan, 57 and with United for 22 years, said he treats every passenger as though the flight is his or her first. He has been known to buy McDonald's hamburgers for a planeload on long delays, call the parents of unaccompanied children who are on his flights and go into the cargo compartment of the aircraft and take photos of the pets there to show their anxious owners that the critters are fine. He's also taken in-cabin pets outside for a quick potty break before the flight boards.

On flight delays, Flanagan will make coffee in the airplane's galley and serve it to the passengers in the gate area, answering questions and taking a bit of the sting out of the situation. "I lead by example," said Flanagan. "I never ask the flight attendants to help me do this, but invariably, by the time I'm on the third pot of coffee, they'll be out serving with me," said Flanagan.

That example creates a similar response from his customers.

Flanagan's kindness and respect begets the same from his passengers. "Things just sort of snowball," he said. "If we have soldiers traveling, we'll move them up to first class if we have room. And if there isn't space, I'll get the gate agent's permission to address the passengers in the gate area and I'll let them know that if there's anyone who would like to increase their travel experience today, if you have a great seat and would like to exchange it with any of the members of our armed forces traveling with us in appreciation for their sacrifice and service, just walk over and change seats with them."  Flanagan reports 100 percent participation.

Do you think those customers even think about complaining about the lack of pillows?

"On Capt. Flanagan's flights, there is a 50 percent improvement in customer satisfaction scores that specifically look at how likely someone will fly United again," points out United spokeswoman Robin Urbanski.

All it takes is a little realization that the customers... are customers.  The ones that pay the bills.

Getting Paid Not To Work

Do you want a quick response while on the phone with customer service?  Should you?  A new book by Bill Price and David Jaffe, The Best Service is No Service, asks that very question.  I haven't read the book myself, so I'm referring to a review by David Price.

In theory, we should be living in a golden age of customer support. Blogs and Web sites make it easier than ever for consumers to reward good service and punish bad. Companies, for their part, can avail themselves of sophisticated customer-service technology and, thanks to the rise of Indian call centers, less-expensive workers. But reality hasn't seemed to follow theory.

Nope, not by any measure.

When calling an 800 number, we expect to find ourselves in voice-response hell. We dutifully follow instructions to key in a 10-digit policy number – only to be asked by the customer-service rep for the same darn number. Waiting on hold for 25 minutes? Well, that's what speakerphones are for. A simple email query languishes for days.

We know there are exceptions... Southwest, Amazon, and Apple come to mind.  So why the disparity?  It comes down to management... or leadership.

Senior executives at most companies, the authors believe, are simply in the dark. "The standard across most service operations is to report and track how quickly things were done," they write, "not how well they were done or how often, or why they needed to be done at all." Thus typical measures like "pickup within three rings" or "email response within 24 hours" hide more about customer service than they reveal. And the measuring is easily gamed.

Instead you should figure out why service is required at all.

The authors contrast these crude metrics with Amazon.com's focus on "CPX" – contacts per order, contacts per unit shipped, contacts per transaction and contacts per customer. In other words: Don't just ask how long it took to help the customer, ask how often the customer needed help and why. The goal is to avoid creating a need for a customer to contact the company in the first place.

The goal is to work customer service out of a job... not get them to work faster to handle more service calls. 

This reminds me of a very innovative company I visited over a decade ago, well before total productive maintenance became a core part of the lean lexicon.  It was a large molding operation that paid its mechanics... when they didn't work.  If the goal was to keep machines running, then why incent the practice of repair?  With the new compensation program, albeit difficult to implement in certain states with rigid labor rules, mechanics were paid on a sliding scale based on the percentage of the work day when they weren't directly working on a machine.  The response was immediate: preventive maintenance became the norm and the mechanics spent considerable time educating the operators in the proper care and feeding of the machines.  Everything revolved around keeping them up and running.  Putting off the inevitable simply created more pain later.

Are you measuring... and incenting... the creation of value to the customer?  Or just how well you respond to problems?

Survey: 3 Respondents Required

11:48am - My email software, configured to check email every 5 minutes, receives the following:

United Airlines - As one of our best customers, your opinion is always appreciated.  Please click on the following link to visit our survey.

11:49am - With nothing better to do for the moment, I immediately click on the link.  And I get the following:

Thank you for trying to participate in our survey.  However, the survey has achieved its desired number of completions.  Thank you for participating!

I don't think any further commentary is necessary.  If you're going to use a survey to better understand the opinions of your customers, at least be serious about it. 

Root Cause Customer Service

Our friend Don Boundreaux, chair of the department of economics at George Mason University and blogger at Cafe Hayek, had an article in the Christian Science Monitor last Friday on wait times for customer service.

Needing help booking a flight, you call your favorite airline's toll-free number. After punching a few buttons to work through the menu of options, you finally connect to the bank of live agents. Sort of. A recorded voice says that "all agents are currently busy…. Please hold on."

We've all been there.  The waste of waiting, and perhaps the waste of a fine phone or piece of office furniture if the frustration of waiting becomes unbearable.  Boudreaux proposes an interesting solution.

Some companies have recently tried to reduce that [wait time] uncertainty by giving callers the estimated time that they'll have to wait. But economics points to a better solution: Switching from the currency of patience to the real currency of dollars and cents. Setting a market price for speed of help would do much to bring speed and harmony to caller queues. For example, customers could pay a fee to guarantee that their call will be answered within, say, 90 seconds.

Okay... yes my hackles are rising a bit too.  So let's let him explain himself a little more.

Many people will grimace at this suggestion, asking why companies should make money off the need of many of their customers to get expedited service. But all of the money that firms earn comes from exploiting customers' need for something. Why is it worse for an airline to make money from customers' desire for quick help on the telephone than to make money by flying them to a distant city?

Boundreaux spends the next several paragraphs explaining how his system would work.  But instead of analyzing the potential efficacy, I have one question:

Why did the customer have to ask for service in the first place?

Instead of adding massive cubicle farms of customer service reps in some cheap labor country, charging for better service to try to give customers what they paid for in the first place, how about analyzing the root cause of the problem.

Why are customers calling?  What is wrong with the design, quality, intuitiveness, or use of the product that creates problems?  With few exceptions, having to answer a call from a customer is a band-aid on a problem. 

Making a larger and more efficient band-aid doesn't change the fact that it is one.  And who really has the gall to charge the customer for it?