Evolving Excellence

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?

Oh Dell Oh Dell

I've been a Dell customer for many, many years.  Partly due to their offering the right computer for my needs at the right price... not the most exotic but still with the features I need.  And partly due to my respect for what they've done with their supply chain.  I drive my computers pretty hard, and generally replace them every two years. 

Dell isn't really lean, but they do have a pretty efficient supply chain.  Their factories are amazingly efficient as well; now if they'd only leverage that efficiency to see the value in a shorter supply chain.  Parts may be cheaper when sourced from southeast Asia, but the supply chain risk is higher... and that's a real business cost.

That supply chain risk, and the resulting cost, may soon include my business.

It is about time to replace my D620, which only a year or so ago replaced my X1.  It hasn't been two years yet, but some self-induced problems has created the need.  As usual I went to the Dell website and checked out some new products that have the power and portability I need such as the D630 and XPS M1330.  Then I went to the configurator to build a couple possible machines... and instead of seeing a delivery date a week or so from now, it said the earliest ship date was in late September. 

What the...?  Dell purposely doesn't keep much inventory of parts, but their lead times are usually a couple days, not a few weeks.  What's going on?  Turns out I'm not the only person that has been surprised by the new lead times.  Several blogs and articles are discussing the situation. 

Reporters for DigiTimes have broken the story that multiple notebook component suppliers are suffering serious shortages ... which means notebook manufacturers like Dell, HP and others will have to suffer through shipping delays. Of course, the bottom line is that customers will have to suffer the most. The parts shortages are coming just in time for "back to school" buyers leaving students without notebooks for class.

The parts of some of the more unique features... white LED backlit LCD's, slot drives, and the like.  I guess several final assemblers, such as Dell, got a little too greedy for the profits those new features would generate and decided not to wait until all the kinks had been worked out by the suppliers.  But some mistakenly believe it is related to lean manufacturing.

Some experts are blaming the parts shortages on the unexpected growth of demand for notebook computers around the world. Others are blaming manufacturers such as Dell for keeping only 1-2 weeks of parts inventory on hand ... the "lean" manufacturing policies such as only ordering parts as you need them may indeed have contributed to the delays we're seeing now.

No, I don't think so.  For one thing, Dell keeps even less than 1-2 weeks of inventory on hand.  But lean didn't contribute to this situation.  If the demand exists, and the supplier can't make components consistently, then the ability to maintain additional inventory is meaningless.  The supplier is already cranking out as much as possible, and creating that additional inventory wouldn't be possible.  Assuming increasing final product demand, which is happening in the case of the D630 and M1330, an inventory build simply delays the impact of the shortage.

Long supply chains are risky.  Dell weathered the Long Beach port strike a few years ago by chartering planes to deliver parts from Asian suppliers.  An admirable recovery, but very costly.  Now they are are experiencing new delays from factories almost 10,000 miles away, delays a chartered plane can't solve.  How would communication improve if the subs were built next door to Round Rock (or any other Dell facility)?  I bet the value, albeit off balance sheet, would offset the higher labor costs, which are already offset by higher shipping costs.

Dell could do a better job at communicating, and they should have waited to sell the new products until their suppliers were confident in their production capacity.  The comments on an actual Dell blog give a clear view of the customer service problem that has been created.

I am still wondering how Dell supply chain can promise customers something that it cannot keep. This is pure greed on Dell's part and this is not the way to run a business. I will sell a product only if I know that I have the product on hand and can satisfy its owner. Is Dell listening?

That was just one I could print without significant editing.  I need to make a decision in a couple weeks.  Will Dell come back?  Or will my long-time business shift to Sony's Vaio or perhaps even an Apple running Bootcamp?

Geo-Centric Customer Service

Today's Wall Street Journal describes how Lexus is trying to improve its market share in Japan.  Somewhat unusually, Toyota launched the Lexus brand outside of Japan and only two years ago began to market the cars inside the country.  It's been tough sledding against predominantly European competition.  So what is Lexus trying in an attempt to differentiate itself?

The screen-door technique is part of an unusual tactic under way in Japan's luxury-car wars. No. 1 car maker Toyota, behind in the luxury market, wants to fight back by plunging deep into the world of ancient Japanese hospitality traditions.  "Japan has a long and isolated history with lots of unique customs. We figured we could bring that to the Lexus brand," says Takeshi Yoshida, a managing officer at Lexus.

So off to school everyone went.

In early 2003, Toyota approached several etiquette schools that specialize in teaching the art of beautifying daily behavior, including the correct way to bow, hold chopsticks and sit on a tatami mat floor. The company asked the schools to tweak their techniques so that they applied to selling cars. Most snubbed Toyota's request.  But the Ogasawara Ryu Reihou institute, in Tokyo, agreed to work with the car maker. All Lexus employees, from repairmen to showroom managers, learn these and other rules during a three-day training course at the Fuji Lexus College, a fortresslike facility perched on the side of snow-covered Mount Fuji.

And that has led to some interesting practices in the Lexus showroom.

At Lexus showrooms, sales consultants lean five to 10 degrees forward and assume a warrior's "waiting position" when a customer is looking at a car. When serving customers coffee or tea, employees must kneel on the floor with both feet together and both knees on the ground. The coffee cup must never make a noise when it is placed on the table.

The etiquette experts determined that a salesperson should stand about two arms' lengths from customers when they are looking at a car and come in closer when closing a deal. They decided that a salesperson should bow more deeply to a customer who has purchased a car than a casual window shopper. When standing idly Lexus employees must place their left hand over their right with fingers together and thumbs interlocked, a posture originally designed for samurais to show that they were not about to draw their swords.

Yes I'm sure that creates an interesting air of formality that works well with Japanese culture, but can you imagine walking into a Lexus showroom in Texas and being served tea by a kneeling sales samurai wannabe?  Me neither. 

But on the other hand that kind of customer interaction would have been refreshing twenty plus years ago when I bought my first car out of college.  The salesman took the keys to my current beater to determine trade-in value, and the refused to give the keys back unless I negotiated.  Needless to say I didn't, I never went back to that dealer, and I told everyone I knew about the experience.

A spot of tea might have changed things.

Bumping the Hand that Feeds You

Geography has forced me to concentrate my air travel with United, and lately I haven't been very happy.  Apparently I'm not the only one, as an article in today's USA Today describes several stories of woe.  Here's my favorite...

Passenger Carolyn Smith of Singapore complained to the DOT after what she calls a "flight from hell" from San Francisco to Hong Kong in January. Eight hours into the 14-hour flight from San Francisco, the United crew announced none of the lavatories in coach were usable, she says. Only the business cabin bathrooms worked, she says. The crew asked passengers to stop drinking so they wouldn't need the bathroom and did not serve the second meal, Smith says.

I guess I better stop complaining about not getting a complimentary elite upgrade very often anymore. At least I don't have to worry about doing sphincter strengthening exercises before flying, just in case.  United has been particularly hard-hit with customer service issues.

Their discontent with United reflects a particularly vexing problem for the USA's second-largest airline: a severe decline in the quality of service at a carrier that once prided itself on just that. United arguably has fallen furthest and fastest among the big U.S. airlines in its ability to keep customers satisfied.

What has caused this once great airline to fall so far?

"Bankruptcy is a cataclysmic event," [Chief Customer Officer Graham] Atkinson says. "It forces you to think about sacred cows."  During restructuring, United shed 21,000 jobs, about a quarter of its workforce, and cut annual expenses by $5 billion, yet today it is flying about as many passengers as before bankruptcy.

Sure, bankruptcy is hard.  But when does fundamental customer service, for customers that create the top line that airlines turn into the critical bottom line, stop becoming a sacred cow?  However the article also points to another issue that has hurt United and many other airlines.  An issue that regular readers know is a hot button for me.

Officials say they are working through customer-service problems related in part to the outsourcing of jobs during the reorganization, which ended in 2006.  Among jobs United outsourced were hundreds of U.S. phone reservations and customer-service jobs. They went to contract call centers in India, the Philippines and Poland. The remaining United call centers in the USA serve only its high-mileage customers, international passengers and special groups such as military personnel.  United also eliminated 200 U.S. finance jobs, including 30 in refunds, and outsourced the work to India.

So, once again, how much did that outsourcing really save?  How does the few bucks an hour compare to the cost of a customer service nightmare that is now making headlines?  I've also always been fascinated by strategies that negatively impact new customers while trying to protect loyal customers... like the high-mileage elite folks in this case.  Wouldn't a long-term business perspective suggest that the opposite was a better strategy?  It's sort of like providing quality healthcare for the elderly while ignoring the young... who will thereby never become elderly.

As a final nail, hopefully not in the coffin, the entire industry has begun to "optimize" the number of passengers on flights.  Incredibly complex software is obviously involved, and you know what I think of incredibly complex software.  The number of empty seats has fallen dramatically, which some would say is in the best interests of the airlines.  Really?  Better hope you don't get bumped, which is a more common occurence these days.  Instead of easily being able to find you a seat on the next flight, it can now take several days to find a flight with even one seat available.  The USA Today article describes several of these cases.

Don't forget who really pays the bills.