How Unresolved Service Failures Can Cost You Big Time

Sally's Mom loved the bouquet ordered through ProFlowers.

Sally's Mom loved the bouquet ordered through ProFlowers.

Service failures happen.

They’re unfortunate. Many are preventable. But make no mistake, they happen to every business. After all, we’re human.

Unresolved service failures are something else. They’re annoying and unnecessary. Continuing to fail at resolving a problem shows customers you don’t care, you can’t handle your business, or both.

Service failures also get far more expensive the longer they take to resolve. A 2013 Zendesk white paper estimated that waiting 48 hours to fix a problem costs companies 66 percent more than if they had solved it in just one business day. Way back in 2008, I wrote a post detailing how recovery costs rose rapidly when there wasn’t a quick solution. The longer it takes you to fix something, the worse it gets.

FTD recently provided another example. 

The costs of their service failure will be hard to spot on their profit and lost statement. Nobody in senior management may ever even notice.

That’s too bad for them. Hopefully, this post will ensure it doesn’t happen to you.

 

FTD's Service Failure

My wife, Sally, ordered some flowers via FTD’s website for her Mom. Her Mom was staying in a hotel for a few days and Sally thought the flowers would bring some extra cheer to her room. She paid extra for Sunday delivery so they’d be there when her Mom arrived.

An automated confirmation email arrived on Sunday signaling the flowers had been delivered.

Except they weren’t. That was service failure number one. It got worse. 

Sally called on Monday morning to see if the flowers could be delivered that day. She was told that someone would have to do some research and call back. No one ever called. That was service failure number two.

Sally called again late Monday afternoon. She still couldn’t get an update on the status of her delivery, so she asked to speak with a supervisor. The supervisor couldn’t guarantee the flowers would even be delivered on Tuesday. He was completely un-empathetic and did not apologize. 

That was service failure number three. Three strikes and your out. 

 

How it Cost FTD Money

This service failure caused FTD to lose money in a number of ways:

The first was labor. Two customer service representatives and a supervisor spent time talking to Sally on Monday about FTD’s service failure.

The second was revenue. Sally cancelled the order.

The third was a customer. Sally spends an estimated $300 a year with FTD. Now, she’ll spend that $300 with one of FTD’s competitors.

The fourth is goodwill. I wouldn’t take the time to write this blog post if FTD had fixed their error. It was their inability to correct a service failure that inspired me to write.

It may seem like FTD hasn’t lost too much if Sally takes her business somewhere else. After all, she’s just one customer.

But, what if this situation is just the tip of the iceberg?

Companies like FTD don’t spend much time looking for icebergs. They should. The cost of losing one customer like Sally might be small. But like an iceberg, what lurks beneath the surface might be bigger and more dangerous. 

How many customers has FTD lost because of unresolved service failures? 

 

ProFlowers Nailed It

Sally didn’t want to do business with FTD, but she still wanted to send some flowers to her Mom. She decided to give ProFlowers a try.

They delivered a beautiful bouquet without a hitch. Sally’s Mom loved it. 

ProFlowers earned Sally’s future business in the process. They did what they promised they’d do. No drama, no issues, just service. 

And, next to FTD, they look like rockstars. ProFlowers delivered flowers faster than FTD could issue Sally a refund.

How to Analyze and Act on CSAT Data

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You probably survey your customers.

But, do you learn anything from those surveys? More important, do you use that insight to improve service?

Chip Bell, author of 9 1/2 Principles of Innovative Service, recently shared this startling stat from a Gartner Group study:

95 percent of companies survey their customers, but only 10 percent actually use the feedback to take action.

Yikes!

Today, I hosted a webinar on analyzing and acting on customer satisfaction survey data. This post is a re-cap of the key lessons from the webinar along with some bonus information. 

You can watch the webinar here.

 

How to Quickly Analyze Your Data

Let’s say your overall customer satisfaction is 85 percent. 

By itself, the number doesn’t tell you much. The key to analyzing this data is to dig one level deeper. 

For example, you could look at the distribution of survey scores by employee:

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Suddenly, you see that Leo may need some extra help.

You could also look at the distribution of survey scores by the type of service request:

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This reveals that product inquiries are a strength, but technical support leaves something to be desired. 

If Leo gets a technical support call, you’re doomed.

 

Identifying Pain Points

Before you fire Leo or stop offering technical support, you may want to dig deeper still. The goal should be finding the true root cause of the problem.

One way to do this is to hone in on surveys where customers gave technical support an unsatisfactory survey score. Can you spot some themes among their comments?

Here’s an example:

  • It took way too long to get a simple issue resolved!
  • The guy didn’t seem to know what he was doing.
  • I got transferred twice before someone could help me.
  • Problem not resolved! I’ve had to call back three times.
  • The lady seemed confused and overwhelmed. 

A theme or two emerges. The comments suggest that customers give low scores for technical support when they get the runaround or the support rep doesn’t appear to be highly competent.

 

Turning Insight into Action

Knowing the specific issues that annoy your customers is a good start. Now, you need to investigate to find the root cause of the problem.

In the technical support example, the best way to do this would be to spend some time with those employees. Share with them the problem you’re trying to solve. Ask a few questions. Watch them do their work.

The root cause of the problems often becomes obvious after just a few minutes of observation.

Four things might jump out if you spent some time with this technical support team:

  1. They feel pressured to solve problems quickly to meet the department standard for Average Handle Time (AHT).
  2. This pressure causes them to take shortcuts to maintain the AHT standard. 
  3. These shortcuts frequently lead them to transfer a call too quickly or misunderstand a customer's needs because they aren’t listening carefully.
  4. The most inexperienced rep, Leo, has a particularly hard time with this.

Now that you know the root cause, you can take action.

Perhaps you could emphasize first contact resolution over AHT with your team. Focusing on resolving the problem makes customers happier. It also reduces callbacks, which in turn reduces overall call volume. 

And, focusing on first contact resolution doesn't necessarily cause a spike in AHT. 

You may also want to check in with Leo to make sure he doesn’t get lost on the learning curve.

 

Revisit Your Surveys

The final step in the process is to revisit your survey. You want to see if the actions you’ve taken have actually increased customer satisfaction.

You’ll be realizing the true value of a customer service survey when you follow these steps on a regular basis. Service will improve and your customers will be happier.

The Fastest, Simplest Way to Train New Hires

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New hire training time is unproductive time.

The new hire doesn’t yet have the skills to do their job. Someone else must take time away from their day-to-day responsibilities to train the new person. 

That puts you at least two people down at a time when you hired an extra person because you needed extra help.

It can be tempting to cut corners and provide too little training. This can be dangerous.

I recently wrote a blog post describing what happens when new customer service employees aren’t fully trained. It told the story of Jesse, a new employee in a bagel shop who felt lost because she didn’t get enough training before being asked to serve customers.

Some companies overcorrect and provide too much training. This can be wasteful.

One of the services my company provides is helping clients develop effective new hire training programs. I’ve helped clients reduce new hire training time by as much as 50 percent with no decrease in performance. 

The secret is creating a laser focus on giving new hires the specific skills they need to succeed at their jobs. Any topic that didn’t help them do their job was eliminated.

So, you don’t want to cut corners on training. You also don’t want to waste time and money. And, you’re not an expert in adult learning theory. What do you do? 

You need a performance checklist.

 

The Magic of Performance Checklists

Most training programs are doomed to fail. That’s because the emphasis is placed on what the trainer will tell the trainee. 

The result is a lot of aimless wandering and blah blah blah.

An effective training program focuses instead on what the trainee needs to do. The trainer creates clear objectives and then works backwards to figure out how to help the trainee accomplish those goals.

The easiest way to capture this is by creating a performance checklist.

A performance checklist describes a set of actions that a trainee must successfully complete to do their jobs correctly. The trainee isn’t fully trained until they complete each item on the list.

The best part is you should already have one. 

Think about the performance standards you have in place for your employees now. Chances are, there’s already a checklist of some kind involved. 

Here are some examples:

  • Mystery shopper checklist
  • Call quality monitoring form
  • Service standards checklist
  • Performance evaluation
  • Standard operating procedure checklist

Whatever you use to describe good performance, that’s your target. Get your new hire to perform at that level and they’re trained.

Now, all you need is a little bit of planning to make it happen.

 

Creating Your Training Plan

Once you’ve identified the performance checklist that will guide your training, you’ll need a plan to get there.

This involves breaking down the checklist into specific steps or lessons. By virtue of being a checklist, this may already be done for you.

Let’s say you want to train a new server in a restaurant. Your handy list of guest service standards (a.k.a. performance checklist) doubles as a lesson plan.

  • Lesson #1: Greet guests
  • Lesson #2: Suggest a specific drink
  • Etc.

The key is the new hire must demonstrate good performance to complete each lesson.

So, to complete lesson #1, your new server must demonstrate the ability to greet guests in a warm and friendly manner. You don’t focus on lesson #2 until lesson #1 is complete.

It may seem a bit simplistic, but that’s the idea. Breaking down training like this makes training easier for the new hire. That, in turn, makes good performance easier.

Getting your new hire to deliver good performance quickly is the ultimate goal.

Why You Should Stop Trying to Improve Your Survey Scores

The score shouldn't be the goal.

The score shouldn't be the goal.

There’s a lot of pressure these days to improve customer service survey scores. 

Executives review the scores on a regular basis. Business units are compared to one another. Employees are held accountable for their scores. Rewards are given for outstanding results. Low scores bring about consequences.

If this is your company’s focus, you’re wasting your time.

Getting fixated on a number can bring about all sorts of unwelcome behaviors. I recently overheard a coffee shop barista pleading with a customer to give them a great score. “We are sooooooooo graded on this!”

Never mind that the barista’s groveling turned an otherwise pleasant interaction into an awkward moment for the customer and everyone else in the store.

Sometimes, enterprising store managers take it upon themselves to have their employees nudge customers in the right direction. I recently received a survey invitation while shopping at Sports Authority. The cashier stamped the expected answer on the invitation.

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Gee, thanks.

Sadly, this isn’t an isolated incident. Auto dealerships are notorious for this type of obnoxious behavior where they relentlessly pester customers to give them a great survey score. All the while, any actual feedback is ignored.

What if you don’t engage in manipulative tactics? 

Focusing on the score is still missing the point. The score, by itself, doesn’t tell you anything. It certainly doesn’t help you do anything differently.

A score is nothing but an average. It’s an aggregate representation of many individual experiences. Focusing on the score might even hide service failures so long as the average looks good.

Think of it this way: your 85 percent satisfaction score won’t help the individual customer who is currently receiving poor service. 

 

What you should focus on instead

Companies that truly care about customer service focus on continuous improvement.

The customer service survey can be a valuable tool in this quest. Used correctly, it provides valuable insight into what your customers want you to do better. This insight should lead to action that will improve service.

Better service, not better a better score, is the obsession.

Making sense of survey data can be tough. Companies can have a hard time culling insights from reams of data and turning those insights into action. That’s why I’m hosting a webinar on Wednesday, March 5 from 10-11am (Pacific) called How to Analyze and Act on Customer Service Survey Data.

The goal is to show you how to quickly use this data to continuously improve service. I hope you can attend.

Benchmarks Give Mixed Reviews for Retail Customer Service

How does your service measure up?

How does your service measure up?

You can learn a lot from customer service benchmarks. You just have to be willing to conduct a little analysis.

Two retail sector customer service benchmarks were published earlier this month. The results are a mixed bag. One thing is for certain - smart retailers will take note of a potential problem.

First, the good news. Retail customer satisfaction is up overall.

The 2013 American Customer Satisfaction Index for the retail sector was 77.9 percent, up 1.7 percent from 2012. This score was bolstered by supermarkets, drug stores, and specialty retailers all posting gains in satisfaction. Amazon boasted a 4 percentage point gain in satisfaction while Netflix continues making a comeback with a 5 percentage point gain. Then there’s Charles Schwab, whose satisfaction rating grew a whopping 9 percentage points.

There were also some ominous signs.

The 2013 Q4 Zendesk Customer Service Benchmark for retail customer satisfaction declined 6 percentage points from Q3. A slight decline in the fourth quarter is normal in retail when sales volumes and crowds increase with holiday shopping. However, the Q3 to Q4 decline was three times larger in 2013 than it was in 2012. 

Zendesk’s analysis pointed to growing agent workload as one potential culprit. 

They are a customer service software company, so they were able to analyze their clients’ aggregate ticket volume. (These interactions are typically contact-center based, rather than face-to-face in a retail store.)

Customer service departments typically get busier in Q4 due to holiday shopping. In 2012, the average number of tickets handled per active customer service agent increased 13 percent in Q4 from Q3. This spike grew larger in 2013 when the increase was 17 percent.

This bears repeating. In 2013, customer service employees had 17 percent more work to do in Q4 than they did in Q3. That's nearly a full day of extra work, based on a typical five day workweek.

Mo' work equals mo' problems.

Problems take longer to solve when workloads increase. Longer wait times lead to increased customer aggravation. Too many aggravated customers can cause customer service employees to feel burnt out.

Higher workloads for customer service employees can also lead to inconsistent service for individual customers.

Employees look to cut corners when they feel pressured to get more work done. Rapport-building diminishes. An emphasis on speed can actually hurt first contact resolution

It can become a vicious, self-reinforcing cycle that leads to even higher volumes.

Customer service employees often modulate their effort level during busy periods. They work faster when volumes are high, but they also work slower when volumes are low. Temporarily low volumes are seen as an opportunity to rest and recover before the next onslaught begins.

Managers have a hard time keeping up too. The extra volume means more issues demand their immediate attention, leaving less time for coaching employees and solving problems.

 

Will 2014 Be the Same?

It’s admirable to try to avoid the Q4 madness from 2013. So, what will you do?

I’d focus on three things if I were in your shoes:

A Lost Employee, Found Three Weeks Later

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I wrote a post a few weeks ago about Jesse, a new bagel shop employee who was lost on the learning curve

She was set adrift on a busy morning without proper training. As a result, she didn’t yet know how to be useful. It was clearly an awkward situation for her.

I wondered if she would last very long.

I visited the same bagel shop last weekend and saw a completely different Jesse this time. She was confident and smiling as she served her customers. She had a job to do and she knew how to do it.

Her job this day was filling orders for customers who wanted to get a dozen bagels. She helped one indecisive customer by making a few suggestions to round out his selections. Jesse even joked with customers waiting in line by suggesting that all they had to do to skip the line was buy a dozen bagels from her. 

Her personality was muffled and restrained by inhibition the first time I saw Jesse. Three weeks later, her personality sparkled.

 

What was the difference?

Jesse had two things that she lacked when I first saw her three weeks ago: competence and confidence.

Three weeks ago, Jesse was at Level 2 on the learning curve. She lacked the competence to do her job. It wasn’t her fault - she hadn’t yet been trained — but that lack of ability in turn hurt her confidence. Nobody likes to look and feel inept. Especially when there’s an audience (a.k.a. customers) to see it.

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All new employees have to go through this stage to some degree, but a lack of training exacerbated the situation by unnecessarily prolonging this stage.

This day, Jesse had attained “Level 4” on the learning curve for fulfilling requests for a dozen bagels. This is where an employee’s skill level and confidence are both high. They’ve mastered a particular task to the point where they can do the job without thinking through the steps. This ability to just flow allows them to infuse their own personality into the situation.

Getting from Level 2 to Level 4 requires time. A lack of training makes it take even longer.

Employees like Jesse are at risk during this period because they aren’t yet able to do their jobs effectively. They may even decided to quit if the process is too uncomfortable.

Good for Jesse for sticking with it.

 

How to Prevent Employees from Getting Lost

Here are some tips from my previous post that can help keep new employees from feeling lost. 

  • Let them know it’s okay to make mistakes during training.
  • Commend then on the progress they’re making.
  • Be available to guide them and provide assistance.
  • Encourage them to stay on track.

You can revisit the entire post here if you'd like a more in-depth explanation of the learning curve.

Developing Effective Customer Satisfaction Surveys

Is your survey effective?

Is your survey effective?

This post is a short re-cap of the Designing Effective Customer Satisfaction Surveys webinar.

It was designed to be an overview of the basics. There are also links to additional resources at the bottom of this post so you can take a deeper dive into the subject.

You can view the webinar here.

The webinar focused on three key points:

  • Impactful survey design
  • Fast survey creation
  • Response rate strategies

This was a very interactive webinar and a lot of participants contributed some terrific ideas. One of my favorites was our brief discussion on why we don’t complete surveys ourselves. You can learn a lot about why your customers won’t do something if you examine why you yourself won’t do it.

The webinar runtime is approximately 48 minutes and is definitely worth viewing. 

 

Don’t Miss Part 2!

Surveying your customers is just the first step. Next, you must use that data to take action! I’m hosting a follow-up webinar on Wednesday, March 5 at 10am PST. It's called How to Analyze and Act on Customer Satisfaction Data.

You can use the form below to register.

Customer Satisfaction vs Delight: Why You Need Both

Customer Satisfaction and Delight: Which will it be?

Customer Satisfaction and Delight: Which will it be?

Note: This post originally appeared on the Salesforce blog. Check out my latest post on the Salesforce blog, "5 Signs Your Customer Service Survey is Missing the Point."

 

In the world of customer service, a lot of attention is given to the concept of customer delight. There are books written about it and training classes offered on how to do it. Influential customer service experts tell us we’ve failed if we don’t delight every customer every time.

Legendary tales are breathlessly retold around the customer service campfire. Did you hear this one? A store once gave a customer a refund on a set of tires despite the fact that the store didn’t even SELL tires.

There are also valid arguments against trying to delight everyone. Giving one customer a refund on set of tires you don’t sell is the stuff of legend, but you’ll go bankrupt if you do it for everyone. Something that delights one customer may annoy another. What delights a customer today may simply satisfy that same customer tomorrow as they become accustomed to a new level of service.

So, is customer delight truly a business imperative? Or, is focusing on customer satisfaction enough?

The answer is somewhere in the middle. Delight and satisfaction actually co-exist quite nicely. In fact, they need each other. 

 

Satisfaction and delight defined

Customers’ perceptions of service are based on how the experience matches their expectations:

  • Satisfactory service occurs when expectations are met
  • Delight occurs when service exceeds expectations
  • A service failure occurs when service falls short of expectations

The rub is that we only really notice experiences that are different than what we expected.  

Imagine you walk into a room and flip the light switch. You expect the lights to turn on. That’s exactly what happens 99% of the time, so you hardly pay any notice when they do. Satisfactory service is a lot like that.

What if something different happens?

You’d be sure to notice if the lights came on to reveal a room full of people shouting, “Surprise!” A surprise party would be an unexpected delight.

Delight is great, failure is bad, but most of the time the lights just come on as expected and you go about your business.

Customer service is the same way. We get satisfactory service most of the time but we don’t really notice it because that’s what we expected. The delight and failure outliers are what we notice and remember. 

 

Why we need satisfaction AND delight

Our tendency to only notice the unusual plays an important role in customers’ perceptions of service. If a customer has four satisfactory service experiences with your company and one delightful one, their overall perception will be heavily influenced by the delightful encounter.

Imagine a frequent flyer who settles into a comfortable routine with her preferred airline. The flights are generally on time, the flight attendants are friendly, and her elite status provides a few extra perks that make travel easier. One day, a severe storm cancels all departing flights and the traveler must wait until the next day to fly home. While other passengers scramble for accommodations, an airline employee seizes the opportunity to be a hero and books the frequent traveler in a nice hotel room at no charge.

These hero moments don’t happen every day, but they’re the experiences that are remembered.

It’s impractical to create hero moments like this all the time. It’s also not necessary. Providing satisfactory service most of the time and delightful service in the right moment is often enough to make your service stand out.

Companies that seize these hero moments benefit from another quirk of human perception called "confirmation bias." When people have a strongly held belief, they’ll selectively filter information based on whether or not it supports that belief. 

If the frequent traveler pledges her unwavering allegiance to her favorite airline after they put her up in a hotel, she’ll unconsciously find herself biased by this experience. Good travel experiences become further proof in her mind that the airline is great. An occasional poor experience is dismissed as an anomaly and quickly forgiven.

 

The opportunity and danger of service failures

Strangely, service failures also represent an opportunity to delight customers. Service failures can and will happen in every company, but what happens next separates the great organizations from the rest.

By definition, a service failure is an experience that falls short of a customer’s expectations. This puts the customer at a crossroads. The service failure is amplified if the company fails to fix the problem. It might even negate the impact of previous satisfactory experiences and cause the customer to dwell on the one service failure. The customer can develop confirmation bias where they expect the company to provide poor service and selectively filter information based on whether it supports their opinion.

But, what happens if someone seizes the hero moment and quickly fixes the problem with style and grace? Now, the feeling of delight is amplified because the customer started out feeling so poorly.

Note: This wasn't mentioned in my original post, but it's worth mentioning that Jenny Dempsey provided an outstanding example of the impact a negative experience can have in a recent post she wrote for the Communicate Better Blog. Up until a recent service failure, her opinion of a certain airline was very positive. Now, she's a bit concerned about future experiences.

 

Start with consistency

If you want to delight your customers, start by being consistently good. Fix chronic problems. Get the basics right every time.

Do this well and your hero moments will stand out and delight your customers. 

You Can't Fake Authentic Customer Service

Beware of customer service phonies.

Beware of customer service phonies.

Nobody likes a phony.

Many customer service professionals are incredibly authentic. Their service is genuine because it comes from the heart.

Other customer service professionals are as fake as a $1,000,000 bill.

Some of these phonies are in leadership positions. They demand service greatness from their employees while treating these employees with contempt.

Other phonies are frontline employees. To them, customer service is just a job and not a calling. Quitting time can never come soon enough.

Still other phonies are talking heads. They blog, tweet, and train, filling their audience’s brains with disingenuous platitudes. These people talk a good game but rarely follow their own advice. 

Authenticity matters in customer service. 

Customers can hear it in your voice. The see it in your actions. They feel it in the way you treat them. 

Genuine service professionals treat everyone as though they were an important customer. They listen. They’re warm and friendly. They follow through and do what they say they’re going to do.

Phonies operate as though there’s some sort of customer service switch. They flip it to service mode when a customer is near and plaster on their Cheshire Cat smile. But the truth comes out in their actions. They don’t listen. They’re not genuinely friendly. They definitely do not follow through and do what they say they’re going to do.

The odd part is the phonies can’t wait to tell you how great they are. Thanks to an odd phenomenon called the Dunning Kruger effect, they really believe it. Phonies like to perpetrate the myth that customer service is easy.

The authentic customer service pros would rather show you. And, secretly, they worry about being a phony. It’s one of those things that keeps them hungry to always do better.