Lessons from the Overlook: How Standardization Drives Service

Note: Lessons from The Overlook is a monthly update on lessons learned from owning a vacation rental property in the Southern California mountain town of Idyllwild. It's a hands-on opportunity to apply some of the techniques I advise my clients to use. You can find past updates here.

When my wife, Sally, and I purchased The Overlook, we had a lot of big ideas.

We wanted our place to be unique, with a lot of value-added touches that would wow our guests and make them want to return over and over again.

So we brainstormed a list of ideas:

  • Leave bottle of local wine on the counter as a guest amenity?
  • Give our guests free firewood in the wintertime?
  • Put high quality toiletries in all the bathrooms?

It turned out the best way to wow our guests was to do none of these things. The biggest reason wasn't cost, although cost certainly was important.

It was standardization. Here's why standardization is crucial to service.

Photo credit: Jon Millhouse

Photo credit: Jon Millhouse

Fear of Service Failure

When we thought about extras at The Overlook, we also worried about service failure.

In their outstanding book, The Effortless Experience, authors Matt Dixon, Nick Toman, and Rick Delisi make a compelling argument that service failures have a much greater impact on customers than wow moments.

That's because people naturally tend to have a negativity bias. Negative experiences are much more memorable and are more likely to sway future behavior than positive ones.

What happens if one guest gets a bottle of wine, tells people about it, but the bottle of wine fails to appear for the next guest?

What happens if we promise free firewood (so guests don't bring any of their own), but the firewood isn't there when guests arrive late on a cold winter night?

What happens if the fancy toiletries aren't replenished and the bathrooms look like the last guest just left a few half-empty bottles behind that weren't removed by the cleaning crew?

We were concerned about all of these potential failures because we knew we'd need to rely on our property manager to handle any extras. Our property management company has a well-defined, standardized process for servicing the 40+ homes it manages.

Asking them to change their routine for just us would be begging for trouble.

 

How Variables Create Failure

Think about cleaning and re-stocking a vacation cabin from an operations perspective. The easiest way to ensure consistency is to standardize.

  1. Write standard procedures.
  2. Train everyone to follow those procedures. 
  3. Stock standard replenishment items (paper towels, toilet paper, soap, etc.)

Our property management company has it down to a science. There are even standard sheets and towels so linens can quickly be replaced without having to launder everything onsite.

Now, imagine changing everything for just one house. 

The procedures change. You need to remind employees to follow the different procedures, and you need to remind them again because the same employees might not service the house each time. You also need to stock special supplies and make sure you don't run out for just that one cabin.

All of those variables are a recipe for things "falling through the cracks." 

Even big companies struggle with this. For example, extreme variability is one of the reasons why McDonald's has struggled with service and food quality.

 

The Standardization Cure

You're much more likely to deliver consistently excellent service if you can standardize your service delivery process. With that in mind, we couldn't just consider our own cabin. We had to think of it from our property manager's perspective. (This is an important aspect of partnership, a topic I covered last month.)

All of our original ideas required our property manager to deviate from a standard procedure.

So we re-thought our approach and came up with some new ideas that didn't require our property management company to alter its normal routine:

Idea #1: Don't charge for snow removal. Standard procedure was for our property manager to shovel and plow snow at each cabin whenever a snow storm hit. It's a required safety item, but most cabin owners charge for this service. We decided to pay for it ourselves.

Idea #2: Stock back-up dishes. Most vacation rental guests expect a few cracked plates or mis-matched dishes. We put in an entire set of matching dishes and then added some back-ups to our owner's closet. Once a month, we inspect the cabin ourselves and replace any broken or missing items so the kitchen feels fully-stocked. (Many guests have commented on this.)

Idea #3: Stock extra kitchen items. The Overlook has four bedrooms, so it's really geared for families or couples traveling together. That means they'll cook a few nice meals in the cabin, so we made sure the kitchen was stocked with items you don't normally find in a vacation rental: a crockpot, extra tupperware, a full set of pots and pans, and even an apron for the chef. It turns out this has become one of the biggest delights for our guests!

Idea #4: Remove clutter. We talked to many people who regularly rent vacation cabins and one of their top pet peeves was clutter. They'd say, "How can I put my stuff somewhere if the owner's stuff is all over the place?!" So we went through the entire cabin and kept every table, counter, nightstand, and chest of drawers as clutter-free as possible.

Idea #5: Provide a nice guest book. The typical vacation cabin has a ratty three-ring binder that contains all of the house rules, instructions for using various items, and information about the local area. We spent a few extra dollars and created a beautiful bound book on Shutterfly. It's a classier way to share the same information.

In his new book, Kaleidoscope, customer service guru Chip Bell calls these items value-unique. They don't necessarily cost a lot of money, but they make The Overlook standout compared to other options.

We've been lucky so far. It's been booked nearly every weekend.


A Powerful and Simple Way to Retain Customers

Customer loyalty is a huge business driver.

Selling to existing customers is typically cheaper, faster, and more effective than selling to new customers. They buy more and buy more often. Best of all, they encourage other people to do business with you too.

Unlocking the secret of customer loyalty would be gold, right?

A new study from customer experience software firm InMoment reveals the best way to ensure customer loyalty is pretty simple. I've synthesized the data with some additional research to give you a few steps you can take to boost loyalty with your customer base.

Spoiler alert: customer service plays a giant role.

The Study Results

Let's start by taking a look at the data from the study. Here's a snapshot:

  • 10,000 brand representatives surveyed
  • 20,000 customers surveyed
  • 12 countries represented (including the U.S.)

The responses to two survey questions really jumped out. The first was "What does it take to foster brand loyalty?"

Notice the differences between what brand reps said and customers said:

Data source: InMoment

Data source: InMoment

The second really interesting question was "What emotions do you associate with a bad experience?"

Data source: InMoment

Data source: InMoment

These charts reveal that the way to win a customer's loyalty is to ensure their satisfaction and avoid disappointing or frustrating experiences.

OK, so what does that really mean?

 

The Story Behind the Data

Notice what customer's aren't telling us.

They aren't saying they need to be wowed or amazed. Customers aren't telling us they need to have a magical, life-changing experience.

Customers are saying they want brands to do exactly what they expect them to do.

  • A new product should work the way it was intended.
  • A service should do exactly what was advertised.
  • Getting assistance should be simple and hassle-free.

Consumers were asked to rank a number of factors in order of importance. Number one was personalization. But look closely at the statement driving this selection:

When you reach out for help, the associate and/or the self-service channels already knows who you are (name, status, loyalty, VIP, etc.) and demonstrates strong knowledge of your recent interactions.

This isn't a desire for more personalized marketing or selling. It's a desire for better service.

It's already disappointing when a service failure occurs. It's frustrating and feels disrespectful to consumers when they're forced to repeat their story over and over again in an effort to get an issue resolved.

 

Action Steps

The biggest thing companies can do is fix chronic problems. 

It seems simple, yet it isn't. Research shows 50 percent or more of customers don't complain when they experience an issue. Those who do complain typically lodge their complaint with a frontline employee. That frontline employee, for variety of reasons, probably won't share it with a supervisor.

One step you can take is to ask your frontline employees for the top complaints they hear from customers. In my experience, employees are quick to share when they're asked to help identify and solve these challenges. This exercise almost always yields opportunities for quick action.

Don't forget those customer service surveys. It's a well-known secret that most companies do very little with this data, but it's a gold mine of service improvement opportunities if you know how to quickly analyze it.

Another action step is to get better at managing customer expectations. This is both an art and a science. For example, did you know:

There's an entire training video on Lynda.com and LinkedIn Learning devoted to this topic. You'll need a Lynda.com or LinkedIn Premium account, but you can get a 10-day trial for Lynda.com here.


Insider Perspectives: Ideal's Don Teemsma on Field Service

Don Teemsma, President of Ideal Plumbing, Heating, Air, & Electrical

Don Teemsma, President of Ideal Plumbing, Heating, Air, & Electrical

Every home owner needs a few go-to service providers.

One of mine is Ideal Plumbing, Heating, Air, & Electrical. This company is my first and only phone call anytime I need a plumber, HVAC technician, or electrician. 

Ideal has remodeled two bathrooms in my house, installed a new heating and air conditioning system, installed a new hot water heater, fixed a slab leak, installed a new electrical panel, and made numerous smaller repairs over the years.

Yes, I'm a huge fan.

The work is first-rate, the prices are reasonable, and Ideal's technicians are consistently friendly, helpful, and reliable. The company consistently earns top customer service honors from companies such as Houzz and Angie's List.

If you live in San Diego, you should have this company on speed-dial!

There's one aspect of Ideal's service that particularly fascinates me. How does the company get its field service technicians to consistently arrive on time, do great work, and provide great service?

I sat down with Don Teemsma, Ideal's President and Owner, to ask him how his company sustains a customer-focused culture with its field service technicians.


Q: Ideal offers two-hour appointment windows and your technicians are always on-time or even early. How do you manage this while other service companies struggle to maintain a four-hour appointment window?

"We've tried four-hour appointment windows, but people really don't like that, so we've made a commitment to stick with a two-hour window.

"It starts with our dispatch team. We keep track of all our appointments and technicians via computer and a dispatch board. It's the service manager's job to make sure we're on schedule.

"We're constantly moving the board around to make sure we can fulfill that two-hour commitment. If we see a service call is taking longer than expected, the service manager can proactively call the next customer to let them know there will be a delay or find another qualified technician to move the call to.

"Our service area is also an important factor. We really try to keep our service area tight and not overcommit. That's why we generally don't serve cities in [San Diego's] North County like San Marcos or Escondido. There are too many unknowns like traffic conditions that would make it difficult to keep our appointments and provide a rapid response.

"Maintaining the right parts and supplies on our trucks is also important. We try to keep our trucks fully-stocked so they can handle 80 percent of service calls with the parts on the truck."

 

Q: There's a stereotype of a typical repair technician who is pushy and will try to suggest a lot of expensive repairs. How does Ideal avoid that?

"A lot of field service technicians work on commission. This pay structure means it's in their best interest to try to sell additional repairs and services to their customers.

"We don't want to create that incentive because our business is built on relationships. We'd rather earn a customer's repeat business or get new business through referrals from customers who trust us.

"Our technicians don't work on commission. They tend to prefer it that way. They're in this business because they like to fix stuff and make people happy.

"Many of our technicians will refer to a customer as 'my customer,' because they take a lot of ownership and personal pride in helping the people they serve."

 

Q: What else do you do to ensure your technicians are customer-focused?

"It starts with hiring the right people. 

"We look for integrity in our hiring process. If we don't feel someone has an innate honesty about them, we won't hire them.

"Our interview process includes a few assessments but we also put candidates through three interviews to see if they will fit our culture. For example, one of the things I ask candidates about is whether they perform any service in their community. Are they involved in their church or do they volunteer for a nonprofit organization? People who give back to their community in some way are more likely to be successful in our culture.

"One of the things we do around here is encourage people to constantly improve. If you're not the best at a particular skill, keep working on getting better. Our culture is not to be perfect, but to perfect.

"We really strive to inspire technical excellence. Having good skills allows you to perform better work, get jobs done faster, and solve challenging problems. 

"Over the years we've hired a lot of technicians with good skills who have been nurtured by their coworkers until they've gotten really good at their trade.

"We also have an Ideal Mascot: Mr. Bill. He truly embodies our culture and is a great ambassador for showing care towards our customers."

[Editor's note: Bill has worked the front counter in Ideal's showroom for over 17 years and is a wizard at locating hard-to-find parts. His friendly and helpful service was one of the reasons I personally became an Ideal customer. He helped me track down a part for a leaking toilet tank that I couldn't find at any of the big-box hardware stores.]

 

Q: Ideal's managed to maintain a reputation for outstanding service for many years. How do you keep everyone continuously focused?

"We talk about service a lot. We have company-wide meetings four to six times per year. All of our technicians attend a smaller meeting every other week where we talk about customer service, share customer feedback, and discuss opportunities to improve.

"We're also fortunate that most of our customers are repeat customers or they came to us because they were referred by a customer. These customers tend to be understanding that things can and will go wrong occasionally because we've had a great relationship with them and they trust us to do a good job.

"Many of our technicians have worked here for a long time. They like working for a company with a great reputation and they like the culture, so they work hard to help us continuously deliver great service."


Three Big Trends from LiveChat's Customer Service Report

Chat software provider LiveChat recently released its 2017 Customer Service Report. The latest report is a treasure trove of data on chat. Here is a snapshot of what was included:

  • 13,500 companies that use chat
  • 22 different industries
  • 24 billion website visits
  • 235.7 million chats
  • 11.1 million tickets

A number of important trends jump out. You can read the entire report here or skim below to see what I think are the top three.

(You may also wish to read past blog posts on chat trends here and here.)

Trend #1: Tech Support Loves Chat

Tech companies had the highest customer satisfaction for chat among the industries covered in the report:

  • Web Hosting: 92.91% satisfaction
  • IT Businesses: 92.66% satisfaction
  • Software: 91.17% satisfaction

One of the natural advantages of using chat for technical support is agents can have a nearly real-time conversation with customers while also sharing helpful links and screenshots.

The slight delay between responses actually creates another advantage. LiveChat was kind enough to quote me in the report:

The natural latency of a chat conversation gives customers built-in time to implement the steps required to fix their issue.

 

Trend #2: Chat Demand is Increasing

The average LiveChat customer saw a 4.11 percent increase in chat demand in 2016 compared to the previous year.

Forrester's Kate Leggett offered one explanation why customers may be increasingly choosing chat—they want to avoid the phone.

Organizations can quickly connect customers to an agent with the right skills to answer the question without them having to navigate an arduous interactive voice response.

That high demand leads us to the third big trend.

 

Trend #3: Companies Are Struggling to Keep Up

The report noted businesses experienced a 31.15 percent increase in the average number of monthly tickets.

This number stands out because a ticket is created in LiveChat when a chat agent isn't available (due to high demand or after hours) or a customer's issue can't be resolved on the initial contact.

Meanwhile, average first response time is 56 seconds, which can feel like an eternity to a customer who is waiting for assistance.

Customer service expert Shep Hyken noted that making chat easy for customers is much more important than the length of a chat.

When I get on live chat, whether it is a live agent or AI [artificial intelligence], it doesn’t really matter whether it takes 6 or 12 minutes. If I’m having my question answered and there is little friction between the time I start and the time I get the answer, I will be completely satisfied.

 

What You Can Do

These trends all suggest a few key actions for contact centers that offer chat:

  • Empower your agents to resolve issues in the first conversation
  • Staff chat adequately to prevent long wait times and excess tickets
  • Take advantage of chat's natural latency to provide value-added service