What Happens When Customers Decide to Stick It Out

How loyal are your customers after a service failure?

It's question businesses might invest time in answering. In the meantime, I can share the results from a little experiment.

Last week, I included a link to an old blog post in my Customer Service Tip of the Week email. The post was a deliberate collection of broken links and misdirection that was intended to show the reader how it felt to experience a service failure.

What's interesting to me is the percentage of readers who stuck with the post after each failure. The data shows a trend that I believe will hold true if you analyze your real customer data.

If you want to read the blog post, I recommend doing that first. Otherwise, the analysis below will spoil the surprise. 

The post will open in a new window. You can come back here and continue once you've read it. (Assuming you don't bail!) Or, you can just skip the post altogether.

Here's An Interactive Guide to Stuff Your Customers Hate

Reader Statistics

The post was a funhouse of problems. Readers are told at the very beginning that I've written it to help them experience some of the issues that bother customers the most.

You’ll truly understand what aggravates your customers if you can make it through all the way to the end.

It had 124 unique readers from July 18 - July 24, 2016.

The first trick was readers were asked to click on a link to learn "A Secret Way to Diffuse Angry Customers." The link was deliberately broken, so readers who clicked saw an error message.

Only 67 unique readers clicked on this link. That's a 46 percent drop-off. Of course, I'm sure some people just skipped it, even though I tried to make it obvious.

There was another broken link. The set-up was exactly the same as the first one. (People really hate it when you don't fix a problem.) Here, just 53 people clicked through. 

That's a 57 percent drop-off. But, it's only a 21% drop-off from the number of unique readers who clicked the first broken link.

Now, I promise readers I've given them a real link. Let's see how many people click on this.

There were 61 unique readers, a 51 percent drop-off from the original post. But, the number strangely rose from the previous service failure. And, it's only a 9 percent drop-off from the original broken link.

This link didn't lead readers to the promised secret.

Instead, it displayed an annoying sales pitch for my book, Service Failure. (The point is that customers don't like to be sold to when you should be fixing their problem instead.) Readers had the option of buying my book or clicking on a link that said, "No thanks - take me to the secret."

That link had a total of 41 readers. These people presumably have faced three service failures: two broken links and an unwelcome sales pitch. Let's see some updated statistics:

  • 67% drop-off from the original 124 readers.
  • 39% drop-off from the original service failure (broken link).
  • 33% drop-off from the previous service failure (sales pitch).

In other words, readers stop reading after every service failure. But, the percentage of readers who stop reading progressively declines. Some people are clearly determined to stick it out.

There's just one more trick. 

Readers who skipped the annoying sales pitch shown in the previous link were taken to yet another annoying sales pitch. The page read, "Are you sure?" 

People could either relent and buy my book or click on another link that said, "I already said No! Just take me to the secret."

Guess how many people clicked on that final link? 41

That's the same number of unique readers who clicked on the previous link. There was a 0 percent drop-off after the last service failure.

 

What Does It All Mean?

Please, take all of this with a grain of salt.

My data shows that people either bail early at the first sign of trouble or become increasingly resilient. But, this is a small amount of data from a poorly controlled experiment. You could easily poke holes in my reasoning.

It does hint that maybe we have some customers who are very willing to be loyal. They'll tolerate a few problems. 

I'd suggest running some real numbers on your own customers. Find people who've experienced a service failure, or two, or more. Dig deeper to calculate their loyalty rate.

If that's true for your business that people are resilient after the first service failure, I'd want to find those people. I'd find a way to make them happy and reward them for their loyalty. 

My guess is those customers are probably worth a lot to your business.


The Department You Need to Check to Avoid Service Failures

In 2008, the shipping company DHL ran an ad campaign touting their outstanding customer service.

Each ad showed different service encounters where a DHL employee went above and beyond. The tagline was, "We're putting service back in the shipping business."

It wasn't true.

In November that year, DHL announced they were pulling out of the U.S. domestic shipping business. The company faced a myriad of problems, one of the biggest being their woeful customer service.

DHL's CEO, John Mullen, was quoted at the time as saying, "It's hard to see what could have been done that would have led to a different result."

But, there is something they should have done: audit their marketing and communications.

Why Conduct an Audit?

Your company's advertising is essentially a promise to customers. So, if you advertise something, you had better be able to deliver it. Customers naturally get disappointed when you promise them something and it doesn't happen.

Imagine a chain of furniture stores that promises same day delivery in their advertising. Fast delivery is the hook to get you in the door. But, what happens if there's a laundry list of exceptions to the same day promise?

A customer who expected same-day delivery when she ordered a couch won't be very happy to learn it will actually take two weeks.

It's scenarios like that that make it essential to conduct a regular marketing and communications audit. You'll avoid service failures if you spot (and fix) promises that aren't being kept.

 

How to Conduct Your Audit

Here's a three step process you can use to audit your marketing and communications.

Step 1: List all advertised promises. Check your advertising, brochures, and other collateral. Find out what your salespeople are pitching. Look at signage. Listen to your hold messages.

Step 2: Test each promise. Run a test on each promise to see if your company can actually deliver it. For instance, a bank is promoting their ATM machines as a faster and easier alternative than completing a teller-assisted transaction. You can test this promise by timing the same transaction via both channels.

Step 3: Make a list to fix. Identify broken promises that need to be fixed. Perhaps your advertising needs to be adjusted. Or, maybe your company needs to boost some capabilities to improve operations. The key is making sure what's promised is what gets delivered.

 

What to Audit

Here are a few specific things you should consider auditing.

Delivery

As I write this, I'm waiting to get my car back from the mechanic. I was told it would be two days, but I just called to check the status and learned it will now be three. 

Check on anything you deliver, whether it's a service, merchandise, or the time to complete a repair or service call.

That's why Netflix frequently sends it's DVD subscribers an email asking, "When did you mail this DVD?" or "When did you receive this DVD?" They're monitoring their delivery to make sure it stays within the promised range.

 

Response Time

Check out fast you respond to customers via various channels. 

For example, the new response time standard for email is one hour. If you can't respond in one hour, make sure you have an auto-responder set up to let customers know when you will respond. And then, time your responses to make sure you're fulfilling that promise.

KLM does this for their Twitter account, regularly posting their expected response time on their profile page.

Product Image

There's a great scene in the movie Falling Down where Michael Douglas's character, D-Fens, loses his mind because he's served a fast food hamburger that looks nothing like what's shown on the menu. 

Source: IMBD

Source: IMBD

It's an extreme example, but customers really don't appreciate it when the product doesn't match what's advertised.

Look at the product images you display on websites, brochures, menus, etc. and make sure they closely match what you're actually delivering. 

 

Resources

You can learn more about this and other techniques in a new training video, The Manager's Guide to Managing Customer Expectations on Lynda.com. 

Here's a short preview video.

You'll need a Lynda.com account to view the entire course, but I can hook you up with a 10-day trial.

PS. Check out this slightly different, but still excellent How-To article from Denise Lee Yohn on how to conduct a brand diagnostic to scale up your brand.


Book Review: Scaling Up Excellence

The authors call it "The Problem of More."

Organizations face a challenge when they identify a best practice and try to do more. Maybe one location in a retail chain is doing something terrific and executives want every location to do the same thing.

Replicating a best practice or an innovative solution throughout a company seems like it should be so easy, but it isn't.

That's the issue tackled in Scaling Up Excellence: Getting to More Without Settling for Less by Robert Sutton and Huggy Rao.

 

Overview

The lessons in this book can be applied to a wide range of challenges.

They describe how a failing hospital re-energized it's staff and turned it's fortunes around. Or, how companies like JetBlue or Disney create and sustain their famous customer-focused cultures.

The book immediately resonated with me in two ways. 

First, it's written as a how-to guide, but there are plenty of interesting real-life stories to spice it up. Second, much of what the book discusses is fundamentally organizational culture.

I read it as research for a book that I'm writing, The Service Culture Handbook, but I found it to be very enjoyable on its own.

The book starts by outlining a general philosophy for scaling excellence. It then describes five core principles and provides some general advice for implementing the ideas in your own organization.

 

Take-Aways

There were quite a few take-aways in this book. Here are my top three:

Think Big + Small. Yes, you need to have a smart program to scale a best practice across an organization, but you also need subtle nudges to get things moving. For example, leaders need to consistently insist on modeling best practices.

Bad Apples Ruin It. Sutton and Rao suggest that people who actively work against an initiative have a far more damaging effect than people who actively support it. You see this time and time again in organizations where individual leaders undermine a program by insisting on doing their own thing. 

You Must Have Excellence. The book contains a quote that's both a blinding flash of the obvious, and an explanation for why so many corporate initiatives fail:

To spread excellence, you need to have some excellence to spread.

 

Buy This Book

The book is available in a variety of formats on Amazon. You can also check out more of my recommended reading list.

 


How to Improve Customer Service Training by 900%

Imagine your employees need customer service training.

You want to hire a professional. Someone who can share cutting-edge concepts and really fire up the team. 

The standard approach is to look for someone like me. The trainer flies in, conducts the training, gets great reviews, and then leaves. 

Has that ever really worked out well? Motivation usually jumps for a few days and then employees gradually settle back into their old habits.

There's another approach. One that's 900% better and costs less

The 70-20-10 Rule

Research conducted by the Center For Creative Leadership is credited with developing the 70-20-10 Rule. It suggests that leaders learn their skills from three sources:

  • 70% from challenging assignments
  • 20% from developmental relationships
  • 10% from formal training

In truth, it's not really a rule. The 70-20-10 ratio is more of a guide. And, it can be applied to all sorts of training.

Let's look at what happens when we apply the 70-20-10 rule to a typical customer service training program:

 

The typical program focuses on formal training, which accounts for roughly 10 percent of learning. But, what about the other 90 percent?

That's usually not part of the plan.

Developmental relationships account for 20 percent of learning - twice as much as formal training. These usually come from a boss or mentor. Unfortunately, typical training programs often fail because the boss doesn't do much coaching to help employees develop their new skills.

The typical training also lacks a clearly defined initiative where employees' new skills can make a measurable difference. That's another 70 percent of learning they miss out on.

 

A New Approach

The good news is we can make a few tweaks to capture the missing 90 percent. And, we can reduce our costs at the same time, but more about that in a moment.

First, we need to identify a challenge for everyone to work on. Jim Collins and Jerry Porras coined the term Big, Hairy, Audacious Goal in their classic book, Built to Last.

The idea is you can rally the team (or an organization) behind an important goal that focuses everyone's efforts.

My clients often identify a specific challenge through a customer service assessment. I offer a comprehensive version, but you can download this mini-version and try it on your own.

That challenge represents 70 percent of learning. We can capture the other 20 percent if the employees' supervisors are prepared to coach their teams.

There are often two big issues for supervisors:

  • They don't think they have time to coach
  • They don't know how to coach

You can solve both issues by enrolling supervisors in a one-on-one coaching program. They'll learn how to carve out the necessary time and how they develop their employees.

Add in the challenge and coaching and your training model now looks like this:

Reduce Your Costs

Remember that bit about adding in a challenge plus coaching while reducing your costs? Here's how you do that:

You do the training via video

Will a training video be as good as live training? The short answer is no. But, video can be extremely effective. And, remember that formal training is only 10 percent of the pie. Better to focus your resources on the other 90 percent.

Let's look at an example of the costs associated with training 30 employees using the typical approach versus the new approach.

I've made a few assumptions here, so your math might work out a little differently:

  • The average hourly wage is $15 per hour.
  • There are three supervisors who oversee the 30 employees.
  • The one-on-one coaching program for the supervisors costs $4,500.

The $900 cost of training for the new approach is based on a one month premium Lynda.com subscription for 30 employees at $29.99 per person. The actual cost can be lower than that with a volume discount. 

 

Bonus Benefit

Many of my clients have reminded me of a bonus benefit gained by the new approach.

Think about what happens when you bring in a professional trainer. That person does their training and then goes home. But, what do you do when you hire a new employee? Or, what happens when it's been six months and your team needs a refresher?

With the new approach, you have an easy source of ongoing development if you keep your access to the training videos!