An Amazingly Simple Shortcut to Improve Customer Insight

You could solve a lot of problems if you better understood your customers.

This can be a real challenge. Budgets are sometimes tight. Deadlines are short. Resources are spread thin.

I recall a time when a simple shortcut came to me like a bolt of lighting.

Years ago, I served on the board of directors for my local ASTD chapter. This was the American Association for Training and Development (now known as the Association for Talent Development). My role was Membership Director.

We were discussing member participation at a board meeting. Specifically, we were discussing a lack of attendance at certain events.

In the midst of our discussion I realized that few board members were attending events themselves. An idea struck and I posed this question to the group:

Why aren't you attending events?

Board members gave me a range of excuses.

  • They were too busy.
  • The events weren’t at convenient times or locations.
  • The topics weren’t interesting to them.

In many cases, they simply forgot.

Lightbulbs starting going off. Weren’t these the same reasons why our members didn’t attend events? 

The discussion quickly turned to solutions. We focused on rethinking our events to make them so compelling that people absolutely had to be there. We varied the times, days of the week, and the locations. 

Most importantly, we each made a personal commitment to attend the events the really interested us and invite some of our friends and colleagues.

It took awhile to implement some of these ideas, but attendance steadily began to climb. We had discovered the secret of empathetic insight.

Applying Empathetic Insight

This type of customer insight comes from putting yourself in your customers’ shoes. Try to imagine how your customers think and feel. Answer key questions from their perspective.

Here are a few examples:

Hotel associates might learn how to improve room cleanliness by asking themselves, “What do I look for when I check into one of our hotel rooms?”

Employees at a software as a service company might learn how to reduce customer churn by asking themselves, “What do I find most frustrating about our product?”

Retail associates might improve sales by asking themselves, “Why don’t I personally buy more from my store?”

The goal is to try to see things from your customers’ perspective by imaging yourself as a customer. In theory, you’re the most educated, loyal customer. If something bothers you, it must really bother your customers who don't have the same insider connection that you do.

This may sound snarky, but I really do wish cable company executives would take a half day off of work and wait around their house for somebody who doesn’t come. My guess is that would be the fast demise of the four hour appointment window.

 

Words of Caution

We have to be careful to acknowledge that this approach is prone to error.

You’re not every customer. You might not even be the typical customer. You might even be a little weird. 

Imagination won’t replace solid data. You should still gather voice of customer data, whether you use a survey (see my how-to course) or choose one of these five alternatives.

However, empathetic insight can augment your data collection. At ASTD, our empathetic insight exercise changed the types of questions we asked our members and the data we collected. It was a great starting point, but not a panacea. 

We also realized that it would be hard to attract members to our events if we weren’t excited about them. That really pushed us to raise the bar on what we offered.

 

Why Culture Initiatives Fail

“We’re working on culture this year.”

I wish I had a dime for every time I heard an executive make that announcement. I’d have a lot of dimes.

It seems like everyone wants a great culture. One that’s customer-focused. And why not? A strong culture promises many benefits:

  • Employees will happily do the right thing
  • You’ll attract top talent
  • Customers will sing your praises

CEOs like to boldly announce that culture is a priority. Even Comcast is getting in on the culture game by announcing a major new initiative.

Most of these initiatives will fail. Here are three reasons why.

Undefined

It’s hard to be good at something if you can’t define it.

The vast majority of organizations I talk to do not have a clearly defined culture. I’m not referring to the standard set of cultural artifacts like mission, vision, values. Let’s face it - most of those are hollow and empty.

I'm talking about something real. A clear compass that points people in the right direction.

The litmus test is to ask any random employee to describe the culture. Chances are, you’ll get a puzzled look or an answer that’s inconsistent from one person to the next.

The few companies who succeed with culture ensure every employee can answer three questions:

  1. What is our culture?
  2. How are we doing?
  3. How do I contribute?

 

Mimicry

Culture initiatives fail when companies try to copy someone else’s culture. 

That doesn’t stop companies from trying. A CIO once told me he wanted his team to be like the Apple Store. When I pressed him for details, the best he could do was say, “I want them to be good at service. You know, like the Apple Store.”

There’s a long list of books extolling the greatness of other company’s cultures. The Nordstrom Way, The Disney Way, The Virgin Way, The Cleveland Clinic Way, and the Southwest Airlines Way are on all sale right now. 

The absolute peak is when you can turn your culture into its own brand. The Ritz-Carlton and Disney offer classes on how to be more like them. Zappos now charges 10 bucks a head to tour their Las Vegas headquarters. 

Trying to copy another company’s culture fails because it’s their culture, not yours. Each company is unique. And, copying another culture ignores all the hard work the other company needed to get where they are today.

Great cultures can provide ideas and inspiration. But, they’re not paint-by-numbers guides.

 

Delay

Culture initiatives don’t work when they’re a side project.

Here are a few excuses I’ve heard for delaying a culture initiative:

  • “We’re knee-deep in system stuff right now.”
  • “We’d like to do it, but we don’t have the funding.”
  • “We’re focused on employee engagement right now.”

These excuses are convenient, but they really reflect a deeper misunderstanding about culture. Developing a strong culture is core. It’s fundamental and strategic.

A great culture would help make all of those decisions easier!

You have to live your culture if you want it to succeed. In-N-Out and McDonald’s started with the same three words to define their culture, but only In-N-Out actually lived them.

Treat it as a side project at your own peril.

 

Building a Strong Culture

You might want to start by reading about a successful cultural initiative.

Here are two resources to help you build your own customer-focused culture:

These resources can help, but there are no short-cuts. Culture initiatives can only succeed through a deep commitment.

Defining Your Customer Can Be Complicated

Identifying your customer is fairly straightforward in some businesses.

Let’s say you own a restaurant. Your guests would be your customer. You might also include vendors and employees as customers under part two of the definition. But there’s no confusion that guests are your ultimate customer.

It gets more complicated in other organizations.

The nonprofit Goodwill has three major customers. The people who donate clothing and other items, the people who shop in their thrift stores, and the people who receive jobs and job training.

Organizations like this have to decide how to manage the needs of their different customers. This is especially true when there's an apparent conflict or limited resources. 

There could be trouble if you choose poorly.

A retail associate serves a customer.

Who is a customer?

The definition of a customer is broad. Here’s the traditional definition from Dictionary.com:

Customer (noun)

  1. a person who purchases goods or services from another.

  2. Informal. a person one has to deal with.

I prefer an even broader definition:

A customer is anyone you serve.

This could represent a wide range of people you encounter in your job.

  • People who purchases goods or services from your company.

  • Coworkers who depend on you to do their jobs.

  • Vendors who rely on you to serve your customers.

For example, imagine you work in customer service department for a furniture store. The people who buy furniture are clearly customers. Some customers elect to pick up their purchases from your company’s warehouse, which makes the warehouse employees your customer since they depend on you to properly inform customers on pickup procedures and availability. Other customers opt to have their furniture delivered, which makes the third-party delivery company your customers as well since they depend on you to accurately schedule deliveries and set reasonable expectations on the service they provide.


Franchisees are forgotten customers

Companies in fast food, retail, and other industries that sell franchises have a customer who is often overlooked, but extremely important: the franchise owner.

McDonald’s has long had a reputation for poor customer service. I once wrote a post detailing how their problems boil down to three areas:

  • Lack of focus

  • Lack of quality

  • Lack of control

It’s that last part that’s starting to bite them.

Franchisees operate over 90 percent of McDonald’s locations. That means most of McDonald’s customers aren’t actually served by a McDonald’s employee. 

The franchisees aren’t too happy. A recent article on Slate described McDonald’s relationship with its franchise owners as “the bleakest it’s been.”

Rent has increased an average of 26 percent over the past five years. Meanwhile, year over year same store sales are down 4.2 percent.

Now McDonald’s wants its franchise owners to invest an estimated $120,000 to $160,000 in it’s new Create Your Taste initiative. The Create Your Taste program is designed to allow people to customize the burger they order using an interactive kiosk.

Many franchise owners resent the additional investment. It will take a significant chunk out of short-term profits while making operations even more complicated.

McDonald’s can’t turn around it’s fortunes unless it improves it’s relationship with franchisees.

 

Customer definitions are tricky

Many industries have complicated customer relationships.

Hotels are a good example. In a typical hotel, one company owns the building, another company owns the brand, and a third company manages the hotel. 

Let’s say the property is getting a bit old and needs some upgrades. The brand might dictate the type of upgrades that need to be made. The building owner has to find a way to pay for the upgrades. And the management company has to keep guests happy until they all can sort things out. 

That’s are a lot of interests to manage.

Insurance is another example. Many companies have independent brokers who sell and service their policies. They must keep these brokers happy to ensure policy holders receive great service. At the same time, insurance companies must keep tabs on their brokers to ensure they’re representing the company fairly and accurately.

It’s enough to give you a headache if you aren’t paying careful attention.

 

Take Action

Here are two exercises to help you identify your customers, and improve your customer focus. The first is to make a list of the groups of people you serve, and the service you provide to each one.

This short training video will walk you through the process.

The second exercise is to create a customer-focused mission or vision. This could be your organization’s mission or vision statement, or a separate statement that clearly identifies your primary customer and the service you provide.

Take a look at Goodwill’s mission as an example:

Goodwill works to enhance the dignity and quality of life of individuals and families by strengthening communities, eliminating barriers to opportunity, and helping people in need reach their full potential through learning and the power of work.

Donors are important customer, but only to the extent that they help fulfill the mission. If a donation isn’t ultimately helping people reach their full potential through learning and the power of work, Goodwill doesn’t want it.

Let’s look at State Farm’s mission for a for-profit example:

The State Farm mission is to help people manage the risks of everyday life, recover from the unexpected, and realize their dreams.

I can tell you from experience that State Farm and their independent agents are aligned around the same mission. In 2001, I traveled to Houston to help my in-laws recover from a flood. My father-in-law's truck had been completely submerged in water and was totaled. His State Farm agent showed up the next day with a check in hand so my father-in-law could buy a replacement.

It required coordination between State Farm and it’s agents to make the same thing happen for hundreds if not thousands of customers who were similarly affected.

Meanwhile, people in the neighborhood who had other insurance companies waited days for their insurance company to lend a hand.

Zendesk 2015 Q1 Report Reveals Live Chat Insights

A new report from Zendesk reveals new insights into live chat.

Zendesk is a leading provider of customer service software. Their 2015 Q1 Benchmark report analyzed live chat data from 2,261 companies.

This post summarizes a few of Zendesk’s more interesting findings. For example, live chat delivers the highest customer satisfaction rating among contact center channels with a 92 percent average. 

You can download the full report here.

Faster Problem Resolution

Implementing chat in a contact center can lead to faster problem resolution.

Companies that introduced Zendesk’s Zopim live chat software saw a significant drop in API and Web Form contacts. These are channels that customers typically find when searching for support on a company’s website. 

Moving to chat allows customers to resolve their problems faster. Zendesk recorded an average chat duration of 10 minutes and 35 seconds. Most companies take an hour or more just to respond to contacts submitted through an API or Web Form.

The grainy graph below shows the percentage of contacts by channel prior to implementing live chat in green. The percentage of contacts after implementing live chat is show in yellow.

Source: Zendesk

Source: Zendesk

Slow Reply Times

There’s still room for improvement when it comes to reply times.

When a customer initiates a chat, they typically have to wait for an agent to respond. In some ways, this is like being on hold when you call a customer service line.

Predictably, customers prefer a faster response.

The average time to first reply is 1 minute and 36 seconds. However, Zendesk noted that customer satisfaction begins to drop once first reply time crosses the 50 second mark. 

Another large drop in customer satisfaction happens just after the two minute mark.

Source: Zendesk

Source: Zendesk

An Emerging Channel

Zendesk’s data also shows that live chat is still an emerging channel.

Most companies are seeing very low chat volume:

62 = Average monthly chats per company

Individual agents aren’t handling a high average volume either:

22 = Average monthly chats per agent

Companies with a low volume of chat contacts face a number of challenges:

  • Live chat agents typically need to support other channels too
  • Training can be difficult when volume is so low
  • Scheduling is tricky at low volumes

 

Whats Next?

Live chat offers two advantages over phone that companies could capitalize on.

First, it has the potential to deliver higher customer satisfaction. It’s a perfect channel for today’s multi-tasking, keyboard addicted consumer. 

Second, chat’s can be more efficient to serve. A typical agent handles two to three chats simultaneously. This means chat agents have the opportunity to serve more customers per hour than phone.

The key to getting this right is response time.

Live chat has to offer a response time of less than 50 seconds to be competitive with phone. Otherwise, the channel will simply continue to divert contacts away from slower channels.

Three Customer Service Perspectives We Naturally Miss

It wasn’t until day two of our vacation that I noticed the band-aid stuck on the smoke detector in our hotel room.

It grossed me out. 

My wife, Sally, had a different reaction. She immediately knew why it was there. Her unique perspective allowed her to instantly see something I couldn’t.

Do you know why the band-aid was on the smoke detector? Just for fun, leave your guess in the comments section below. I’ll provide the answer in a couple of days.

But for now, this band-aid serves as a reminder. 

There are customer service perspectives that we often miss. This miss happens naturally. It’s instinctive. We’d benefit greatly if we could overcome it.

Photo credit: Jeff Toister

Photo credit: Jeff Toister

You Perspective

We lose out on many opportunities to serve because we naturally start from the Me Perspective:

  • That angry customer is being mean to me.
  • These customers are preventing me from getting work done.
  • That customer is making it hard for me to follow the rules.

This is instinctive. We naturally see the world from our own perspective. It takes effort to stop viewing things from our Me Perspective and take steps to find the You Perspective:

  • Why are you angry?
  • How can I help you get something done?
  • How can I help you get what you want?

The Me Perspective is “That band-aid on the smoke detector grosses me out.”

But, imagine what we could learn if we thought about the person who placed it there. “Why did you put the band-aid on the smoke detector?”

 

They Perspective

There’s a danger to the You Perspective.

If we aren’t careful, we can confuse the opinions, tastes, and preferences of one customer with those of all customers. When thinking of all (or many customers):

  • Do they tend to get angry about this?
  • Do they find it difficult to get things done?
  • Are they able to get what they want?

In my book, Service Failure, I wrote about a wine bar that can be a bit polarizing.

A few customers don’t like it. The employees use colorful language. There’s a chummy group of locals who enjoy loud conversations across the bar. The place is definitely not romantic. The wine bar might want to make some changes if they listened to the You Perspective of a few customers.

However, the They Perspective reveals that their regular customers have a few things in common:

  • They enjoy the employees’ fun personalities.
  • They like meeting other wine enthusiasts and making friends at the bar.
  • They appreciate having a wine bar that’s more social than romantic.

The very things that turn a few customers off are exactly what makes the wine bar special for a large number of loyal customers.

So, back to the band-aid. 

Sally instantly knew why the band-aid was there because she had seen it before. This wasn’t the work of one random customer. It was part of a larger pattern. She had the They Perspective.

 

We Perspective

There’s value in looking inward.

The challenge with the Me Perspective is we only look at ourselves. But, customer service is often a team endeavor. That’s where the We Perspective comes in.

  • A delivery driver relies on the dispatcher to set appointments for the right time.
  • A restaurant server relies on the chef to provide a great meal.
  • A doctor relies on the office staff to keep things running efficiently.

Chronic problems often exist because we don’t step back and look at the whole system. There are a few obstacles:

This short video explains how overlooking customer service icebergs can be dangerous:

Back to the band-aid. The hotel could ask a few questions:

  • Have we seen this before?
  • Are we aware of similar issues?
  • Is there something we can do?

 

What You Can Do

A lot of pithy advice tells us to ignore our instincts. This is unhelpful. Instinctive behavior is just that. Instinctive. It’s what we naturally do. The Me Perspective is one of those things.

What you can do is be aware of it. 

Sense those moments when you are thinking of yourself and not your customer. Then, take charge of your perspective and re-frame. 

  • You Perspective: What help do you need?
  • They Perspective: What help do they need?
  • We Perspective: What can we do better?

Back to the band-aid one last time. Can you figure it out? Enter your guess in the comment section. I’ll respond with the answer in a couple of days.

Three Social Customer Care Trends You Need to Know

Social customer care should be entering an age of maturity.

The dominant social media channels have been around for awhile. Facebook is more than ten years old. Twitter is now nine. 

In reality, best practices are still evolving.

Here are three trends from the 2014 Customer Experience Management Benchmark (CEMB) study that’s co-produced by Executives in the Know and Digital Roots. These trends all seem to indicate that companies are still trying to find their way.

Trend #1: Channel Priorities

You can tell a lot about a company’s social media priorities by who owns it.

The CEMB revealed that customer care is an owner or co-owner of social media channels in only 50 percent of companies.

Why is this happening?

One explanation could be that corporate CEOs still don’t understand social media. A 2014 Domo study revealed that 68 percent of Fortune 500 CEOs have no presence on social media.

Another explanation is an apparent lack of social media adoption by customer care representatives themselves.

The Twitter backchannel was a virtual ghost town at ICMI’s 2015 Contact Center Expo & Conference. Only a few highly active participants regularly chimed in. 

Likewise, when I conducted an informal poll in my conference sessions, less than 10 percent acknowledged they were Twitter users.

We can't win the social customer care game until we're actually playing the game.

 

Trend #2: Wavering Commitment

Many companies are experiencing a commitment problem when it comes to social customer care. They're just not as invested in social like they are in other channels.

According to the CEMB, the growth of social media customer care has slowed.

And, fewer companies are training their social media agents.

Even worse, many companies are almost completely ignoring social media as a customer care channel.

Here are two stats that really jump out:

  • Only 14% of companies measure CSAT via social (Source: CEMB)
  • The Top 100 brands ignore 78% of Tweets (Source: Freshdesk)

Brands would love us all to have social media conversations about how great they are. They encourage us to share our positive thoughts using their carefully selected hashtags. 

But, they can't have it both ways. If they want us to engage with them, they'd better engage with us.

 

Trend #3: Strong Alternatives

Other customer care channels are a much higher priority than social.

The CEMB report revealed that social media is the preferred customer care channel for only 9 percent of customers.

Phone is still the top channel. According to ICMI Senior Analyst Justin Robbins, self-service is the fastest growing channel.

My own 2014 study of customer care via Twitter revealed that most customers view Twitter as a secondary channel, not a primary one. They only take to Twitter when another channel has failed them.

Another Twitter study I did earlier this year suggested that the impact of an upset customer ranting online may be overestimated. Or, viewed another way, a customer who receives poor service via any other channel is just as dangerous.

 

What’s Next?

Sadly, I could easily cut and paste the conclusion from a similar post I wrote a year ago.

It’s about time more companies figure it out. Key areas for improvement include:

  • Faster response times
  • Fewer ignored questions
  • Consistent service quality across all channels

The few companies that get it right can really stand out from the rest that don’t.

There are a few additions, too:

  • Customer care teams must gain a seat at the table.
  • Customer care professionals must personally engage with social.
  • Organizations must provide their agents with adequate training.

Perhaps most importantly, organizations must strive for consistency across all channels. A service failure can be just as damaging over the phone, in person, or via social media.

Unfriendly Signs Are Bad For Business

Imagine you stroll into your local self-serve frozen yogurt shop and see this sign:

Image credit: Jeff Toister

Image credit: Jeff Toister

The business hung the sign because a few people would come into the shop, load up on samples, and then leave. This sign was the response.

But what does this sign really say?

It’s unfriendly. It discourages you from lingering. It almost feels threatening, as in “You’d better find a flavor you like or we’ll charge you!”

There’s a better way to handle this.

  • Do nothing. What’s really the cost of a few free samples?
  • Talk to people who abuse sampling on an individual basis.
  • Have employees give out sampling cups to encourage friendly interaction (and sales!).

I’ve previously written about unfriendly signs here and here. These were two places I haven't returned to. 

These signs usually point to a bigger problem. A lack of trust. Poor customer engagement. And lost business opportunities.

It’s a self-serve yogurt place, so the cashier usually stands behind the register waiting to ring up customers. There’s typically a lot of downtime in between. 

Why not encourage sampling?

The cashier could suggest a new flavor or recommend toppings. He could do a lot of things to engage with customers. This might actually justify the tip jar that otherwise inexplicably sits in front of the register.

Shep Hyken recently wrote about a similar experience on his blog. He made this excellent suggestion for business owners:

Don’t make a rule because just one or two customers (out of hundreds or even thousands) abuse your system. In other words, don’t penalize all of your honest customers for the sins of a few.

ATD 2015 Conference Re-cap: Training is Changing Fast

The Association for Talent Development’s 2015 International Conference & Exposition may have finally caused a tipping point in how we train employees. 

I’ll address this more in just a minute.

But first, here’s an overview of the conference in case you missed it:

The conference was held in Orlando, FL and featured nearly 10,000 training professionals from around the world. There were keynote presentations, breakout sessions in 10 topical tracks, and a massive expo hall with more than 400 exhibitors.

You can read more here:

Image courtesy of ATD

Image courtesy of ATD

Training is Changing

Rigid, formal training will soon be a thing of the past. The classroom may soon be gone or at least unrecognizable. E-learning may look very different.

In it’s place? Problem-centered, self-directed learning where participants train themselves.

In customer service, this has huge implications on the way we deliver training over a number of topics:

  • Training new hires
  • Developing customer service skills
  • Product knowledge training
  • Educating customers
  • Developing customer service leaders

I’ll dive deeper into the how and why over the coming weeks. In the meantime, here are a few resources to start exploring.

On a personal note, I was one of nine recipients of the CPLP Contributor Award, which recognizes holders of the Certified Professional in Learning and Performance credential for outstanding volunteer efforts to support, promote, and advance the CPLP program.