Lessons from The Overlook: Verify Procedures are Followed

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.

Last month, I wrote that guest bookings had suddenly slowed at The Overlook. Our property manager called at the beginning of June with a new problem.

The Overlook was too hot inside and she was having trouble renting it to guests. The cabin can get to 80 degrees or hotter inside when the weather turns warm. Even worse, the cabin develops a distinctive, "musty cabin" smell when the inside temperature rises too high.

Our cabin doesn't have air conditioning, so our property manager wanted us to consider adding central air. As an alternative, she thought we could add window ac units to each bedroom.

If this problem sounds familiar, it's because it is. We went through the same exercise last year. At the time, we thought the problem was solved.

Many businesses encounter recurring problems. Here's how we handled this one.

Step 1: Know Your History

Start by checking to see if the problem has already been solved.

Harried employees quickly forget decisions made last year, last month, or even last week. Do you remember what we decided at last Monday's meeting? Yeah, me neither.

Employees come and go, too. New employees often think they are the first ones to encounter an issue, without realizing their predecessor kept copious notes on how to handle it.

And some managers are too eager to put their own stamp on something. They change for the sake of change, without first understanding why something was done a certain way.

Forgetting your history can be expensive and wasteful. 

For example, it would cost $600 (on the low end) to put window ac units in each bedroom at The Overlook. Adding central air conditioning would cost at least $5,000. Given our recent sales slump, it might be tempting to spend that money on a quick fix without verifying we'd get a reasonable return.

We knew we had already found a solution to the heat problem at The Overlook last year. So we decided to check on that first before deciding to spend any more money.

Step 2: Check the Procedure

It's always a good idea to ensure the existing procedure is being followed before implementing anything new. Existing procedures can represent a known solution to a problem. 

Unfortunately, procedures aren't always rigorously followed. People develop poor habits. A new employees comes onboard and isn't properly trained. Infrequently needed procedures are simply forgotten.

We had an existing procedure for dealing with the heat at The Overlook:

1. Close the blinds during the day to keep the hot sun out.

2. Turn the ceiling fans to summer mode. 

3. Put window fans in the bedroom windows.

Two of the three steps were not being followed when we checked. The blinds had been left open and the window fans were still in the closet where we had stored them for the winter.

Our property manager followed the remaining two steps and the cabin quickly cooled. The inside temperature was a nice 72 degrees on a recent weekend when we had guests.

Better yet, we quickly picked up several more guest bookings. This puts us back on track after a slightly slow May.

Step 3: Follow-up

If an existing procedure breaks down once, it's reasonable to assume it will break down again without reinforcement. You can help prevent this with some timely follow-up.

Sally and I need to accept some responsibility for the heat issue at The Overlook.

We learned long ago that adopting our property manager's standard procedures makes things run more smoothly. The company oversees more than 40 cabins, which makes it difficult to keep track of a procedure that's only used in one particular cabin for a few months a year.

It makes sense for us to remind our property manager about the heat abatement procedure the next time it starts getting warm.

Following these same steps can save you a lot of grief when things go wrong. It's tough enough to solve a problem one time, let alone solving it over and over again!

How to Improve Your Powers of Observation

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Have you ever encountered a customer who had that "lost" look?

There's something about their facial expression and body language that tells you they are having trouble finding their way. You probably made a difference in their experience if you seized the moment and offered them assistance.

What if I told you there were many more opportunities like this, but we don't often see them?

There are customers who need extra help, but we don't realize it. There are opportunities to go the extra mile, but we don't see them. There are even clear signals that can help us prevent service failures, but we miss them.

I recently did an interview with Investors Business Daily to share some tricks for improving your powers of observation. Here is some more details on what I shared, plus another one of my favorite exercises.

Change Your Lens

It's easy to get locked into one perspective.

In her book, What Great Brands Do, brand leadership expert Denise Lee Yohn shares a story about a fast food chain with dirty stores that were a real turnoff to customers. Executives weren't aware of this issue because they didn't look through the lens of a customer when they visited various locations.

So Yohn gave the executives an assignment. Each one, including the CEO, had to visit one of their locations, go into the restroom, and sit on the toilet.

It was an eye-opening experience. The chain's executives suddenly realized exactly how dirty the stores had become. The exercise forced them to see the stores the way a customer would.

Experiencing your product or service the way a customer would is one way to change your lens. Another way is to literally move yourself to a different location.

Here's a picture I took from Badwater Basin in Death Valley, the lowest point in North America at 280 feet below sea level. 

From this perspective, there's not much to see. The landscape looks desolate, even boring, with the faint outline of some mountains off in the distance. What you can't see in the picture is it was also 113 degrees Fahrenheit.

Here's the same landscape from a different perspective. This picture was taken from a vantage point 5,000 feet above the valley.

The sweeping view is quite beautiful. The white swirls you see are salt flats, which create quite a contrast with the red earth. It's also nearly 30 degrees cooler up here.

Pause and Reflect

We can sometimes get locked in to a particular assignment, which causes us to miss something else entirely. 

Here's a short video that illustrates the concept.

Most people who watch this video accomplish only one of two things. They either correctly count the number of times the team in white passes the basketball, or they observe the other thing. It's tough to do both.

This explains how servers in a busy restaurant can forget to refill our drinks, or a repair technician can forget to call us back. There's a good chance they got locked into other activities and missed something obvious.

You can learn more about selective attention from The Invisible Gorilla, by Christopher Chabris and Daniel Simons. Their research is truly amazing.

The cure to the selective attention problem is to take periodic breaks where you step back from whatever you are working on and look at the big picture.

For example, I review my calendar and project planner on a daily basis to identify my top priorities. I also do a more comprehensive review once per week where I update all of my action plans. This prevents me from missing an assignment that's about to come do or forgetting to follow-up with a client.

Find Something New

My wife, Sally, and I visited a well-known winery in Napa Valley last November. The tasting menu featured a grape we had never heard of, Sauvignon Black.

Our host gave us a puzzled look when we asked about it. "Do you mean Sauvignon Blanc," she asked?

No, we really were asking about Sauvignon Black. It turned out the tasting menu had a typo and it really was supposed to be Sauvignon Blanc, a popular grape used to make white wine. Our host sheepishly admitted the same menu had been in the tasting room for two months, and nobody had caught the error!

You can help avoid situations like this by playing a little game.

Take a walk through your store, office, or wherever you work. While you are walking, try to spot something you've never noticed before. You'll be surprised at what you see!

I like to do this exercise in my neighborhood. I'll take a walk around the block or down to my neighborhood park, and try to see something I've never noticed. I notice something new every time I try this exercise.

Additional Resources

You can learn more about improving your powers of observation from this short video on LinkedIn Learning. 

Improving your powers of observation from Innovative Customer Service Techniques by Jeff Toister

Inside Perspective from ICMI's 2018 Best Small Contact Center

The International Customer Management Institute (ICMI) held its annual Global Contact Center Awards party this past May.

Gopher Sport won the 2018 award for Best Small Contact Center. (Contact centers with fewer than 75 agents are eligible.) It specializes in selling sports equipment to schools for physical education and athletic programs and prides itself on friendly service.

The company is a client of mine and I've been consistently impressed with the customer care team and it's commitment to service. Beth Gauthier-Jenkin, Gopher Sport's Vice President of Customer Care, shared some insight into what makes her team so special.

Q: What is Gopher Sport’s customer service vision?

"Our CEO established the service vision about 5 years ago, which is to 'be the easiest company to do business with'.

"Our plain-language vision has served us well because its meaning is clear. As a company, we often use it in day-to-day conversations as we’re making decisions, asking each other: 'Does this direction, decision, etc., make us the easiest company to do business with?' Sometimes the answer is 'no,' and we have to rethink our plans."

Q: What do you believe sets your contact center apart in winning this award?

"We’ve had a customer-focused mindset for 70+ years.

"Our previous CEO, now Chairman of the Board, Joel Jennings, instilled a deep sense of customer commitment in our organization before differentiating with customer experience was the hot topic. 

"Company DNA aside, we’ve gotten good at balancing most aspects of contact center effectiveness. We’ve recognized the diverse gifts, skills, and aptitudes within our team and aligned them with key areas of performance and leadership. We’ve been able to lead, coach, and educate team members well. We’ve optimize resources through workforce management. We’ve used continuous improvement and performance management methods effectively. Many wins in these varied areas due to this diverse group of gifted people. 

"Lastly, we’re committed to continuous learning. That’s why we’ve soaked up so much knowledge from you Jeff!"

Q: How has the rest of the organization supported the contact center (and vice-versa)?

"The entire organization supports our Unconditional 100% Satisfaction Guarantee. 

"Unified support of this customer-focused philosophy, although the right thing to do, isn’t always easy on other teams. For example, large returns and product replacements can be negatives for our Product teams when it comes to maintaining margin targets. Our Quality team works to minimize quality issues and returns, but when customers can return product for any reason, at any time, this can be difficult. So as a company, we recognize and support the greater good, which is taking excellent care of our customers, versus maintaining team standards and KPI’s.

"The contact center supports others in the organization by working to balance customer needs with business needs. For example, we’ve partnered with our Distribution Center to help balance their workload when it comes to order fulfillment. If we only complete order entry after inbound calls and emails are handled, they’d have no orders to ship until 2PM each day. We continuously look at how what we do impacts others and balance the best interest of the customer with business needs, when possible."

Q: What are some challenges you are working on now?

"We are really interested in ensuring customer insights and feedback are communicated across the organization to keep improving the experience.

"In the past, we’ve sent information to other teams in hopes it’s digestible and actionable, with little success. This is our biggest challenge right now. We have to find ways to ensure the customer is heard, across the company. It seems like this should be easy, unfortunately, technology limits and resource constraints sometimes get in the way. We have to figure this out!

"We also continue to focus on attracting and retaining talented team members. The insights you’ve provided on an improved approach to onboarding and training our newest team members has been a game-changer. Modifying our approach has helped us take better care of these hard working people who want to be successful. This will continue to evolve. We have to keep improving in this area so we have the best people caring for our customers."

Q: How has the customer service assessment we did helped your contact center? 

"This could be an entirely separate discussion!

"It helped us understand our strengths and opportunities in such a clear, straight-forward way. Considering how we grow and improve can be overwhelming, so the prioritized list provided in the assessment was key. The assessment also provided a clear line of sight to key areas which ensure we’re aligned with our service vision.

"In areas we’re missing the mark, the assessment gave us practical, easy-to-implement action items so we become better aligned with the vision. The focus on hiring for culture fit is our biggest priority, and implementing your suggested improvements will continue to yield positive results and transform how we hire."

(Note: you can find more information on the assessment here.)

---

Winning this prestigious award was a big achievement for Gauthier-Jenkin and the rest of the Customer Care team. What's most striking is they aren't about to rest on their laurels. The entire team is focused on continuously building its service culture.

Lessons Learned from My First Contact Center Jobs

I have the honor of speaking at the NorthEast Contact Center Forum conference in Foxborough, Massachusetts later today.

My first contact center job was in Massachusetts. In fact, I worked at three in total while living in Mass, so this conference is a homecoming of sorts for me. The experience taught me a lot of lessons that are still useful today.

This post is a look back on what I learned from those jobs.

This is likely what I looked like when I started working on contact centers.

Fawcett Energy: Hire the Right People

It was the summer of 1995, and I needed a job—fast. 

A job offer fell through at the last moment. Desperate to find a way to pay my rent, I responded to a newspaper ad titled, "Talented Talkers." 

It was an outbound telemarketing job for Cambridge-based Fawcett Energy. My role consisted of cold calling families on Cape Cod and trying to sell them home heating oil. If the person said they didn't have an oil furnace, I next tried to pitch them on a new sealcoating for their driveway. "Gotta keep the boys working in the summer!"

When that struck out, my last pitch was a lawn greening service. It's amazing how many people don't have lawns, or so they say.

The owner, Red Fawcett, took me to lunch on my first day and I remember being impressed with him. He seemed like a successful business person who took an interest in employees.

But I was instantly miserable. Cold calling just wasn't my thing. I cringed before each call.

My first evening on the job, the computer dialed the home phone for one of Fawcett's competitors. Oh boy did I get it good from them. "Hey honey!" said the man who answered the phone to his wife. "Some kid from Fawcett is calling us. Do we need a new home heating oil supplier?!" 

I heard peels of laughter before they hung up on me.

The biggest lesson I learned is you need to hire people who will love to do what you ask them to do. A lot of people are like me in that they end up working in a contact center just because they need a job.

A coworker seemed like a natural. He shrugged off each rejection knowing it was just a matter of time before he got a sale. He was the type of person Fawcett needed to hire, not me.

Fortunately, I soon landed a three month contract doing market research for a company in Dublin, Ireland and left Fawcett after just two weeks. 

Aramark Uniform: Build Relationships & Be Resourceful

Two years later, I landed a job as a national account manager for Aramark's uniform division, located in Norwell.

My job was to grow sales within my assigned accounts and handle any customer service issues. We were also part of an inbound phone queue, so new customers calling our general line would get routed to whichever account manager happened to be available.

Here I learned the value of building relationships.

We were plagued by long lead times, uneven quality, and high prices. I had to soothe a lot of angry customers at first. Eventually, I learned how to anticipate my customers' needs and find ways to prevent problems and keep them happy.

I also built internal relationships, making friends in accounting, finance, merchandising, and other departments. This was essential because the fastest way to get things done was often to go straight to the person doing it. 

Resourcefulness was another lesson. 

Our factory embroidered logos on uniforms for customers. We had a minimum order size of six since our smallest machine handled six at a time. The production team wanted to maximize efficiency, but this also meant turning away a lot of small orders.

This was a problem for me, since my biggest account had many small offices that only needed one or two uniforms at a time. The solution I pitched to the production team was to hold orders from multiple locations for an extra day or two until we had enough to meet the minimum. This kept both my customers and the production team happy.

Unfortunately, long lead times, quality issues, and high prices caught up with the company. Quite a few of us were eventually laid off.

Chadwicks of Boston: Experiment

Training was my passion, and Chadwicks represented an amazing opportunity.

Two weeks after getting laid off from Aramark, I found myself managing the training team for two contact centers, one in West Bridgewater and the other in Taunton.

This was during the dark ages of contact center management, when every interaction was tightly scripted and the most important metric for agents was talk time. Employees knew they would get in trouble if their average call length went too long.

Fortunately, my boss let me try new experiments to see what worked.

One of my first projects was to re-write our new hire training curriculum. I had heard about some accelerated learning techniques, such as whole-task training, and I convinced my boss to try them out. We immediately saw decreased training time and improved performance.

Another project focused on getting our sales agents to offer a branded credit card to pre-approved customers. The average acceptance rate was just 5 percent at the start of the project.

Some agents were successful on 40 percent or more of their pitches, so I decided to see what they were doing differently. Those lessons helped us quickly boost the acceptance rate from 5 to 20 percent.

Applying Lessons Learned

A colleague once remarked, "There's a big difference between having twenty years of experience and having one year experienced twenty times."

Her point was that we should all be learning from our daily experiences. We risk getting stuck in a rut and watching the world pass us by if we don't.

I continue to share a lot of these stories and examples today, while continuing to learn from my new experiences as well.

If you are attending the conference, please make sure you say "Hi." It will be great to see you there.

3 Simple Ways to Make Your Small Business Stand Out

My wife, Sally, and I are in the middle of a bathroom remodel right now. I probably shouldn't share this, but we only got one bid for the project. 

It never occurred to us to call any company besides Ideal Plumbing, Heating, Air, and Electrical. The company has successfully done two previous remodeling projects at our home, installed a new HVAC system, repaired a slab leak, and made countless repairs. 

It's a company we trust, so why take a risk with someone else?

Chances are you feel the same way about a small business that counts you as a customer. You may even recommend them to others on Nextdoor or Yelp.

And if you're a small business owner, you probably want to earn that same type of reputation. Here's how you can do it.

Be Responsive

Service business owners have a reputation for not being responsive. Calls, texts, and emails go unreturned. Appointments are missed.

You can stand out just by mastering this one basic step.

Sally and I hired recently hired Artisan Landscape Management to help maintain our yard. We were frustrated by a previous gardener who didn't show up when promised and didn't respond quickly to contacts.

Pete Pena, Artisan's owner, is always responsive.

He and his crew arrive on time. Pena promptly returns calls, emails, and texts. He's even proactive about notifying us about important updates, such as a recent text prompting me to change the amount of time I ran my lawn sprinklers.

Pena and his team do great work, but it's his responsiveness that really sets him apart from other landscapers we've worked with.

Keep Promises

Things don't always go as planned. Sometimes you underbid a job or promise a delivery time and your truck breaks down.

Customers still expect you to keep your promises.

Sally and I tried to book a room at a small inn for an upcoming vacation. The inn's website advertised an off-season special, "Stay one night, get the second night free," but we were charged for two nights when we tried to make a reservation.

The inn's manager was unsympathetic when I called. "That's an old promotion," she told me, and she refused to honor it. The offer magically disappeared from the hotel's website during our conversation.

Needless to say, we booked a room somewhere else. 

Small business owners undoubtedly face pressure to watch expenses. A small issue like forgetting to remove an old two-for-one promotion from your website can cost the business money in the short run. 

However, keeping your promises will payoff over the long-term.

We recently hired Peek Brothers Painting to paint our home. Like Ideal, we've relied on Peek Brothers for many years and often hire them without seeking other bids.

This project included painting our front door. When it came time to do the job, the foreman realized the door needed several more coats of paint than our contract called for. Unlike the inn, Peek Brothers kept its promise and painted the door without trying to charge us for the unanticipated extra time. 

It may have cost the company a little more in the short run, but it's this type of service that's caused us to re-hire and refer Peek Brothers many times.

Be Honest

There are times when your customer is in a bind. An unscrupulous small business owner will take advantage of that situation. A customer-focused business will do right by the customer.

A HVAC technician once came out to fix the heater at The Overlook, a vacation rental cabin we own in Idyllwild, California. He knew we had guests scheduled to arrive later that evening and were eager to get our heater repaired.

Unfortunately, the technician did not get the heater working that afternoon. He recommended we replace the motor, a repair that would cost several hundred dollars. It would also take several days for the new motor to arrive.

Martha Sanchez owns Idyllwild Vacation Cabins, the property management company we use for The Overlook. She went out to the cabin with her maintenance technician to see what they could do to keep the cabin warm over the weekend. They discovered the real problem with the heater was a loose wire and they quickly got the heater working again.

The local HVAC business had tried to take advantage of our situation and cheat us!

I was in a similar situation a couple of years ago. My car broke down while I was in Woodland Hills on a business trip. Not knowing the area, I took a gamble and had it towed to Automotive Instincts, a nearby mechanic with good Yelp ratings.

The shop manager knew I was stranded and he could have taken advantage of my situation, but he was fair and honest.

My car needed a new clutch slave and a master cylinder. It was a major repair because the entire transmission needed to come out to install the new parts, but the shop charged me less than half of what my local dealership would have charged.

Even better, the car was towed in mid-afternoon, and the shop ordered and installed the parts by lunchtime the next day.  

Make Your Small Business Stand Out

I realize these three techniques are far from revolutionary:

• Be responsive

• Keep promises

• Be honest

My challenge to you is to review your business to see if this is really happening. How quickly do you respond to customers? Do you keep your promises? And what do you do when your customer is in a vulnerable position?

In my experience, the vast majority of small businesses do not do these three things on a regular basis. This helps those that do really stand out.

Why Leaders Should Focus on Middle Performers

Think about which employees you spend time with as a leader. For most, the priority order is fairly straightforward.

1. Under performers get the most attention.

2. Top performers garner the rewards and recognition.

3. Middle performers get the least attention.

This seems to make intuitive sense. 

Under performers represent a top priority because they aren't doing their job correctly. It can take time and effort to find out why and help them improve.

Top performers deserve to be celebrated. We hope they will set a standard for other employees and we want to encourage our top performers to keep producing.

What if I told you we have our priorities all wrong? The key to your success actually lies in the middle! Here are two compelling reasons.

Reason #1: Variation

The chart below shows some sample customer satisfaction (CSAT) survey scores from a customer service team.

The CSAT average for the team is 85 percent. The challenge is your customer won't interact with "average." Your customer will be served by Kate, or Nick, or even Leo.

Leo looks like an obvious problem. But what about Nick?

On his own, Nick's CSAT average is right in the middle. He might even seem like a breath of fresh air to a customer who interacted with Leo the last time.

Now look at Nick in comparison to Kate. If a customer was wowed by Kate, they may be in for a letdown if Nick handles their next issue.

Inconsistency drives customers nuts. 

Many leaders accidentally promote this variation. Kate gets recognize for her great performance. Meanwhile Nick gets largely ignored since he's doing about average.

Some leaders even initiate games and contests that encourage Kate to do even better, though sometimes at the expense of employees like Nick.

Reason #2: Untapped Potential

I recently facilitated a breakout session on employee empowerment at ICMI's Contact Center Expo and Conference in Orlando. 

My session included a small demonstration. Two teams of three people each were asked to move three balls from one bag to another as quickly as possible. Here were the results of three rounds:

Team one was disqualified in round one because they only had two balls. (Side note: that's what happens when you don't give your employees the resources they need!)

You can see team one did a great job in round two, but there was also a high degree of variability between the teams. Part of this was because the teams naturally assumed they were competing against each other during the first two rounds.

We did something a little different for round three.

The teams were asked to come together and share best practices ahead of time. Rather than compete, we focused round three on both teams doing as well as they could. Round three not only yielded the best result, it was the most consistent between the two teams.

Let's go back to our customer service team.

What does Kate know that the rest of the team could benefit from? There's a good chance we can find some insight to move everyone higher.

In rare cases, we might learn that Kate is engaging in unethical activity that artificially inflates her survey scores. In one company, support agents were transferring angry customers to colleagues so they wouldn't risk getting a negative survey. Another company caught employees submitting fake surveys to artificially boost their scores.

Apply This Concept

Leading organizations are remarkably consistent. Customers know they can count on the same great service from location to location, or even from employee to employee.

That doesn't mean every person needs to be a clone who follows the same robotic script. It means that leaders should help their employees be equally good.

Here's how you can do it:

1. Look at the variation in performance between employees, teams, or locations.

2. Identify what the top performers are doing that others are not.

3. Share the the secret sauce with everyone else.

What Exactly is a Service Culture?

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Think about the companies best known for customer service.

A few probably come to mind immediately. These companies have an undeniable service culture that helps set them apart. Yet it's tricky to put your finger on exactly what a service culture is.

This post gives you a definition, a word of caution, and a few examples.

Service Culture Defined

I met my friend Catherine Mattice for coffee when I started writing The Service Culture Handbook. 

Mattice is an expert on helping companies create positive workplace cultures and the author of Seeking Civility, so I wanted to get her perspective on my new project. She offered this definition of workplace culture:

"Corporate culture is the way an organization's members think, act, and understand the world around them."

So service culture is an organizational culture where there is a collective way employees:

• think about providing outstanding service

• act to provide it, and

• understand how and why they do it

My shorthand definition is a service culture is one where employees are obsessed with customer service.

You can tell an organization has a strong service culture by observing its employees. Customer-focused employees go out of their way to help their customers have a great experience.

Get the book

A step-by-step guide to getting your employees obsessed with customer service.

Available on Amazon

Caution: Beware of Inconsistencies

Intentionality is a key element of the service culture definition.

Brand leadership expert Denise Lee Yohn cautioned against inconsistencies between culture and brand in her book, Fusion. This occurs when a company tries to promote a certain brand image but its internal culture is really something else.

Wells Fargo is a good example. 

The bank touted its service culture for years, even when faced with a massive scandal. In 2016, it was revealed that Wells Fargo employees created more than two million phony customer accounts in an effort to meet sales targets.

Then CEO John Stumpf wrote to employees in September 2016 to assure them that Wells Fargo was customer-focused.

"Our entire culture is centered on doing what is right for our customers."

In reality, Stumpf had helped create a culture that focused on aggressive sales targets, not customers. The CEO was ultimately forced to resign and return $28 million in pay.

Service Culture Examples

The outdoor gear retailer REI is an excellent example of an organization with a strong service culture.

My wife and I once went shopping for camping equipment to take on a backpacking trip. We first went to Sports Authority, where a disinterested sales associate pointed towards the camping equipment aisle.

Sports Authority had a culture focused on making the next sale, not serving the customer. Schemes like stamping survey invitations with the suggested "Highly Satisfied" rating to boost survey scores were not uncommon. The company has since gone out of business.

We realized we were in over our heads, so we went to REI.

Here we were greeted by a sales associate who was an avid backpacker. He enthusiastically helped us select the right equipment. The associate quickly built trust by recommending products we didn't realize we needed and talking us out of purchases that weren't necessary for our trip. 

This experience is very typical at REI. The organization's culture is focused on helping people enjoy the outdoors, and the service experience consistently reflects that.

Another example is In-N-Out Burger. 

The company has a service culture focused on three words: quality, cleanliness, and service. This culture was infused into the company from the time it was founded in Southern California in 1948.

Amazingly, McDonald's once shared those same three values with In-N-Out. The difference, as we now know, is McDonald's became focused on rapid growth.

That growth helped the company become one fo the world's most iconic brands, but it's service quality has lagged behind the industry for years. McDonald's placed dead last in the 2017 American Customer Satisfaction Index for limited-service restaurants.

Take Action

Creating a service culture in your organization, department, or team requires an intentional focus.

The first step is to define your unique culture by creating a customer service vision. This is a shared definition of outstanding customer service that points everyone in the same direction.

From there, it's imperative to align your business around the culture. The goal is to use each strategic decision to reinforce the service culture while avoiding the mistakes of companies like Wells Fargo that say one thing while doing another.

Report: Poor Customer Service Costs US Businesses $75 billion

Broken promises. Defective products. Surly employees. The list of poor experiences we face as customers goes on.

A report from NewVoiceMedia estimates those service failures are costing companies in the United States $75 billion per year.

The company worked with research firm Opinion Matters to survey 2,002 consumers. Its objective was to learn what people do when they experience poor service and why. The results should be a wake-up call for businesses:

• 67 percent have left a company due to poor service

• 10 percent have switched 5 or more times in the past year

• $430 is the average a business loses per lost customer

Losing a customer isn't the only consequence of poor service. A separate study revealed many other ways angry customers can hurt a company.

Here are two insights from the report along with what you should do about them.

Insight #1: Focus on Emotions

Think about the last time you used a vending machine and it cheated you. Perhaps it was a candy bar that got stuck on the rack. It hung there, as if to taunt you with nobody around to help fix it. 

We've all felt anger and frustration in those moments.

Customer service is about emotions. Yes, customers have rational needs like getting the candy bar they purchased or solving a billing issue. However, it's the emotions behind these experiences that will cause a customer to be loyal or jump ship.

NewVoiceMedia's report discovered that 86 percent of customers are likely to do business with a company again if they make a positive emotional connection with the person serving them. It could be a moment of friendly banter or an empathetic gesture to solve an issue.

Sadly, customers say that emotional connection happens just 30 percent of the time.

Smart companies train employees to read and respond to their customers' emotional cues. You can do this by having employees recall recent interactions or even watching videos of customer service scenarios.

1. Try to identify the emotions the customer is expressing.

2. Decide upon an appropriate way to respond.

3. Practice those new techniques with real customers.

Here are some more ways you can make customer service more human.

Insight #2: Make Service Easy

The phone is still king when it comes to customers' preferred channel for solving issues quickly, with 48 percent indicating it is their top choice. 

That doesn't mean everything is perfect. Customers often find calling companies to be exceptionally frustrating. Here are the biggest challenges cited in the NewVoiceMedia report:

• Talking to multiple agents.

• Not being able to talk to a real person right away.

• Being kept on hold.

My own study of customer complains on Twitter shows that 80 percent of complaints are an escalation. This means that customers tried to call, email, or contact the company via a different channel and were unable to get their issue resolved.

Companies make service too difficult.

Customer-focused companies constantly try to make things easy for their customers. In The Service Culture Handbook, I profiled Safelite AutoGlass for its strong service culture. One of the company's best practices is having a real person answer their phones so customers don't have to deal with annoying phone menus.

Another way you can make things easy is to analyze your survey data. The comments and ratings your customers provide often reveal clear pain points that can quickly be addressed to improve service. 

The best surveys allow customers to opt-in to a follow-up contact, so you can close the loop with upset customers. This gives you another chance to save their business. You can also learn more about what caused their issue so you can prevent future customers from experiencing the same thing.

Take Action to Improve Service!

Building a service culture starts with a customer service vision.

This is a shared definition of outstanding customer service that gets everyone on the same page. It gives employees purpose and meaning in their daily work, while also giving companies an internal benchmark to evaluate each service experience.

Once you have a vision in place, spend time looking at areas where that vision is difficult to execute:

• Feedback from frontline employees

• Customer service surveys

• Online reviews and social media mentions

• Contact volume by type and channel

This data can help you understand where service failures are happening so you can find the root causes and address them.

Customer-centric organizations constantly engage in continuously improving service, because they know the financial consequences of service failures.

Lessons from The Overlook: Don't Panic

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.

Things have changed dramatically at The Overlook in the past six weeks.

The cabin was booked every weekend from November through early April. This is the busy season in Idyllwild, though the results were still better than we expected.

The slow season is now upon us and we're feeling it. Half our weekends in May are open and we have only one booking for June.

It's times like these when it can be tempting to panic and make some knee-jerk decisions. Here's why we won't and why you shouldn't, either.

Panic at The Overlook?

You tend to make poor choices when you panic in business.

Revenue is down right now and it looks like we're in for several months of the same. There's definitely a gut instinct to do something dramatic. 

The challenge is every idea goes against advice I previously laid out in this column.

For example, we could slash pricing to lure in an extra guest or two. Perhaps we could convince people to upgrade from a three bedroom home to our four bedroom cabin if the price was right. The challenge with this ploy is it runs counter to our pricing strategy. And, like many retailers have discovered, extreme discounting can become a habit your customers come to expect.

Another idea is to switch property managers. We recently had one promise us an extra $5,000 in net profit in our first year. Of course, that runs counter to our warning to beware of easy money. Our current property manager, Idyllwild Vacation Cabins, is likely to outperform that competitor over the long-run, and it will definitely take much better care of both our guests and our cabin.

Deferring some maintenance is another idea on the table. We have a painting project about to start and perhaps we could wait another year on that one. The key lesson here is knowing when to cut corners. This minor paint job will include some necessary repairs that allow us to delay painting the entire house. That means we'll actually save money.

So far, a level-headed analysis of these ideas makes it easy to conclude they are based on panic, not on what's right for the longterm health of The Overlook.

Panic in Your Business

Perhaps you've seen other signs of panic in your business. Here are a few examples I've seen in other companies.

One customer service executive frantically asked for customer service training. There had been a few complaints and the company president had demanded swift action. 

The problem with rushing into customer service training is it's only responsible for about one percent of service performance. The complaints will likely persist if the other issues are not addressed. 

Retailers across the country are cutting staff. This provides a short-term reduction in expenses, but it can hurt revenue and service quality over the long-run. I recently conducted a mini-comparison of three drug store chains, and found that understaffing led to lost sales in two of three stores.

Other businesses cut corners in any way they can. I've worked with several companies that have hired temporary employees through a staffing agency and then given those employees inadequate training because they were "temps." The inevitable result was poor service quality and a lot of turnover that cost the company much more than it saved by not hiring and training properly.

Take a Deep Breath and Don't Panic

This advice is easier written than followed. Panic can still tempt you to make poor decisions. Here's how we avoided doing that at The Overlook.

First, we know our numbers. Putting our current slow period into context helps. Here are a few things we know about that:

• The slow period is a normal part of the business cycle.

• Occupancy is trending just one booking lower than last year's slow season.

• Our booking window is 4-6 weeks out, which means we're still okay for June.

We also understand the role of time here. Last year was our first full year owning The Overlook. It was previously a vacation rental, but we opened up the master bedroom which the previous owners did not rent. That made the property a four bedroom, three bath cabin, which appeals to a different group of customers than before. 

Our target audience tends to stay in Idyllwild once per year. We're just now starting to see some repeat guests. The goal is to continue adding more regular, repeat guests over time. That will take patience.

Finally, we're using this opportunity to innovate a bit.

For example, our property manager is pitching The Overlook for month-long rentals during the summer. This could help us lock in slightly higher revenues than last year. We'll have to wait and see on that one.

We're also starting to put some effort into social media, such as posting on The Overlook's Facebook page. That's not been high on our list so far (we've been busy with those pesky day jobs of ours), but we think it can pay dividends.

Time will tell if things will turn out okay, but I think they will. We just have to avoid panicking!

The Dystopian Future of Customer Service Ratings

The ride sharing company Uber has just announced it will start allowing customers to rate their driver mid-trip.

This could be a very positive development. It's often during the ride where passengers have a convenient moment to give a rating, share a comment, or even tip the driver. 

Passengers are typically on the go when they arrive at their destination, so stopping to give any sort of feedback via the app could be seen as an inconvenience.

There's another side to this story.

The never-ending quest for ratings feels like a slippery slope that leads us to a dystopian future imagined in this episode of Black Mirror, where we rate every interaction with every other person.

It feels a bit dehumanizing. Is this a glimpse at our future? 

Socially Awkward Rating Systems

I must admit, this bell gave me pause.

My service was satisfactory.

There's nothing wrong with that, especially when you are buying a few items in a grocery store. We don't need a life-changing experience with every interaction.

So ringing the bell would feel like a lie. It would also feel incredibly awkward since ringing the bell would inevitably draw attention to me and the cashier.

On the other hand, I couldn't help but wonder if I was subtly insulting the cashier by not ringing the bell. She probably works hard every single day and I can't literally lift a finger to *ding* her some low-level praise?

Rating an Uber driver mid-ride comes with a similar level of social awkwardness.

• Should you rate your driver while in their presence?

• What if your feedback is less than stellar?

• Should you share feedback with your driver or just rate them?

The Impact of Personal Ratings

The rating you give your Uber driver is personal since it's tied directly to them. A form of personal ratings are already underway in China.

Called a "citizen score," this system is currently in a pilot phase before it's rolled out to the entire country in 2020. A person's score could impact their ability to get a loan, rent a car, or even entitle someone to faster check-in at a hotel. 

Two elements of the citizen score are the person's behavior, including their personal spending habits, and the person's social connections. That means a friend using social media to rant about extreme political views could impact your own credit rating.

(If this happened in the US, we'd all have at least one friend we'd "unfriend" as a result.)

Back to Uber, there's an awkward social contract knowing that your rating directly impacts your driver's job. This BuzzFeed article has several excellent examples from Uber, Lyft, and other services.

Many drivers are outright coaching their customers on what rating to give, which is a form of survey begging.

Uber and Lyft drivers also get to rate passengers. A passenger's rating can impact how likely they are to have a ride request accepted. This can be especially important during busy times.

There are two interesting caveats:

• Both Uber and Lyft request 5 out of 5 stars as the default rating for okay service.

• Studies show overall ratings are higher when customers are rated, too.

What Future Will We See?

The change to Uber's rating system is relatively small and could be positive.

My worry is how this change will gently nudge customers away from the human-to-human interactions that are the core of great customer service. 

Customer-centric companies should prioritize humanity over data.

Humanity encourages interactions between people. This includes the positive stuff, such as "you did a great job, thank you!" It also includes letting someone know when things aren't going so well.