Diary of a Customer Service Revolutionary

Launch presentation

I quickly suppressed my “oh crap” reaction to CN’s introduction, and jumped right into my presentation. Since I have a tendency to ramble, I scripted my presentation to keep me on point. There were 52 slides, and each paragraph below corresponded to one slide, more or less.

I’m going to present to you today our proposal for a comprehensive customer service program for the region. By the end of this session, I hope to get your commitment to execute this program 100%. CN is already sold on the program [as you could tell from his intro], but there is no way that we can make this happen unless you are 100% on board. So if you have any questions or objections, please let us know now.

Why is it important that you’re on board? This is an article from the Gallup Management Journal. [read]. I highlighted this last paragraph: “Store managers have the biggest impact on a store's success because they determine what the customer sees, and how the team performs.” And that’s why this program will happen only when you are all 100% on board.

Strategic advantage

First, let’s talk Big Picture. Why should we do this? I’d like to answer that question within the framework of strategy.

What is strategy? Now I could have just made things up, but out of respect for your intelligence, I actually went and did a little research. So to answer this question, I called up my old friend …

… Michael Porter, at the Harvard Business school.

Michael, or Mikey, as I call him, is the world’s leading authority on competitive strategy. So Mikey says “M, competitive strategy is about being different. A company can outperform rivals only if it can establish a difference that it can preserve.”

So how can we be different?

Well here’s one way way: We can be the worst. This is a recap of a survey that was published last month. As you can see, we came out dead last.

And we made the news again this week, when this quarterly survey got published, and it was announced that of the Top 100 companies, CompX was the worst, with a satisfaction score of 67%.

But that’s not the kind of “Different” that I was looking for. What I’d like to know is, What can we do better than our competitors?

Can we have lower costs than [Competitor 1]? Can we have a wider selection than [Competitor 2]? Can we have more locations than [Competitor 3]? Can we sell hot products that no one else carries? I think the answer to all of these questions is “no”.

And anyway, we really can’t control any of that – not as a Region.

What we can control is service, and it’s also in the area of customer service that we can make a huge difference.

In the book Retailing Management, Michael Levy & Barton White maintain that we can gain strategic advantage through customer service because it’s difficult to do, and therefore difficult for competitors to copy. It’s difficult primarily for two reasons:

(1) It’s hard to control the performance of the employees who provide the service. A sales associate may provide good service to one customer, and poor service to the next.

(2) Customer service is not tangible. You can’t touch it, you can’t hold it, and you can’t pull it from the production line before it gets to the customer.

And yet it’s critical that you do control the quality of your service, because 73% of customers say that when they got excellent service, it was because of the store employees. And when they had bad experiences, 81% said it was because of bad employees.

The difficulty is compounded when you have a multi-unit operation such as we do. In addition to variability within stores, you also have variability among stores, even neighboring stores.

Can we do this?

Our objective is to become the best in customer service. If not in our industry, then at least in our communities. Now we all know that it’s BS to set up a goal that we cannot achieve. So the next question is: Can we do this?

First the bad news. Michael Porter says that competitive advantage grows out of a whole "system of activities", and by that he means something like this: Southwest Airlines’ System of Activities that allowed it to bring American, United, Delta, and most everyone else to their knees.

But we don’t control the whole CompX system, and there are many things that the company can do to tick off our customers that we really can’t do anything about.

Now the good news is that, again, we get to control at least 73-81% of the entire system.

And the even better news is that in this area that really matters, our competition is still very weak. As you can see from this slide, although we’re bad, our competitors are just about as bad. We’re all clustering around the bottom here.

Here’s another survey. This one’s from the University of Michigan’s American Customer Satisfaction Index. Again, you will note from this chart that our two main competitors rank below the retail sector average. So when I say that we will be the best, it really isn’t much of a stretch.

How do we get there?

Our customer service program has six components. Standards, Hiring, Assessment & Training, Recognition, Empowerment, and Accountability.

Standards. We have defined specific behaviors that we expect to see executed consistently in each store. These are stipulated in the one-page document called “Region x Standards of Customer Service Behavior”, that you went through line by line when you did the survey before this meeting. When executed consistently, these standards will not only improve customer loyalty, they will strengthen employee engagement, raise your productivity, and have a positive impact on our personal growth.

Hiring. These standards will be used in our hiring process. All applicants will be made aware of these standards, and they must commit to live up to them before they are hired.

Assessment & Training. Each employee will go through a day-long seminar on our customer service program. To get this done quickly and cost-effectively, we will use long-distance training over the internet.

This form of training doubles up as an assessment process. They’ll be taking the survey that you took, but not all at once. The behaviors will be discussed, they’ll be asked to rate themselves at the end of each discussion. The results are collated and will serve as a basis for follow-up training.

As one follow-up to this training, participants will conduct 3-minute customer service presentations during our daily morning/evening huddles. The customer service managers will schedule the presentations and assign topics.

We’ll also maintain a Customer Service website and a blog, so our employees have 24/7 access to some of the best readings on customer service. They can make their comments through the blog, and in that way participate in the development of our principles and behaviors, and thus get some ownership over the program.

Recognition. We're launching a recognition program, whereby employees are encouraged to catch others in the act of providing outstanding customer service. Employees are awarded these pins by their store managers for engaging in outstanding customer service behaviors. Five pins equates to $25. We're keeping the incentives small and symbolic, because we don't want this to be about money, but about pride.

Awardees will be recognized in a weekly bulletin, which will be distributed throughout the region. This will be included in their personnel file.

These bulletins will also be posted on at the front of the store. Here’s an example of a wall that we designed for the purpose.

Empowerment. Robert Spector, who wrote the book on Nordsrtom, had this to say about empowerment:

Customer service is all about empowering your front-line people to give great customer service. It’s giving people on the front line the freedom to make decisions. That’s the key.

So we will eventually give all Team Members the power to take care of customers instantly, without even calling a manager, up to an authorization limit of $100. Each accommodation will be documented and justified after the fact.

So we don’t give out rope to hang ourselves, the key to this process is that we must develop guidelines within which our employees can play. The principle here is that policies are there to protect the company from dishonest, abusive, or criminal people. We’re here to protect good customers from the policies.

The sixth component is Accountabilty. This program is not just about doing nice things like recognition & empowerment. It also requires that we take action when our principles are violated.

Each customer complaint will be investigated. Where there are opportunities for improvement, these complaints will be used in training discussions. These discussions will be documented and included the personnel file. Failure to improve will be grounds for termination.

If that sounds a little harsh, maybe it is, but here again is the reality: to be able to gain and sustain a competitive advantage, it is absolutely necessary that we control the quality of service. To quote that famous Six Sigma mantra: Variation is Evil.

And that’s the program. Any questions at this point? Are there any questions or suggestions about the standards that you reviewed when you took the survey?

posted by CSR @ 5:15 AM