Customer Service is the new marketing. For me this seems so...well, obvious. But, then I came up through the ranks of frontline customer service. What was your business other than serving customers? I love the esoterics of business models and partner deals and joint ventures. While the freemium business model today and the eye-ball business model of the 90’s are useless by themselves, they always made me chuckle. So I guess that’s some value-add. But all of their success came back to serving customers in a way that no one else could serve them. Otherwise, especially these days, as customers we can take our wants and needs, our attention, our word-of-mouth, our loyalty, oh and our purchases...somewhere else. And do it in a snap.
We discussed his latest book BAM: Bust a Myth: Delivering Customer Service in a Self-Service World and Barry’s thoughts in his book, how and why a serial entrepreneur found the religion of customer service and what it can mean for your company’s success.
First off, I gotta say I’ve always been a fan of yours. That didn’t mean I agreed with what you wrote, how you wrote it. But you wrote it, shared it, shared your successes and failures. And got up and did it again, amen. And I always benefited. And clearly there are many of us. Thank you.
Now, let’s talk about this new book: BAM: Bust a Myth. I love it. I love that a serial entrepreneur puts Customer Service first by busting myths about it.
Why, as an entrepreneur did you feel the need to bust these myths about customer service?I think when people start a business they keep thinking that a competitive advantage is a patent they have. I believe that unless you are a monopoly, the only advantage you have is the customer service you offer.
You list 19 customer service myths in your book. What are your favorite three myths?
1. The customer is always right. This was started in the 1900s by a French hotelier. Guess what, they are not always right and it is not good for business if we treat the customer like they are always right.
2. Customer service is just plain common sense. That is just plain ludicrous. Just like any other skill, it needs to be trained and developed. I think this is why Zappos does so well. They train their people.3. Under promise and over deliver.
How did you come about to this realization? With most businesses, customer service is always last on their mind. What transformed you to the fact that it is the only sustainable advantage for business today?
I think that over the last ten years, being a speaker, consultant and coach, it is the only competitive advantage that I have. It is more than lip service. We need to be serious about it.
I was coming in from Chicago yesterday and I caught a cab and half way through the trip the taxi driver had forgotten to turn on the meter. I knew how much it would cost from my house to the airport! When he had picked me up, he took luggage, put it in the trunk and opened the door for me. When we arrived at my house, the fare was posted at $15.00. I gave him $30.00 for his great customer service.We need to train everyone from the top down –making CS training effective.
Just the common act of courtesy and connecting is sometimes lost with what we are teaching today.
The biggest thing is that most people who call with a concern just want to be listened to. They want to know that someone cares. Customers just want to know they have been heard – their concern has validity at the moment.
Myths usually contain 2 elements. A lack of good data and an excess of convenience for their believers. What data was missing that created these myths? Whose convenience was supplied with the spread of these myths?
I think people are just plain lazy.
People want to deliver at a cost effective price.
People don’t have training or action to make it happen.
People think it is common sense- every customer is the same. It is not true. In BAM, we talk about that what a satisfied customer is changes from customer to customer, from situation to situation. THAT is why Customer Service is so difficult to do well in a company.
A good sign that a myth-buster is on to something is when those with vested interests in maintaining their myths push-back. They disagree, they call you names, they fight you, then they accept. What kind of push-back have you had?
People say this is nonsense – asking why we need yet another book on Customer Service?
Society is not getting it yet. The essence of Customer Service has changed over the past couple of years.
One is that businesses are location independent and you have to have a sustainable customer advantage like Customer Service.
The second thing is web personalization that companies do has changed the whole playing field. Customer Service is changing because of social media and the web. You can tell 10s of thousands of people and it goes viral.I’m going to push back on one. Myth Number 10. Unhappy customers tell their stories to more people than happy customers.
I don’t have the reports and studies that support this. But, I remember seeing 3-4 studies that support this. Anecdotally, though I try not to, I tend to tell more people about a disappointing company than a satisfying company.
Where’s the gap? What am I missing?
I think a lot of people like to complain. There are a lot of people out there who just want to talk about what happens to them.
What about the people in the middle? The companies have to find these people who don’t say anything.
Chapter 3 in your book is titled Determining the Value of Customer Service. What is the Value of good customer service or BAM-Good customer service for a company?
I think this is the crux of the book. The only reason why we should offer BAM good customer service is because it makes good economic service for business. The bottom line is giving great customer service will make your business more money.
How does it answer these three questions from a company’s perspective?
1. What’s in it for a company?2. Why should they care?
3. Why should I believe?
Long term they are going to:
- get more customers,
- retain more customers, and...
- make more money.
IF they can just realize they have the information and skills, but they are just not using them.
I’ve worked at companies where they calculate the value of a customer by subtracting the costs of a customer service call from the total expected revenue of that customer. You take a more comprehensive approach in assigning customer value.
We have a detailed formula called "Customer Value Calculation" and we look at 8 different items because we need to understand if a customer is valuable and profitable.
How much revenue do they bring in?
Do these people pay on time?
We also look at referrals. They can be positive and valuable.
How long have they been with us?
Are they a major brand?
The 8 items are:
1). Revenue ( add points based on customer's rank in revenues paid)
2). Timing ( add 2 points)
3). Referrals ( add 4 points )
4). Additional Products They Buy ( add 3 points)
5). Feedback They Give You ( add 1 point )
6). Stickiness ( add 2 points )
7). Brand Power (add 4 points)
8). Unhappy Customer (subtract 2 points)
Note: See Page 65 - 66 for more details.Brand power is very important. If I as a speaker can drop names of who I have done business with, it helps my brand. It translates into additional business. The customer’s brand brings value to your brand.
In chapter 6 you talk about How to deliver BAM-Good Customer Service in a self-service world. What’s the first step? Why?
This is a good point.
1. One thing you have to do to BAM your own company is to bust your own myth. What things are holding you back from offering really great customer service?
2. Then you have to define customer service for your company as you want it to be.
3. After that you must determine the economic value of your customer. It doesn’t have to use the same formula that I use, but a comprehensive way to value your customers.
4. We have BAM Blockers. What gets in the way of you offering great Customer Service? What processes or systems prevent this?
5. You have to write your own manifesto.
6. Decide how you will measure and deliver Customer Service?
7. How do you handle the atypical customer that color outside the lines from the best to the worst.
What are the most important metrics that report a company’s BAM Good Customer Service?The Net Promoter Score or repeat business and referrals.
In your current business, what would be 3 metrics you would use to confirm you are delivering the Customer Service you want your customers to have?
1. How much biz do people do with me?
2. Do they pay their bills on time?3. Do they refer me to other people?
I love the 3 question survey that delivers the The Net Promoter Score. The survey is called The Ultimate Question survey. The Ultimate Question starts with the ultimate question How likely would you be to recommend us to your friends...etc. On a scale of 0 -10 with 0 being definitely would not and 10 being definitely would...how likely are you to recommend us to a friend or colleague?
You reference Fred Reichheld and the Net Promoter Score ... methodology. What do you think of it?
I like it. One of our questions is “How can I make your more satisfied?” That is what I believe is one of the ultimate Customer Service questions.
Another thing I really like about this chapter is you customized this for 3 stakeholders: The CEO, the manager, the front-line Customer Service person. And rather, than be the expert, you offered a series of questions they should ask themselves. You’ve already burst myths, shouldn’t you bring order to their world by offering a plan?I think we do offer a plan in the book. I believe the most help we can offer is to ask the right questions and they can bring that back to their business, it will go a much longer way to help that company. One size does not fit all. Ask the questions that fit for you and this will make a long term difference.
One stakeholder not included is the sales person. What are your thoughts on that?They are front line and very important! That would be a whole new book.
If asking your customers what they want, what they think about your service is so important...and it is...why do so many companies avoid it?
First of all, I think people are lazy. Customer Service is what any one customer thinks at one particular time that will make them satisfied. As I said, it is not one size fits all. It is difficult and they don’t want to tackle that problem.Secondly, I think most people can’t handle the truth.
Now what happens when their answers are just unreasonable? You talk about firing customers? In a recession? When does a company fire a customer?
We go through many things in the book to identify this. If you go through the process, you can realize if the customer is going to actually cost you more than the revenue you are bringing in or it deflects you from bringing in new customers. It is not in line with your business. It is not an overnight process though.
What are the first steps in that action plan to fire a customer?
1. You have to identify who those customers are.
2. If you are no longer helping them.
3. If your skills are no longer needed.
4. They are disregarding your advice.
5. They are not part of the business.
6. They aren’t willing or able to pay the price.7. They are not profitable, legal, or ethical.
Then you go on and revisit the Customer Service evaluation. See what they are really giving to you and see then how you can replace that revenue. Start dropping hints to them.
Erika Andersen, in her book Being Strategic, uses the term reasonable aspiration or hoped-for goal. What was yours in writing this book?
I think again was to make Customer Service new again. To show in self-service and social media world that Customer Service is the new marketing.
You don’t always have a chance today to interact directly. You have an opportunity to be more personal if you just do it right.
I want people to understand that things have changed and if you don’t do things right, you won’t have business for too long, unless you are a monopoly.
How will you know when you reach it?I think depending on the measures and metrics you use, those things will change. You will know that when you have happy customers, they will stay.
Let’s leave with a story. What’s been your best customer service experience recently? And what myths were burst to deliver that experience?
I am getting ready to go to Asia and I went in to MooseJaw looking for various types of items in the store. I found a pair that I liked, but I hate to buy shoes unless I know the costs from Amazon and Zappos. After the salesperson showed me the shoes, she saw that I was looking up prices on my iPhone. She said you don’t have to look it up – let’s go to our computer right here.
THIS was great customer service for me. The price was about the same and I bought them right there.
43:12People buy when they are ready to solve their pain.
What myths did MooseJaw bust to deliver that experience?
1. They really said how am I going to make this person more satisfied?
I am more satisfied knowing that I got the best price. They busted the myth that you shouldn't encourage customers to comparison shop.I believe the woman was really trained to do this.
What has been the worst customer experience lately?
Yesterday with AA. I was on a standby flight out of CT. I had called and knew there were seats available. When I got to the gate I asked about a seat and the attendant said she couldn’t give me a seat because it was a small plane and had to make sure "there was enough fuel to take you.
BUT if you confirm your reservation by paying me an additional $50.00 I can definitely take you. "
I am an Executive Platinum flyer with AA and travel thousands of miles every year.
I always stress the life time value of the customer. This was not BAM good customer service in any manner.
I saw that you wrote a great blog post, Small Business Needs More than Just Presidential Talk. It was in response to President Obama’s ideas on spurring small business and entrepreneurs.
What is disconcerting is that enough is not happening. Money is not flowing downwards.Where can people find you, follow you, connect with you, on the web?
- Twitter: Barry Moltz