In February I wrote a post about a recent service recovery experience with Swiss Chalet.

I thought I would share the subsequent follow up I had with the manager of the particular store I mentioned.

The franchise manager called a couple days later because I had made a comment through their website about my experience. I thought it would be interesting to see how they reacted.

The timing of the return call was pretty quick, but upon connecting, her first concern was to ensure that the issue was with her particular location — and not another  location. I confirmed it was her location.

She then asked what I wanted to make this right — yes those were her exact words. I indicated I wasn’t looking for anything — I had just responded to the feedback form that was made available to me for feedback. They had asked — so I assumed they were interested in what I had to say.

She then indicated that she was calling because “the Franchise owner wanted me to clarify that it was their store”.

She saw I had received a $6.00 credit and said “she would take up with the central organization”. Implying that somehow, someone else had dropped the ball in the total experience.

And that concluded the call. Not even an apology on behalf of her store.

My Perspective: This encounter is part of a much bigger problem I am seeing in the service industry — particularly the auto industry. The follow-up survey for customer satisfaction.

You know the one — where corporate has arranged for a survey company to call customers to gain feedback and then punishes the outlet if they have poor performance.

This results in employees basically asking people to give them a high ranking so the employees/outlet doesn’t get in trouble or even penalized. Talk about a skewed result. Employees start to “game” the system when feedback is used as a stick.

How is this type of information gathering supposed to help businesses improve? They have missed the real opportunity for honest feedback because they have forgotten the purpose of the feedback loop.

 So have a look at your customer feedback programs. Are they focused on improving the experience or punishing the laggards. Are they being implemented simply because you know that you should be measuring customer experience — or are you using this important tool to fine-tune and continuously improve.

There are much more effective ways to deal with the poor performers.

I spotted a couple interesting articles about the power of online reviews (word of mouth). Articles in BizReport.com and Internet Retailer report on Forrester Research’s recently released report called ‘Myths and Truths About Online Customer Reviews’.

Forrester Research indicates that while 81% of people look for information online, and are influenced by what they read — they also do not base their purchase decisions on that information. In fact only 14% always trust an online review. There are slight variations by target audience and category, but the good news is that bad online reviews can be survived. In spite of bad reviews, people sought additional information either from a professional reviewer (37%) or followed up directly with the company (7%).

My view is the lack of personal connection with the reviewer made their motives and credibility suspect. We don’t have a context for why they provided a poor review. Was it a disgruntled employee or a customer with unreasonable expectations? People want to make their own decision and online reviews are a research tool as part of the decision-making process.

However, compare that with an offline review — word of mouth from someone we know. What makes off-line reviews so powerful is that we know the person, we trust them and therefore their views are already in the context of a credible reviewer. We may already have discovered similarities in expectations that align with our own values, so their opinion holds special value.

A bad review online may not be a death knell, but bad offline reviews from someone we know will surely have an enormous impact on any business.

Many of you will have heard or read about the new report released by the CMO Council that describes the current role of the voice of the customer in marketing decision-making based on a survey of 480 executives. It is a dismal state of affairs given the sputtering we hear about the importance of customer service.

Reports have already been published in major industry publications such as AdAge and AdWeek, as well as blogs too numerous to mention.

Some key findings include;

• Nearly two-thirds of companies do not have a formal Voice of Customer program in place.
• Only 31 percent highly rate their organization’s commitment to customer listening.
• Only 13 percent of companies have deployed real-time systems to collect, analyze and distribute customer feedback.
• While 74 percent say they receive customer feedback via e-mail, only 23 percent say they track and measure the volume and nature of these messages
• Only 12 percent are using a word-of-mouth marketing platform to drive online customer advocacy.
• 58 percent of them believe the Internet and social media have changed the level of influence and expectations of their customers, but only 14.5 percent track word of mouth on the Internet and only 16 percent regularly monitor online message boards for complaints and feedback
• 37 percent said they gather insights from customer engagement situations
• 56 percent said they have no programs tracking or propagating positive word of mouth among customers
• Only 33 percent of the respondents think their companies are very good at resolving complaints
• 58 percent said their companies do not compensate any employees or executives based on customer loyalty, satisfaction improvements or analytics
• Only 29 percent said their companies rate highly in their ability handle and resolve customer problems or complaints

I think you would agree that this is a dismal state of affairs. From all this data, two things stand out for me.

1. What gets measured gets done: Unless people are being recognized and rewarded for an activity it will not get done.
2. Empowerment: If improving the customer experience is not central to your value system and everyone isn’t empowered to effect change, then change will not happen.

At the end of the day, even though everyone seems to espouse the value of customer service, it still isn’t being effectively leveraged to create a point of difference for organizations. I believe those of us who focus on these two truths will win the day.

Check out the articles (and some of the comments) – they make good reading. You can download the Executive Summary here.

The authors wrote in Industrial and Organizational Psychology that employees will feel — and act — engaged when their employer creates conditions that permit them to do so. The key condition for feeling engaged is fair treatment, which creates a feeling of trust and, in turn, feeling safe to be engaged.

They feel that some people confuse engagement with satisfaction and/or commitment and consider retention and turnover to be indicators of engagement. However, Macey and Schneider said employee engagement concerns both feelings of engagement, focus and enthusiasm, as well as engagement behavior, proactivity and persistence.

Engagement is not equal to satisfaction. Engagement connotes energy and not satiation, while satisfaction connotes satiation and contentment but not energy.

The authors contend that employees come to work ready to be engaged, and the challenge for organizations is to create conditions that will release that energy. I agree. Do you?

Cheers!

Most organizations have put considerable time and money into developing a benefits package that is a positive for their employees. Rightly, they expect that these benefits will contribute to a positive work environment and overall engagement.

However, Andy Philpott of Accor Services (one of the UK’s leading providers of employee benefits, rewards and loyalty services), reports that in a recent study they conducted of rewards, benefits and employee engagement that only one-third of employers (33%) believed staff understand what benefits are available.

More concerning is that just one in five employees (21%) claim to have a good understanding of the value of the benefits available and one in 10 admit they have no clue about the value of these benefits.

Employees also seemed unsure whether their pay, benefits and incentives packages were competitive when compared with people doing similar jobs in similar organisations. Only 33% felt their company was competitive on pay, 25% on benefits and just 17% felt their organisation offered competitive incentives.

It is critical that we communicate the value of our benefits package effectively to staff. Successful communication is an foundational element in building employee engagement and the resulting performance, motivation and productivity benefits are not maximized if people are unaware of what the benefits are.

Cheers!

Not that we need to say it again, but more recent research confirms that increasing employee engagement increases performance. Most boardrooms see employee engagement as a key priority for the future and investment in engagement is set to grow — even in the current economic environment.
This is a key finding of the comprehensive study of engagement practice undertaken in the UK, commissioned by employee engagement consultancy, Engage Group.

The survey of nearly 23,600 directors, managers and employees, conducted during October 2008 , reveals that effective engagement can demonstrably improve an organisation’s performance.

A high level of employee engagement is one of the top three drivers of an organisation’s performance, and nearly a third of the UK’s senior leaders see a fully-engaged workforce as one of the most critical factors in their organisation’s success.

Key findings from the report are as follows;

• Effective engagement can demonstrably improve an organisation’s performance
• Most boardrooms see engagement as a key priority for the future and net investment in engagement is set to grow, even in the current economic environment
• Despite growing board support for engagement, most employees still feel disengaged from their organisation – board buy-in has not yet, according to employees, been translated into action
• ‘New world’ aspects of engagement, particularly the appetite and ability of leaders at every level to share power and engage people in decision-making, emerge as powerful new elements of engagement
• Delivering on the ‘new engagement agenda’ will result in more engaged employees, more committed customers and faster growth
• Forceful ‘command & control’ styles of leadership have little, no or even a negative impact on engagement and performance levels – less than 40% of employees view their leader(s) as effective
• Employee satisfaction, the oldest assumed element of employee engagement, sinks near the bottom of the list of influential factors
• Internal measurement lags behind external measures of performance – only 28% of board members claim to use robust internal measures of employee engagement

This study confirms an earlier thesis, the outcome of an extensive research programme carried out in partnership with McKinsey & Company, that the drivers of employee engagement are steadily shifting towards a new inclusiveness

However, despite growing board support for engagement, most employees feel disengaged from their organisation. Only just over a third of employees believe their organisation engages them to perform well.

For those of us who live in the world of employee engagement this comes as no surprise, but for those clients who are still struggling to find the time, money or motivation, maybe this will help.

You can download a complete copy of the full report at Engage Group.

Recently MarketingProfs sent out a note about going the extra mile. In it they referenced an article (Giving Firms an ‘E’ for Effort: Consumer Responses to High-Effort Firms) by Andrea C. Morales, assistant professor of marketing at the Marshall School of Business, University of Southern California.

Their research indicated that customers reward companies that are seen to go the extra mile — even if they don’t personally benefit from that effort. In fact, customers are willing to pay more for a product, frequent one store rather than another, and, in general, have a more positive impression of a company or brand that is perceived to put in more effort.

Andrea’s explanation is that customers recognize that effort is a controllable behaviour, and as a result, feels gratitude toward firms that work hard.

It reminds me of a review an advertising agency got from a client (our customer) where I worked many years ago. In that review the client was very critical of the creative product and lukewarm on the media and production. However, they were very positive about the account service team because, in their words, “we worked so damn hard”.

They acknowledged that they were not always getting the level of service they expected, but were willing to be somewhat forgiving because of the obvious effort their daily account team was expending on their account. They gave us time to address the issues while putting senior management on notice that something had to be done.

According to the researchers, customers can view a company’s outstanding efforts as either general or personal.

• A company’s actions are considered to be general when they benefit the universe of customers, such as creating new products
• However, a company’s actions are considered personal when the action is deemed to benefit a specific customer (such as outstanding customer service), even if they are not the customer receiving the benefit.

We all know that personal wins because of the emotional connection. However, the interesting notion is the halo effect created by doing a good deed for someone else. My sense is that it is driven by the belief that the company (or person) would do the same for us in a similar circumstance.

I think this concept applies to personal behaviour as well as company behaviour. So demonstrate you are making the effort even if you can’t satisfy your customers need. They will recognize your efforts and appreciate and reward you for your attempt.

Cheers!

I was reading Seth Grodin’s blog this morning and he talked about the importance of measuring the quality of traffic that is coming to your site or blog versus the quantity. His point being that it is better to have a smaller number of qualified prospects/customers versus a lot of people who will never purchase. He summarized with the comment “Just because something is easy to measure doesn’t mean it’s important.”

It reminded me of the same principle that should be employed when trying to measure 1) customer satisfaction, and/or 2) employee engagement.

Too often we get caught up in designing dashboards and metrics that may measure lots of things, but if they are not actionable or possibly aren’t measuring the stuff that gives you insight into the health of the organization, then they aren’t very useful measures.

So ask yourself, are your measures giving you advance notice of changes in your business, or are they lagging indicators of issues that may have been around for awhile?

I have been doing some reading on this topic lately, so I will share some of my observations over the next little while.

Cheers!

I recently came across an article about the Kronos Retail Shopping Frustrations Survey that takes a look at shopping frustrations across all retail store types and the effect that a poor shopping experience has on the retailer’s reputation. Some highlights include:

• 84% of shoppers are frustrated with lines at checkouts
• 74% of shoppers would actually leave a store without making a purchase if lines are too long
• 81% of respondents are likely to share a poor shopping experience with friends and family
• 49% of respondents say they have walked out of a store with long lines at the checkout without making a purchase
• 25% have walked out and taken their business elsewhere to find a store with shorter lines
• 51% indicated long lines with unopened checkouts as the biggest frustration

Yet at the same time, customers felt that having to wait was acceptable.

• 17% of respondents happy to have one person in front
• 44% of respondents agreeing that a maximum of two people is acceptable
• 23% of shoppers think its fine to have a maximum of three people in front of them
• 7% of respondents think it’s acceptable to have up to four other customers in front.

Commenting on the findings from the survey, Simon Macpherson, Operations Director EMEA Kronos, says: “Shoppers are happy to shout it from the rooftops when the service provided is not up to scratch, leaving retailers with dented reputations. Unopened pay points, long queues and out-of-stock products are almost without exception the result of staff not being in the right place at the right time to provide the best possible customer service. Retailers need to address this issue if they are serious about improving one of the prime differentiators between their competition – the customer experience.”

You would think that every retailer would aspire to having happy customers 100% of the time. Happy customers mean loyal customers and greater loyalty brings bigger profits, yet many retailers still fall short when it comes to providing a great customer shopping experience.

Cheers!

Recent data released by TD Canada Trust found that 95 per cent of consumers say their experiences with a company can make or break a relationship with the firm or its products — up 10 points from a year ago.

In fact, when asked which form of appreciation they are most interested in, 49 per cent ranked “just good customer service” as No. 1, followed at a distance second by rewards or loyalty programs at just 18 per cent and 17 per cent gifts.

But as we know, even more importantly, good service doesn’t end with one customer but spreads to other potential customers, as happy customers become advocates. The survey also found that 89 per cent say they share their positive experiences with friends and family.

Compare this to the recent study on the airline industry. J.D. Power and Associates 2008 North America Airline Satisfaction Study indicated that overall satisfaction for the airline industry has declined in 2008 to its lowest level in three years.

Now you might expect that this would be driven by increased pricing, but the decrease in satisfaction with people factors is more than twice as large as the decline in satisfaction with price factors.

The study finds that satisfaction with “people” factors—including knowledge, courtesy and helpfulness of reservation and gate agents, check-in staff and flight crew—has declined dramatically since 2007, and is the leading contributing factor to the overall decline in customer satisfaction with airlines in 2008.

Sam Thanawalla, director of the global hospitality and travel practice at J.D. Power and Associates said, “In this unstable industry environment, it is critical that airlines invest in their employees as a means to enhance the customer experience, as there is a strong connection between employee satisfaction and customer satisfaction. Those airlines that focus on keeping their employees informed and motivated will be better able to change negative consumer sentiment and truly differentiate themselves.”

Whether banking, airlines or any other business, I couldn’t have said it better.

Cheers!