Recession – is not a time to stop improving the customer service- it is time to continue and be ahead of the competition!

Overview of the research conducted in Lithuania: “How the companies are changing their customer service management practices due to economical recession?”

SPECT-DIVE (Lithuanian branch of DIVE Group) together with AKA (National Customer Service Association) have conducted a special research at national level in Lithuania in the beginning of this year. It was designed to analyze how different sector companies are changing their customer service management practices due to economical recession. The outcome of the research is that in the long term perspective the customer service quality will decline and companies will loose the input of nearly ten years as they are cutting the costs on main customer service improvement tools such as personnel training, financial motivation and measurement (mostly Mystery Shopping). It proofs, that there is still a big lack of understanding that customer service management represents not only a cost, but an investment leading to competitive advantage and that refusal of systematic approach towards customer service management can result in bigger losses in the future, not only monetary, but also non-monetary like company image, customer satisfaction and loyalty.

1 scheme. What is your customer service improvement strategy for 2009?

2 scheme. What actions will you take while cutting the customer service costs?

Summary of main findings and conclusions of the conducted research:

• Customer service management costs are being drastically cut (67% of companies are cutting, 33% are not cutting)

• In order to cut costs companies are mostly moving from outsource to internal resources and significant personnel redundancies o Comment of author: If companies will be able to sustain same level of professionalism while using internal recourse (which is significantly reduced in quantity as well) – effects after recession is over can be less harmful, but experience shows that internal people can not be professionals in everything – that is exactly why specialized companies are existing in each market

• Mostly companies are cutting costs by refusing (i.e. total stop of using) of main customer service improvement tools like personnel development (training, attending conferences, financial motivation systems) and measurement (mostly Mystery Shopping)

  • Comment of author:
    These named tools are extremely important in order to sustain the systematic customer service management and also are hard to replace with internal recourse professionally

• Companies mainly focus and move to usage of tools that are possible to execute with internal resource and require smaller investment at a time: creation and implementation of SOP (standard of performance), complaint/praise management, internal and non-anonymous audits

  • Comment of author:
    These named tools are needed to use – but used solely without full measurement and personnel development tools, most likely will not guarantee the expected results

• Companies underestimate and do not take advantage to use cheaper but still effective personnel development tools that actually require quite reasonable and affordable investment or are possible to execute with internal recourse, e.g. establishing self-development and self-training systems, individual development (coaching) done by middle level management, online tools (training, testing, etc.)

  • Comment of author:
    These tools usually require motivated and skilled internal recourse people, a bit more internal initiative and patience- but if used correctly can bring sufficient development results and replace classical training and seminars

Main recommendations for companies to focus and think about before they jump into drastic cost cutting in customer service quality management tools:

• If you choose to use internal recourse instead of outsource – you have to be careful and put enough attention to the professionalism of applied tools (use outsourced consulting at least), especially in Mystery Shopping – because if done unprofessionally it can harm more then help; by doing it unprofessionally you risk with all the input of Mystery Shopping program you have achieved so far

• Main goal is to maintain the systematic use of tools – i.e. to maintain the system of steps: measure -> develop -> motivate -> measure… When you need to cut costs – then cut on quantities, try to be more efficient in each step rather then refuse of one step totally

• Focus on quality of the services you still choose to outsource – try to get the value for money

• Be flexible, diversify, try innovative personnel development tools like self-development, online solutions, but do no refuse this important customer service quality management system step totally

• High quality customer service is a way to differentiate and win the competition now, during economical recession, and accomplish even more after it will be over! So continue and be ahead!

article by: Jurgita Adomaityte
courtesy of MysteryShoppingLive.com

Un-Boxing Experiences

25 years of blood, sweat and tears building a leading brand, millions invested; but it all works when that same customer walks in again and again with a smile on her face… all vaporized because a staff member treated them like a self serve moron. Disappointed as she is she sends out a message through her blog, twitter and facebook accounts to her trusted network that the brand is no more.

And still leaders of today do not invest pro-actively in front line staff. Some of us try to join in the web 2.0 processes by getting bloggers on our side or by reactively fixing the problem. Still these leading brands box front line performance as a staff expense and not as a crucial realization of the branding efforts. Can we please un-box and accept the experience economy is here to stay?

I just became an Ambassador of the Mekong Riverview hotel in Luang Prabang in Laos. It’s not an official title, Ambassador, just a term I use for being an amazingly loyal customer. As a self claimed experience specialist, I guarantee you will be amazed by the people who run this place. The thing is I haven’t even visited it yet but plan to do so 2 months from now. But I am a fan and I will promote them to the world. Daniel, the manager there, has been able to build my experience even before I visited the hotel.

The hotel is based in Laos PDR which can also be described as “Laos Please don’t rush,” the same attitude many professionals around the world demonstrate when it comes to front line branding experiences. A marketing effort brought me to the Mekong Riverview hotel, a beautiful hotel, but the hotel’s team itself made it clear to me that I should spend my dollars on them. And for Laos, believe me, it’s not the cheapest hotel and the city does have fancier hotels at comparable if not lower rates.

Hoteliers are known to be active in an industry that is somewhat old fashioned. The organizational structure, marketing initiatives and product offer are not always as fancy or innovative. Yet here I was begging for a room at this hotel after they informed me all large rooms were booked. Are the clichŽs true? Are consumers really prepared to pay more for the right experience?

In one key aspect Hoteliers are leading the world; it’s the realization that once a customer walks in to your environment, their work really starts. It’s the realization that once customers honor us with their visit we can create value, a long lasting friendship and make them our ambassadors who will promote and sell our brand for life.

And somehow retailers and other industries believe it’s not the case for them simply because the level of interaction between customer and staff is not the core of their existence. They are in the business of margins and costing. Customers buy shoes and bags; guests buy smiles and warmth?? Apologies for those 10 retailers around the world who do act on this or the other retailers who do have service or experience in their mission statement which is a nice start.

We box things so we can understand and make sense of things, and any investment in the frontline has to be boxed which again will relate to costs and margins. Is it staff related? Then it must not exceed 3% of store sales. These boxes have a purpose and they make sense. They also aid in terms of keeping control and we can’t simply blame middle management for not being entrepreneurial or breaking out of these boxes. Or can we? How do you change ancient ways of doing it? It’s time to make that step and fortunately some of us are. Some of our luxury brand clients in Japan started benchmarking with Hotels instead of with just each other. We sit them down together with Hoteliers to share best practices. It’s time to stop only acknowledging that retaining a customer is far more cost effective than replacing one.

It’s time to stop using powerful words like excellent service and great experiences in the mission statement or statements like “once a customer always a prospect”.

It is time to act.

Let’s look at the hospitality model of The Hotel School The Hague (Netherlands), consistently ranked in the top three hospitality schools in the world.

This “simple” model shows where the experience is created. The experience is not just made by the offer itself; it is finalized where offer and demand meet which is at the front line of the organization. Conventionally retailers have been investing in working on either sides and not so much on where it meets. We claim we do, but we don’t. We research and invest in marketing on the demand side, so people love of us and want to visit us, and then we make sure we have the right products/ services in place at the right price in the right environment. Customers pay us money for this. Oh, let’s not forget to hire some staff because unfortunately we can’t automate the last steps and someone needs to get the right size and wrap it all up.

We acknowledge that a nasty staff member could well have a negative impact on a possible purchase or loyalty; perhaps he or she should be removed, perhaps average staff should be trained again next year, yes we should monitor, coach and reward them; but in reality we don’t seriously. The budget does not fit the box and please don’t rush this. So we lose a 25 year loyal customer and a bunch of her friends and family members with it. Who knows what the (lifetime) value of that is? Well, Ritz Carlton does know actually. And let’s start calling customers guests like hoteliers do.

The most positive factor in the process is that the easiest element to influence, to get to that great experience, to actually get guests to make that purchase, is your people at the front line. The front line teams finalize everything that you put in the mix. It is by far the cheapest investment to be made as long as you don’t box it, but see it as part of the brand experience.

Front line staff leaves us; they are not capable, they only want a dollar per hour more, they are not motivated…they make up excuses; they don’t show up for work. But when we invest in them, give them attention, give them concrete and actionable feedback, train and coach them; they will reward you with loyalty, passion and they will make things happen. They will build your brand to an extent you can’t imagine.

It’s just like any other relationship, if you don’t build it, it will never grow or it never actually existed. Let’s pick up the speed and un-box the ancient way of doing.

My two cents.

article by: Jan Willem Smulders
courtesy of MysteryShoppingLive.com

Customer Service Proves Key to Retaining Clients

by Dave Dougherty and Ajay Murthy
Harvard Business Review

Superior customer service can be an essential source of strength as companies emerge from the recession, but managers need to understand the extent to which the consumer landscape has shifted.

Weakened brands, customers’ easy access to information about vendors and the erosion of barriers to switching among competitors have combined to create a much more challenging environment for service, whether it’s outsourced or delivered in-house.

Evidence shows that customers will no longer tolerate rushed and inconvenient service. Instead, they are looking for a satisfying experience. Companies that provide it will win their loyalty.

Our recent research demonstrates that when customers contact companies for service, they care most about two things: 1) Is the front-line employee knowledgeable? and 2) Is the problem resolved on the first call?

Yet those factors often aren’t even on customer service managers’ dashboards. Most service centers continue to measure time on hold and minutes per call, as they have for decades. Such metrics encourage agents to hurry through calls, resulting in just the kind of experience customers dislike.

Bad experience = exit

More than half of the customers we surveyed across industries say they’ve had a bad service experience, and nearly the same fraction think many of the companies they interact with don’t understand or care about them. On average, 40 percent of customers who suffer through bad experiences stop doing business with the offending company.

To get a better understanding of what customer experience, managers should draw on a variety of information sources, including customer satisfaction surveys, behavioral data collected through self-service channels and recorded customer-agent conversations.

In addition, companies must revise processes to give agents the leeway and authority to meet individual customers’ needs and provide positive, satisfying experiences.

In evaluating service, managers should measure across all channels the percentage of customer problems resolved within the first contact, determine what is at the root of problems that aren’t settled in one call and make any necessary changes.

They should also aim to have consistently high-quality interactions between customers and front-line employees. That may sound costly, but knowledge management systems, speech recognition for automated calls and other technologies can help to substantially offset the expense.

Forgive and forget? Nope

Some executives believe that irritated customers will forgive vendors and come back for more. Our research indicates that, on the contrary, alienated customers often disappear without the slightest warning.

And as companies rebuild themselves after the recession, this silent attrition represents a host of lost opportunities for future sales and positive word of mouth.

Mystery Shopping Analytics – Out-Executing the Competition

Analytics refers to the gathering and interpreting of data in order to make better business decisions and optimize business processes. In mystery shopping, the most common use of analytics revolves around trying to understand how various interpersonal experience attributes influence customer loyalty measures. Correlations can be determined between loyalty and simple attributes from extending a thank you all the way to product knowledge. How important is it that the customer is thanked? How important is it that the associate smiles when greeting the customer? Answers to these questions allow organizations to more effectively allocate resources and focus on the factors that will bring about the greatest return.

In order to draw confident conclusions on various relationships with these target outcomes using mystery shopping data, it’s critical that the mystery shopping program has three elements:

1. Survey Design: A properly designed mystery shopping survey (analysis friendly).
2. Sample Size: A large enough sample size.
3. Skill: A skilled analyst who understands the client’s business and market research analysis.

Survey Design – Three Critical Design Objectives for Analytics

Survey design plays a critical role in enabling effective analysis of mystery shopping data. Each survey should be developed to include three critical design objectives:

1. Measure the shopper’s overall experience rating against an organizations loyalty measures such as likeliness to return or recommend the store to friends and family.
2. Measure key driver attributes known to influence customer loyalty.
3. Measure variations in performance on key driver attributes over time.

Overall Experience Rating – Net Promoter Score, Loyalty Three, Customer Satisfaction Index
To understand the influence of various experience attributes (e.g. greeting, helpfulness, attitude, etc.) on loyalty, the survey form must include questions relating to overall satisfaction or probable future behavior of the shopper based on the experience. An organization’s customer experience metric (Loyalty Three, Net Promoter Score, Customer Satisfaction Index) might encompass questions such as:

• Based on this experience, how likely would you be to return to this location again?
• If you were in the market for this product, how likely would you be to return to this location?
• Based on this experience, how likely would you be to recommend this location to family and / or friends?

Once this information is gathered, shoppers can be divided into segments and analytics can begin. Identifying the differences and similarities between the experiences of shoppers against the anchors of the Net Promoter Score, Loyalty Three, or Customer Satisfaction Index will reveal attributes that drive motivation to return / recommend and those that do not.

Measuring Key Driver Attributes and Capturing Variations in Performance
A high score doesn’t always equate to a shopper’s intent to return. For example, the associate scored a 95% on the mystery shopping form, but the shopper indicated that she was somewhat unlikely to return again based on the experience with the associate. When this occurs, there are typically two possible causes.

The first is that the survey form simply doesn’t include questions that measure key drivers of loyalty / advocacy (e.g. helpfulness, friendliness, knowledge). Instead, it may be very “compliance” heavy, measuring attributes that don’t influence the customer one way or another.

The second potential cause is that the questions designed to measure these attributes fail to capture varying levels of performance.

• Did the associate greet you? Yes / No
• Did the associate ask questions about your needs? Yes / No
• Did the associate make a recommendation? Yes / No
• Did the associate thank you? Yes / No

Using questions and response options like those above means a great greet, an okay greet and a poor greet are all grouped together as a simple “Yes.” A thank you that makes someone feel valued as a customer and one that seems insincere and scripted are both grouped together. As a result, it’s impossible to know how often great greets are occurring. There is also no way to conduct analytics to determine the influence of a great greet on the overall experience.

Sample Size Considerations

It is important to understand the influence of sample size on the accuracy and validity of analytics. For more information on this, see T&A Consultores CEO Marcelo Tarica and Service Evaluation Concepts CEO Arcadio Roselli’s article titled “Sample Size Calculation in Mystery Shopping Programs.”

Analytic Skill / Capabilities

The final component is finding the right resource to perform the analytics. With an adequate sample size and the right data in hand, a skilled analyst should be poised to engage in high value analytics that can drive decision-making. A skilled analyst will uncover relationships between the key driver attributes and loyalty measures. To tell the story of how performance impacts customer experience, the analyst must consider which statistics to use and how to convey the information in the most effective manner.

Statistical Caution and Top-Box
Using the right statistic can make or break the impact of survey data. If a mean of five is reported, the distribution of responses could have been all fives or half tens and half zeros-either way the mean is five. To assume these two scenarios are equivalent is an obvious misuse of the statistical mean as a productive metric. This is where choosing your statistical measure is vital. One common measure is the top-box, the percentage of surveyed customers who assign an attribute the highest rating; this is in contrast to the bottom-box, the percentage who assign the lowest rating. Depending how the attribute is correlated with the overall loyalty measure or outcome (or dependent variable) we can understand where to focus managerial attention.

Keep it Simple
Most managers don’t have hours to spend interpreting data. To proactively counter this time constraint, even the most complex information must be presented in a simple and visually stimulating fashion. Using cutting-edge statistical analysis programs can aid an analyst in creating thriving dashboards that are both relevant and simple.

Article courtesy of MysteryShoppingLive.com
Authors: Mike Jennings and Nick Vanderheyden

Reconstructing the image of Mystery Shopping

Few years back, a woman took a job in a superstore retail outlet. Every morning of her job started with a fear of mystery shopping. At every duty, of every customer she was scared. She was always too conscious – and the result was job dissatisfaction. However, this was the time when the idea of mystery shopping was sprouting its leaves. Many years have passed since those days and today mystery shopping is a lot different an issue.

Today, mystery shopping is no longer that scary, anonymous, voodoo like process which was totally phantom and even employees could never know of the outcomes. The programs available these days are much more interactive. The famous author Len Barry even suggested the phrase Virtual Shoppers to be used instead of Mystery Shoppers. According to him- mystery shopping the very word has a negative air about it- which creates a terrifying image among the employees.

Mystery shopping program can be made an effective strategy if coupled with proper explanation of the results and adequate rewards, reinforcements as well as training programs followed by it. However, the ultimate results of mystery shopping can be ripped only if the management: top and middle actively takes part in implementing the programs. A change has to be indoctrinated in the organizational culture- the frontline employees are to be incorporated in the strategic improvement.

• Building support for mystery shopping at management level:

It is crucial to get the support of the management in the mystery shopping program. How to get it? For the best shot you need to have a well-designed plan, a measurement system that is thorough and quantifiable, a recurring procedure, well defied objective and proper activation plan basing on the outcomes of the shopping.

As stated by Al Goldsmith, they portray the mystery shopping procedures to the clients as well as to themselves- as an integral part of the overall improvement procedure which is a factor of simultaneous sessions of measurement and according actions. For example, training sessions are designed and implemented basing on the outcomes of a typical shopping session. After the implementation the shopping agency goes on re-shopping to measure the effects again.

Such cycle of cause and effect should be elaborated to the management beforehand so that they are convinced. However, if the client is new in the field-relevant case studies can be shown to the client in order to make the claims credible. Sometimes rewards and incentives play important roles as well.

• Building support for mystery shopping at frontline employees level:

It is always prescribed to business entities to check on their level of employee satisfaction level if they find their customers consistently dissatisfied. A dissatisfied employee will always loath the job and the customers s/he is supposed to handle. Now there are much serious implications of this scenario. When a customer is handled badly- the company loses not only one customer- but rather a stream of potential as well as present customers. For, a dissatisfied or angry customer will surely tell others about his/her experience and this will affect the goodwill of the company hideously. The simplest real life example of this can be the restaurant scenario-

Suppose a waiter behaves badly with a customer. That customer along with his/her peers is hardly going to visit again. So, this is established that employee satisfaction is to be established in order to achieve maximum customer advocacy.

With today’s well designed mystery shopping programs- a retailer has nothing to worry about. Rather these days they look forward to it as they have incentive opportunities associated with it. In pursuit of achieving success in service marketing it is necessary to incorporate the culture of excellent quality assurance in the organizational culture. However, it’s very likely to be encountered with resistance within the organization at the verge of introducing a new culture. But it is also necessary that it is done- because in a service organization the contact between the frontline employees and the consumers is obvious and hence the culture of communication plays a vital role in assuring quality service.

• Building long term effect:

Build a team- yield the long term fruits. You can start by sharing the effects, the results, such as: the increase in sales, customer loyalties can be notified to the employees. When you are sharing such info it creates a sense of belongingness among the employees- they feel they are a part of a strong team which is destined to achieve the organizational objective. They find themselves as important players in the big picture.

As a company goes through a cycle of mystery shopping activities like: shopping and then training based on the results then shopping again, the company starts getting some tangible outputs like growth of revenue, bigger customer base etc. However, to make this step real effective it is important to have credible shopping results- and therefore it’s important to appoint skilled shoppers.

• To what extent the positive spin is to be promoted?

It has been established so far that there is chances of far better results if mystery shopping can be portrayed positively. Now to what level positivity should be portrayed? Is there any chance that too much positivity will end in negligence of the employees? So far a lot of research works have been done on this but no such results were obtained. It has been found out that the more mystery shopping has been made friendlier the more enthused the employees are to embrace it. The results of a positively imaged mystery shopping have always shown perpetual improvement.

While it’s true that, mystery shopping should be made interactive for the employees for better results- however, the best results cannot be ripped until or unless the employees put into action the trainings they have received and venture for better shopping score.
Article courtesy of MysteryShoppingLive.com