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

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.

Inside Marketing: Can You Really Measure Customer Experience?

Mystery shopping programs help direct staff training and measure how CUs stack up against competitors

By John Swinburn
Executive Director of MSPA

A senior citizen walked into his Dallas credit union to discuss his soon-to-mature share certificate. Interest rates had dropped, and he was looking for a better way to invest his money.

The teller directed him to a CU member service rep to learn more about his options, noting that possibly an annuity or a conservative mutual fund would better suit his needs.

Unbeknownst to the teller, this senior citizen was more than what met the eye. He was a mystery shopper, evaluating the customer experience. He was taking note of such things as whether the teller introduced him to the MSR, or just pointed and sent him away, and whether the teller restated his inquiry to the consultant, or left him, the valued member, to re-tell his story.

Credit unions are using mystery shoppers right now to monitor and improve everything from customer service and cross-selling techniques to compliance and fair lending practices and how well they measure up to the competition.

Often used as a tool to identify and continually improve customer service, mystery shopping can have a significant impact on every aspect of the customer experience, which ultimately drives the bottom line.

The impact of mystery shopping on credit unions has changed significantly over the years.

“Before, we had to explain mystery shopping,” says Judi Hess, owner of Customer Perspectives(TM) in Hooksett, NH. “Now that the discipline has proven its value to the industry, we need to explain new ideas for maximizing your program.”

Hess explains that an effective mystery shopping program approaches customer service improvement from several angles. The same shopping program can be used to measure and fine-tune training initiatives and highlight specific results with individual employees. Results could also be part of an incentive program on the individual or branch level.

Training and Measurement

$1.6 billion Travis Credit Union in Vacaville, Calif., uses mystery shopping on regularly to monitor all member touch points; including teller shops, loan shops, phone shops and new account shops. Management uses the data to pinpoint specific areas that may need improvement.

Travis CU’s January 2007 mystery shop reports were showing a score of just 62 percent for employees asking questions and listening for cues of how the credit union could better serve members. The CU implemented a training program that taught employees what types of phrases to listen for and what kinds of questions to ask. In a year’s time, the same question received an 82 percent score. During the same time frame, Travis CU had 8,014 direct new members compared to 7,842 in 2006.

“If employees aren’t listening and asking questions, they’re missing opportunities,” said Renee DeSantis, president, Game Film Consultants, a mystery shopping firm in Austin, Texas. “That’s where the value of mystery shopping is very evident. It clearly shows where to focus your training efforts.”

In its shop, $98 million Premier Federal Credit Union in Greensboro, N.C., was looking to improve its cross-selling. It leveraged mystery shopping results to pinpoint specific areas where employees could use additional training.

“Realizing that providing top-level service to members includes offering a variety of products to meet their needs, we began to focus on a ‘needs-based’ selling culture,” says CUES member Lori Thompson, executive vice president of Premier FCU. “Our mystery shopping program was a key factor in being sure employees were on the right track.”

When the mystery shopping program began, Premier FCU employees achieved a 52.8 percent score on closing skills, or asking questions to see where additional products may benefit members. Relying heavily on mystery shopping scores and training provided by its mystery shopping provider (Customer 1st, Greensboro, N.C.), Premier FCU was able to increase its closing score to 95.6 percent in just two years.

Measurements and Morale

Premier FCU also implemented an incentive program for strong shop results by publicly recognizing associates for a job well done. Sometimes associates are rewarded with movie tickets or other small but meaningful giveaways to recognize exceptional evaluations. This step can boost the likelihood of positive results, says Carl Philips, director of Customer-1st.

“It’s about catching them doing it right,” says Phillips. “The old adage, ‘You can’t move what you don’t measure,’ applies here. If associates know a mystery shopping program is in place to measure closing standards, then they will be more likely to meet those standards.”

No matter the type of shop, program or initiative, mystery shopping is an excellent opportunity to boost employee morale.

As Phillips pointed out, the simple fact that employees know they’re being evaluated is often an incentive to do good work. Recognizing employees for a job well done or talking through things that didn’t go so well is a form of hands-on training that gets results.

According to Bob Maietta of Service Evaluation Concepts, a credit union in Massachusetts uses its mystery shopping reports at quarterly meetings with loan officers. Team leaders point out the areas of the mystery shopping program that show weakness, taking out the names of employees and discussing ways to fix the problem. More importantly, they also point out the areas where employees do exceptionally well. That simple task alone helped improve mystery shop scores to the level of the credit union’s service standards.

Frank Aloi of ath Power Consulting in Andover, Mass., says mystery shopping can focus a credit union back on the basics of the industry.

“Credit unions were created to deliver the type of member/customer-focused service that banks want to be known for,” Aloi said. “We’re seeing the trend in the industry that mystery shopping is being used as one of the primary mediums to gather customer experience data. Effective shop programs tell management what really is happening out on the front lines.”

In addition to revealing a credit union’s strengths and weaknesses, mystery shopping can also be used to see how well a credit union is measuring up to its competition. Evaluating the same customer touch points at competitive banks and other credit unions allows significant insight into opportunities to gain new members.

“Using the information for coaching and training truly will create change and improve customer service,” says Brian Caldwell, client services manager for IntelliShop in Perrysburg, Ohio. “It’s a simple equation. Better customer service leads to better member satisfaction which equals a better bottom line.”

A Tale of 2 Burgers

No doubt you’ve had the experience of traveling along the highway with a rumbling stomach when, all of a sudden, there’s a billboard advertising a juicy, mouthwatering, cheesy hamburger, available within seconds at the fast food joint only one short exit away. Agreeing with your stomach that it sure looks good, you speed up a bit to get there faster, dreaming of splashing it all down with a cold drink.

But as you get ready to devour your meal-in-a-box, reality hits. This burger looks nothing like the picture. In fact, it looks more like a two-year-old slapped it together from pieces of other burgers. You, my friend, have just experienced one of the underlying themes shoppers complain about most often: a disconnect between a brand’s image and the actual customer experience.

If your store’s brand doesn’t match your typical customer’s experience, get on the phone to HR right now. You may not have much time to undo the damage that’s been done. While many customers will put up with an occasional snafu in service or expectations, consistently disconnecting from your brand with bad customer service and substandard products will kill interest in your product. When this happens, your only hope is to prioritize the training and monitoring of your frontline staff to revive public interest and match your service and product with those pretty pictures in your advertisements.

True, customers are fickle. One day they want you to leave them alone to wander the store, and the next day they complain no one is helping them. But the bottom line is, customers who consistently have poor experiences will look for someplace else to shop. And they tell their friends. No retailer wants to suffer bad word-of-mouth. The Internet has made it all too easy to turn the tide of a brand’s popularity with a few truthful, albeit wicked, stories in a very short amount of time.

Retailers must be seriously supportive of ongoing training and coaching for sales associates based upon the principles of excellence in service. This is the only true competitive advantage in an industry where your brand may sink or swim based on public opinion. Companies who seek assistance in developing and maintaining strong training and coaching programs often need a comprehensive mystery shopping program to cultivate the strong frontline staff that drives sales, and provides managers and store owners with the ongoing, meaningful data necessary to maintain and continue to build on those increases in both sales and customer loyalty.

Source: http://www.iccds.com/a-tale-of-two-burgers.html

How Important Customer Care Really Is

As the world now knows, last year a guitarist named Dave Carroll was sitting in a window seat on a United plane at O’Hare airport in Chicago when he looked out and saw baggage handlers hurling guitar cases through the air. He pointed it out to flight attendants; they responded with indifference. When he arrived in Nebraska, he found that his instrument had been smashed. After months of complaining to the airline and getting no response, he wrote and performed a song, “United Breaks Guitars” and posted it on YouTube. It was viewed more than 3 million times in its first 10 days.

Across the world in China, Wang Jianshuo, a famed blogger, posted about a United flight he took to the U.S. A surly flight attendant refused to help an elderly passenger stow his carry-on luggage. The audio on the movie channels didn’t work. The overhead lights turned off and on the entire trip. His return trip was worse: The plane sat on the tarmac for three hours and then was cancelled until the next day because of a fuel leak.

How does a company perform so badly? United Airlines’ ( UAUA – news – people ) stock price was tottering even before the financial crisis. Now that even stellar airlines like Southwest ( LUV – news – people ) suffering, a weak player like United seems doomed to follow in General Motors’ ( GMGMQ.PK – news – people ) and Circuit City’s ( CC – news – people ) footsteps unless it makes major changes. This week, United announced a quarterly profit of $28 million, but that included fuel hedges and other accounting gains, without which it lost $323 million. It also named a new president. The airline’s missteps over the past decade provide a case study of what not to do when running a company.

Here are three key lessons we all can learn from United.

Create Brand Loyalty, Not Simply Satisfaction

It is doubtful that the millions who have watched Carroll’s video or read Wang’s blog will want to fly United anytime soon, unless they have no choice. That is terrible for the airline. It is fighting for every last passenger dollar, and trying to make inroads into the emerging Chinese travel market. Part of the problem is that the company, like many, makes satisfying customers part of its mission statement but fails to go nearly far enough beyond that.

Winning companies like Apple ( AAPL – news – people ) go past mere satisfaction to try to create true brand loyalty. Not only do loyal customers spend more, they are more likely to become brand ambassadors and bring along other customers. When everyone from the mailroom to the chief executive buys into the mantra of creating brand loyalty, the result is increased profits.

Consumers are more price sensitive in this economy, and they are trading down, but it’s still a great time to capture loyalty. People don’t want to waste money on brands that fail to meet their expectations. They’re buying only what they trust, and they’ll return to trusted brands repeatedly.

Instead of watering down its frequent flyer benefits to save costs, United should be taking the exact opposite tack. It should take a page from hotel stalwarts like Starwood ( HOT – news – people ) and Marriott ( MAR – news – people ), which are offering more goodies than before to their most loyal clients. In consumer studies that my organization, China Market Research Group, has conducted, we’ve found that the No. 1 reason people fly United regularly is because they have racked up points in United’s Star Alliance loyalty program. Why would United want to disenfranchise its most loyal customers?

As consumers think harder about where to spend their money, aiming to satisfy them is not enough. Only striving to create true loyalty will work.

Don’t Forget Why You’re Here

Many companies forget their main purpose and become bogged down in just sustaining their operations. United forgets that it’s not only selling a means of transportation that is faster than trains or cars. For vacationers, who make up most passenger traffic, it’s selling dreams and memories. An airline flight is typically the first and last part of a newlywed couple’s honeymoon, or a family’s overseas trip in planning for years. People remember such journeys forever. I fondly recall my own first flight on TWA when I was six years old, to Italy and Greece with my parents. Likewise, my childhood flights on Delta to see my grandmother in Florida. What United fails to get is that it is selling dreams, not just a form of transportation. Few United employees take pride in their jobs, and it shows.

One company that gets it right is Disney ( DIS – news – people ). A trip to Disney World is not simply an outing to an amusement park like Six Flags ( SIX – news – people ) or Universal Studios. It is a time when families can create memories that last a lifetime. Disney trains its employees, from the monorail drivers to the people selling fast food, to be more than just salespeople. They are weavers of dreams. That is one reason families repeatedly return to Disney World, according to research my firm has conducted with visitors from eight different countries.

Unilever got it right with its Axe deodorant. That company understands that it is not selling a way to stop sweat or to smell a little better. It’s selling a way for young men to be more attractive. Axe put together a TV commercial that shows a dorky guy, who happens to use Axe, getting more glances from attractive women than Ben Affleck, the movie star. The spot uses humor to imply that you, too, can be as appealing as the Hollywood star who dated Gwyneth Paltrow and Jennifer Lopez and is married to Jennifer Garner.

To create real customer loyalty, you have to offer more than just functionality. And you have to train everyone in your organization to have the pride to sell an emotional connection, not just tools.

Don’t Forget Employee Morale

United’s workers have been a beleaguered group for years now. They have had their wages, pensions and benefits cut even as the chief executive officer, Glenn F. Tilton, has been paid nearly $20 million dollars over the last five years (despite United’s stock dropping 43% during his tenure). Does that seem fair?

Employee morale has gone into the gutter. Unhappy workers mean terrible customer service‰¥ãas Dave Carroll and Wang Jianshuo and millions of their followers know. The company may have no choice but to lay off workers and reduce benefits in the downturn, but it has to do so with respect and with effective communication to the rank and file about why such pain is necessary. Every company everywhere must have an effective strategy for ensuring that its remaining employees don’t lose hope or happiness, just as it must maintain its focus on creating brand loyalty.

One thing to do is to make sure that all employees share the pain equally. If there are big cutbacks anywhere, senior management should take substantial pay reductions and limits on its privileges, such as fewer business class flights and trips on private jets. The troops look to senior management for direction. If those troops see the top brass caring for itself at the expense of others, the spirit of the entire organization erodes.

In today’s economy you can’t get by on decent prices or acceptable service. You have to stand out and win the hearts of your customers. To do that you have to go beyond satisfaction to true loyalty. You have to provide a compelling reason, beyond basic service and price, for consumers to choose you. And your organization must be unified in that mission.

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Source:
http://www.forbes.com/2009/07/24/united-airlines-lessons-leadership-managing -mistakes.html