Thursday, April 7, 2016

How to Establish a Strong Service Culture Fast

Image courtesy of lpk90901
Today I'm pleased to share a guest post authored by Jochen Wirtz and Ron Kaufman.

Ron and I have been working on this topic for many years and are happy to report that the April issue of Harvard Business Review picked up our ideas and published a short piece in the Idea Watch section in the April 2016 issue. In this post, we summarize this article and add insights for service leaders and practitioners who would like to know more.

Traditional Approaches to Often Don’t Work!
Our key message is that traditional approaches to service improvement often don’t work. They are fragmented, incremental, and based on faulty assumptions about the true nature of service. Companies try these approaches again and again, and while they may enjoy temporary surges of improvement, people run out of steam and the improvement dies. Instead, many companies would benefit from a more dramatic service revolution that quickly rebuilds their culture around the vision of taking action to create new or greater value for others.

Four Common Mistakes and How to Do it Better
There is a better way to build a culture that quickly and dramatically improves customer service. While many people think changing an organization’s culture takes a long time, we have had the opportunity to experiment and observe a wide variety of companies for the past 25 years. We have been part of many innovations and successes. In the process, we observed four common mistakes companies make when implementing service revolutions, and we propose a more effective and proven way to make sure a service revolution sticks and achieves sustainable service improvements.
They are:

Rule #1: Don’t start with customer-facing employees. Instead, involve everyone, with a special focus on internal service providers.
We found that customer service reps usually understand the importance of satisfied customers; often the real problem lies with other backend function such as logistics, IT, HR, that isn’t meeting their frontline colleagues’ needs. When that’s the case, efforts to train customer-facing employees often generates frustration. Therefore, include everyone in service training, and focus special attention on internal service providers.

Rule #2: Don’t start by training people on specific service skills, scripts and procedures. Instead, educate them first to a better understanding of what service excellence really means.
Educate employees more generally about what “service excellence” means. Companies spend vast sums training employees to follow procedures and flowcharts when interacting with customers. (“If the customer says X, respond with Y.”) They may then monitor phone calls or use “mystery shoppers” to ensure adherence to the new rules. But highly scripted employees are often less able to be imaginative or empathetic about a customer’s true needs.

A better approach is to persuade employees to commit to a holistic definition of service: creating value for others, outside and within the organization. Teach them to first appreciate customers’ concerns and only then to take action. They should continually ask themselves, “Who am I going to serve, and what do they need and value most?”  This way, employees slip into the shoes of their customers and take actions aligned with what delights their customers.

Rule #3: Don’t pilot the change. Instead, go big and go fast to build momentum for the new culture.
Conventional wisdom calls for limited experiments that, if successful, are later rolled out more broadly.  That can work for small tweaks in an organization’s culture, but for more-sweeping change, organizations must create momentum fast and set their sights high.

Rule #4: Don’t focus on traditional KPIs during the service revolution (such as satisfaction, NPS, operational measures, and sales). Instead, focus on leading “revolution indicators” (i.e., ideas generated and ideas implemented) to generate value-adding ideas and new service actions.

Instead of worrying about typical customer satisfaction measures such as share of wallet and net promoter scores, organizations that aim for dramatic change should look at the number of new value adding service ideas put into practice. It’s not that traditional metrics are unimportant, but because they are “lagging indicators” that don’t show quick improvements and discourage employees, and they can bog down efforts to achieve rapid, dramatic change. Use indicators that respond quickly to actions taken, and that build momentum and excitement in the organization.

For which kinds of companies would the ideas presented work well and for which will they not work well?
These four rules would work very well for B2C or B2B companies whose products have become commoditized and who want to differentiate on service. They’re great for companies who know they provide sub-optimal service and want to change that, for companies that have undergone mergers and want to create a vibrant new culture, and for companies that have grown rapidly with a primary focus on sales and now need to build a culture of service.

On the other hand, the four rules will not work well for companies that don’t need a revolution—those that have excellent service coded into their DNA already (such as Disney, Nordstrom, The Ritz-Carlton Hotels, Singapore Airlines, Southwest Airlines, USAA, or Zappos). Also, they won’t work for companies whose top leaders aren’t 100 percent behind the change.

How can the ideas presented in this article be applied other organizations?
Any organization can follow the four rules outlined in the article, and if they implement them properly, their odds of success are vastly improved.  Today, companies need dramatic change more than ever before. In the past it was possible to gradually try to catch up, but in a global economy a smaller more nimble company can grow very quickly and leap ahead of you. The ideas advanced in this article helps leaders to stage their own successful service revolutions.

If you’d like to learn more about this topic, check out:
Jochen Wirtz is Professor of Marketing at the National University of Singapore. Jochen has over publications on service marketing, including 5 features in Harvard Business Review.  He authored the globally-leading text book Services Marketing: People, Technology, Strategy (World Scientific, 8th edition, 2016, co-authored with Christopher Lovelock).   

Ron Kaufman is the founder and chairman of  UP! Your Service College. Ron is author of the New York Times bestseller Uplifting Service and 14 other books on service, business, and inspiration, with sales exceeding 500,000 copies. Ron’s engaging approach to service education has been featured in the Wall Street Journal, the New York Times, and USA Today. 


6 comments:

  1. Thank you for sharing this article, Annette. Delighted to see your own in-depth writing and commitment to CX on this website...and doing great work in the world!

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  2. Great Article by Ron Kaufman, his book is the best book out there about Uplifting Services, and CX and he walk the talk with practicality and hands on. His company is among the best around the globe in Services and CX. I loved this article and the work he have done for many years! Thanks for sharing it R

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    1. Thanks for your comment, Ricardo. And you're welcome!

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  3. Thanks for sharing Annette! I see a lot of companies that get really big, really fast and their customer service is not prepared at all to handle the extra stress.

    I like the idea of training new employees by using the holistic approach, not just telling them to remember scripts, procedures, etc.

    When you instill the groundwork of customer service into their minds, you can create a much stronger CS agent down the road.

    Just shared this on Twitter!

    Best, Jack

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    1. Thanks so much, Jack. And you're welcome. I agree... it starts during onboarding... set the tone, the expectations, the definition of what great customer service looks like. Use stories to teach. And empower employees to deliver a great experience, unrestricted by scripts and policies.

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