Robbie Frazer Tough Love: Excelling at Customer Service Is Not Just One Big Happy-Clappy Hugfest
Jinfo Blog

Saturday, 31st March 2007

By Robbie Frazer


Robbie FrazerIn 2001 I was asked to put a pool table into Prenax's converted industrial loft offices in North London. At this time, 'fun' was one of our three values and everyone was dotcom drunk. The champion of the pool table campaign was a trendy Dane with wild hair and crazy dance moves. The guy who sat next to him, the coquettish Hans - a flamboyant Swede - wanted us to install a swing. A swing, for goodness sake, suspended from the iron struts supporting the glass church roof. He wanted to enjoy his 'downtime' by swinging to and fro 6 feet over the customer service desks whilst humming ABBA classics to himself. He was genuinely disappointed when we kyboshed the idea, and the Dane never forgave us for our fun-free stance on the pool table.

A year later, someone in the company told me that 'success' and 'being valued' were actually more fun than a swing on the ceiling. And without those two important values, no one was likely to have a good time at all. We needed to sharpen up our act and made our first tough-love decision. Hans and the Viking were on the next boat out.

Hard lessons, hard decisions

I never realised that running a subscription agent could take me to the cutting edge of the new world of business, but that's what this act did. The gorgeously named Red Herring magazine (which popped with the bubble, only to re-emerge in '03 as an online-only production) was full of strange companies doing odd things but with photos of deliriously happy employees and delighted clients. They had onsite creches, concierge services (so your employers would wash your smalls for you), community outreach benefits packages and, of course, pool tables and swings. For some reason, the businesses were usually named after oddly coloured animals or fruit. The world was full of red bananas, blue parrots, pink fish, orange cats and red herrings. Customer service was all about being warm and fuzzy, peopled by friendly types who wore distressed jeans at client meetings and drank carrot juice for breakfast.

That's the storybook idea of customer service, and it doesn't work. Sometimes, treating your customers right hurts.

My point is that there are rock-solid reasons why a company should champion its people, really care about its customers and create a culture where customer service is central to everything. And those reasons are not all joss sticks and dungarees, but hard business motives that sometimes need very tough decisions to be made: to create this service culture where people take pride in their customer relations and generally seem to be enjoying work takes some effort.

In other words, some silk mittens have iron fists inside them. Consider the chap who runs Innocent, the organic smoothie maker. I used to have a very clear picture of him - knitting his own underwear out of muesli and smoking dolphin-friendly mung beans. But no, he's got visions and values up the ying yang and knows his balance sheets from his hessian. Here was a man who created the yoghurt equivalent of a group hug and still skimmed off a nice fat-free profit. Turns out the guy's running one of the sharpest companies around. Admirable stuff.

Think about all the trendy and excellent companies that debuted in recent memory. Pret a Manger kept their sandals dry when flogging a third to McDonald's; Ben and Jerry had more on their minds than Chunky Monkey flavourings when they sold up to Unilever; and Anita knew exactly how much strawberry foot salad she was shifting when negotiating L'Oreal's shoe-in to Body Shop.

Good investments

Clearly, being smart but tough about customer service is important from a supplier's profit perspective. Quite simply, a company that provides good customer service tends not to lose clients. New clients are expensive. Because you have to pay salespeople, it takes a huge amount of management time, and implementation costs mean you don't make a profit for ages - sometimes years. Also, if you offer lousy service, it's harder to acquire new clients because everyone knows you're a bit crap when it comes down to it. So how do you get business? Sell cheap. Yep, keep your market share by dropping your pants every time you get a sniff of a deal.

Now here's where you get into trouble and why customer service is a positive-feedback mechanism, scientifically speaking. The downward spiral comes from cutting your prices: you cut your fixed costs so that you hit profit targets which means you pay less (peanuts, monkeys, etc.) and those that survive the knife have less time per client, especially as there are more new clients replacing old ones. It all points to a deterioration in service. Which, in turn, leads to more client haemorrhaging, more staff cuts and more price reductions. Eventually your remaining clients are so hacked off they start to swear at you, your prospects don't trust you, your gross profits are plummeting and your staff are looking for the exit. And if your staff want out, your customers won't be far behind.

From a client's perspective, the picture is just as clear. In any mature B2B environment, you can be sure that no one is making super- normal profits over a long period of time. The odd product launch or technology breakthrough might buy a supplier a year or so of premium pricing, but the Darwinian mechanics of the market will see that competition will be on your doorstep sooner than you think. The paranoid in business are usually those that survive!

So, you pretty much get what you pay for. In my industry, there's a precise line that suppliers and customers are always trying to find - one where benefit exceeds cost. Presumably, Prenax and our competitors are much better at managing subscriptions than our clients are. But clients have to buy enough of our time to make sure they are getting enough service to make a difference. For example, pay too little and you simply get 'noise on the line', where the intermediary is actually creating more work because you end up managing them. Pay too much and you'll be paying our profit bonuses - something I'm sure is not high on your agenda. This line - often less than the most expensive but always higher than the cheapest - is where everyone's in profit.

Love hurts

That's the economics for dummies that everyone's aware of, but what is usually hidden is the fight against entropy that exists in all companies and is a daily event in the best. A customer service culture has one foot in both camps - the buyer's and the seller's - and, like straddling two canoes, can be painful if the balance is not right. It's fascinating to watch a group of people evolve in a work environment. The search for meaning at work is constant and if a positive model is not presented to us, then we'll look for other things to hang our hats on. That's not usually very pretty.

Most of us, as consumers, have experienced being passed like the proverbial hot potato from person to person in organisations that employ people who don't really care. It is infuriating and truly stressful ('Press 4 to feel like a number ...'). In many companies, good customer care has been reduced to being given your position in the queue. Dreadful. But leave a team of people to their own devices, don't give them support or anything to believe in, and even the most talented and positive of them will end up embittered, cynical clock-watchers.

So this fight against entropy is one a good company has to win and there are five weapons we have at our disposal to beat it:

1. People. There is a saying that you can't polish a brick (or something like that but less polite). When building a good customer service team, one has to be picky. That means only taking on people who have the brains to understand a problem and the attitude to do something about it. It also means that you usually pay a bit more and offer a positive working environment.

But we all make mistakes. And mistakes need to be rectified or else you end up with the sediment effect. That is, an organisation where no one is ever fired. Pretty soon you get to a tipping point where the bad people control the culture and all the good people leave. The latter may even be in the majority, but such is the power of negative energy, just a few bad apples can affect the whole barrel.

2. Ownership. The people at the sharp end - the customer service team - need to have the power to make decisions. They also have to own their own clients, and this means no call centres.

3. Leadership. You can have all the mission statements you like, but if the boss doesn't jump higher than he or she demands of others, the whole structure crumbles. This means having immediate escalation for unhappy clients. 'Escalation procedures' should be thrown out - there's only one: talk to the boss. The management of all staff should also be based on customer satisfaction and the values that drive it. It sounds like the tosh that comes straight out of an MBA textbook, but if progression and salary is determined by client satisfaction, the results are quite predictable.

4. Stop fire-fighting. Easier said than done, of course, but if you get things right first time, there's usually not much fire-fighting later down the track. It's all down to economics again, and reminds me of the proverbial story about pulling drowning people out of the river when one should go upstream and stop the guy throwing them in. It takes investment at the beginning - in my business it's about mapping the client and cleaning the data - but it pays off in the end, because more of the time you're buying goes on solving the problems that naturally arise as opposed to cleaning up self- imposed screw-ups.

5. Put your wotsits on the line. Sorry for the coarseness, but when a service provider's fees (or pride) are related to SLA metrics, they tend not to fail as much as when there are no financial consequences. So from a customer's perspective, if you have had bad experiences with a vendor, make sure there's a 'prenup' before you jump into bed with the next supplier that brings you a bunch of flowers.

So there it is. Customer service is really just about how much it is valued. And once you can put a pile of cash next to that value, the hard decisions suddenly start getting taken and a virtuous circle of client retention, positive culture and profit starts to become manifest. It's not always fun, but it feels better.

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