Service Untitled

I am a big advocate of giving credits to help “ease the pain” that customers feel when they’re inconvenienced by one thing or another. What a lot of companies often neglect offering to customers is something that is usually just as (If not more) important: expedited shipping.

Just how much sense expedited shipping makes for any particular company will vary greatly. Large companies that ship a lot of products (and thus have a lot more leverage with their preferred shipping company) will find expedited shipping to be a lot more cost effective than small companies that don’t usually ship products. The cost of expedited shipping depends on the product, the shipping company, and perhaps most of all, what your company means by “expedited.” Some companies consider expedited faster than two weeks, others consider it faster than 24 hours. These are all things you’d want to look into and make decisions about before offering expedited shipping to customers.

Expedited shipping makes perfect sense for any sort of issue relating to an order delay. If the order is delayed a day or two from the factory, make that time up by upgrading the shipping from ground to next day air. If there was a problem with a product that is supposed to be deliver in a week, fix the problem and upgrade the shipping. Including expedited shipping as an option of possible incentive to customers certainly broadens the possibilities.

You can also use expedited shipping as a credit-like offer. Apologize for the inconvenience and say the customer’s next order will be shipped via next day air. That may make a bigger difference and a bigger impact than a $10 credit. When that one customer calls to ask if there are any discounts, instead of offering him or her a 15% off coupon, upgrade the shipping instead. You don’t necessarily have to upgrade it to the highest level, so that builds in quite a bit of flexibility.

The most important thing to remember is that there are more creative ways of “easing the pain” than just throwing money at customers.

When I was talking Frederick Mendler from Rackspace yesterday, he mentioned the platinum rule. I admittedly did not pick up on the metaphor right away, but Frederick noticed my confusion and quickly explained it me. The golden rule is treat others how you want to be treated. I had heard that before. Like most children, the golden rule had been mentioned to me by my mother, teachers, and relatives about 1000 times between the time I learned to talk and age 10 (after age 10 or so, one’s knowledge of the rule seems to be assumed). The golden rule shows up in business when executives start to have conversations with themselves (and others) about the plight of their customers (”I wouldn’t want to wait on hold for 3 hours and then get transfered to someone else. That just isn’t right!”) and I was familiar with that thinking as well. But the platinum rule was new to me.

The platinum rule, I learned, takes a different approach. It uses the same basic idea of the golden rule (be a nice person) and takes it a step further. The platinum rule is to treat others how they want to be treated. What an interesting idea. I was intrigued and jotted it down for a future post. A bit of research revealed that the “platinum rule” was a term coined by Dr. Tony Alessandra, a speaker, consultant, and author. More importantly, that research revealed a great description of the platinum rule on Dr. Alessandra’s web site:

“Treat others the way they want to be treated.” Ah hah! What a difference. The Platinum Rule accommodates the feelings of others. The focus of relationships shifts from “this is what I want, so I’ll give everyone the same thing” to “let me first understand what they want and then I’ll give it to them.”

Looking at business (and life) that way makes sense. What’s right for you isn’t always right for the customer. While more than a couple companies are known for designing products or offering that originated from their own needs, the idea doesn’t always work. These companies came to the realization that X was needed to do their business, so they created X. When they were designing or creating whatever X was, these entrepreneurs essentially built a product for themselves. It works in many cases and doesn’t work in others.

The problem with the golden rule is it assumes that everyone wants the same thing. If I am a nine year old who can take a joke about being fat, skinny, or any other childish extreme, that doesn’t mean the kid siting next to me will find the same joke as amusing as I do. If I don’t mind jokes, I’m not breaking the golden rule by saying them to another kid; I’m treating him how I want to be treated. However, if I followed the platinum rule, I would need to consider what the other kid wanted specifically. I would learn (through research of some sort) that he doesn’t like those types of jokes, and as a result, I would try to avoid upsetting him by making such jokes. I could even take it a step further and compliment him. The idea makes sense. Imagine if a company like Intuit built accounting software for itself. Chances are, the $2.6 billion software giant needs different things from accounting software than I do for my personal and small business needs.

I think the platinum rule could be rephrased into something as simple as: work for your customers, not yourself. If your customers needs are similar to your needs, great, that makes life easier. If not, that’s okay as well - just make the effort to understand their needs and keep their needs in mind when doing your job.

Technorati Tags: Golden Rule, Platinum Rule, Culture

Nordstrom. The Ritz Carlton. Lexus. These are all companies that understand customer service at the deepest level and are able to provide unparalleled customer service consistently, across countries and across continents. As a result of their mastery of the customer service experience, these companies are widely regarded as some of the world’s greatest customer service organizations. Rackspace, an IT hosting company based in San Antonio (TX), aspires to become one of those famed customer service organizations. To help reach this goal, they’ve defined their “Fanatical Support Promise.”

The idea behind Rackspace’s Fanatical Support Promise is to formalize a process in which Rackspace investigates issues that upset customers and subsequently develops a plan for addressing such issues. If the issues can’t be resolved in a way that makes the customer happy, the promise provides a way for the unhappy customer to get out of any existing contracts they might have with the company. By making such a promise (guarantee), Rackspace is admitting that things inevitably do go wrong and that they are making commitment to listen to customers and address those problems when they occur.

Rackspace’s VP of Customer Care Frederick Mendler (who I’ve met and also interviewed here) explained to me that Rackspace doesn’t want to hold unhappy customers hostage. Utility companies hold customers hostage because they’re monopolies and customer satisfaction doesn’t really contribute to the success of the their businesses. Companies like Rackspace, though, would rather provide their customers with an option to move on if all options have been exhausted. It makes more business sense to let the customer move on (thinking relatively highly of the company) than to lock the customer into a contract they don’t want to be in.

Functionally, the promise first comes into play when the customer feels Rackspace has failed them in some way. Rackspace failing the customer in some way can include any number of things from not supporting a service that was assumed to be supported to a failure to communicate something properly. Regardless of the reason, the company then works with the customer to collect specific feedback and come up with a plan of action. If the plan of action is satisfactory to the customer, Rackspace will then do its best to follow through on the plan and ensure it achieves all of the plan’s goals. If the plan isn’t satisfactory to the customer, or for some reason, Rackspace can’t successfully execute the plan, then the customer is given the option to cancel his or her contract without penalties.

As a company, Rackspace lives and breathes what they call Fanatical Support. Part of the Fanatical Support Promise included dividing Fanatical Support into five key areas of focus, each of which have a specific set of goals associated with it (see this page): Responsiveness, Ownership, Resourcefulness, Expertise, and Transparency.

The result is a fairly concrete explanation of a somewhat difficult to grasp concept. Rackspace then ties those five areas into the promise and goes on to describe exactly what it all means for the customer. The promise says, quite simply, if Rackspace doesn’t meet live up to its standards (standards set by both the company and its customers), they will take action to ensure a resolution happens. And if a resolution is impossible or the customer still isn’t happy, they’ll let the customer cancel without any penalty.

Companies can learn from Rackspace’s promise because it sets a standard (based on an existing cultural element within the company) and then backs that standard up with a formal process. If a promise isn’t backed by something, it’s more marketing hype than anything else. The company made their promise simple enough to be easily understood, but deep enough to actually have merit and meaning. This promise addresses both the personal and the professional aspects of a guarantee.

I tend to advocate and recommend concrete service mission statements (or promises or goals or whatever you want to call them) because they provide employees, executives, and customers with something to look back at when they’re making decisions — both long term and short term ones. The Fanatical Support Promise can serve as a great one for Rackspace. What do you have that’s similar?

Something I try to encourage companies (and their customer service representatives) to do is to offer a small service credit to customers who have had issues and have had to call or email the company several times. Even if the problem wasn’t necessarily the company’s fault, the service experience wasn’t unpleasant, etc., it is an act of good will (and good business) to proactively offer the customer a small discount on their next bill. When I suggest this, I’m usually asked why in the world a company would offer a credit to any customer who was not:

• Demanding a credit
• Threatening to cancel
• Threatening to sue, call the BBB, etc.
• Violent

The act of proactively offering a service credit is almost unheard of. The idea, however, is a good one(I think). It shows that your company is dedicated to great service and to a great customer experience. Volunteering (as opposed to the customer asking or demanding) makes a big difference. Even if it is just a tiny service credit, the act of offering it proactively is always helpful. Customers will likely be impressed and appreciate the gesture. They’ll be impressed and appreciate the gesture because companies offering a service credit proactively is so out of the norm that it is a big deal.

One of the best parts about this is the service credit doesn’t have to be a large amount. What determines a “large amount” obviously depends on your business and the particular customer, but I’ve seen companies that bill $15 a month offer a $5 service credit to a somewhat flustered customer. The customers usually appreciate the gesture, especially every dollar given as a service credit is a dollar the customer doesn’t have to pay. Companies that charge $50 a month sometimes give a $10 service credit, which is perfectly reasonable. I would say you should make it roughly between 5% and 35% of the monthly bill, with the percentage getting smaller as the monthly bill increases.

What customers like most is that you are considering the inconveniences and problems they’ve had. And then you’re doing something about it. It just makes the customer feel good.

Technorati Tags: Credits, Customer Service, Customer Service Experience, Customer Service Representative, Pro-active, Little Things

If you’ve tried to use a gift certificate or merchandise credit at The Sharper Image lately, you have experienced unfriendly policies in action. Because the company is going through bankruptcy, they’ve implemented new policies that make it more difficult for customers to use the gift certificates and merchandise credits.
Last night, I went to my call Sharper Image with a $100 merchandise credit I had from something I had returned to the store after Christmas. I walked around the store and found something that I wanted for about $70. I went to the counter to buy it and herd the clerk explaining a new policy to another customer about. Due to the bankruptcy, the company put a policy in place where customers must spend twice the amount of their gift certificate or credit in order to be able to use the credit. Since I had a $100 credit, my minimum purchase would have to be $200. Instead of being able to leave the store spending nothing, I had to leave the store spending $100. Needless to say, I was aggravated, especially since the thing I wanted was only $70. There wasn’t anything that I wanted in the store that cost $200.

This policy has put me strongly against The Sharper Image. I used to be a loyal Sharper Image customer and would specifically buy things from the company because of their flexible, Nordstrom-esque return policies and good customer service. Over time, the policies got stricter and the company’s products started to appeal less to me (mainly because I owned essentially everything I wanted or needed in the store after a few years). However, this change definitely pushed me over the edge.

What other companies can learn from this (my rant is over) is the importance of not alienating your best customers, even when times get tougher. This policy might very well serve the purpose of getting the most money possible per sale, but it doesn’t serve the equally important purpose of making customers loyal and ensuring repeat purchases. It does the exact opposite of that (the other customer was also annoyed at the policy change and walked out). The long term customers who (hopefully) have a lot of nice things about the company are the ones that usually make the difference between success and failure at a particular company.

As for me? I left the store, without purchasing anything, and will continue to discourage people from shopping at The Sharper Image. I don’t like holding grudges against companies, but I also don’t want to shop at The Sharper Image until they change this policy.

The Consumerist has more on this subject.

Technorati Tags: Customer Service, Customer Service Experience, Customer Service Representative, Policies, The Sharper Image

Companies, especially those with complicated products or services, often run into the issue of the difference in roles. Companies aren’t sure about the lines between support, account management, and consulting. The first step is defining what the exact roles are within your company. Here is how I define them:
Support.
I typically look at support as reactive. The customer calls a general phone number or emails a general email address with their question, a case or ticket number is assigned, and then a pool of representatives responds. There usually isn’t a personal relationship with customers and the company. There are of course cases where individual representatives get to know individual customers, but that is simply because the customer and the representative have been there for however many months or years happens to be the case.

Account management.
Most companies define account management as a service role where the customer is assigned a personal account manager. Account managers develop a more personal relationship with the customer and work with the customer to resolve a majority of their needs. Essentially, the customer has an individual, as opposed to a group or a company, to turn to when they have an issue. Account management usually involves working with the customer to develop solutions that are best for them and doing so on an individualized and often proactive basis. It is a mix of sales and support with some consulting mixed in.

Consulting.
Consulting is the most involved of the three roles. Customers (usually referred to as clients by consultants) work with experts in a particular field (i. e. customer service or sales management). The consulting is usually hands on, it is customized, and while it helps to sell products and services, it does more than that. Consultants often work with products or services that aren’t made by the company and make recommendations that are beyond just the scope of the products and services offered by the company. An example is if a company is a client of a company like Oracle (which makes some CRM applications). They hire a consultant through Oracle not only to implement their new CRM from a technical perspective, but also to get the most out of the CRM throughout the rest of their company. It is part product training, part procedure and process design, etc.

Support is the least involved and consulting is the most involved, with account management in the middle. A future post (probably tomorrow) will be about deciding what your company should offer and perhaps most importantly, what should be standard.

Technorati Tags: Customer Service, Customer Service Experience, Consulting, Support

This week seems to be the week of surveys for me. Yesterday I wrote about Mailtrust’s One Question Survey and today I received another survey from a software company called TimeBridge. TimeBridge makes scheduling software and they have been pretty persistent at trying to get beta feedback from me.

Today’s email was an interesting one, though. Here is the text of it:

Dear -name-:

We’ve noticed you haven’t used TimeBridge a lot since you signed up.  We’d love to understand what is holding you back.

If you click on one of the links below it would help a lot.

    “Everything is fine, just haven’t had an occasion to use it yet.”   Yes, that’s it.

    “I’m having technical difficulties with TimeBridge.”    Yes, that’s it.

    “Don’t think I’ll be using this, as I don’t have a need for it.”    Yes, that’s it.

    “None of these apply.”     Let me tell you more.

You can always just reply to this email if you’d like.  Thanks for your feedback!

Regards,

John

________________________
John Stormer | VP Marketing

While I don’t think the email is the most eloquently worded one in the world, it gets the job done. Perhaps most interesting is when you click on one of the links (I’ve put the links’ locations in italics), it not only records that basic response, but has a comments box and another box saying you can put in your email if you’d like a response.

Having the box saying that responses are anonymous by default, but that you can put in your email and receive a response is pretty helpful. I replied to the survey saying I wrote a post about the company and just want to see if anyone replies to my email. Reading the survey results and acting on them accordingly is extremely important.

This survey doesn’t offer any incentive (possible prize, etc.) to filling it out, but once again, it is pretty quick and pretty easy. You can click on the links right from your email and everything else is optional. Surveys that are simple will get a lot higher response rate than those that are long.

I’m not quite sure how helpful the answers to these survey questions by themselves are, but the company knows better than I do about what they need. It is interesting to see how they included the links directly and took a step out of the equation.

Good job TimeBridge.

This is the final part of the interview with Tony Hsieh, CEO of Zappos. In this part of the interview, we talk about what it’s like to work at Zappos, how the company finds its employees, what they’re doing to improve their customer service, and why the company decided to differentiate itself with customer service.

(more…)

37signals is a smart company. Not only have they seen incredible success with their product line, but they run an extremely successful blog, have gotten more press coverage than most companies 50 times their size, and have a very good reputation. They also read other blogs and knew not to make the same mistake that DreamHost made when they had some issues with their service.

Last week, all of the products/services made by 37signals were offline for about two hours. The problem was with their load balancer affecting their connections. It seems like a pretty technical issue that most customers probably wouldn’t understand if explained fully to them.

37signals did a lot of things right with their announcement:

• They said what happened.
• They addressed a big concern early on. Was data lost? No.
• They apologized.
• They said they weren’t happy about what happened and apologized again.
• They offered compensation to affected clients, even though they don’t have a formal SLA plan that requires them to do so. They also made this process easy.
• They said they had the best service provider out there, but the company dropped the ball (see below).
• However, 37signals repeatedly said the problem is ultimately their problem and their fault. They claimed full responsibility.

Commenters on the post pointed out that 37signals only used one load balancer (when two are often standard), which is their fault, not their service provider’s fault. An employee from 37signals replied and said they will be adding one. As mentioned above, they claimed full responsibility for the downtime. It doesn’t matter who’s fault it is, but it is their problem.

37signals was also pretty responsive to comments on TechCrunch. They updated their status web site frequently during the outage. Basically, 37signals handled the situation as well as any company I’ve seen.

There are very few companies who do things as well as 37signals did with this situation. From what I’ve read, how 37signals handled this situation is how they handle most others - very well. Kudos to 37signals.

DreamHost is a web hosting company that has been around for a while. The privately owned, California-based company is well known for generous space and bandwidth allocations, relatively good web hosting services, and for a laid back attitude. This week, though, has probably been one of the toughest weeks in the company’s history.

On Tuesday, the company’s billing system messed up (due to human error) and billed thousands of customers when their accounts weren’t even due. The amounts charged totaled in the millions of dollars and the charges caused some customers’ checks to bounce, debit cards to be stopped, etc. A lot of accounts were also shut down for non-payment when a payment wasn’t actually due for another year. In short, the entire issue was a big mess.

In addition to the mess and tremendous hassle of all of those billing errors, the real thing that DreamHost didn’t do as well as they should have (and what got all the media coverage) was the way they initially responded to the situation. They posted a ridiculously informal blog post (titled Um, Whoops) saying the issue was caused by a fat finger and essentially dismissing the seriousness of the whole situation.

By the book, the content of DreamHost’s first post was appropriate. They what happened, why it happened, explained what was going to happened, explained why it wouldn’t happen again, and offered to provide help for any problems. The content was fine, but the tone was inappropriate and uncalled for. 

As the media coverage continued, DreamHost realized they messed up and posted another blog post the next day. This post was what they should have done the first time. It was genuine, informative, and serious. The company offered some additional options and courses of actions for frustrated customers (including letting people back out of contracts early and receive a pro-rated refund). DreamHost explained some major modifications in their billing system and provided a much needed update.

The following day (Thursday now), another update and explanation was posted. It was slightly less formal than Wednesday’s “serious” post, but did not mock the event. More updates and statistics were provided and the issue is now basically resolved.

DreamHost did a good job in the sense that they quickly realized their mistakes and acted to fix them (both technically and with their communication). They provided frequent and honest updates. And from what they say, they got the actual problems sorted out pretty quickly.

DreamHost will hopefully have employees reach out to frustrated customers and media sources over the coming weeks, but I’m not sure this will happen. I don’t think the company has a PR department and I don’t think they have any sort of blogger or customer outreach program. If they don’t, now is a good time to get one.

This issue is something that will haunt the company for a long time and will cost them a lot of money. They’ve learned a valuable lesson. I’m pretty confident they won’t be making the same mistake again.