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What The Economist doesn’t know about the magic of customer service


The Economist’s Schumpeter had a nice piece this week on ‘The magic of good service – Companies hope that “chief customer officers” will provide better service. Yeah, right’.

The cynicism is theirs not mine. That said, cynicism about Chief Customer Officers actually improving customer service may be well founded. As the article points out a 2012 study said that when customers are asked, a third of major companies rate poor or very poor in customer service and, as Schumpeter points out “Companies have paid lip service to customer service for many years, yet still treat customers like serfs.”

There are, of course, many possible reasons for this. The cynicism of Schumpter is one possible reason (the companies have no intent of fixing customer service) but I fear this falls foul of a famous rule – never ascribe to malice that which can be ascribed to incompetence. So if companies are trying and failing to improve customer service, why could that be? I see two main causes for such failures

  • A failure to make operational changes to match the companies’ strategic intent CCOs and programs to improve customer service are often big, strategic investments. But no attempt to make such a strategic shift ever succeeds without a matching focus on changing operational behavior. Too many companies and executives think that all they have to do is worry about strategy when operational execution is also critical.
  • A failure to recognize the central value of customer decisions. These efforts are meant to focus the company on the customers point of view. At the end of the day this means making customer-centric decisions. A focus on the overall customer experience and on customer journeys is great but these involve a whole series of operational decisions that must be made for and about the customer. Unlike Schumpeter I see this as making customer-centric decisions in specific transactions to create an overall experience (rather than seeing a focus on the customer experience as an alternative view to the transactional one).

But back to the article. What is it that they are missing? Well, the power and potential of Decision Management Systems for customer decision management. I have written about this before (as in this post on Customer Decision Managementfor instance) but let’s take some of the specific issues raised in the article:

  • “Successful firms hire for attitude”
    True but good attitude must be supported by the power to treat customers appropriately and solve their problems. staff with a great attitude will still annoy customers if they can’t ever do anything without referring customers to a supervisor or putting customers on hold while they figue out how to do things. Decision Management Systems can handle things like approvals, eligibility, pricing and discounts so that staff can focus on customers.
  • The right performance measures matter but these must be aligned with systems
    It does no good to incent a group of folks one way and then build their systems to behave a different way.  If the call center are incented to keep calls short it won’t help to have a smart Decision Management System deciding on possible cross-sells or up-sells that might improve the customer’s experience
  • Customer journeys and archetypes are great
    But you must be able to deliver differentiated service, content, processes etc. If your systems and processes assume everyone is treated the same then none of this will matter. If you use Decision Management Systems to deliver customized, personalized content and actions then you can refine and improve these results over time and take advantage of your customer archetypes.
  • Improving the offline shopping experience is important
    But again you need to differentiate so that different stores with different physical layouts, customer bases and locales are all optimized. This means a Decision Management System that delivers dynamic, specific planograms for each store based on everything from sales to supply chain (see this Target story for example).

But why have companies continued to treat customers poorly? Well some of that comes from another point Schumpeter makes – customers want low prices AND great service. Keeping prices low has traditionally meant one-size-fits-no-one kinds of systems designed only for scale – the Henry Ford attitude to customer service. With Decision Management Systems, though, companies can deliver mass customization of the way they interact with customers and so scale great service so it is cheap and personal. This kind of breaking of ratios is one of the key benefits of Decision Management Systems I describe in the book.

And ask yourself this – if the call center rep you are speaking to is supported by great software that helps them rapidly figure out what your problem is and approves their taking the action necessary to fix it, why do you care where it is? Technology can be a barrier but it need not be – it can be an enabler and even IVR systems can be made responsive and personal.

So, rather than assuming that reaching a human being is the measure of CCO success as Schumpeter does, why not try a different approach. See if you can choose the channel you want to use and still get what you need. See if the channel you pick “knows” you. And if you do need or want to talk to someone, see if they can do what you need without referring you. That would represent success and that requires Decision Management Systems.