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Finding the missing million

I recently met Guy Letts, Founder and Managing Director of CustomerSure which is an all in one customer feedback system.

Apart from what I learnt about the product itself, I also learnt about  Guy’s journey, his experience and his ‘battle scars’ of being tasked with finding a missing million in revenue that took him ultimately to start the Customer Sure business after turning round the operations centre he managed.

Before founding CustomerSure, Guy was Head of Customer Services at Sage, the market leading business software company based in Newcastle and Guy was responsible for running a medium sized services operation with 120 staff, which was a business unit within the larger Sage organisation.

His customers were small and medium sized companies and, together with his experience prior to Sage, he’s been fortunate to learn by working with people at both ends of the corporate spectrum.

When he first took on the role there was a challenging revenue target in a less than favourable business environment.  He was tasked with growing a £20m ($30m) revenue line by 10%. This was before he discovered the customer attrition problem, which was running at 9% which made tackling the growth target even harder.

Guy set about the challenge by starting to improve customer satisfaction to both stem the attrition rate and to try and make headway into the challenging financial growth target he was tasked with.

In the period of time that he was in the role, he tried what all the customer service books typically tell you to do;

  • Train frontline staff
  • Use mystery shopping to provide feedback
  • Standardise processes
  • Answer the phone quickly
  • Audit people and process
  • Benchmark
  • Introduce a VoC programme
  • Conduct an annual measure of customer satisfaction

However in reality he soon realised that all these aspect didn’t work for him and his team. His experience in implementing them, showed that whilst most of the practices were good things to do, for him and his department at the time, they were not effective in moving the needle on their customer satisfaction dial. They didn’t deliver a return on the effort they were investing because they weren’t the things that were most important to customers.

All they succeeded in doing was to make a bunch of committed people even busier and more exhausted than they already were. 

Training the ‘front line’

This is of course important but it’s nothing like the whole story. Of course it’s vital to make sure that people who are in frequent contact with customers know how to listen carefully, deal with people appropriately to all the circumstances and reach an outcome that leaves the customer completely satisfied. Training also helps people deal with the often stressful demands of their roles.

The mistaken belief that organisations often have is that the ‘front line’ are the only people who influence customer satisfaction, and that training them solves the problem.

In fact, people who do that job generally enjoy dealing with people and are often good at it. Where it falls down is how they themselves are treated, the policies they have to defend, the systems and data they have to work with and the support that’s available for solving customer problems that are not mainstream or that need attention from someone elsewhere in the business.

A bad environment can grind down even the most motivated and talented people, and no amount of training will counter that. Furthermore, it ignores the fact that everyone in every role in a company has an impact on customers in some way. The people who set the policies, who deal with recruitment, deal with suppliers, drive the vans…everyone influences customers and potential customers one way or another.

Mystery shopping

“We found it told us what we already knew or could have worked out for ourselves.”

Clearly there’s some value in having a fresh perspective, and it’s sometimes easier for a third party to share uncomfortable truths, but however skilled are the proxy customers, they’re not real customers.

Guy’s view is that “I’ve found that customers are won or lost one at a time, according to their own specific preferences, circumstances and experiences of dealing with the company. It’s impossible to second guess the critical factors for a particular real customer. So again, we found this method can produce interesting results, but it didn’t improve conversion, retention or average spend.”

Standard processes

One of the common tenets of customer experience is that customers like consistency and people do, in general. Some restaurant chains, for example, go to extraordinary lengths to make experience the same no matter which restaurant you visit. Menus laid at the right angle, chairs neatly aligned and a precise number of pepperoni slices on the pizza. It’s all designed to make us feel more comfortable and reduce anxiety. Even in offices all over the world, brand consistency rules: colours and margins must comply for the sake of a consistent customer experience.

“Consistency does not beat quality” Guy explained. “Consistent presentation does not overcome a sub-standard deliverable, or an unhelpful attitude, or a call that’s not returned, or a deadline that’s missed without warning or a promise that’s not kept. So while there are benefits in standards, we had to make sure that we didn’t risk hitting the standard but missing the point, and disappointing the customer.”

Fast phone pick-up

This point Guy confessed, was an initiative that they were supposed to comply with at the time but they kept their heads down on this.

“Customers want a fast response and that is the key to customer satisfaction. Three rings to answer a call was the maximum at the time, and one ring the gold standard.”

However speed of answering the phone became a crusade and they saw other areas decline as response times improved dramatically. The result was that customer satisfaction actually dropped rather than improved.

This highlighted to Guy the danger of setting the wrong targets. Of course as customers ourselves, we all want a fast response. But customers prized more highly a call in which they would receive a sympathetic hearing, a friendly approach and a competent and caring first-time resolution. This was the new target that Guy subsequently adopted for his team.

Auditing

Guy is a big fan of peer reviews in helping to improve customer satisfaction. Having a competent ‘second pair of eyes’ observe and make constructive suggestions to his team was one of the biggest contributors to quality that he says he’s come across and used, and it can be applied to most tasks.

On the other hand though, he hated prescriptive checklists which just rewarded people for going through the motions and distracted focus from the quality of the deliverable. Audit is good for maintaining quality and developing people, and he adds “I’d say there’s always a place for it, but by itself it’s not the answer – it can improve quality and consistency, but it doesn’t guarantee the customer will be happy.”

Benchmarking

Guy’s got an interesting view point on this subject which won’t sit comfortably with some people.

“Benchmarking customer satisfaction is a waste of time. There is no RoI because the activity does not benefit customers.”

“You might benchmark some other things, perhaps the specifications of your product or service – that could be helpful, especially in a competitive market. Certainly you should measure customer satisfaction. But the only thing you should compare against is the reasonable expectations of your customers. If you score highly on that, you’re good. If you don’t, you have work to do – and one by one they are the (only) people who can tell you what that work is. It really doesn’t matter how other companies are doing. At least not in my experience.

If you still want to try, then benchmark yourself against somebody impressive, not your competitors.

Voice of the Customer (VoC)

The challenge here is that most VoC projects are not done in a way that actually benefits individual customers. On the contrary, the problem is that they can often leave individual customers feeling that they have been ignored.

Here’s the issue as Guy sees it:

“If you ask customers for their views, you need to be prepared to respond immediately if they use that opportunity to report a problem.

A problem may not be the type of feedback you were looking for. But if you ignore the ‘wrong’ type of feedback, how do you think a customer will feel when that happens?

Of course it’s not the feedback you wanted. You were looking for feedback that helps you plan the future shape of your business. What are the deep insights that you can get from customers to make your company even more popular and so even more profitable? Well, you may well get some responses like that.

But because I’ve done this, and read all the responses, I’ve found that you’ll get far more reports about things that need fixing for customers now – not in a month or two when the feedback has wound its way round to every stakeholder in the business and then a team has decided what to prioritise.

In our experience, we realised that we needed to deal with issues and problem within 24 hours (although preferably within an hour). Once we started to deliver against that, we started to blow customers’ socks off!”

The foundation to put in place first and foremost then for a VoC program to be successful, is to prepare staff and systems to respond quickly to whatever comes back from customers.

Annual satisfaction surveys

Again, Guy’s view on this typical and often traditional approach that many organisation follow could be viewed as counter intuitive or even down right heretical!

“These provide great sentiment, but I’ve never seen these deliver good results for customers nor, therefore, for a business.”

In his role in which he first learnt all these lessons he inherited two annual surveys from prior years.

“The background was that I needed to deliver 10% growth, but I’d just learnt that we had 9% attrition – so in reality we needed nearly 20% growth because we first needed to replace the revenue we’d lost.  I was therefore very anxious to read what all these customers had said.”

He described the feeling as his heart sank though when he read line after line of cries for help in the customer feedback, all of which had not even been read, let alone actioned.

“I counted that we could have saved 6 in every 10 customers that we had lost…if only the surveys had been read and the customers’ issues resolved.”

The light bulb moment came for guy when he realised that these initiatives weren’t exactly wrong, they just weren’t enough. He recounts;

“I spent many months trying things like these, visiting other companies, reading the literature and listening to people who’d achieved some success.  It did feel like we were making progress, but we were only inching forward.”

His breakthrough came when he and his team set up a basic customer feedback system.  After the painstaking, incremental improvements in customer satisfaction he’d seen before, this one system started delivering remarkable results.

With hindsight it’s easy to see why but when you’re in the thick of it and under pressure it’s much more difficult. “Looking back it’s obvious why it worked” he says.

“When we did something for a customer, we just asked them simply and politely whether they were completely satisfied or not, rather than leaving it to chance.

If customers were happy, they appreciated that we were concerned to check.  We also got some positive feedback to encourage the teams or to display as a review.  If on the other hand there was a problem, we made it dead simple for customers to get it fixed.”

The customer feedback system delivered dramatic benefits from the outset and Guy and the team carried on working hard to get the process right for customers so that they could continue getting the maximum benefit for the business.

“The main thing we learnt was that customer satisfaction doesn’t depend on what you do, it depends on how the customer feels.” Something that’s easy to forget in a busy and fast past business focussed on delivering on its financial commitments.

Between doing the best and the final outcome for the customer all sorts of things can go wrong.  “You think you’ve done a great job, yet the customer can be fuming.  Unless you close the loop and check for satisfaction, you have no idea.  Meanwhile your marketing goes in the bin, your reputation suffers, and your competitors are being asked to quote.

Even when someone has smiled and shaken you warmly by the hand, that’s no guarantee of success.  Nobody likes initiating an awkward conversation…sometimes they just decide to vote with their feet.”

What the team came to realise is that by checking for satisfaction, in a way that’s fast and convenient, for customers and making it clear that honest comments were welcomed, they started to guarantee and realise increased satisfaction, retention and more repeat business with the confidence that there was a firm grasp of all the issues that were important to customers.

“By improving customer satisfaction we met our revenue budgets and then grew it for 3 successive years before I left to set up Customer Sure based on the principles and my experience of what really works.”

This approach can be succinctly summarised by the 3 key principles for a successful customer feedback system which not only made Guy’s operation a success, they also form the basis of the CustomerSure approach;

1. Focus on business benefits

2. Make it easy for customers to have their say

3. Act on customer feedback.  Immediately.  Every time.

Simple. And so it should be because that’s exactly what customers want.

(Article originally written for the January 2014 edition of Customer Experience Magazine)