Strategic Customer Service: Managing the Customer Experience to Increase Positive Word of Mouth, Build Loyalty, and Maximize Profits

273 Pages·2009·1.03 MB·English

by  John A. Goodman

Strategic
Customer
Service
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Strategic
Customer
Service
Managing the Customer Experience to
Increase Positive Word of Mouth,
Build Loyalty, and Maximize Profits
John A. Goodman
American Management Association
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Contents
FOREWORD xiii
INTRODUCTION: WHY STRATEGIC CUSTOMER SERVICE? 1
Beyond the Complaint Department 3
Why Bother with Strategic Customer Service? 5
Everyone Has a Stake in Service 7
The Origins of This Book 9
The Structure of This Book 10
Starting Strategically 11
PART 1: THE IMPORTANCE OF CUSTOMER SERVICE
1. SEEING CUSTOMER SERVICE STRATEGICALLY:
Understanding the True Role of Customer Service in Your Business 15
How Customer Service Affects a Business 16
The Bad News 16
The Good News 18
Making the Business Case for Improvements in Service 19
Clarifying Key Concepts 21
A Model for Maximizing Customer Satisfaction and Loyalty 23
Do It Right the First Time (DIRFT) 25
Respond Effectively to Questions and Problems That Arise 25
Feed Data About Issues to the Right Parties 26
Capitalize on Opportunities to Sell Ancillary or Upgraded
Products or Higher Levels of Service and Create Connection
and Delight 27
First Steps to Strategic Customer Service: Economic Imperative
and VOC 28
Key Takeaways 29
v
vi Contents
2. WHAT DO CUSTOMERS WANT (AND WHAT SHOULD WE DELIVER)?
Understanding Customer Expectations and Setting Goals Strategically 31
Unexpected Reasons for Unmet Customer Expectations 32
Trends in Customer Expectations About Service 33
Broad Trends in Customer Expectations 34
Operational Expectations for Tactical Customer Service 36
Setting Service Goals Strategically 41
Operationalizing the Process Goals 43
Financial Goals 46
Key Takeaways 48
PART 2: IDENTIFYING IMMEDIATE REVENUE AND
PROFIT OPPORTUNITIES
3. TACTICAL RESPONSES AND STRATEGIC SOLUTIONS:
Dealing with Customers’ Problems and Addressing Their Causes 51
Tactical Versus Strategic Problem Solving 53
Five Steps to Tactical Problem Solving 54
Step 1: Solicit and Welcome Complaints 55
Step 2: Identify Key Issues 56
Step 3: Assess the Customer’s Problem and the Potential Causes 57
Step 4: Negotiate an Agreement 57
Step 5: Take Action to Follow Through and Follow Up 59
Six Tasks Connecting the Tactical Response to the Strategic Feedback
Loop 59
Task 1: Respond to Individual Customers (and Capture Data) 60
Task 2: Identify Sources of Dissatisfaction 61
Task 3: Conduct Root Cause Analysis 61
Task 4: Triage to Solve/Resolve Systemic Problems 62
Task 5: Provide Feedback on Prevention 63
Task 6: Confirm Improvement of Product and Service Quality 63
Unconventional Management Wisdom 64
Redefine Quality 64
Aggressively Solicit Complaints 65
Get Sales Out of Problem Solving 65
Assume that Customers Are Honest 65
Key Takeaways 66
Contents vii
4. FIXES AND FINANCES:
Making the Financial Case for Customer Service Investments 67
The Case for Great Customer Service 69
How CFOs Think 71
Questions to Guide Modeling the Customer Experience 72
The Market Damage Model: What’s the Damage? 74
Data and Output 75
Financial Impact 77
What Is the Payoff if We Improve? 78
Objections to the Market Damage Model 80
The Word on Word of Mouth 81
Quality and Service Allow You to Get a Premium Price 82
The Market-at-Risk Calculation: Identifying Customers’ Points of Pain
Across the Whole Experience 84
What About Customers With Limited or No Choice? 87
Impacted Wisdom 88
Key Takeaways 89
5. INFORMATION, PLEASE:
Developing an Efficient, Actionable Voice of the Customer Process 90
The Objective of VOC and Its Key Building Blocks 91
Three Sources of VOC Information and What They Tell You 93
Internal Metrics 93
Customer Contact Data 94
Survey Data 95
The Attributes of an Effective VOC Process 97
Unified Management of the Program 98
A Unified Data Collection Strategy 98
Integrated Data Analysis 99
Proactive Distribution of the Analysis 99
Assessment of Financial Implications and Priorities 100
Defining the Targets for Improvement 100
Tracking the Impact of Actions 101
Linking Incentives to the VOC Program 101
The Two Major Challenges in Using Customer Contact Data in VOC
Programs 101
Developing a Unified, Actionable Data Classification Scheme 102
Extrapolating Data to the Customer Base 104
Getting Started in Improving Your VOC Program 105
Key Takeaways 106
viii Contents
PART 3: RESPONDING TO CUSTOMERS’ QUESTIONS
AND PROBLEMS
6. DEFINING PROCESSES THAT WORK FOR CUSTOMERS:
Using the Eight-Point TARP Framework for Delivering Service 111
Framing the Work 112
Tactical Functions 114
Intake 114
Response 115
Output 115
Control 115
Strategic Service Functions 115
Analysis 116
Evaluation and Incentives 116
Staff Management 116
Awareness 117
Why Use the Service Delivery Framework? 117
The Flowchart of the Framework 120
Best Practices for Improving Specific Functions and Activities 122
Activities Within the Tactical Functions 122
Activities Within the Strategic Functions 125
Implementing the Framework 127
Map the Tactical Service Process with Visual Tools 128
Use Employee and Customer Input to Redesign the Process 128
Tweak the Technology to Enhance Tactical Service 129
Create or Strengthen the Analytical Functions 129
Enhance Strategic Service Across the Organization 129
Practice Continuous Improvement 129
Get Your System Framed 130
Key Takeaways 130
7. TECHNOLOGY AND THE CUSTOMER INTERFACE:
Creating Systems That Customers Will Use—and Enjoy 131
Why Customers Love-Hate Technology 132
When Customers Hate Technology 133
When Customers Love Technology 133
Getting the Customer-Technology Interface Right 134
Make the System Intuitive for Both Novices and Veterans 135
Contents ix
Create a System That Will Save the Customer Time and You
Money 135
Educate and Encourage Customers to Adopt the Technology
Cheerfully 136
Start With a Few Functions to Guarantee Success 138
Which Technology Should You Apply? 138
Nine Technological Applications to Consider 138
Interactive Voice Response 139
E-Mail and Chat 140
Web sites 142
Web Video 143
Automated Web-Based Self-Service 144
Recording Interactions 145
Mobile Communications 146
CRM and Data Mining 146
Machine-to-Machine Communication 147
A Few Words on ‘‘Push’’ Communications 149
Key Takeaways 150
8. PEOPLE ARE STILL PARAMOUNT:
Four Factors for Creating Sustained Front-Line Success 151
The High-Turnover Mentality and Its Subtle Cost 152
The Alternative to High Turnover 153
Factor 1: Hiring the Right People 154
Positive Attitudes Make a Difference 154
Proper Staffing Is Essential 154
Factor 2: Providing the Right Tools 155
Give Employees the Information They Need 156
Empower Them to Act 157
Use Feedback Channels 158
Factor 3: Offering the Right Training 158
Four Types of Training 159
Factor 4: Supplying the Right Motivation 161
Competitive Compensation 162
Superior Supervision 162
Excellent Evaluations 163
Avoiding Problems with Satisfaction-Based Incentives 166
Recognition and Advancement 168