What do I have to manage? Customer Service – Part 1

Wednesday, August 18th, 2010

Up to now, we’ve had a good look at a few basic, but absolutely essential aspects of a business that you, as the business owner, simply have to manage on a daily basis.  So far we’ve covered:

  • Cash flow – because this is where reality bites!
  • Being able to monitor your trading performance, through a simple but efficient business intelligence system
  • Hiring, keeping and motivating good staff

Now we’re going have a look at the area that, for me, is probably the most important of the lot.  And it’s quite simple really – without customers you don’t have a business and the rest is of no consequence!


 The latest terminology in this regard is “Customer Relationship Management” or CRM.  The market abounds with new software to make this task easier, but it doesn’t come cheap – especially for small business.

There are also hundreds of books on the market about marketing and customer service, – most of which will contain much more specific advice on the concept than I could hope to cover in a few short pages.   However, I do want to address a few basic aspects that I believe most small businesses tend to overlook, – aspects which I believe are vital to the health of a business (and particularly those businesses in distress), and which should not be under-estimated by management. 

These aspects can all be included under the heading of “engaging” your customers.  The Gallup surveys revealed one important relationship – there was a direct correlation between the level of engagement of employees and the level of engagement of customers!

So, – as much as you want to be engaging your employees, you want to be engaging your customers.  If you don’t get the first one right, you can forget about the second one!

To explain this in more detail, lets have a look at the categories of customer engagement as defined by the Gallup Organisation: (in the book “Follow this Path”by Curt Coffman & Gabriel Gonzalez-Molina)


These customers are:

  • Responsive – this means that they pay their bills promptly;
  • Positive – they show a consistent pattern of effective use of your business’s service infrastructure because they learn about your business, and they are willing to try any new products and services, that you may provide.
  • Listeners – They are most likely to welcome any of your innovations and try new products and brand extensions.
  • Fair – They are least likely to submit unreasonable restitution claims.
  •  Sustainable – They value long-term relationships with their brands and provider organisations – your business, as their supplier of choice.

 A fully engaged customer sounds something like this:

“I thought that buying things was something that we just had to do, something to satisfy our basic needs.  But in the course of getting to know your products and being in contact with your organization I have learned that I can enjoy being your customer.  You have made me feel important and valuable; I can always count on you.  I often ask myself this question: “Why didn’t I contact you before?”  You are not only the best there is – the way you make me feel as a customer is truly legendary.” (“Follow this Path” – emphasis – mine.)

Ken Blanchard, in his book entitled, “Raving Fans: A revolutionary approach to customer service” says this:

Great service is not an accident. It starts when you decide what kind of experience you want your customers to have — when you articulate a clear vision. You keep it alive by empowering your people to go the extra mile for the customer. When it’s innovative and comes from the heart, great service keeps customers coming back again and again.

Blanchard goes on with:

Tony Hsieh, CEO of Zappos.com, understands what great customer service — or, as they call it at Zappos, WOW service — is all about. Once you read the following excerpt, you’ll understand two things. First, you’ll figure out why Zappos quickly became the biggest online shoe store. Second, you’ll know the company is not exaggerating in calling it WOW service.

Excerpted from Chapter 5 of Delivering Happiness: A Path to Profits, Passion, and Purpose – by Tony Hsieh

We receive thousands and thousands of phone calls and e-mails every single day, and we really view each contact as an opportunity to build the Zappos brand into being about the very best customer service and customer experience. Looking at every interaction through a branding lens instead of an expense-minimization lens means we run our call center very differently from most call centers.

Most call centers measure their employees’ performance based on what’s known in the industry as “average handle time,” which focuses on how many phone calls each rep can take in a day. This translates into reps worrying about how quickly they can get a customer off the phone, which in our eyes is not delivering great customer service. Most call centers also have scripts and force their reps to try to upsell customers to generate additional revenue.

At Zappos, we don’t measure call times (our longest phone call was almost six hours long!), and we don’t upsell. We just care about whether the rep goes above and beyond for every customer. We don’t have scripts because we trust our employees to use their best judgment when dealing with each and every customer. We want our reps to let their true personalities shine during each phone call so that they can develop a personal emotional connection (internally referred to as PEC) with the customer.

Another example of us using the telephone as a branding device is what happens when a customer calls looking for a specific style of shoes in a specific size that we’re out of stock on. In those instances, every rep is trained to research at least three competitors’ Web sites, and if the shoe is found in stock to direct the customer to the competitor. Obviously, in those situations, we lose the sale. But we’re not trying to maximize each and every transaction. Instead, we’re trying to build a lifelong relationship with each customer, one phone call at a time.

A lot of people may think it’s strange that an Internet company is so focused on the telephone, when only about 5 percent of our sales happen through the telephone. In fact, most of our phone calls don’t even result in sales. But what we’ve found is that on average, every customer contacts us at least once sometime during his or her lifetime, and we just need to make sure that we use that opportunity to create a lasting memory.

The majority of phone calls don’t result in an immediate order. Sometimes a customer may be calling because it’s her first time going through the returns process, and she just wants a little help stepping through the process. Other times, a customer may call because there’s a wedding coming up this weekend and he just wants a little fashion advice. And sometimes, we get customers who call simply because they’re a little lonely and want someone to talk to.

I’m reminded of a time when I was in Santa Monica, California, a few years ago at a Skechers sales conference. After a long night of bar-hopping, a small group of us headed up to someone’s hotel room to order some food. My friend from Skechers tried to order a pepperoni pizza from the room-service menu, but was disappointed to learn that the hotel we were staying at did not deliver hot food after 11:00 pm. We had missed the deadline by several hours.

In our inebriated state, a few of us cajoled her into calling Zappos to try to order a pizza. She took us up on our dare, turned on the speakerphone, and explained to the (very) patient Zappos rep that she was staying in a Santa Monica hotel and really craving a pepperoni pizza, that room service was no longer delivering hot food, and that she wanted to know if there was anything Zappos could do to help.

The Zappos rep initially was a bit confused by the request, but she quickly recovered and put us on hold. She returned two minutes later, listing the five closest places in the Santa Monica area that were still open and delivering pizzas at that time.

Now, truth be told, I was a little hesitant to include this story because I don’t actually want everyone who reads this book to start calling Zappos and ordering pizza. But I just think it’s a fun story to illustrate the power of nothaving scripts in your call center and empowering your employees to do what’s right for your brand, no matter how unusual or bizarre the situation.

As for my friend from Skechers? After that phone call, she’s now a customer for life. (emphasis – mine.)

One can see from that excerpt that fully engaged customers result from the efforts of fully engaged employees.

In the next Newsletter, we’ll have a look at the other categories of customer engagement – I think you’ll be surprised!