Customer Service Strategy: A 10-Step System

Implementing a successful customer service strategy could take several months or even a year. Do not expect to change things overnight. Unfortunately, life (and business) isn’t that easy – yet that is the mistake that many business owners make. To effect real change, you must change behavior and ingrain the new standards into the culture of your business.

This article looks in some detail at the customer service strategy.
 
Step 1: Commit to the Project
 
During the first stage of this process, you must become thoroughly involved in the project. It’s imperative that you “walk the talk”. It’s absolutely critical to the success of the customer service strategy, and it’s something that cannot be effectively delegated.
 
Here are some suggestions for taking this important first step:
  1. Communicate the customer service strategy to all team members.
  2. Get the team members totally involved in establishing performance standards for customer service.
  3. Make customer service issues a regular item on your meeting agenda.
  4. Deal with all problems by asking, “What is in the best interest of our customer?”
  5. Establish a system for rewarding team members for delivering outstanding customer service above all other performance criteria.
  6. Encourage team members to give you feedback about the standard of service.
  7. Spend as much time as possible in direct contact with your customers so that you discover their needs and frustrations.
  8. Set up a system for measuring the impact of your customer service strategy.
Step 2: Assess the Standard of Your Present Service Level
 
It’s important to benchmark your progress and have a starting point to work from.
 
Rate the present service level of your business on a scale of 1-10. Once you’ve done that, you’ve established the mindset and a target to move toward.
 
Step 3: Determine Your Customers’ Needs
 
During this step, send out a carefully designed survey to your existing clients (and one-time clients that you have serviced in the past).
 
Some things you’ll want to ask in the survey:
  1. Have you used other providers of our product or service in the past?
  2. Did that company do anything that you think this company should replicate?
  3. How would you rate the level of service you receive from this company?
  4. Are you sure you know all the services this company provides?
  5. How important do you feel to this company when dealing with us?
  6. Are services and materials delivered when promised?
  7. How is the timing of invoicing and information?
  8. Would you like the company to be more proactive in its communication with you?
  9. What are the top two things you like about the company?
  10. What are the top two things you dislike about the company?
Step 4: Set Performance Standards
 
During this step, you and your team generate ideas for moving toward a “10” and start the process of creating performance standards based on what your clients want.
 
Keep a running list of these ideas as you generate them. Examples might be:
∙ We will always arrive when promised, and if we don’t, we will not charge for the first hour of work.
∙ Our personal and professional presentation will always be top-notch (e.g. uniforms, cleanliness, politeness, etc.)
∙ We will give you an update of our progress every day before we leave the site.
 
Step 5: Identify the Moments of Truth
 
A business is nothing more than a bunch of activities performed by people (team members and managers) to meet the needs of other people (customers). Some activities are visible to the customer. Some are not.
 
The visible activities are the ones the customer sees or experiences. These are the points of contact, or, in Jan Carlzon’s words, the “moments of truth” – the moments when your customer decides how you score on the service spectrum. A moment of truth is that precise instant when a customer comes into contact with your business and, on the basis of that contact, forms an opinion about your business and the quality of the products or services being sold.
 
A single occasion of contact may give rise to several moments of truth. In a simple, straightforward process – handling an inbound telephone call – you have a number of opportunities to delight or disgust a customer. Just one could undo all the good that was accomplished with the others. And you won’t be judged on the basis of the five good points. You’ll be judged on the basis of the one bad point.
 
For example, when a customer calls your business to speak to a salesperson, the moments of truth (MOTs) are:
  1. The phone rings (MOT 1). How long did it take to answer?
  2. You take the call (MOT 4). How warm was your greeting?
  3. The customer raises an issue with you (MOT 5). How did you deal with it?
  4. You finish the call (MOT 6). How warm was your closing remark?
Invisible activities, which aren’t evident to the customer, are no less important. These things occur behind the scenes, such as negotiations with suppliers to ensure that products arrive on time to meet your customers’ orders, or specialized team training to ensure that they can competently advise and help customers.
 
The most useful way to manage a business through the eyes of your customers is to visualize your organization as dealing with its customers in terms of a service cycle (the sequence of events or activities involved in doing business with your customers). What you do, how you do it, and the enthusiasm and commitment at each point along this cycle determines the way the customer feels at the conclusion of the transaction.
 
The cycle starts with the initial point of contact with the customer, such as an ad or an inbound phone inquiry. It continues with the way you identify what the customer wants, how you fill that need, how you provide after-sales follow-up, and how you handle any subsequent problems.
 
When you break down your business into the sequence of activities in the service cycle, you gain valuable insight about how you can better meet your customers’ requirements. This way you can start to develop customer-friendly systems – that is, policies, procedures, and practices designed with the customer in mind, rather than the business.
 
Once you’ve identified the moments of truth in your service cycle, systematize the processes involved at each moment of truth so that your customer is predictably delighted in a consistent manner.
 
Step 6: Manage Your Business through the Eyes of Your Customer
 
As the manager of your business, it is useful to view one aspect of your role as being the customer’s representative on the board of management. If you were paid by these people, how would that affect your management decisions? When you think about it, your customers are the ones who pay you at the end of the day. Without customers, the business ceases to exist. So it makes sense to manage it with their needs in mind.
 
Too many businesspeople believe their customers are out to take advantage of them. They respond with a combative mindset. To survive and prosper, they have to force customers to play by their rules. This does not work. If you adopt the position of customer advocate in your business, you will make decisions with the customer’s interest in mind. For example, with each decision, you will ask yourself the following questions:
  1. What are the options?
  2. What customers or groups of customers will be affected?
  3. Will the effect be positive or negative?
Some people might suggest that it’s naïve to manage your business as if you are a customer. For example, if you take this idea to its logical conclusion, you’d never increase prices, and you’d go overboard with your service. In response we say this: If customers want a business to continue servicing them, the business must survive. To survive, it must make a profit. To make a profit, it must charge a price that is fair for the value offered. If costs go up, the customers will be well-served by a rise in price.
 
Here’s a 10-point checklist we’ve adapted from the excellent book Customers for Life: How to Turn that One-Time Buyer into a Lifetime Customer (Carl Sewell and Paul B. Brown, Pocketbooks, 1998). Use the checklist for new ideas. It will help you get the end result right the first time.
 
    1.   What’s the benefit to the customer? 
    2.   Will the customer easily understand that fact?
    3.   What impact will this idea, program, or system have on our employees?
    4.   How will it affect our existing system?
    5.   Is anybody else doing it successfully? What can we learn from their experience? 
    6.   What could go wrong?
    7.   Will it give us an advantage over our competitors?
    8.   How much will it cost?
    9.   Will it make money? 
  10.   When should we evaluate it?
 
We should add one more point. Businesses whose customers rate them as providing above-average service charge an average of 10% more than businesses rated below average. It seems customers place a premium on above-average service.
 
If you try to run your business with your eye constantly on the bottom line, you’re looking in the wrong direction. It’s a bit like playing a game of tennis with your eye on the scoreboard rather than the ball. Ultimately the profit you earn is a measure of your success in meeting your customers’ needs, wants, and expectations. An even more telling measure is your growth in profit over time, because this reflects continuing customer patronage.
 
Step 7: Focus Attention on Your Team Members
 
You should also put systems in place to involve your team members and focus attention on them.
 
Here are some issues to consider with regard to team members – present AND future:
  1. The people who have the most contact with your customers are your team members. How these people feel about themselves and their role in your organization will determine how they treat your customers.
  2. Your team members will treat your customers the way you treat your team members. If you are indifferent or uncaring toward your employees, you can expect them to adopt a similar attitude toward your customers.
  3. The way you treat team members goes beyond simply treating them with respect and dignity, critically important though this is. It also includes the systems and procedures you expect them to use to carry out their work, as well as the backup and support available.
  4. Nothing is more frustrating or difficult than when the system fails the team member – an irate customer vents his anger on a team member, who was either not responsible for the cause of the customer’s complain, or who was doing his job exactly how he or she was told to do it.
  5. Systems designed for the benefit of the business rather than the customers are a major cause of customer-sensed indifference and team member job dissatisfaction.
You don’t need to do much to show your team members that you respect and value their contributions. Consider these points:
 
    1.   Make sure they know what the business is seeking to achieve, particularly for customer service.
    2.   Give them regular opportunities to express opinions on how customer service can be improved and their jobs made easier or 
          more enjoyable.
    3.   Establish performance standards that you and they can use as a benchmark, and be sure to give them regular feedback.
          Be available to support them if a problem arises. Always seek to get to the root cause of the problem rather than simply  
          dealing with the symptoms.
    4.   Show concern and, when possible, give assistance to team members when they have personal problems.
    5.   Publicly praise a job well done, or a difficult situation well-handled.
    6.   Reprimand in private and as soon after the event as possible. Always ensure that the reprimand addresses the problem rather
          than the person, and that it concludes with a positive affirmation of the person’s value to the business.
    7.   Treat all team members with the same courtesy you extend to customers. This means using their preferred names and saying
          “please” and “thank you”.
    8.   Celebrate team accomplishments.
 
That is the theory out of the way – the important part, of course, is to put it into practice. We will work with you to set Action Plans for systematizing the process, and be sure to allocate “by whom” and “by when” for each action.
 
Step 8: Train, Then Empower Your Team Members
 
Tell your client that if a team member doesn’t know what is expected of them, or isn’t given specific instructions on how to perform the assigned tasks, output quality will vary and will be below acceptable standards. Not only that, the team member will derive little satisfaction from the job and will quickly adapt an indifferent attitude.

But training is only part of the story. You must empower the team with the responsibility they need to get the job done. If they have to defer to the boss for every decision, the boss becomes the weak link in the chain. Decisions will be made on the run without full consideration of the circumstances and the facts. As the boss, you will be forced to spend most of your valuable time dealing with trivial issues rather than important matters. And you’ll quickly lose faith in the ability of your people. Once that happens, the noose becomes tighter.
 
Empowerment is not simply giving people responsibility. It’s also giving them the opportunity to take responsibility for their actions, then helping them learn from the consequences of those actions. Discuss these points with your client:
 
    1.  Clearly, empowerment without training is a recipe for disaster, as is training without a purpose. So before you even start to
         think about giving your employees room to move, you must decide precisely what you want them to accomplish. This is what
         Steps 3 and 4 are all about.
    2.  One of the most important aspects of employment is giving the team members authority to resolve customer problems and
         complaints the instant they occur – wherever and whenever possible. To do this, the team member needs to be sensitive to the
         organization’s total commitment to delighting customers. This often means reprogramming the team members’ concept of
         customer service and the boundaries within which they can unilaterally operate.
    3.   If you are serious about service and you want your team members to deal with problems, you must support them absolutely,
         even when they make a decision you wouldn’t have made. When this happens, it’s important to get the team together, discuss
         the issue, and work out better approaches.
    4.  This turns the experience into a learning situation. It also gives you an opportunity to identify the source of the problem so that
         it can be eliminated. It is a continual process, but over time systems improve, attitudes improve, and team members get
         quicker, more skilled, and more creative in dealing with problems.
 
A great resource to demonstrate these points to your client is Making Your Business Really Fly.
 
It eloquently demonstrates the points you have made.
 
Step 9: Implement a Feedback System
 
Feedback is a two-way process. You need to give your team members information that lets them know how they’re performing and how the business as a whole is performing. The other direction of feedback is from the team members to management. It is critically important that they let you know what’s happening in their part of the business. This relates to matters with customers, in particular, but also must involve people who work in other parts of the organization.
 
It’s important to remember that the customer is at the end of the service chain. The ability of people who are dealing directly with customers and are trying to delight them depends, in large measure, on the work done by people down the line. For example, the person serving the mean in a restaurant is not the person who washed the dishes or prepared the meal.
 
The only way the kitchen worker will know how the customers feel is if there is feedback from the customer to the waiter and from the waiter back to the kitchen. Too often people adopt a poor attitude: “I’m not the cause of the problem. Therefore, it’s not my problem. I’m doing my job as well as it can be done, so who cares?!”
 
Team members need to know the critical success factors of the business, how they’re measured, and how they relate to the overall mission of the business. These are the handful of things that you must get right. Key Performance Indicators reflect how the business handles these things. Generally they will be activity-related measures, such as occupancy rate or number of meals served per day, or per hour, or per shift. Or they may be performance-related, such as the amount of time taken to fill an order or out-of-stock situations. Some of them will be financial, such as the average value of a sale.
 
The type of feedback team members give to management is more subjective. For example, it relates to situations or experiences that management needs to know. It also relates to system failures or inefficiencies that could be eliminated by changing processes. Conducting regularly structured but informal meetings with team members is the best way to deal with this type of feedback. But for these meetings to be effective, you must create a climate of trust and mutual respect. Everyone needs to know their ideas are valued. If, for some reason, a change cannot be made, the reason should be made known.
 
Another way to obtain feedback is through regular team member reports. In our opinion, these should be received weekly from each team member or from the team leader, if that is more appropriate. These reports must be acknowledged and acted on by management.
 
You’ll find a team member weekly report in the Business Development Program (Form 8). The most important aspect appears in the lower right of the form: “I want someone to talk with me about these ideas.” As soon as a team member checks that box, management is committed to discussion. That way, you encourage an innovative culture where team members know they won’t be ignored.
 
A third element in the reporting framework is an incident report prepared by the team member, who should make suggestions about how to prevent the problem from occurring again. As with the weekly team member reports, if you want your team to continue to give you feedback, you must respond to the reports.
 
Another aspect of your system is letting people know when they’ve done well. So often the drive for greater efficiency focuses us on the things that go wrong. However, the best way to keep people motivated and moving forward is to let them know they’ve done well as vocally and with as much drama as possible.
 
Step 10: Create a Continuous Improvement Mentality
 
This is the final step in your customer service strategy, and the one that is the hardest to give you a system for implementation. Suffice it to say that Rome wasn’t built in a day, but it didn’t take long to collapse when the slide started.
 
In his seminal article in the Harvard Business Review, John Kotter wrapped up his discussion by outlining the error many organizations make that contributes to the failure of transformation efforts (“Leading Change: Why Transformation Efforts Fail,” Mar/Apr 1995). The points he makes are totally relevant here. Kotter discusses the two factors that are particularly important for institutionalizing change.
 
The first factor is the importance of making a conscious effort to show people how the new approaches, behaviors, and attitudes helped improve performance. Kotter suggests that inaccurate links can be made if this is left to team members to figure out. He gives the example of a company that achieved better results under the stewardship of a charismatic box. The team linked his idiosyncratic style with those results rather than seeing how their own improved customer service and productivity were instrumental.
 
Helping people see the right connections comes down to communication. Kotter suggests that time be invested at every major management meeting to discuss why performance has improved. He also suggests that the findings be documented (say, by publishing articles in an internal newsletter) to show how the changes boosted profitability.
 
The second factor is a company’s failure to make succession planning. Many times leaders want to get out of the business and put in place a new management team. It is critical that the next generation of management totally personify the new approach; otherwise the changes you and your client implement will be lost virtually overnight. So link this strategy with the succession planning you will be doing with your client, and ensure that the management you are lining up to take over from your client are involved right from the start and are champions of the change effort.