Attack The Service/Support Points of Pain

The 2023 CCMC National Rage Study had three findings that should give every service director concern.

The study, which made the CBS Evening News, found that 43% of Americans admitted to yelling at a service person and 21% thought that physical threats and taunts were acceptable, in at least some situations. Further, 9% had attempted to “get revenge” against a company in the last year.

While it has been a year since we published that study (we produce it every other year), we continue to see customer rage worsen.

A substantial part of that is the angry, selfish, dominating “me first/you last” with little-regards-to-others attitude accelerated by the COVID-19 pandemic and seen visibly in air and road rage and in restaurants and stores. But there are often legitimate reasons for upset customers that organizations need to address.

In most service environments, both B2C (business-to-consumer) and B2B (business-to-business), between 20 and 30% of serious points of pain (POP) for customers are also POP for service employees.

Examples of poor internal service and support include ineffective guidance and empowerment for service reps, stale or incomplete websites and knowledge management system (KMS) data, and service staff’s inability to get answers from Sales, Marketing, and Operations.

All three of these issues, in turn, cause their poor response to the customer. But if the internal service problem is rectified, you also immediately fix the external response POP as well as reduce the cost of staff chasing answers they should have had. Attacking one joint problem can make you a hero with customers, the service staff, Marketing, and Finance.

Internal Service Impacts External Service

Across all industries, our research and assessments of over 1,000 service systems including 45 of the Fortune 100, find that one-third of all non-self-service issues consist of needing information or action on status, pricing, or a technical issue that the frontline cannot immediately handle.

This is especially true in B2B environments because almost every business has slightly different needs. The service staff often must go to sales, operations or manufacturing to get answers.

On the other hand, most consumers buying yogurt or even an automobile have generally the same expectations and a limited range of needs (certainly consumers do vary by expertise, product involvement and whether they read the directions).

More than a score of employee surveys in a half-dozen industries indicate two broad causes of employee support points of pain. They are poor internal communication/service and an inadequately maintained KMS and websites.

Poor internal communication and service include a range of issues – how many have you encountered in your organization – most likely most of these.

• Failure of support departments to respond to inquiries by email or phone in a timely (e.g. immediately or within four hours) manner.
• Failure to respond ever.
• Ineffective response guidance with no believable explanation for policies and processes and lack of empowerment and management support.
• Surprise changes in production schedule or short shipment without notice.
• Promises made to customers by Sales and Marketing that have little or no chance of being fulfilled.

Inadequate KMS includes:

• Out-of-date sales and inventory data, e.g., minimum order quantities and pricing.
• No information on new policies and marketing offers.
• Lack of product information, e.g., specifications, ingredients, dimensions, lead times, or availability.
• Lack of real time access to accurate operations and production information, often from ERP (enterprise resource planning) and logistics tracking systems.

When internal service encounters any of the above issues, two things always happen.

First, service staff cannot provide an answer to the customer and must beg off while they investigate. Several staff members have told me, “I’m embarrassed that I can’t answer the question because, in a rational world, I would have access to that information!”

When we’ve compared satisfaction with immediate answers versus callbacks providing exactly the same answer, we’ve found at least a 10% decline in satisfaction and loyalty. Further, in B2B, one callback often turns into telephone tag, consuming three times the resources of a closed on first contact call.

Secondly, service staff waste 10 to 30 minutes of their time tracking down the information needed: purely wasted time, often at a loaded labor rate of $20-80 per hour.

These impacts occur whether in consumer or B2B environments, especially for high involvement products and services. The 2023 National Rage Study found that consumers encountered rage most often in housing, financial services, travel, technology, and automobiles: all critical parts of their lives.

In B2B, unpleasant surprises (e.g., delayed or short shipments, out of stock products, and software crashes can shut down a business) and poor/slow response to a problem can affect the career of the company manager responsible for that part of the company’s operations.

I talked with several supermarket meat counter managers who complained bitterly when a major chicken supplier short-shipped each about 100 chicken breast packages with no notice.

One said, “I personally get the complaints from multiple consumers in a single day because they come in, expecting to buy on sale, and then find the cooler completely empty! I get blamed for it and I really don’t like it.”

When we’ve compared satisfaction with immediate answers versus callbacks providing exactly the same answer, we’ve found at least a 10% decline in satisfaction and loyalty.

This can become even worse when the chain is B2B2C (business-to-business-to-consumer). I experienced this with a recent major home appliance purchase when, after paying several thousand dollars, I was then told there was a supply chain problem which would add nine months to the delivery date.

When asked for an explanation, the retailer, distributor, and manufacturer all pointed fingers at each other as to why I was misinformed. My loyalty to both the retailer and manufacturer has been damaged.

Identifying the Double Payoff Opportunities

Attacking double payoff issues is most effective when you can quantify the frequency and financial damage of such issues. The following steps result in buy-in from Finance, Marketing, Operations, and Quality.

Step 1

Via interviews of six to 10 frontline service and inside-sales staff, ask employees their frustrations with giving external customers good service. Identify their frustrations and ask them to note situations when an external customer is also impacted.

Step 2

Create a short survey of frontline employees, providing a granular list of 15-30 service delivery POP. For each POP, ask how often each frustration occurs, and how much time they waste each occurrence trying to chase down the information as well as other damage. An example extract of the POP is shown in Chart 1.

For instance, one technology company found that when a special quote could not be provided to a customer in less than 48 hours, the client almost always moved to the next vendor and the sale was lost. As each lost sale averaged more than $10,000, multiple delays per week added up to millions lost annually.

Step 3

Present a random sample of external customers (ideally, at least 1,000 customers to support statistical validity) with a list of problems and needs for assistance they may have encountered. The key questions are:

• Have you had any POP on this list?
• If so, did you complain or request assistance from the company and if you complained, how well was it handled?
• For all respondents (no problem, problem/complained, and problem/no complaint), ask loyalty and word-of-mouth questions.

Be sure to include in the POP list the timely response and information access issues the employees have identified in Step 2.

We find that the loyalty of customers with POPs who did not complain declines by 20% for both B2B and B2C customers. This makes the case for a strong program to solicit complaints, e.g., “We can only solve problems we know about!”

It is also useful to ask customers to describe how upset they were about the problems when engaging them on POPs. This is where the rage mentioned earlier among the meat counter managers will surface. Such vignettes are powerful stories to motivate management.

If you execute annual relationship customer surveys, you can differentiate this short survey as a problem resolution or “dissatisfaction” survey. Surprisingly, customers are very enthusiastic about such surveys.

Two Harley Davidson motorcycle owners, in their responses to a CCMC survey sponsored by the manufacturer, made comments such as, “Finally someone sent me a no-B.S. survey – looks like you really want to solve problems!”

Step 4

Compare the list of internal service problems with the customers’ external problems in terms of frequency and impact on loyalty and willingness to recommend the company.

Step 5

Identify the two or three issues that are prevalent on both the employees’ and customers’ lists. These issues are your opportunities for synergistic “two-fers” (employee and customer) resolution.

Implementation Example

Here is an example (see Charts 2 and 3) of the two-fer issues identified in Step 6 at an electronics manufacturing company based on CCMC surveys of about 200 frontline employees and over 1,000 technology manufacturing customers.

The employees were asked about their frustrations with giving external customers good service (Chart 2). As the arrows on Chart 3 show, the six frustrations were:

• Incorrect/no information on internal/external website.
• Calls to other departments not returned.
• Short shipments to customers without notice.
• Production changes without notice.
• Emails to other departments not responded to promptly.
• No response to emails requesting assistance from other departments.

These six problems caused over 40% of the overall damage to employee retention with 7.6% at risk of leaving the company out of 17% total of employees who would not recommend the company. Further, when asked how much time was wasted chasing down resolutions to those problems, over 1,400 staff hours were wasted each month costing over $100,000 in labor at loaded rates.

When a census of over 1,000 electronics parts customers were presented with a list of potential points of pain, the same issues raised by employees resonated with customers.

As shown in Chart 4, a conservative quantification of the revenue at risk due to these four POP, was $25 million annually out of a divisional revenue of $275 million.

The four problems highlighted placed over 9% of divisional revenue at risk. Each of these problems (website data, order changes without notice, unresponsive service, and delayed quotes) was rooted in an issue that had been raised by the frontline service staff in terms of poor communication and responsiveness from other departments.

Customers at Risk and Why

Management mandated three actions to address the dual POP:

1. Creation of a team to update stale data on the website serving both employees and customers, starting with the most popular products.
2. Creation of a company-wide communication standard where internal requests supporting external customers are given priority and high-quality attention. This policy also created a “Golden Rule” for all internal communications.
3. Creation of internal service agreements to ensure that product management and operations responded to communications from customer support and notified them of production and pricing changes in advance.

The results of the three management actions were very significant. Within a year, sales increased by $40 million, and sales lost from late quotes almost disappeared. Further, employee satisfaction and productivity increased dramatically.

Implement internal service enhancement initiatives...Communicate your actions to employees and customers.

Finally, customers who reported their expectations were exceeded had NPS (net promoter score) ratings 30 points higher than those who were just satisfied and 70 points higher than those who were only mollified. Advanced notice to support by Operations and Marketing allowed them to proactively notify customers of changes and advocate when needed. Bad news does NOT get better with age.

Recommended Actions

We’ve seen great success in both B2C and B2B companies when the following are the six steps used to identify and operationalize potential POP two-fers:

1. Interview your most articulate frontline employees and determine their frustrations: especially those problems and questions that impact external customers.
2. Incorporate POP into your next customer survey and include those that would result from the internal service issues identified by your employees. Identify their frequency and impact on loyalty and word-of-mouth.
3. Conduct a short employee survey focusing on training, empowerment, and service versus benefits and pay. Ask how much time is wasted each time the issue occurs.
4. Identify two or three overlaps and develop an action plan for each.
5. Implement internal service enhancement initiatives similar to the above case study. Communicate your actions to employees and customers. When the CEO of a credit union communicated the survey findings and resulting actions to the marketplace, he received 54 customer emails thanking him for asking and acting.
6. Measure the impact with process (reduced problem occurrence, callbacks, and fire drills) and outcome (loyalty survey and sales data) metrics and gain buy-in from Marketing, Sales, HR, and Finance.

Summary

The adage, “treat employees as customers,” is not only true but a key to enhancing customer experience (CX). If you fix internal service you’ll enhance external CX.