Customer Service

I would like to open my discussion with a brief introduction of the organization I work for: Swatchgroup. It is the largest watch manufacture in the world with 22 individual watch brands under group. Each brand operates relatively independently in term of product design, manufactory (Few rely on group resource for mass production, e. g. : Swatch), retailing, sales, marketing and finance. Therefore, I will choose one brand – OMEGA that I have been worked for over 4 years to critically evaluate its operation management strategy.

There are also many crucially important parts of service operation systems in watch manufacture: sales and after sales, business to customer (retailing), business to business (wholesale), suppler chain management and logistics management, etc. I will use after sales – the customer service operation as my objective for analysis. Firstly, to identify at which stage of the Hayes and Wheelwright model the operations of customer service function of OMEGA place, I will lay out its function operation by the four Vs analysis (ref 1) and the process map.

It works as below process in terms of Vs positioning and process: (4Vs) It is obvious that OMEGA, as a prestige watch product, offers its customer relatively reliable, hi-classified, customized and direct operation service. So we arrange “bank counter” service, where our customer can talk to receptionists face to face about their watches’ problem (front line).

After receptionists recognize the demand of the customer, e. g: watch strip shortening or caliber malfunction, the demand will be assessed individually: e.g. : watch strip shortening can be processed in the back stage within 20 min (XXX), while caliber malfunction need to be further diagnose with the problem, sent to local manufactory workshop to be fixed(XXXX). The customer will be informed with the repair period, alternatively with the service receipt, customer is also able to track the after-sell service status by accessing the customer service website, or call the 24hr service line. Luxury goods industry has been recently blooming in the past 5 years in China.

As one of the early entrants, OMEGA has been building up the service operation since the first day. Its outstanding performance is recently awarded by “IT Time” magazine – one of the most outspoken publications in the watch industry for “Best Customer Service”. There is no doubt that the strategy impact of OMEGA’s customer service is “clearly the best in the industry”. However, I am afraid it is not yet placed as an operation advantage at the stage of “redefines industry expectation”.

I will further elaborate the augment in the following discussion: (OMEGA positions in the stage 3 in the Hayes and Wheelwright model, chart source) Internally support to externally support: The customer service is still a supporting function within our organization. It is a simply “after-sales” service, which has a co-ordinated set of manufacturing structural. The function is thought to be a “watch repair & maintenance center” for most of the time to our customers, though it provides the best quality of service in the industry.

It lacks of initiative and proactive, and the operation service will always to be the “warranty service”. So how do we do to upgrade the service support from internal support to external one? Maybe, we can learn one thing or two from the same kind of function focused on “repair & maintenance” in the automobile industry. Volkswagen, with the world-class reputation of reliability, claims “its reputation for reliability is synonymous with the quality of service”(www. volkswagen. co. uk/owners/servicing).

It is obvious that Volkswagen takes service operation as important as its product offerings. It is important for the customers to realize that the service comes active from the moment they purchase the car, not from the moment the car breaks down! Likewise, the service operation for watch industry shouldn’t be only set to be an “after-sales warranty”. We must take a step ahead, offering the service bounded with watch product, so service is one of the reasons the customer chose OMEGA.

“Treat them mean, keep them keen” couldn’t be further from the truth when it comes to customer service and customer loyalty.  to a growing or established company’s bottom line —  that drives profits and allows companies to compete against rivals with more funding and resources in their pocket.

Why customer service matters

1. It’s how you’re remembered.

When your product or service has reached the end of its lifep, your reputation and customer interaction live on — whether you like it or not. If your reputation is positive, that’s great, but customers tend to remember their  more than their positive ones, meaning a bad image is harder to shift. Ruby Newell-Legner, author of Understanding Customers, asserts that 12 positive experiences are necessary to make up for just one unresolved negative one. Therefore, you need to get it right (and often).

2. It’s a statement about your business.

Back to the Virtuous Circle. Your customer service reflects on your entire business. Rightly or wrongly, people assume that if your customer service is good or bad then your product or service is too. As a business owner, you should adopt the same attitude, devoting time and money to your support team just as you would your product or sales.

3. People like to feel cared for.

Your customers are living, breathing, emotive beings, not automatons, so play to their emotions. If you , they’re far more likely to invest their faith in your business. And since customers put the food on the table, it shouldn’t be hard to drum up some genuine appreciation for them.

4. It makes everyone’s lives easier.

If you reduce the effort it takes for customers to get in touch with you, you’re simultaneously making it easier for them to purchase from you. Add contact forms on your site and . Whip up an FAQ page. Don’t make your phone number impossible to find. Place interaction opportunity directly into their hands and you’ll ultimately guide them from interaction to purchase.

5. It’s a profitable marketing strategy.

Word-of-mouth is the holy grail of marketing. When your customers speak favorably and widely about your business, they do more than most A+ marketing teams can. Advertising your company’s customer satisfaction standards is an excellent way to start the trend. Use customer testimonials and happiness ratings to show leads just how much you do for your client base — this carries weight that unbacked assertions cannot. Plus, if you can  of their own accord, you’re closing in on the gold mine.

6. There are always alternatives.

Undervaluing customer service is a risky strategy because there’s always a competitor who’s doing the opposite.  that a staggering 78% of consumers have backed out of a transaction or failed to make an intended purchase because of sub-par customer service. It’s a global marketplace, and if you don’t have the tools in place to make doing business with your business easy then “so long” for now.

7. It directly affects retention.

 costs considerably less than attracting new ones. Retention matters — big time. On average,  as much as their first purchase, but that worth won’t pan out unless you prioritize customer success. If you’re a service-based operation, consider the costs — money, time and more — of onboarding new clients. An experienced client who sticks with you means reduced efforts for you in the long run.

8. It impacts conversion rates.

Driving traffic is all good and well, but if you can’t  then it’s not much use. Converting someone from consideration to commitment is a careful balancing act that’s eased along with good customer service.

Starbucks: Delivering Customer Service Christine Day, Starbuck’s senior vice president of administration in North America, believes recent market research indicates customers are not satisfied with Starbuck’s customer service.

To address this concern, she is proposing to invest $40 million to increase store hours in order to reduce customer wait times. Day believes there is a direct correlation between customer wait times and their overall satisfaction with service. Starbucks has implemented a “secret shopper” program in order to spot check stores on their service, cleanliness, product quality and average wait times.The goal for average customer wait time is 3 minutes. The secret shopper scores for the past 5 quarters have shown a negative correlation between customer service and average wait time (exhibit 1). As average customer wait time decreases, the average secret shopper scores increase. In response, Day feels that adding an additional 20 hours to each of the 4500 North American Stores will reduce the customer’s wait time and in turn, increase their overall customer satisfaction scores.

Day’s plan will have the largest impact on the following three major stakeholders: shareholders, employees/partners and customers.Starbuck’s shareholders are primarily interested in the plan’s impact on retained earnings and long term growth. Investing an additional $40 million dollars will reduce the shareholder’s short term earnings. Investors who were looking forward to larger dividend checks would be disappointed, but investors who were interested in the long term growth of their portfolio may support Day’s plan if she could show how this investment would positively impact customer’s loyalty and improve the company’s future profit potential. Assuming the partners were looking for additional hours, this plan would be viewed favorably by store baristas and employees.During peak periods of business, they would have another employee to help share the workload and it could reduce the stress of “rush hour” on each individual partner. The popularity of this plan would be different depending on each store’s location, layout and manning.

Stores with insufficient work flows could create or enlarge bottlenecks and the additional manpower may actually increase wait times. On the other hand, stores who have a hard time recruiting employees may not want to burden their existing overworked employees with an additional increase in hours.In some stores, partners would prefer to reduce the quantity and complexity of available drinks instead of increasing available hours. Starbucks is known for innovative and seasonal drinks and over the years, the knowledge requirement for baristas has dramatically increased. Baristas are constantly challenged to learn more complex drinks and still perform to the 3 minute metric. Reducing the number of drinks offered may be an appropriate solution if there is evidence to show that there are a number of very unpopular drinks, but we do not have any current sales or market data to support those decisions.Additional research needs to be performed in order to assess this option.

Customers visit Starbucks for a variety of reasons and those who value short wait times may approve of the new manning plan if indeed it results in shorter wait times. Customers who visit Starbucks for the quality of their coffee or the inviting environment may not increase the frequency of their visits because of a shorter wait time. Customers who value the intimacy and personal attention their local Starbucks provides may actually disapprove of the plan to increase manning if it interrupts their established relationship with their trusty barista.In 2002, Starbucks surveyed their customers to find out what store qualities they attribute to customer satisfaction. The top 6 of these responses referred to the actual store, relationship with the staff and product quality. Wait time was ranked 7th on the list (exhibit 2). This survey suggests that investing $40 million to decrease the wait time might not have the desired impact on customer satisfaction.

There is an inherent issue with self reported customer surveys that may have influenced these findings. Customers may not realize what influences their opinions and what constitutes good customer service.What they think they value and what they actually use to make purchasing decisions may be different. In addition, each customer will have their own bias when rating customer service because they all value different experiences and relationships with their local Starbucks. If you look at the secret shopper findings and the self reported customer service surveys jointly, you could devise that customers may give higher cleanliness, service and product quality scores if their wait time is shorter regardless of the store’s actual level of cleanliness, service and product quality.The shorter wait time may have influenced the customer’s opinion on the other store attributes. Another measure of customer service besides secret shoppers and customer surveys is the number of repeat customers.

Customers vote with their feet and if they continue to patron Starbuck’s stores, they are voting that they are satisfied customers. In exhibit 8 of the Starbucks case, it is reported that in 2002, 73% of Starbucks customers have been visiting Starbucks for over a year. Only 23% of customers were new that year. This report suggests Starbucks has done a good job at reducing customer churn and they are already satisfying their customers.A common error when trying to measure and improve customer satisfaction is using quantitative metrics. Customer service is a qualitative experience that is very subjective for each individual. Trying to influence someone’s overall customer satisfaction by improving only one quantitative metric may not give you the intended impact to your overall customer satisfaction scores.

Day needs to understand the limitations with her single metric plan and realize that she needs to address all aspects of customer service for an overall improvement.In order to understand the variety and complexity of the issues impacting their 4500 stores, Day needs to engage the store managers to fully understand what each store needs to improve customer service. Increasing available hours may help some stores while others may need new equipment or a re-designed work space. Day’s plan to uniformly increase labor hours over-simplifies the potential needs of the individual stores. Empowering the managers would encourage individual ownership and commitment. The manager’s guidance would ensure Day allocated the $40 million most ffectively to not only reduce customer wait times but to increase overall customer service. During this process, Day may find out managers are frustrated with Starbuck’s aggressive growth.

In metropolitan areas, growth has led to cannibalization of customers which undermines the manager’s efforts to increase customer loyalty. Quality customer service is an individual experience that requires a personal interaction between customers and employees. It is more difficult to create a lasting experience and relationship if customers are constantly changing from store to store.Manager’s will lose their motivation to encourage these relationships if they feel another Starbucks will open nearby and steal away the loyal customer base they have worked to create. Starbuck’s value proposition to their customers concentrate on three goals: quality coffee, excellent service and an inviting atmosphere. These three attributes are focused on building customer loyalty. Starbuck’s loyal customers (8 or more visits a month) account for 62% of their revenue.

This group of established customers value high quality coffee and Starbuck’s meets this need through mass customization.Starbucks gives customers the ability to specialize their drinks to fit their individual tastes in order to create customer loyalty. This evidence suggests that Starbucks needs to continue to allow for individual drink customization in order to increase customer loyalty even though it may increase their average wait time above their three minute goal. Loyal customers are their largest source of revenue and if their perceived value is centered on quality coffee, they would not want to risk losing this source of steady revenue.Starbucks lacks a strategic marketing group who is responsible for managing their overall marketing plans, promotions and research. Marketing was internally viewed as the responsibility of all senior executives, but as their corporation continued to rapidly grow, the executives could not keep up with their primary responsibilities and effectively contribute to the strategic marketing plan. As a result, Day states “We’ve been operating with the assumption that we do customer service well.

But the reality is we’ve started to lose sight of the consumer. In addition, Day admits “we tend to be great at measuring things, at collecting market data, but we are not very disciplined when it comes to using this data to drive decision making. ” Both of these statements validate the concern that Starbucks needs to hire a senior executive who will make marketing their chief responsibility. They need a central department who will integrate their market research with top level decision making, and manage promotions, such as frequency programs, so they are using their resources in the most effective way to increase customer loyalty.The marketing department should not only collect data from their own customers, but they should consider hiring a marketing firm in order to ensure they are collecting unbiased information about themselves and their competitors. Using research on their competitors will allow Starbucks to have a more comprehensive view on their industry and growing trends or concerns from their available customer base. This will also give them the information they need in order to attract new customers from other competitors.

Day’s preliminary research shows more resources need to be given to accurately capture their customer’s interests to ensure they are meeting high standards of customer service to create and keep loyal customers. Her original plan to invest $40 million to increase labor hours is not the most effective use of resources because each individual store’s needs are unknown. Quality customer service cannot be achieved by concentrating on a single quantitative metric. Customer service is a personal, qualitative experience only the individual store managers can gauge and deliver.Day needs to work with store managers and a marketing department to formulate a more comprehensive plan to measure and improve customer service. EXHIBIT 1 The AVG line is the average of the secret shopper scores for Service, Cleanliness and Product Quality. The compiled average increases as the average customer wait time decreases.

EXHIBIT 2 These are the top 7 attributes grouped by category reported in Starbuck’s 2002 self-reported customer survey. Store Attributes, relationship with staff, product quality were all reported to have a higher impact on customer satisfaction than wait time.

After looking over the customer service model I would use what I thought I would want to receive as a customer calling in for help. You have a preconceived notion as to what your customer service call would be like. For instance if I had a customer call I would like to greet them warmly and get right to the point as to what the problem is and what I am prepared to do in order to help them. A customer expects professionalism but they also expect understanding and dedication to their issue, so being very attentive is key.

This would be a part of my strategy. As far as the systems I would make sure that the use of the state of the art facility was used as well as up to date equipment and software, being on top of the newest technological trends and software will ensure fast and accurate repairs. Another important aspect of customer service is the representatives taking the calls. It is my duty to the customer to make sure that every individual they speak to has been trained and is qualified to help them.

I have had experiences where the responses are from a text and often times you get shifted to different people that are qualified in different areas. I think that making sure the persons receiving calls are qualified leads to a better customer service experiment the less run around and hold time the better. The management of the facility as well as other personnel must have a background in the customer service area as well as technology because they support the frontline.

When I first began my design agency, I couldn’t fall asleep without thinking about the first hour of the next morning.

Being a growing agency while trying to manage safe team growth and internal administrative work meant that we were solely focused on giving our clients the very best service and getting their projects delivered on time, every time.

Doing these things was standard operating procedure.

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After all, those are the things you have to do to continue trading successfully over the long-term as a service provider.

It’s why we have an agency today at all.

These weren’t the reasons that I couldn’t sleep at night though. Nor was it the reasons that I dreaded the first hour of every single morning.

The reason that I worried about that first hour was simple. I was anxious beyond belief about the customer service requests that would inevitably have filled my inbox overnight.

Each morning I woke up to around 90 new emails, compounded by 30 more arriving between 8 a.m. and 10 a.m. each day.

Thinking back, it wasn’t anything to be concerned about. It was just follow-up requests, bug fixes and additions to project scopes following a launch.

The problem was that I’d placed unreasonable sanctions on myslef for dealing with customer service requests like these.

I assumed that if I didn’t get it done instantly then customers would look elsewhere or be unhappy with the service.

Honestly, I ran myself into a burnout largely because of it in 2012.

Since then, I’ve gone on to build other businesses outside of the agency as well as host a globally successful  – all without having the same kind of burnout and while sleeping better than I have ever before.

So, what changed?

I didn’t realize it, but for a long time, I was just like the business people that I didn’t understand at the time.

I was the guy staying late at the studio, getting things done. I was the one doing favors for clients because I was afraid of them leaving.

And you guessed it, I was the one frustrating family and friends by not being able to switch off.

Yet the demands kept rolling in. I couldn’t understand why it wouldn’t stop. I was staying on top of it and barely treading water.

The impact that had on my business was that I didn’t have the time to work on the development of it, instead I was simply allowing clients to dictate how my days were run and what I worked on at any given time.

Then something changed.

For the first time in a long time, I came across the famous Albert Einstein quote – “The definition of insanity is doing something over and over again and expecting a different result.”

After that, I starting measuring my time more closely and realized that sure enough, I was spending all of my time firefighting, and it was the fear of what I was going to have to deal with the next day that caused me to dread showing up to my own business.

After that, something startling happened to me – I realized what I was missing.

Empathy.

I was treating contact from my valued clients, the very same clients who I was so afraid of losing, as issues that I simply had to get through.

Worse, I was blaming those clients for my inability to empathize with them, and look at these requests for what they were – people asking for help.

Customer service 101, and I was failing at it, despite being so worried about failing at it.

If my new approach to empathizing was the catalyst for change, the tactics that I implemented were equally simplistic in approach.

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What I realized was that if I was reaching out to a company for support myself, it was because I was frustrated.

I was either frustrated about not knowing something, frustrated about not being able to do something or frustrated about a perceived mistreatment at the hands of this company.

Either way, I was purely and simply frustrated in that moment.

Taking that a step further, I looked inward and realized that a lot of the dread around facing all of these customer service enquiries each and every morning stemmed from me assuming that everyone has the same level of knowledge as I do in my field.

I was being so naive and the more I looked at it, the more I began to identify that the never ending customer service emails were actually all grouped into a very small number of categories – support, new work and perceived complaints.

And usually, the latter category of perceived complaints was rarely that. It was actually just a frustrated customer looking for support and firing off that email in a fit of desperation.

I think we’ve all done that.

At this point, I had another realisation. I was assuming that unless I reacted or responded immediately to someone with a resolution, they would be unhappy – or even angry at me and my company — causing them to look elsewhere.

Forcing myself to think like a customer, I began to understand how irrational I was being.

After all, when was the last time that I left a company because they didn’t instantly respond to me and more so, respond to me instantly with a resolution.

What we all actually value as customers is acknowledgement — being heard.

These days, when discussing customer service with my teams, I often use the analogy of a team member taking their car into the repair shop for some work carrying out.

If I take my car to the repair shop, and I’m told that the car will be back to me today, I expect it to be back today. But the unexpected happens and often, a part isn’t available immediately, resulting in my car being in the shop overnight.

Consider, if the mechanic ignored this, chose to close up for the day and headed home for the evening without telling me. Well, then I’d be extremely frustrated. I’d then call up saying that I needed my car, and this wasn’t acceptable.

But imagine that the mechanic puts himself in my position and calls me up ahead of time. He explains that the part required isn’t available until the next day and asks whether it is alright for my car be ready by the following day at lunch time.

Would I still need the car? Would I still be frustrated? No, it’s highly doubtful that I would.

Customer service is about the customer maintaining a level of control.

In the mechanic example, by ignoring and not informing about the delays, the implied control lies with the mechanic, which will frustrate any customer.

In the example, where the mechanic puts herself in the customer’s position, and even though the outcome is the same, the implied control is with the customer. After all, the mechanic asked whether it’d be ok or not, even though the part isn’t available regardless.

By understanding that control factor, I was able to begin placing focus on the right kind of communication to remove the dread of turning up to support requests every morning. Applying the control factor logic and being uber clear with communications, specifically that very first response to a customer request resulted in me being able to plan customer service into my schedule.

The best part? Both my customers and I are happier now.

Remember, we all just want to be heard and to know that we’re being cared for.

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People rarely need a resolution immediately.

As a solopreneur, you will inevitably need to deal with some kind of customer support – after all, it’s what keeps the relationship alive — but equally, you need to make sure that it doesn’t rule your day or dictate your week.

Take control by giving your customers the control that they want. Be clear, empathetic, timely, and set realistic expectations with your first response. And get some sleep.