Perfect Customer Service: Bigger is NOT Better
by David A. Goldsmith & Lorrie Goldsmith

Why do companies have customer service departments? Some common reasons are to solve disputes, to answer questions from prospective customers, and to update customer accounts. Recently we talked to management in a large food service company who said she was working on increasing the number of people in her customer service department; more calls had been coming in from customers, lately. We explained to her, as we will to you in this article, how a bigger customer service department was the last thing she needed. Consider this: if management developed alternative solutions to customers' needs, some or all parts of the customer service department could be eliminated. Don't think so? Read on.

Let's imagine that management can develop a perfect customer service system, from placing orders through final delivery and collection of receivables. You build a product that fits the demand of every customer you visit with all information in a way that quickly shows your customers why it's their best solution. Customers and purchasing agents set up perfect purchasing scenarios and never have to call you to place an order. All your customers have a shared scanning system that checks every incoming box to confirm its count for both them and your accounting system. Invoices are confirmed. Products are shipped in special boxes that hold products in levitation so that the products never break and are delivered within tolerance every time. Invoices are created and sent to the customer while an Artificial Intelligence system reviews the invoice with purchasing and inventory. Invoice figures are posted into the accounting system. The money is wire transferred to your account exactly 720 hours after generation (30 days). The premise is not only to "do it right the first time" or to eliminate staff. It is to build a system that services customers so efficiently on the front end that you don't need as many people answering phones to clarify the unclear, correct the incorrect or assuage the dissatisfied.

You can move your firm in the direction of perfection by changing how you look at problems. Don't start with, how do we fix the problem? Ask, what would make the situation not exist? For example, you don't need service technicians if the unit does not break down. Cannon did this by putting as many of the parts that will break or malfunction into the original toner cartridges in earlier copy machines. When the toner was replaced, so were the parts that could break down. Xerox could never catch up.

Today's customers expect their vendors to be accessible and available 24/7. The world is now an interconnected global economy. You buy your shoes from American companies that employ labor on the other side of the globe. While the American executive sleeps, his Indonesian managers are making sure that sneakers are still being manufactured. The customer service offices in North America might close at 7pm, but when customers have questions at midnight, they expect to access a website and get answers. Customers who want to purchase new sneakers can surf the web and check out several different companies' brands in minutes, without the help of a representative. Buyers can order online. They can also purchase from stores, but today they can enter retail outlets more informed and less in need of a clerk's help. This reduces the need for sales personnel to actively engage in the selling process.

Think about strides made in banking when executives made the shift from servicing bank patrons between 9am and 3pm to 24/7. If you needed to make a deposit at 3pm but arrived at 3:01pm, there was no way you were getting the teller to open up those steel-bolted doors, even if the teller was your own mother. Now you can make that deposit at the ATM machine or at a drop box. If you want your account balance, check online. Move funds with click the mouse. Pay bills while sitting in your robe on Sunday night at 11:23am. At the same time, if you have to talk to a live representative, one is always available. Can you imagine going back to the way banking used to be?

It's important to make strides in the direction of virtual access before you need to do so. Sprint PCS offers the virtual representative, Claire. Call their customer service department and you talk to Claire to be directed to the appropriate representative. Unfortunately, Claire can't answer all questions, and if she does not understand you, you're tough out of luck. How annoying it is to ask a question of a computer and get sent to the wrong department. Their system often creates frustration and more calls. The only way to move within the system is to talk to Claire, (and we just had our first fight. Not sure if she feels the same way I feel about her.) Anyway, Sprint's introduction of Claire is to cut down on the amount of customer service representatives they have on the phones. Combined with a very high turnover, the company can't handle the load and management is pulling at straws. Unfortunately, management is a little off course. Don't put Claire on the phone; fix customers' phones so they always work where and when needed. Simplify invoices so that customers can understand them. Be a solutions partner who will not keep customers on hold for 29 minutes on hold only to be disconnected.

Ask yourself, what would be the ultimate work flow system? Could you create a pull for your product, offer tools to allow customers flexibility and develop a system that eliminates much of the human decision making along the path to delivery? Wal-Mart improved customer service through their supply chain by developing their own proprietary software that links trucks to goods and profits to people and eliminated human intervention. Think about how Electronic Data Interchange (EDI) has transformed the way that companies and vendors interact. EDI is the method by which businesses exchange information electronically. For example, when a customer purchases a television from Sears, Sears' inventory system is automatically notified. The inventory system software replenishes inventory by ordering a new television from the vendor once minimum balances are met through EDI. The purchasing agents don't have to consciously touch any of the order. Again, this means a reduction or elimination of elements of the customer service staff taking orders or answering about the status of an order. FedEx, UPS and Airborne must have eliminated the need to answer millions of calls by allowing customers to track a package online. If you've been shut out of the EDI craze due to its high expense, you'll be happy to know that less expensive alternatives are becoming available. To find out about one such alternative, visit http://www.xmlglobal.com/consult/.

Soon, it will be realistic to take proactive customer service one step further. Your computer system calculates exact demand needs, you have enough credit with vendors, stock is available in production and personnel is ready to fulfill the orders on time consistently. The orders move through the system in Willy Wonka Oompa Loompa-style, creating a perfect product with not one scratch or dent. Even the packaging makes it so that no product is damaged in transit. In addition, the shipper is so familiar with supply chain management and logistics, that a carrier arrives at precisely the time needed to get the order to its destination on time. Meanwhile, the accounting department has cleared credit and/or payment, including having a direct relationship with the purchaser's bank, so that you will be paid on time. How different would the customer service department look if this scenario were real?

Look at your entire business to see how you can accomplish excellent customer service in new ways throughout the system. In that answer, you'll still want live people who are accessible to customers. However, their roles will be more specific to offering value up front and throughout the process to insure customer satisfaction. When that happens, customer service is preventing problems, not solving problems. While customers still expect human contact, they're also looking for more services that don't require customer service representatives. Those services include internet access for managing their accounts and learning about new products and services. Depending on your industry, you may need to offer 24-hour automated phone services and access, as well. Customer service departments can look very different than they do today if your products showed up on time, employees did what was expected, orders were completed with precision and products rarely, if ever, failed. If you're doing everything right, your customer base will be growing and your customer service department will not.


David and Lorrie Goldsmith are managing partners of MetaMatrix Consulting Group, LLC. Their firm offers consulting and speaking services, as well as conducts seminars for senior level management. They can be reached at (315) 476-0510; email business@davidgoldsmith.com and http://www.metamatrixconsulting.com/ .

Many more articles in Customer Service in The CEO Refresher Archives

   


Copyright 2003 by David and Lorrie Goldsmith. All rights reserved.

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