For my friends that are not aware of the incident with United Airlines breaking guitars, I am posting the video link below.

It goes without saying that we need to be careful how we treat our customers.  Three million views in less than a week is a lot of negative press!

I’m sure during the development of this issue, the United representative(s) felt the customer should have received consideration outside the policy, but did not feel appropriately empowered.

Although generalized policies are necessary in any large company, these should always be backed up by employee empowerment.

Individual customers never like to be shown they are being treated impersonally by “broad brush” policies that leave them without identity or options.  ”I’m sorry Mr. Jones, there is nothing I can do, this is our policy”, is a good way out for the representative, but could be the worst thing to say to customer.

(Before you upset a customer, ask them if they own a video camera)

here is the link: United Breaks Guitars

Rudy Vidal
Creating Profitable Loyalty

I was listening to a talk by Iqbal Quadir an inspiring entrepreneur who is changing the world through human empowerment.  He said two phrases that made an impact.

  “Connectivity is Productivity” and  “Specialization is Productivity”.

Both of these make sense, but bringing them together is powerful.

Although I’m not a math major, I could not resist doing the logic.           

If             Connectivity = Productivity
and
If             Specialization = Productivity

Then it follows that:
               Connectivity = Specialization 

As I thought about it, it didn’t take long for some of the challenges and opportunities in our markets to start making more sense.
One of these changes is the shifting marketing paradigm that is largely ignored.

For the last couple of hundred years, business has relied on raw POWER as the deciding factor of success.  Although brilliant ideas and management are still necessary, the power to reach more people, to build more products, to move them faster, is the engine for success.  We only need observe mass mailing, television, or the number of SKUs in Nike’s shoe lineup, to see that it’s about POWER more so than efficiency.

In the end, we are forced to homogenize our segments, compromise the essential value in our products and dilute our brands in order to widen our mass appeal.  In essence, we destroy, destroy and destroy in order to deal with the inefficiency of the paradigm.

But maybe the equation: Connectivity = Specialization, presents new possibilities.

The drastic increase in Connectivity accelerates the normal rate at which we create “specialized” communities of like-minded people.  These communities form faster and become larger and more powerful than would normally be possible.  In essence, they become large networks of beacons searching for more resonant experiences, people, products and brands.
Suddenly, we find we may not need to look for them, they may be inadvertently looking for us.

The problem is that in order to be noticed we need to resonate, we need to have a point of view, a stand or clarity of purpose, what Simon Sinek might call a clarity of WHY?

This new paradigm has potentially meaningful characteristics:

1. It is personally meaningful
2. It is deliberate (not passive, like mass media)
3. It provides an opportunity for deeper connections.
4. But, it requires TRUST.

The old paradigm of PUSHING our value to the masses is giving way to the need for CLARITY and TRUTH that allows smaller more aligned groups to hear us.  A clarity and truth about who we are, and what we stand for as companies. 
This clarity of purpose, turns the brand into a resonator that draws all that are tuned.

Only one problem . . .

Companies today are not good at CLARITY or TRUTH.

We find it difficult to be clear on what we stand for. (read your mission statement lately?).
And we find it difficult to be truthful because we want to maximize potential customers as we aim at the masses.

Are we sure of our WHY?  Can we be true to it?  Can we resonate?

I vote for investing some resources here, so we can stop sending junk mail.

Rudy Vidal
Committed to Profitable Loyalty – XCS

One of the most common hurdles in trying to improve the customer experience, is that we view the customer’s situation through our own internal filters which are ladened with our own limitations, policies and generalization.  In effect, we can hear the customer but what we “know”, doesn’t let us listen.   

Those that touch the customer daily know more than anyone about what the customer considers important.  As surprising as it may be however, I find that those that touch our customers every day are not the ones designing the customer experience.  Those that decide are often somewhat removed and rely on their “past experience” to make the right decision.

Some time ago, I gave a contact center manager a challenge to transform the customer experience with the representative by only changing the rep’s greeting.  At first, the feeling was that the greeting could not change the experience.   The content of the experience was so much more important than the greeting that it could not be overshadowed.  Jut to be nice, she played along.  After considerable thinking and word-smithing, the new greeting was surprisingly similar to the original.  The reasons for the measured change were all logical and full of merit, backed by experience and knowledge in customer service.

Because I had done this exercise before and new the results, I pressed on.  However, if i did not have the benefit of my previous experience, I would have likely agreed with the logic and “let sleeping dogs lie”.  Instead, I provided an idea for the new greeting. “Hello, thank you for calling XYZ, my name is Rudy Vidal.  I am committed to resolving your issue today, please let me help you.”  This new greeting was received with raised eyebrows and determined to be “corny”.  I agreed it could be “corny” , but in whose eyes?

 To a contact center person who knows what happens day in and day out, who is aware of all the difficulties associated with actually resolving an issue, it may sound corny.  But to a customer who is having a bad day, who has just gotten escalated and has lost all hope of ever resolving her issue, this greeting could be comforting, perhaps even surprising.  It could disarm a person who is ready to take 2 full minutes to expound, at high volume,  why she is so upset.  At the very least it is unexpected.   We tried it in a small group of representatives. Customer Satisfaction increased by double digits, representative satisfaction did the same, first contact resolution went up.  

Sometimes, it is difficult to put ourselves in the customer’s shoes.  We see their situation, only through our own.  We try to walk in their shoes, but fail to off our own.

By the way, the most surprising aspect of that experiment, was the effect it had on the representatives.  They were more loyal to the customer, more engaged in the solution, more committed.  First call resolution went up, not because empowerment policies changed, but because the representatives changed.  What they said to the customer changed what they did.

Two suggestions:  

• Make sure to include people that directly touch customers in the creation of new solutions.
     Have them represent the customer without regard to internal limitations or
     common knowledge.

• Try new things, after all nothing will change until something changes.

Rudy Vidal
Committed to XCS 

During a seminar last week, someone asked the following question: 

“More industries than ever are experiencing runaway price and margin erosion.  Why is that?  More importantly, what can be done?”

 I believe value is being lost as a result of our lack of understanding  of  shifting paradigms. 

 Economies naturally progress through value shifts.  For example, 

from  Raw Material Economies (pre-industrial)
                         to
Product Economies (Industrial)
                         to
Service Economies (post industrial)
                         to
Experience Economies. (information)

Although we can still find economies at all four levels throughout the world, most of the higher systems are now Experience Economies.  In experience economies, by and large, consumers place lesser value on Raw Materials, Products, or Services.  Instead, they place more value and are willing to pay more for the Experience.  Products and Services, although required and expected, are no longer the prime field of differentiation.  Their expected high quality is simply a minimum business requirement.

Sadly, within our experience economy there are companies and entire verticals that may not have yet noticed the shifted paradigm and still offer products and/or services as their key value proposition.  A perfect example is the consumer electronics sector, which continues to assert product features as their key value.  Features, however, are easily copied, creating short-lived differentiation.  In the absence of other differentiating value, they turn to price.  And so, the cycle begins:  Lower prices causes reduced margins which causes diminishing profits which creates pressure to reduce costs which causes layoffs which brings reduced purchasing power which prompts the need for lower prices.  You get the idea.

A surprisingly large portion of top management I meet believe customers demand and cause lower prices, without considering the possibility we may simply be misaligned with customer values, which ultimately forces us to turn to price.  After all, although lowering price is not usually the best course of action, we cannot deny it is an easy and generally effective way of getting attention; if only for a brief moment.

Maybe we should learn from others:

• American auto manufacturer’s have refused to see the new paradigm.  They are still selling cars as if it were 1950. 
• Nordstrom, on the other hand, sells the same exact merchandise as other department stores, but charges a premium based on the experience.

(I’ll leave more, and perhaps better examples to you – please share through a comment.)

Perhaps it’s time we listen to the voice of the customer and align ourselves accordingly.
If we don’t, our only recourse will be lower prices, outsourcing and ultimately layoffs.  

Rudy Vidal
Committed to XCS

Please note we moved the blog to:  www.rudyvidal.net/blog 

Keep your subscription by clicking HERE.

Thank you for your interest in Creating Loyalty !

I often encounter the confusion between frequent purchase programs and Loyalty strategies.  I don’t believe these are equivalent and would like to address it.

For a long time, the marketplace has endorsed the lowering of prices as a justifiable form of value-add.  And, although a lower price does, in fact, constitute value (more for less), it is hardly productive.

By now, most of us have figured out that the incremental sales achieved by a lowering of price will only last as long as the price advantage.  We would all agree this increment should not be attributed to Customer Loyalty. 

Points, free merchandise or discounts through frequent purchase programs, no matter how well camouflaged, still result in a perceived reduction of price.  And, although customers may act more loyal due to the accumulated points in their frequent purchase accounts, they are in fact, attached to the points, NOT the brand.  We should be careful not to equate captivity with LOYALTY. 

I have a Delta SkyMiles account.  Although I am somewhat captive, I took a United flight to LA (which I don’t like) because it was $200 cheaper.   I am somewhat captive, but certainly not LOYAL.  Captive audiences will stay as long as it is advantageous, but let’s not say that we are creating LOYALTY. 

LOYALTY is the ultimate goal in a commoditized market.  To have customers that have accepted our brand as part of their life’s value structure is a privilege and takes hard work.  We can’t buy this kind of LOYALTY.  If we want it, we’ll need to think about adding value to our customers’ lives, and making them emotional in the process.

Most companies have not been able to quantify the ROI on Customer Loyalty and therefore, find it difficult to commit the resources to creating it.

Instead, we continue to feed the price-erosion monster through masqueraded lower pricing, and add insult to injury, by calling it LOYALTY. 

If we want Loyal customers we’ll have to do more than offer double points on any purchase before the end of the month.

Rudy Vidal

Committed to XCS

Two things drive me to a posting on Average Handle Time (AHT).

1. A previous posting on Average Speed of Answer (ASA) remains the most popular posting on the blog, so I thought another Contact Center metric may be welcomed by our visitors.
2. A recent discussion with a group of the Contact Center managers clearly showed AHT to be a point of interest.

Metrics can be a subjective bunch, and as such, definitive answers about their use may be ilusive, so please be ready for some generalizations based mostly on my personal experience – which by no means is definitive.

AHT is an often misunderstood metric because on the surface it looks like a problem to be managed, while if we look deeper, it tends to act more like a symptom.

AHT Definition: The average length of time it take agents to handle a customer, wrap-up and become available for the next customers? (This differs from Average Talk Time (ATT), which excludes wrap-up and other ancillary activities such as research).

The obvious benefit of a short AHT is that agents can take care of more customers in a set time and therefore, less agens are required to handle the incoming load. Expectedly, management, usually upper management, feels very comfortable placing attention on AHT as a way to control the largest cost of a contact center, people. Likewise, many Contact Center managers concentrate on AHT ensuring agent efficiency, at times incenting agents to achieve lower an lower AHT levels.

In my experience, the control-point for AHT is not the agent. In stead, AHT is more directly affected by our ability to provide the appropriate environment, knowledge, tools and expectations.

Here are the areas I believe contribute most to AHT.

Appropriate Staffing Levels
Staffing can become a vicious cycle. “If we had more staff we would not have this problem, but, if we were more efficient we would not need so much staff”. Although this posting is too general to address this important balance, we do know that bad Average Speed of Answer, Service Levels and excessive hold times which are greatly affected by staffing levels, can add 30 to 60 seconds to your AHT. Primarily, in the time it takes to calm down irate customers and the composure time for agent stress. Irate customers have a great effect on agent morale and the efficient flow of the call. It’s amazing how much more efficient we can be when our customers are cooperative and our agents are not stressed out.

Training
It goes without saying that knowledgeable agents have lower AHT than new agents. But technical and product training only take us so far. Our agents must also know how to quickly assess a customer’s needs, troubleshoot and create an interactive flow that is conducive to quick resolution. They must also know when to escalate. An simple analysis of call length within a queue can show us the tipping point of AHT. Passed a certain call length, we can see calls have a higher likelihood of reaching astronomical AHTs. That is the point at which to intervene and ask your agents if they need help. I know of a team that calls this the 12 minute rule – at 12 minutes a lead agent or supervisor would simply ask “need help?”. Less stress for the agent, lower AHT.

Processes
How many screens do your agents need to manage in order to manage an interaction? Do they need to get up from their station and send faxes, pull manuals, etc? Inefficient processes can add considerably to handle time.

Empowerment
An empowered agent is a less stressed agent who knows he/she has some decision-making power to do the right thing for the customer. Less time is spent working towards an unlikely solution while giving the agent more ownership of the outcome and more perceived value as an employee.
Of course, empowerment is not for every agent and requires proper training and clear guidelines, but we would do well to push as much empowerment as possible to the front lines of our customer touch-points. Surprisingly, empowerment can be easier to manage than the policies and processed designed to ensure customer satisfaction through escalations.

Attrition
Attrition is an indicator to most, if not all agent inefficiencies. It is the single most costly event in a contact center, mostly occurring within 90 days of hire and costing up to $8,000 per agent.
When we have high attrition, our average newbie rate on the floor is high, which means knowledge and efficiency is low (just think what happens to your stats -including AHT – when you have a new team nesting? uhgg!).

Also, high attrition floors have more challenges in agent dynamics which make empowerment, quality, and employee participation less likely and more difficult.
Average Handle Time is therefore, greatly affected by our ability to hire and keep the right employees. If you have an attrition rate of more than 50%, don’t worry about AHT. You’ve got bigger problems.

Perhaps most controversial, is the topic of agent relations.
At times, we can enter into contentious cycles with our agent community. Usually driven by frustration in our inability to improve operations, we’ll begin to feel a disconnect and a difficulty sharing the same side of the fence with those who directly manage the customer.

As long as it’s acceptable for us not to share the same side of the fence with our agents, AHT will remain difficult to manage and, unfortunately, we will continue to press the wrong button, expecting different results.  AHT is not a measure of agents approach or willingness to follow direction, but a measure of management’s ability to Train, Hire and Empower.

I believe AHT is not the best indicator of agent efficiency but a greater indicator of management effectiveness.

Rudy Vidal
Committed to XCS!

Friends,

Today a colleague sent me this video which I think is not only inspiring but revolutionary in its simplicity and effectiveness to present the essence of XCS.

Please view it, it will make a difference.

Johnny’s video

Thank you.

Rudy Vidal
Committed to XCS !

Yesterday I had the pleasure of speaking at a regional gathering of the Contact Center Networking Group (www.ccng.com) in Phoenix, AZ..

I love CCNG meetings because I am always inspired by the common force and unity that Contact Center Professional feel for their craft. They are inherently united and willing to help each other.

I ran out of time at the presentation (not unusual), and could not touch on these basics, so I thought I would cover a couple of them here.

1. Contact Centers Are About People
Although technology, statistics, quality sheets and accuracy are important, contact centers are about people.
- People buy your products
- People call you for assistance
- People deliver the service.

The proper management of contact center is the creation of a conduit that facilitates the efficient servicing of people (customers and employees). Our goal is to exceed both of their expectations in a manner that the human-touch can be noticed. Ultimately, we are transforming transactions into positively emotional events that create the possibility for loyalty.

2. Listen to Customers – Understand Their Expectations.
It is very difficult to exceed expectations we don’t understand.
I often find contact center managers making assumptions about what customers want. Many times we are wrong. The result can be an unnecessary over-extension of resources, or the blatant mis-aiming of our efforts. “If you don’t know where you’re going, you’ll end up somewhere else”

Ask your customer what they expect? Build policies and procedures to exceed those expectations.

3. The Customer Wants Only Two Things:
a. Answer the phone Now!
b. Solve my problem Today!

This may sound too basic, but it isn’t.
As we concentrate in areas we know to be deficient, we risk loosing focus. Although ASA, training, calibration, AHT, processes, attrition or any of the hundreds of variables that call our attention play a key role in achieving success, we must make sure we consider and prioritize our activities in the context of how they help us achieve the customer’s expectations.
When deciding on any aspect of our business, we would do well to ask ourselves: “How does this help me answer the phone more efficiently and/or increase First Call Resolution for my customers?”

Which brings me to,

4. Choose the Right Key Performance Indicators

There are two types of KPIs – Leading and Lagging.
A Lagging KPIs point to the past. For example, Customer Satisfaction Results is a lagging KPI. It tells you the level of Customer Satisfaction you’ve achieved. But it doesn’t provide insight on how to improve it.

A leading KPI measures activity that impacts the achievement of the desired result. For example, abandon rate is a leading indicator of Customer Satisfaction. In this case, I would say, make sure you put more weight on Abandon Rate in your balanced KPI set.

Although, abandon rate is leading, and that’s good, it is also passive and that’s not so good. It does not measure actual actions that create the desired goal, and therefore, is a weak leading indicator.

The best leading indicators are active in that they measure actions that lead to the desired results. Here is the perfect example:

McDonald’s needed to increase their average purchase per visit. Naturally, they chose average ticket sales as their KPI. After a year, they saw only marginal improvement. The reason was that their attention was placed on the lagging KPI. So they changed their focus from the lagging indicator to a new and active leading indicator – The percentage of times the host or hostess asked the question: “would you like that super-sized?”. By measuring the percentage of times the host or hostess offers super-sized meals, they are managing action that creates results.

Although Leading vs. Lagging is simple to understand, finding great active leading KPIs is not so easy. One can spend weeks looking for the right leading KPIs, but, they will be weeks well spent.

Keep it simple, keep it basic.

RudyV
Committed to XCS!