12.04.09
Customer Care or Customer Culture?
I have to be honest right up front and say that this blog was triggered by a terrible customer experience with Overstock.com. While I have every right to rant and rave and be one of “those” customers, I thought that I might channel the rage into something more positive. At least more positive for us and not for Overstock, because they lost a good customer, fore-v-e-r.
I will explain the story of how I went from loyal customer and advocate to their worst critic later. What I want to share here was the thought that came to me while dealing with this company. While there are thousands examples of customer experience nightmares in retail or consumer businesses, what came to me spans all industries. You might relate to this same thought. Most reasonable companies have some organization, person or functional area called “Customer Care”. This usually is meant to be something greater than just a customer support or call center but sometimes it is just lipstick on the pig. In the case where they have truly invested in a customer care organization though, it does not mean that the company is customer centric and certainly does not mean that they have a customer centric culture. In fact, most companies I have studied who have good customer focused cultures do not have or need a department called “Customer Care”. With a great customer culture, customer care is everyone’s job. A great example of this is Zappos.com.
Here is the example that shown the light on this issue for me, today. I ordered about $100 worth of merchandise from Overstock.com. Over the years, I have generally been pleased with how they run their site and the shopping experience and I have shared my wallet with them. In fact, they have done rather well in building an online selling environment with good technology and innovation. It seems that they worked very hard on all of the back office functions to become efficient and profitable. They have done well in the online marketing area with leading edge work on communities, reputations (reviews) and targeted advertising. Based on this I made my recent mistake, by ordering from them. There were 3 items (sku’s) ordered and none of the items ordered have arrived without significant errors in process, communications, order quality etc. Being the customer experience professional that I am, this REALLY annoyed me. In this same vain however; I am the first to give the customer care group a chance to win me back. Mistakes happen, even for Zappos; and the potential customer recovery action is often more important. Needless to say, Overstock just compounded the errors.
I contacted Overstock.com Customer Care several times via phone, chat and email. In fact, they even called me proactively after I had returned a bad customer survey. Given my 30 years of experience in Customer service, I am pretty quick to understand what is going on behind the scenes. In this case, all customer interactions are with their customer care “department”. In my interactions here is what I observed. They run state of the art contact center technology and handle multi-channel contacts pretty well. They have a good CRM system and knowledge base that allows the agents to see a customer’s history and can provide good self help. The agents seem to be well trained. They use empathy; they apologize appropriately and have some discretion to provide a minor store credit as a way to affirm the apology. In all they act very professionally but clearly have a limited role within the company to make corrective actions.
In one part of my order they clearly shipped the wrong thing. Upon contacting customer care and explaining the issue they did all the right things to reorder and expedite a replacement. I was very clear that it was a picking problem in their warehouse. It was very clear to all that it was a quality process problem for them. A supervisor called me later to again apologize and took notes on the issue. The replacement order arrived and the exact same mistake occurred but now no replacement was possible as they were out of stock. The customer care person was again professional and well trained but did not offer me anything other than a refund. No recommendation for a substitute product, no further compensation for my problem etc. Basically no service recovery action was taken. In reading the incident report as written by the agent, no record of my dissatisfaction was noted.
Then I went to do some deeper research on this company and it came clear that having a good customer care department is not good enough if the customer culture does not exist in the rest of the company. In our work on the “Service Oriented Enterprise” we found that organizational alignment around customer experience worked as well or better than even a great culture. While changing a culture is hard, changing behavior is a matter of changing incentives. Someone once told me that herding cats is easy, you just need to move their food. As I looked at the management structure of Overstock.com, I got a real hint as to the issue. They are focused on being a state of the art retailer and customers were not at the forefront. If they have a good product niche, good technology then the customers would come. (at least once ). They have a SVP of Marketing who also has responsibility for customer care. This says everything about the vision and culture of the company. Here is the quote from the CEO about the person in charge of customers :
CEO Patrick Byrne said of Stormy, “I have learned a lesson I wish to share with corporate America: if you want to make your company customer-centric, just take the most stubborn, unbending, hard-headed, customer-loving employee you have, and put her over customer service. The company gets customer-centric quicker than you ever thought possible.
I have news for Patrick Byrne, I do not know how bad it was before this person came to be, but this is not best lesson for corporate America. Perhaps he should take a few classes from Arizona State University’s Center for Services Leadership or at least read the books on customer experience written for the last 20 years. The short cut might be to hire good consultants, but be prepared to make some real changes. They should not believe their own press and assume that they are customer centric. They are online retail centric, they are operationally focused but they are not customer centric.
The good news for Overstock might be that they are not alone. In both consumer and B to B environments we see this same mistake. Companies create customer facing organizations that are given the responsibility to garner customer loyalty no matter how bad the products may be or how many times the warehouse screws up an order. Good companies use these front line organizations to listen to the customer and then use the feedback to improve the rest of the organization. In good companies these folks sit with the c-suite and partner across the business silos. In good companies the incentives are aligned to balance customer value and shareholder value. It is not a mission statement, it is a process and it is a team sport. Bad companies create the organizations, survey customers, justify the results but make the customer a responsibility of just the front office.
James Teboul, a professor at INSEAD in France wrote a book called “Service is Front Stage”. In it he discusses how more and more of the back office operation and systems affect the customer facing experience. Problems in Supply Chain or Operations are now more visible and more directly affect the customer. In our research on how companies survived over 75+ years, we found that the key to survival was how companies listen and responded to their customers. They focused on customer success and customer needs. The evolution of business organizations and processes stem from the old industrial economy where internal efficiency was a key measure. Today it is not good enough to measure and reward internal metrics, you have to focus on how those metrics drive customer experience and increase the both the value of the customer and how they create value for the customer.
Back to the main question, does having a Customer Care group mean the same thing as being Customer centric or having a Customer culture? Clearly it does not. The evolution of industry leads companies to put someone or group to be in front and in charge of customers. While this type of function provided for some form of customer advocacy, the groups charged with this were for the most part an island. The goals of the customer advocate are often at cross purposes with the goals of a manufacturing engineer, as an example. Technology like CRM with so called 360 degree view of the customer is also not the answer. It is about aligning people (organization), process and technology for focus on the customer value streams that changes the game.
There is a term used today and new area of study which gives me hope. It is “Service Value Networks”. This term has many definitions and many different views of the same problem. In essence we are talking about the power of shared information and process for the benefit of others in the network. Smart Energy Grids or Healthcare systems might be two examples of a Service Value Network. In these cases they connect the customer to all parts of the delivery and provider systems with mutual goals around the intended outcomes. I see the research and development in this area helping to automate and improve customer care without having to depend on just human to human interactions. Service Value Networks tend to be end to end managed systems and processes that drive a desired value outcome. This is an exciting area for Service Science that will involve many core disciplines. Perhaps with Service Value Network designs we can eliminate the need for one group called “Customer Care” in companies who actually do not really care about their customers.
Those are my opinions, what are yours.
