7 Reasons Why Customer Service is Failing
As part of our research into current levels of service in the UK, we asked people to describe the service they experienced in the UK. It probably won’t surprise you that words like robotic, poor and incompetent were some of the most frequent words that came back.
It’s been over 60 years since the management guru Peter F Druker told us that “the purpose of a business is to create and keep a customer” [i] and we seem to have been talking about this customer experience stuff for a very long time. Delight, care, excellence, quality, world-class, value, loyalty.
If you search online for ‘customer’ followed by any of these words you will find pages and pages of links to articles, blogs, books and a wealth of other resources. With all this talk you’d be forgiven for thinking that sales and service experiences in the UK must be amazing, and here’s the thing; some of them are, but most of them aren’t.
According to the latest UKCSI Customer Satisfaction Index our levels of customer satisfaction have been decreasing for the last three years and this is supported by the KMPG Nunwood analysis which found that “UK business are struggling to translate their customer investments into clear success” and “UK Plc is outperformed globally” in delivering customer experience excellence.
How many companies can you think of that you would recommend versus how many you could think of that you would bad mouth?
From our own findings, we found only 21% of respondent’s rated UK customer service as excellent in terms of it “Feeling Human”.
Interestingly, 78% of these people would be willing to pay more for better service.
70% of buying decisions are influenced by how companies make them feel (Sales Force 2015). We also know from various research sources that there is a clear link between a company’s bottom line and great customer experience.
According to Harvard Business Review’s Employee-Customer Profit Chain, a 1.3% improvement in customer satisfaction scores results in a revenue increase of 5%.
Small businesses tend to understand the importance of this link between profit and great service, but in bigger organisations, this focus or connection seems to evaporate or get lost in translation.
So why is it not working?
If we know treating our employees well and delivering great service equals profit, then why are we as customers not experiencing consistent and human interactions on a daily basis?
1 in 10 of us work in sales and service, that’s a whole lot of conversations going on in our homes, the street, in shops, over the phone and on the internet and yet it isn’t it working, why?
Some organisations are great at customer service; it’s deeply embedded in their culture – it’s “in their DNA”. But for many organisations, delivering great customer service is an ongoing issue. Senior teams know it, but seem unable to do much about it. Initiatives come and go, but none really move the dial.
From the research, we have done there are seven key reasons:
1. Short-termism vs. long-term organisational health
There seems to be an epidemic of short-term focus in larger organisations, where the pressure of shareholder value drives a behaviour of cost reduction, chasing numbers and profit rather effective outputs and a lack of long-term strategy. Leaders play a huge role in changing the face of customer service in the UK and fixing what is at the moment, broken or at best mediocre.
Unfortunately, many leaders are hooked on the short-term performance and not longer term organisational health. In spite of its undeniable importance, so many leaders struggle to embrace organisational health because they quietly believe they are too sophisticated, too busy or too analytical to bother with it. In other words, they think it’s beneath them.
Organizational health is so simple and accessible that many leaders have a hard time seeing it as a real opportunity for meaningful advantage. However, the benefits of becoming a healthy organisation, as powerful as they are, are difficult to accurately quantify. Organisational health permeates so many aspects of a company that isolating any one variable and measuring its financial impact is almost impossible to do in a precise way. The easy option is, therefore, to focus on short-term performance.
Unfortunately, many of the leaders I’ve worked with suffer from a chronic case of adrenaline addiction, the ‘adrenaline bias’, seemingly hooked on the daily rush of activity and firefighting within their organisations. As simple as this may seem, it remains a serious obstacle for many dysfunctional organisations led by executives who don’t understand that old race-car drivers’ axiom: you have to slow down in order to go fast.
Too many companies these days are addicted to bad profits. Bad profits choke a company’s growth. They blacken its reputation and make it vulnerable to competitors. The pursuit of bad profits alienates customers and demoralises employees. But wait, you say, how can profits, that holy grail of the business enterprise, ever be bad? Short of outright fraud, isn’t one pound of earnings as good as another? Bad profits are not easy to spot on an income statement. But outside the world of accounting, they’re easy to recognise: They are profits earned at the expense of customer relationships. Whenever a customer feels misled, mistreated, ignored or coerced, profits from that customer are bad. Bad profits come from unfair or deceptive pricing. Bad profits arise when companies short-change customers by delivering a lousy experience. When sales reps push inappropriate products onto trusting customers, the reps are generating bad profits.
Companies begin with good intentions, but often compromise their founding values when under shareholder pressure for growth in the short term.
2. Profit over people
Numbers and facts and figures are intoxicating things, it’s exciting to see your revenues and profits climb over time. While there’s nothing wrong with enjoying the thrill that comes along with running a company that is performing at its very best and generating lots of sales, as a leader, it’s important not to forget exactly who is making those numbers go through the roof, your employees. If not for them (and your customers), you wouldn’t have a business at all. In his book ‘People Over Profit’, Dale Partridge, co-founder of Sevenly, explains that socially-conscious business models that put people first are the future.
It’s easy to forget just how important people are to the success of any business. Employees and customers are people, not parts and not gears in some big money-making machine. How you make them feel about themselves says a lot about your business. Treat them poorly or like a number, don’t be surprised if their behaviour manifests itself in poor service for customers. Many companies pay poorly or outsource important customer service roles to reduce costs, a short-term focus that results in bad ‘organisational’ health in the long term. Treat people like they matter and they will surprise and reward you with discretionary effort and hard work.
Some turn to technology to solve all of their technology issues. One retail organisation spent millions to improve customer retention through expensive new technology primarily because a big six accounting firm told them to do it. It didn’t help. Their sales growth continued to spiral downward. Investment and support of their people were an afterthought. Whilst great systems matter, people matter more when it comes down to the customer experience.
Leaders often fail to create a climate where people want to show up and where they feel valued, safe, challenged and they have a sense of purpose. They fail to assassinate fear and make employees feel safe. As Simon Sinek says “The leaders control the circle of safety. To be the leader, you have to belong to our tribe. We have to feel like you serve us, and we would happily serve you”. The Circle of Safety that we create is rooted in trust.
Simon explains:” Only when we feel we are in a Circle of Safety will we pull together as a unified team, better able to survive and thrive regardless of the conditions outside.”
If people don’t trust their leaders, if they don’t feel safe and cared for they are unlikely to bring their ‘best version of themselves’ through the front door every day.
Leaders are not close to their people or customers.
This distance from reality clouds decision making and their ability to know how effectively frontline people are having conversations or what needs to change to improve the experience. In many cases, we see the opposite to proximity – wilful blindness. Sometimes we keep our heads down; we ignore the poor behaviour, underperformance or broken processes for a multitude of reasons. It is like a parent with a badly behaved child in a restaurant. Everyone in the restaurant knows the child is misbehaving but the parent is willfully blind to it.
When the British Member of Parliament, Adrian Sanders, asked Rupert and James Murdoch if they were familiar with the term “willful blindness,” their silence said it all. The MP defined it for them “If there is the knowledge that you could have had, should have had but chose not to have, you are still responsible.” Leaders of organisations inhabit a bubble of power, detached from reality. A lack of proximity to the truth and reality can be very damaging to companies.
4. Process takes over
People become conditioned to focus on process.
The very process that is created to protect the customer often inhibits the frontline person from doing the right thing (Think David Carroll). There is a real lack of trust and permission for employees to step out of the process and do what is right in the moment.
Over time employees become battle-weary and stop questioning why things are “done this way” or lack the courage to do the right thing and challenge others to do so
5. Low CQ (Conversations Quotient)
We find on average, a company devotes more than 90 percent of its training
hard skills (such as technical and operational skills and product knowledge) and less than 10 percent to soft skills.
People are developed in “soft skills” and not the essential CQ mindsets and skills that result in authentic human conversations that feel easy, focus on resolving the customers stated issue and head off future problems the customer had never even though of. Training the masses is seen as a quick fix and is often a sheep dip approach, with little or no embedding activity to ensure behavioural change happens
This term comes from the world of digital photography. People that are obsessed with all the new qualities and features of the newest camera model: the lens, metrics etc., but “they take rubbish pictures.”. We use this as a term to describe a leadership behaviour of obsession with the number (the output) rather than what drives the number (the input)
At a company level, CSAT, NPS and Customer Effort measures often fall low down on the balanced scorecard. Despite the clear link between profit and service, leaders de-prioritise such measures and fixate on EBITDA. Where the customer measures are evident we find CX teams hooked on analysis and the measure itself, rather than the inputs that drive the number. Leaders fail to recognise or value that the input that drives the number is great human conversations and effortless service.
Frontline managers often fall into the trap of managing the number and not the person. They spend hours analysing the stats of their teams, but this does not drive behavioural or performance change.
Instead of coaching employees around the ‘how’ to have great human conversations the focus is on what number you need to hit today. We often see this being played out in call centres where Average Handling Time (AHT) results in customers being processed quickly and rushed off calls, only to call back as their issue was not resolved
7. The failure of CI (Continuous Improvement)
One company executive told me that they have consultants for everything.
Take your pick from TQM, Six Sigma, The Goal, ISO, Kaizen and numerous other approaches to get better. (You have heard the phrase, “program of the month.”) These multiple efforts were seldom executed well or sustained. Employees were drowning in meetings, data, paperwork and confusion.
Most companies these days will invest huge amounts of money collecting, mining, analysing customer data to understand levels of satisfaction and loyalty. But all that big data is only any good if you act on the feedback. In most cases this is where things fall down, root cause analysis is not done to or there is decision paralysis.
Companies keep getting the same feedback from customers and for many reasons don’t act on it. This just frustrates and infuriates customers even more. Don’t ask for my feedback if you don’t do anything with it or fail to close the feedback loop, and tell me what you did change!
Companies that do CI well, have a systematic process.
CI is engrained in the culture, it is encouraged at all levels of the business and investment is made in the right areas. Failing to the frontline, those closest to the customer can have a damaging impact on service and employee engagement. Leaders fail to clear the path, so it is easy for frontline people to make it easy for customers.
Improving customer experience requires a deep and ongoing commitment. It starts with a vision of how you want the customer to feel and to perceive the organisation and its people. Delivering it might require programmes of education and skills development, developing a new language and ways of working, and lots of communication. Making a step-change in customer service really is like turning an oil tanker. It takes leaders to act like a trim tab who to guide the giant tanker. One thing that will guarantee failure, is trying to do it through a standalone initiative.
Whilst the intent of many people is good, these seven factors, coupled with a changing customer landscape, conspire to impact on the service we experience as customers. Gartner research notes that in 2016, 89% of companies will compete mostly on the basis of customer experience.
Many brands and organisations will talk the talk, but those that empower employees, and invest in human customer service, will be able to walk the walk.