A call on (up) scaling Social

With Social Business Design, Social Media Marketing and Social CRM being more or less mainstream thoughts right now, most seem to be seeking how we can leverage social technology to uncover cost savings or serve customers more effectively. There is a clear calling throughout all company’s disciplines to adapt to and adopt the new paradigm that we need to focus on having more transparency and more authentic and meaningful conversations with Customers, employees and partners. At the same time we see an increased call for scaling in resources for social.

In technology we trust

Esteban Kolsky, in his 3rd part of The Roadmap to Social CRM states:

Building a SCRM strategy or deploying it is no different from building a CRM strategy and deploying it – except for two tiny, tiny details: the volume of feedback you collect has increased by magnitudes in excess of 100X the original feedback you used to collect via surveys (and it is unstructured), and the emergence of communities (try a different mental picture).

Of course this implies that we have a problem: how do we scale the increasing number of conversations with Customers, employees and partners? How do we scale collecting feedback? How do we scale our organizations to all this?

As we usually do, we trust upon technology to solve the problem. Here’s a snapshot from Mike Fauscette at the Destination CRM Blog:

Scale: This is an interesting topic. A lot of social data already exists and a lot of Web 2.0 tools are available for use in the new social enterprise — but the issue for enterprise adoption is scale. In fact, IMHO, scale represents the opportunity for technology and technology vendors. We want to leave the customer, partner, supplier, etc., “experience” in the model of “when, where, and how” THEY want it, but on the back end we have to deploy tools that allow us to build business processes around the interaction and to scale at a reasonable cost. We will also need the tools to collect, manage, and analyze the social information.

Social does not scale

But does Social scale? Some, like Jeremiah Owyang, admit that they have reached their limits and state this:

So what does this mean? It means the social media space is starting to look like just about every other industry that starts to get mainstream. Social media is often the premise built on 1:1 relationships, and even with technology, that clearly doesn’t scale, and I can relate.

Others claim that

if businesses want to be successful in participating in social media, they’ll need to allocate resources in proportion to the volume that exists for their brand. Small companies can get away with small teams. Large corporations will need large departments. They will be structured like call centers with IVRs, scripts, answer trees, etc. It will take a substantial investment in staff training, infrastructure, and rolling out business processes. Everyone in the company will have to know how to use the tools and different departments will be responsible for different pieces of the conversation.

Customer Services is coming to a community near you

If it is not technology it is people we use to scale. Best Buy has taken this approach with Twelpforce. Much is said and written about this already and the judge is still out as to whether this will be a successful approach or not. The numbers are not astonishing high. According to this article only 125 questions per day. But there is no information whatsoever on how many DM’s are involved. How many conversations are transferred to the Contact Center or their own service forum etc. Furthermore it is not clear if this volume is cannibalizing on other channels (which could be a good thing) I can also not relate this to the number of sales-transaction they do.

Same conversations, same solutions

When thinking about all of the above, I’m thrilled nor amused. It even brings me down a bit. Are we really seeking to meet Customer needs? Are we trying to find better ways to sustainably grow our business? Are we listening to what Customers (mind-blowing thought: your one yourself too) are saying? Or are we just gasping at the size of the Big Shift and trying to apply old solutions to cope with the size of the “new” problem. Are we really just going to throw lots of people and some new technology at it to facilitate the same old and same (or increased) volume of conversations?

Social Dialogue (Interactive) Marketing

There is extensive talk in the marketing side of the business to shift from Direct Marketing to Dialogue or Interactive Marketing, and from the looks of it, we’re still struggling with the approach there too. We understand that we need to have these authentic and meaningful conversations, but still have little ideas how to change the conversation into meaningful relations. Telemarketing and e-mail-marketing are suffering and will be done and over with within several years. Still we are discussing new ways to send the (right) message to the right (potential) customer at the right time. This is still a message based on push-theory, while we need to think about Customers pulling the message they want, when they want.

Think of the problem like this: What should you do if you need 20 million of new revenue and have an average revenue of 500 per Customer? How are you going about to pull 40 thousand meaningful conversations from Customers with your company that result in a sale, without the traditional broadcasting approach? How many touches with prospects/Customers do you need if your average revenue per sale is far below 500 and you still expect 20 million revenue? There is an end to creating multiple million touches to generate these (relatively small) kind of sales-volumes. Modern analytics will help your company cope with the volumes, but will your Customers cope too?

The Big Shift is taking place, but is the Paradigm shifting enough too?

In believe the Big Shift () is taking place, but is the paradigm too?

I think that, among lots of other paradigms that need to be restated, these are up first:

1. We need a big shift in the marketing paradigm that we seek more conversations because we are so poor in turning them into a sale. We need less, way less, conversations, and we need to make them meaningful, successful and sustainable again.
2. We need a big shift in the Customer Service paradigm that we solve more Customer problems by allowing more Customers to help themselves through more automated conversations or have Customers solve problems amongst each other. What we need is less Customer problems, so that we can have meaningful and personal conversations again.

If you ask me Social Business should be about scaling down the number of conversations and significantly increasing the value of conversations for all participants. That, in my humble opinion, is the essence of the Big Shift that’s taking place.

Did your Paradigm shift enough to keep up with his Big brother?

Today I read a great post by Brian Vellmure: The New (Social) Customer Advocate.

Scaling of conversations

While reading, a few thoughts came to mind with regard to scaling of conversations. A challenge that many big companies face when entering the social web and wanting to engage. For small companies having meaningful conversation in, on or with a little help from social media, will be a small challenge. For big companies it’s a major one, because on-on-one conversations don’t scale.

Automation is not an option

Of course conversations on an individual level between Customers and employees in big companies, on the widest variety of topics, cannot scale without taking a completely different approach. Automating these conversations, IMHO, is a no-go area if not impossible (for now at least). One can automate transactions, decision tree problem solving etc, but real conversations, in a social world, are about people connecting with people. Authenticity and Transparency are two key elements of those conversations:

Automation does not fit in this world and is just another way of trying to reduce costs of things you think you have too many of.

We can go on and on about how, much like Best Buy’s Twelpforce, we need to involve all employees of the organization to have meaningful conversations, and what would be needed to make that possible. I think one-on-one conversations will not scale in the end, at least not without a completely different approach.

The real problem is that there is just too much to talk about.

Social Media and most of all contact centers are filled with people talking about experiences with brands/products/services etc. Some good, most are not.

Hence my thought that our real question should be:

How can we scale the conversations to fit with the organization?

Obviously I don’t have the answer, or I would not be here, right now. But maybe taking on the following challenge will help companies to come up with an answer:

The Challenge:

Take your combined budgets for Marketing & Customer Services and ask yourself the following:

If I had this amount of money to spend (annually!), and I did not have any Marketing & Customer Services departments to spend it on (but you do still have the problems they solve), what would I do with it, to ensure that I can have meaningful, authentic conversations with my Customers that create value for both of us? What would you do first? What would you stop doing? How would you organize?

Are you up for the challenge?

Quite a while ago I was introduced to the theory of Failure Demand. Failure Demand has been defined by System Thinker John Seddon as “demand caused by a failure to do something or do something right for the customer“. It is probably a Customer Services department of a company that can relate to it the most e.g. through Customers with repeat calls, because their problem has not been solved, despite the promise made. I agree with Tripp Babbitt, that failure demand can cause between 25 % en 75 % of Customer services work. In itself this is not strange (it is what you have Customer services for), yet I also think that the majority of failure demand can be prevented. How? I will address this in a second post on this theme, next week.

In this post I would like to focus on the implications of changing the definition of Failure Demand and, by doing so, broadening the scope and application of the principle.

Failure Demand Redefined

Coming from a Customer services background and with extensive personal experience in analyzing root-causes for failure demand (use of terminology in hindsight by the way) I came to think that Failure Demand, as a concept, can have a much broader impact and applicability, if we change the definition to what it really is:

Failure Demand is the consequential act, or non-act, of a Customer when his desired outcomes are not met.

Why is it important to redefine Failure Demand

For me, the importance of redefining Failure Demand lies in the following: I believe it is important that there is some kind of general accepted vocabulary that can be used across industries and disciplines. If we are ever to establish good collaboration between company silo’s it is needed that we all understand what we are talking about. As you might already know I believe collaboration (and its superlative “co-creation”) is at the center of a Customer centric strategy. Such a strategy even requires collaboration to extend outside the company with Customers and partners.

The traditional definition of Failure Demand makes a good case of tackling the consequences of a failure to act or a failure in acting by a company on its own work. I believe  it is a powerful concept from that angle. Taken from the angle of putting in place a Customer centric strategy, like Social CRM, designing great Customer (Service) experiences and Innovation, the “traditional” definition falls short.

Implications of Failure Demand for Service (Experience) Design and Innovation

Service (Experience) Design and Innovation should focus around Customer’s needs and desired outcomes.  In essence this is what putting Customer needs at the center of your Business Strategy is about.

I believe it is important for both Service (Experience) Designers and product/service Innovators, as much as it is important for Business Process Engineers, to understand that their insights will be enhanced when starting their approach from an outcome perspective and that they can also learn a great deal from understanding Failure Demand in their own organizations and from their own products and services. Furthermore I believe all functions mentioned in this blog-post should collaborate closely to really address the issue. It stretches far beyond Customer Services and the back offices. Analysis of Failure Demand, even in the “traditional” definition, is probably a very good first step for such a collaborative venture to improve or innovate the Customer experience. At the same time, understanding where your products and/or services fail to do the job that Customers want to get done, will help you best understanding where you need to focus your improvement or innovation efforts.

Extending to the above and my proposed definition, Failure Demand can even be regarded as a failure in Customer demand from an economic perspective: lack of (repeat) sales and revenue. All as a consequence of not meeting desired outcomes. From this perspective failure demand enters the world of marketeers and strategic business development too. A perspective well worth a try if your short of demand in current economic times. And who isn’t?

To conclude

Failure Demand, as a concept, provides great insight in the inability of the Customer experience (design) to provide for a Customer’s desired outcome(s). Failure Demand cannot only explain the level of extra work to be done as a consequence of failures by the own organization, it can be a powerful concept that contributes to the field of Service (Experience) Design and Innovation. Failure Demand can well be the starting point for Outcome Driven Collaboration.

I will blog on my approach towards failure demand analysis next week, to further outline that perspective. In the meantime let me know what you think. How could you apply Failure Demand in your work?

Worth to read:

The Customer Centered Innovation Map

Strategyn: What is Outcome Driven Innovation

Service Design – practical access to an evolving field

Co-creation is what makes Social CRM and Social Business Design work

Over the past months I’ve been writing about Social CRM and Value Co-creation in an attempt to define both. As it appears, to me at least,  both are highly linked if not of the same kind: Co-creation is at the center of Social CRM or Social Business Design. One can not have Social CRM or Social Business Design or what have you, without applying the principle of (value) co-creation. Co-creation is not only at the center of all, it is the heart of it all. Co-creation is what makes it work (and not technology).

Social CRM nor Social Business Design is “the next big thing”

Come to think of it, it is not that mind-blowing. We understand for a while now that Customers, employees and partners can be great resources when it comes to listening to them and understanding what is happening with them and in between them and that this understanding is a good source for improvement. We did not need Social Media to understand the principle. Furthermore, most of us know and experience in our daily business lives, that in order to be successful in whatever you are doing in (business) live, one needs to collaborate. Also not a lesson told by Social Media. And good collaboration requires good communication and sharing of knowledge between stakeholders. Much like communications, value co-creation requires parties to work together to make it happen.

More recently, but still over a decade ago, we have discovered that stakeholders are not only good resources of knowledge, but that they are very willing and able to be part of the value-creation process as well. And it is human nature, or even the law of evolution, that we must adapt to changing circumstances. With an ever changing world around us we are in constant need of adaption, also called innovation. The fact that Customers are talking and networking is not new either, the fact that they do it on-line in a newly facilitated highly networked environment is just one of those changes that we need to adapt to.

Mind-blowing is, that it took us so long to “get it”

I thus come to the conclusion that there is nothing mind-blowing or shocking about Social CRM or Social Business Design and alike, nor to my Social CRM Strategic Framework Statement. The thing that is mind-blowing is that it took us so long to “get it” (and we’re long from everyone “getting it”), To conclude this part: Social CRM and/or Social Business Design is not The Next Big Thing. It has been common sense all along and we’re just late implementing it.

If Social XYZ is not the Next Big Thing (NBT), what is?

I have to excuse myself. I really do not know the answer, or best guess at this stage (yet). Before I can get to that I need to understand what the last (and one or two prior to last) NBT of the past was. I’m counting on you to help me with that: what do you think the last NBT was and what will be it next. Or do you not agree with my statement above? Please let me know too!

Thanx for sharing, looking forward to the debate.

After some posts on Social CRM I feel it is time to write about one of my favorite topics. I wrote about metrics in the Customer world before. Most of them can be considered “rants” against current measurement practice in Call Center / Customer Services today.

Desired Outcomes Metrics – A design thinking approach -

Out of the many things that can be wrong about metrics and measurement frameworks, the one thing that is hindering companies from making break-through improvements is  the lack of measuring against Customer desired outcomes. The ability to measure against these starts with understanding them. Product, service and/or experience designers are focused on understanding Customer desired outcomes (or needs) first. Only after they understand those they will start the process of ideation on how to meet those outcomes, followed by the actual designing (or prototyping) and testing.

Managers of Customer services departments or otherwise responsible for (parts of) the Customer services experience would do themselves, as well as their Customers, a huge favor when they would do the same; starting with the design (for the avoidance of doubt: I’m not talking visual presentation here) of their balanced scorecards, dashboards or what have you.

Outcomes Customers desire from a company’s Customer service

All outcomes that Customers desire from a company’s Customer services, in my humble opinion, can be summarized in these 4 categories:

1. Understandable information
2. Easy to use
3. Right answer or advice the first time
4. Speed of resolution

In this short deck I show how widely adopted metrics in Customer services are not focused around these desired outcomes. They may even hinder them.

Do you have examples of how you measure against your Customer’s desired outcomes? Or more bad examples that I should include in my little presentation? Please share your views and experiences in the comments.

About two weeks ago I wrote my post on What a Social CRM Strategy is all about. Despite the great responses and discussions in the comments I think there is still a huge part missing: How do you do it? The Strategic Framework statement I concluded with, provides just a very rough indication of the direction I believe one should work towards as well as how this can be achieved.

Does anyone have a map?

Several people in the Twitter #scrm accidental community have since written posts with views on how to proceed (you can find links to these posts at the bottom of this one). In general there seems some kind of agreement that there’s still lots of ground to cover and we should enjoy the ride. Nevertheless we should start now, plan our journey, cross the bridge when we get there and learn from our mistakes. And, this is a hell of a job, if you do not have a map.

Social CRM has not arrived (yet), not as a technology, nor as a strategy. The absence of a clear map does not mean though, that we cannot plan our journey. The journey will not be mapped out like you plan your journey from home to work and back. There are still many unknown variables and a huge number of what-if questions. There is more we don’t know than there is we do know. Fortunately more blanks are being filled every day.

Not knowing is no excuse for not going

So, what do you do? Sit around and wait for it to have happened? Jump-in without a good view on what could happen and how you would deal with those circumstances? I hope not for both questions.

What could be a sensible way to proceed is to develop a “portfolio of real-options“, or – in other words – a map that provides you with a series of options to choose from or decline. A map that allows you to value (technology) investments and other Social CRM strategic choices based on the implications of each step along the way — without committing to anything before you have to or want to (Please read any of the suggested reads at the bottom of this post).

If you understand your options you’re half way there

Creating a map of “real-options” is not a light task. If one reads the academic papers on this, it is actually complicated. Complicated because it requires a deep understanding of your business, your Customers, your competitors and all the variables that are in play to make your Social CRM Strategy successful. First you need to understand the “value-to-cost” ratio (also referred to as NPV or ROI) of the project/investment or initiative. Secondly you need to make an assessment of the risk/uncertainty involved in combination with how long you can afford NOT to make a decision (remember: you do not have to make a decision, you may; basically this provides you with a window of time to mitigate the risks or fill out the blanks to decrease uncertainty). The theory names this “volatility“. As you can imagine: the lower the volatility and the higher the value-to-cost ratio the stronger the advice to invest now.

What’s in it for you

The above may not make it clear for you how this can help you. Here are my views on this:

• First of all creating a “real-options” mapping for only one investment (or real-option), will provide you with the insights on what variables are important to understand. E.g. when you map the risks involved, you would want to mitigate those, hence you need to start better understanding the variables that mitigate the risks. At the same time you will (or should) start small (research) projects to find out more about the variables and what drives their values. The journey (and the fun!) starts here.
• Secondly creating a portfolio of “real-options” will provide you with insights on how all these options of the Strategy are linked (or not). (Do not limit yourself in the definition of options and linking them together. You should be creative here. But do not forget: you need to make them “real” eventually). Whenever you fill out one of the blanks in one of the strategic projects, you have the ability to assess the (potential) effect on other real-options of the strategy. When one thing moves, all things (can) move. This in itself is fascinating. Most of all you will recognize that you are actually executing the strategy and learning along the way.
• Thirdly you make wise business decisions and still you may (probably will) fail. The good part is that you will notice quickly, with no major harm done yet. As one says: it is ok to fail, but do it quick and learn.

These are my 2 cents to the debate on how to proceed with a Social CRM Strategy. Bottom line: you can start the journey, and have the fun, in a business smart way, today!

Let me know if it makes sense to you. I’m enjoying the journey, I hope you are too.

Wim Rampen

Further reads:

Esteban Kolsky: The slow path to SCRM

Prem Kumar: All roads lead to Social CRM; But “Hanoz Dili Dur Ast”?

Mitch Lieberman: Social CRM is a journey – not a destination

Wall-Street Journal/MIT Sloan: Stay Loose

Harvard Business Review: Strategy as a Portfolio of Options (PDF)

Credit Suisse | First Boston: Get Real (PDF)

It has been a while since Paul Greenberg put the stake in the ground by writing down the definition of Social CRM. For further reading purposes I will repeat it here:

SCRM is a philosophy & a business strategy, supported by a technology platform, business rules, workflow, processes & social characteristics, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted & transparent business environment. It’s the company’s response to the customer’s ownership of the conversation.

On top of the definition I think there is a more specified set of elements needed to define a Social CRM strategic framework statement. A statement that can provide some direction how to design processes, services and experiences in line with the SCRM philosophy and the latest thinking on Customer Centricity and CRM.

Three Strategic questions: Who? – What? – How?

I think of strategy in three simple questions: Who are your Customers? What are their needs? How will those needs be met? Answering these questions will provide you with a rough strategic statement that enables you to communicate both internally and externally on what your Company is all about. At the end of this post I will provide you with my view on the Strategic Framework Statement for Social CRM.

Before I do I will take you through some steps I think are important for understanding the framework-statement I propose. First of all we need to understand how Social CRM changes the way we answer those 3 questions?

What has changed through Social CRM that is significantly different from the pre-scrm era?

Paul Greenberg makes a statement in his “staking”-post that relates to this last question, which I totally agree with:

What this means is that SCRM is an extension of CRM, not a replacement for CRM. Its a dramatic change in what it adds to the features, functions and characteristics of CRM but it is still based on the time honored principle that a business needs its customers and prefers them profitable and that same business needs to run itself effectively too.

But there is a change! Another quote from Paul Greenberg:

The lesson for business, in terms of Social CRM is that we are now at a point that the customers’ expectations are so great and their demands so empowered that our SCRM business strategy needs to be built around collaboration and customer engagement, not traditional operational customer management”

This is the fundamental change, that has been discussed and is still being discussed all over the (virtual) globe.

On top of this Graham Hill said the following in a comment to Paul Greenberg’s post:

Social CRM [...] extends CRM from being something predominantly inside-out, to something that extends out into the conversations that customers are having between themselves. If we want to engage customers we need to really understand [...] the jobs customers are trying to do and the outcomes they are trying to achieve by doing them. This is best practice in understanding customer needs today [...] Once we understand what customers need, we can innovate around delivering exactly that [...]. And we can use service-dominant logic to provide experience platforms that allow customers to co-create value together with companies. Co-creating value with customers is the modern definition of customer-centricity.

This is not a light read and Graham Hill has since written several posts that shed some more light on the value co-creation concept. I wrote a post on the definition of Value Co-creation myself based on (among other) Graham Hill’s views (you can find links to his post there) because I had a need myself to better grasp the concept of value co-creation and furthermore because I felt the need to be able to explain it in as few words as possible to anyone who is newly introduced to the concept.

I advise you to read the whole post as well as the comments on it. This has been one of the most valuable posts for myself when it comes to better understanding the concept of value co-creation and the way it differs from different shades of “co-production” or “mass-customization” (the differentiating element is `personalization of experiences – in use`).

A Social CRM Strategic Framework Statement

If I now take the definition of Social CRM from Paul Greenberg, the understanding of Service Dominant Logic, Customer jobs and desired outcomes as explained by Graham Hill as well as the differentiating element from the value co-creation definition, and I put them all together in context by answering the who-what-how questions, I get what I would like to define as the Social CRM strategic framework-statement:

Obviously I like it and I will discuss in future posts what I think the implications of this statement are for a more detailed strategy.

Of course I am not a guru and I’m definitely not perfect in what I think and write. So it is now up to you all to blow it to bits or otherwise let me know what you like or not about the statement. And I would appreciate any views on the implications of the SCRM strategy framework statement when it comes to building a detailed strategy.

Thx for stopping by, reading and letting me know your thoughts.

A few days ago I was asked on Twitter how I would define Customer Services: in the reactive sense, the pro-active sense, or both? It was immediately followed by a second question: What is the agenda for pro-active Customer Services? My initial response was that it is both (re-active and pro-active), for sure, whilst adding that I haven’t been giving the future of Customer Services very much thought lately (shame on me actually).

This great question and short discussion made me think though. The agenda for Customer Services in the (socially) networked era has more to it than transforming from re-active to pro-active, from helping customers re-actively answer their requests or solve their problems to pro-actively engaging through social media or any other channel to collect feedback and help prevent and solve (service) issues, or to assist Customers in their purchasing decisions. All important stuff, but already happening.

The Agenda for Customer Services is not (only) about integration of (new) systems, channels, quality improvement models or even pro-active servicing. In some format, more or less implemented or leveraged, this is already there. The Agenda for Customer Services is also not about transforming (or morphing) the traditional cost-center approach into a value (for the Company) approach. The latter not only not being the company’s choice, but also since it is mainly about maintaining the status-quo (how can we keep justifying that we spend large amounts of money on our Customer Services department? Because they contribute to value/revenue for the Company!).

So, what is the Agenda for Customer Services? I do not have the full agenda in mind, but I trust that you can help me with that by adding your views in the comments. Let me share some topics that I think should be on the Agenda of the company’s Customer Services Strategy for the future:

• Agenda topic 1: Align the scope of the Customer Services function with Customer’s service perception:
  Customers think of service in a broader perspective than just after sales service as most companies see it. Terms, conditions, policies and even the products and services that are surrounded by them, may have more impact on the perception of good service than flawlessly executed customer service resolution. This topic is not only relevant to ensure alignment with the Customer’s perspective, it is also needed to be able to allocate funds and resources to those parts of the Customer (Service) Experience that matter most to Customers.
• Agenda topic 2: Expand the customer services function into helping Customer’s get the job done:
  I take that a company’s improvement strategy should be focused on meeting the Customer’s unmet needs or desired outcomes whilst doing the jobs they are trying to get done. Helping Customers to better meet their needs is probably the most pro-active and largely unexplored function of Customer Services. Your Customers are closing the gap for you now on all kinds of (online) communities. Sounds great and is surely cost-effective, yet you are missing out on great opportunities.
• Agenda topic 3: Implement Enterprise Feedback Management (really now):
  Collecting Customer feedback and using it will become more important in the networked era than it has been before. Customer’s will judge a Company’s value not only by the resolution of their own questions, problems or complaints. In the (socially) networked era Customers will also judge a company by the way it takes care of other Customers and how it improves based upon the feedback provided. Enterprise Feedback Management must become an integrated part of Customer Service design. Closing the feedback loop towards your Customers is not a nice to have.
• Agenda topic 4: Align you metrics with Customer’s service perception and desired outcomes:
  Metrics and KPI’s need to be aligned with the scope and (new) functions of Customer Services. Aiming at meeting the unmet needs and desired outcomes this is also exactly what you should be measuring against. Correlating with Company’s performance (revenue, profits, retention, Customer Life Time Value) is the final step you need to take to see whether you are doing it all right.

These are my thoughts. Care to share yours (or comment on mine)?

When reading “the web” one could be lead to think that a company’s poor Customer Services is the worst that could happen. Any mistake in this area would easily set off negative word-of-mouth. Armed with Social Media the “crowds” will seriously harm the brand(ed) reputation, seriously damaging a company’s growth opportunity. Some even consider Customer Services the new Marketing. The importance of Customer Services though, which in lots of cases is considered to be the same as the importance of a company’s (multi channel) customer services contact center, can easily be overrated.

Operational Excellence is often a zero-sum game

I’ve worked for several companies that invested significantly in operational excellence of the Customer Services Contact Center. Convinced that this would provide them with competitive advantage and high Customer retention in the end. At the same time competition did the same, resulting in a zero-sum game with regard to market shares.

For one of these companies, increasing retention of (B2C) Customers became even more important than before, because it was for sale. They had been loosing Customers to a new Competitor for a little over a year (like most other competitors, yet this specific company was hurt most). In combination with not meeting market share growth plans for several years and a shareholder short of cash, this was to be expected.

The company’s strategy continued its focus on improvement of the Customer Experience through improvement of Customer Services and processes, at the same time trying to increase operational efficiencies to reduce costs. Whilst their Customer Services satisfaction rates improved as did their overall CSAT (the numbers were decent, not great, much like competition), churn rates continued at (too) high levels, market share eroded as did the company’s potential sales price.

Who is Calling? And Who is Not?

An analysis of the company’s Customer data revealed that their strategy of Customer Services Operational Excellence did not work out, because it was only 20 % of the customers that contacted Customer Services. At the same time churn rates were caused for less than 15 % by Customers who contacted Customer Services. From this perspective Customer Services did a good job.

It is not difficult to understand that a strategy that focuses on only 20 % of Customers (and their direct need for Customer Services) is not the best strategy. This example also shows that doing a good or great Customer Services job is not necessarily the sweet spot. Valuable resources can easily be wasted for years.

Understand where your Customer’s Sweet-Spot is

Understanding your Customers, their needs and wants, the jobs they are trying to do, the experiences they have with your Company (not the ones you think or assume they have), the relative importance of each part of the total Customer Experience, how well you perform against desired outcomes of the jobs and Experiences etc etc.. All of these are important to understand where your Customer’s sweet spot is. Customer Services might be it. It might also not be.

KPI’s should be about understanding what you need to improve to be better at meeting your Customer’s needs and desires. Designing a measurement framework, the metrics that go with that, and the cross-functional dashboards to ensure cross-silo understanding how improvement in one area effects another, should not be regarded lightly. At the same time putting together a Customer Experience Feedback Analytics team to keep tracking metrics, searching for new correlations and continuously increasing your understanding of what truly matters to Customers, as well as what you need to do about just that, I consider a must for every company.

Unfortunately, in the perception of many, KPI’s seem to exist only to please “the boss” or to show “the boss” how well one is doing. KPI’s or metrics are often not well designed, and are sometimes extremely well designed: Extremely well to suit an important purpose: Fool your Boss (e.g. for a bonus, for getting the money to launch that project you really want to do, or just to be able to not have to do anything).

Here are two examples of metrics that fit into that last category:

Pursuing your own desires, not your Customer’s:

A company understands that their customers desire a speedy turn-around time with regard to account-change-requests. They have asked their clients what they would consider a speedy turn-around time. On average the Customer has provided feedback that 10 business days would be fine. The manager therefore has put in place a metric: average turn-around time of account-change-requests. After a big ICT project (which they always wanted to do but did not have a sound business case for) they succeeded in getting it about right. Unfortunately Customer Satisfaction did not increase and the (complaint) volume in their Contact Center did not decrease either, it increased!

What happened: after analyzing the data on turn-around times it was discovered that the company has been successful in decreasing the turn-around time of requests, that were already being dealt with within 10 days before. They improved turning them around in 3 days. Great achievement, but clearly not in line with the desired outcome of their Customers. Worse even, the turn-around time of requests that were handled outside the 10 day limit, increased from 15 days to 18 days. A lot of money had been spend on reducing the average turn-around time (by system automation), only to find out it did not have any of the desired outcomes for the company. The manager is happy though, with a state of the art system and a good bonus for meeting the KPI-goals.

Little effort, maximum results

A company has analyzed that their Call Center First Contact Resolution-rate was too low, causing high levels of dissatisfaction among their Customers who contacted the Contact Center. They also analyzed that most of the repeat traffic occurred within 2 weeks after the first call. Hence the responsible contact center manager put in place a KPI to track and reduce the repeat volume that occurred within 2 weeks. After as little as one month they saw an increase in the new First Contact Resolution KPI and after 3 months they hit their target (95 % FCR). Unfortunately, and you feel it coming, dissatisfaction levels did not decrease, nor did call volume.

What happened: contact center management proved to be very effective. They implemented the new KPI all the way through to the level of Customer Services Representatives. They of course know exactly how to influence this, without structural improvements needed. The CSR’s made a great effort in managing expectations of the calling Customers: it will take at least 2 weeks before your requests will be dealt with. No improvements were made on the actual turn-around time of the Customer requests, hence all Customers kept calling back after the two weeks had passed. A good example of: little effort maximum result!

What kind of (bad) examples do you have to share? Or: how did changing the way you measured really improve understanding, what mattered for your Customers, for you? Please share your stories here.