One of the great things about vacationing is that you're exposed to a lot of customer experiences that you don't enjoy during your normal daily routine. You go to new places, buy new products and services, and see the world from unique perspectives.
Customer Service Representatives (CSR's) are often among the lowest paid employees in most organizations. Yet they're among the highest influencers of the customer experience. Let's look at the logic - or the lack thereof:
Employees who interact with customers all day long are in a position to influence the customer experience in a positive or negative way. Because they're in this highly-sensitive tactical position, it would be wise select employees for this job who are inherently capable of delighting the customer with better discretion.
But most companies hesitate - and rightfully so - to grant such latitude to such low-paid workers. After all, their pay is low, because they lack the aptitude and experience to warrant higher pay (and greater latitude in decision-making with respect to customers). There are five big reasons why the Customer Service Representative should be a higher-paying position.
1: A higher wage will attract higher-quality candidates.
If companies offer a higher wage for CSR's, they'll attract more experienced candidates for the position. Candidates with a higher level of experience will have more likely learned and acted upon what it takes to delight the customer, and to do so judiciously, with the mutual interests of the customer and the company. They'll be more capable of making the right decisions in those moments of truth, where the experience could go either north or south, depending on the actions of the CSR. This type candidate can warrant the trust to please the customer without giving away ranch, as is often the fear of call center managers. This brings us to the second reason...
2: Higher-quality CSR's can deliver a better customer experience.
CSR's who can be trusted with the latitude to make the best decisions in the moments of truth are better positioned and more capable of delivering a superior customer experience. When a first-line representative at a bank is allowed to waive an overdraft fee without putting the customer on hold to seek approval, the customer immediately has a better impression of the bank, and will feel their loyalty to the bank grow stronger. And this brings us to the third reason...
3: Higher-quality CSR's increase customer loyalty.
A consistently higher quality experience drives greater customer loyalty. When a customer is delighted with the service provided every time she comes in contact with the company (often through a CSR), the customer will actually look forward to engaging with the company. This is the heart and soul of customer loyalty. And loyal customers often don't keep it a secret - they recruit more customers, bringing us to the fourth reason...
4: Higher-quality CSR's are catalysts for increasing market share.
When a customer has a great experience, they tend to talk about it. This positive talk from a customer is more credible, and more powerful than the most expensive marketing campaign. Strong positive word-of-mouth attracts more new customers, and does so at a relatively low cost. And that brings us to the fifth reason...
5: Higher-quality CSR's generate higher profits.
One of the highest expense categories for a company is Sales & Marketing. But when a current customer "sells" a friend or family member on becoming a customer, the company gains the customer and the additional revenue, without the expense of sales and marketing. As a result, word-of-mouth customers are higher profit customers.
When a company invests more in their customer service team, they're more apt to generate a better customer experience. And a better customer experience increases the loyalty of existing customers. Loyal customers recruit new customers through positive word-of-mouth at a lower cost of sales and marketing, which increases profits for the company. This virtuous cycle begins when an organization makes the decision to recruit higher quality, more experienced CSR's, by offering a higher wage.
The entire customer experience was going well.
My wife and I were greeted immediately upon entering the showroom, and offered help in a non-intrusive, low-key manner. The salesman was not at all pushy; in fact, we found him to be quite helpful. When we settled on a vehicle, and agreed on a price, we were introduced to the finance manager, who promptly completed all the paper work with us.
When our new car was brought to us, the salesman demonstrated all the controls, gauges, levers and buttons, showed us where each of the 32 cup-holders were located and even offered to connect our phones to the blue-tooth stereo. We were happy customers.
When customer-facing employees are paid more, do customers receive a better experience?
According to McDonald's CEO, the answer is "Yes."
“We know that a motivated work force leads to better customer service, so we believe this initial step not only benefits our employees, it will improve McDonald’s restaurant experience,” said Steve Esterbrook, CEO of McDonald's, according to an article in the New York Times.
When employees are paid more, they're more likely invest more discretionary effort into their work; they're willing to go the extra mile. A 2013 study by human resources thought leader Aon reveals that pay is a key driver for employee engagement. For a customer-facing employee, this may mean working a little harder; trying a second time to satisfy a customer. The added discretionary effort can turn the corner for the customer from merely satisfied to delighted. And delight drives loyalty.
When employees are paid more, their attitudes improve. They're more positive, and this comes across in their demeanor with the customer. Higher pay reduces financial stress. While research indicates that a more positive attitude can reduce stress, the inverse is also true - reduced stress allows a better attitude to happen. A customer can smell a bad attitude from a mile away and a positive attitude from two miles. People tend to be drawn toward positive people, and away from negative ones. Positive employees attract more customers.
When employees are paid more, they stick around longer; they're less likely to move to another employer for incrementally higher pay. As a result, the work for as a whole becomes more experienced. And greater experience brings greater knowledge, more confidence in doing the work, and a reduction in training and hiring costs. As HBR points out, there are indeed high costs associated with low wages, and frequent turnover is just one of them.
There are plenty of systemically good reasons to invest more in front-line employees - those who most directly interface with the paying customer - but perhaps the most strategically sound reason of all is to improve the customer experience. Greater customer experiences lead to greater customer loyalty, an higher revenue and profits.
What's so special about seeing fresh flowers in public restroom?
(This article was originally served in November of 2013. New links have since been added to revise and refresh your reader experience! Enjoy!)
It drives me crazy when a front-line employee can solve a problem, but can't.
They can because they see the problem, they see the cause, and directly observe the customer's frustration, as it happens. They can't, because they're not given the authority to fix it, nor incented to step outside of their area responsibilities to take action.
Here's a recent example, to illustrate what I'm talking about:
I was at an airport seated at the departure gate of a flight to Orlando, FL. The lighted sign above gate showed a different flight number, and a different city (Tampa). It was still about 40 minutes before my scheduled departure, when passengers began boarding.
Because it was still relatively early, and because the monitor still showed "Tampa" with the other flight number, I assumed that it was not my flight that was boarding. I was wrong, and so were several other passengers that were more focused on the sign at the gate, than the PA announcements telling us that the sign was incorrect.
The gate agent told me that the sign was "stuck" on Tampa; that the sign had not changed over the past two days. An easy solution, I thought, would have been for the gate agents to post hand-written signs with the correct information, next to or over the electronic sign. For whatever reason (lack of authority, lack of will or desire, etc.), nothing was done to address the root cause of the problem.
Instead, the problem persisted, because the gate agents didn't take the intiative to correct it. The result was two days of frustration for the airlines' customers, and the airlines' employees - the gate agents.
Here's the point:
Front-line employees ought to be given the authority and mindset to think and act outside their normal responsibilities to take action, particualry when that action will prevent a negative customer experience, or, create a more positive one.
There're some legendary examples of this in the business literature, like the FedEx driver in January in Minneapolis, on finding a FedEx drop box frozen shut, opted to back over the box to uproot it from the concrete so its contents would not be delivered late. Uprooting a drop box was beyond the scope of his employment, but doing it enabled his employer to live up to its promise.
There's the story of the Zappo's CSR having a pizza delivered to a "customer" at a hotel. Zappo's normally doesn't sell pizza, but this customer really wanted pizza, and the CSR got creative to make it happen.
There's the Ritz Carlton story of the employee that built a ramp so a wheelchair-bound guest could go down to the beach during his stay.
Yes, these are extreme examples because the employees were all trained to "do what it takes" to help the customer achieve the results they purchased.
These legendary customer service examples occuured, because their organizations nurture a culture of "doing whatever it takes" to correct problems, and create improvements to make for a more positive customer experience. And because the employees are encouraged, and given the latitude to take more drastic-than-normal steps to make it all happen.
Do your employees feel empowered to take steps outside their normal responsibilities, to deliver a better experience?
"One machine can do the work of fifty ordinary men. No machine can do the work of one extraordinary man." -- Elbert Hubbard
We're living in an era where automation is becoming the norm. Business processes that were once performed by humans are more often performed solely by technology. If not already, human interactions will soon become the exception.
Within a ten-minute period this afternoon, I ordered a prescription refill from my pharmacy, got cash from my bank, and bought and paid for groceries at a neighborhood supermarket. That's three transactions at three different businesses without a single human interaction.
By automating those transactions, the pharmacy, bank and grocery store reduced their costs, but they also reduced my customer experience to its lowest common denominator. By removing the human touch, they eliminated an opportunity to trigger my emotions; they eliminated a chance to show me a competitive advantage.
Each time a business automates a customer touch point for efficiency sake, it should look balance the automation with a human touch for experience sake.
Think about a company like Zappo's. They sell a lot of shoes, and they do it very efficiently. But if you ask Zappo's what they sell, they won't say "shoes." They'll tell you they sell "happiness." And that happiness is created by the fun, engaging customer service reps that love to make a customer's day. In fact, these human interactions are the essence of the Zappos brand. Sure, the company runs a very efficient e-commerce business, but they don't forsake the human touch for more efficiency.
Here's the point: Before automating a customer touch point, think about how the automation will impact the customer experience. Will it remove an important point of emotional contact, and a competitive advantage?
If it does, then look to either enrich an existing human touch point, or create a new human touch point that adds value and emotion to the customer journey. A good example here is the Trunk Club...
The Trunk Club is a men's clothing service where a personal stylist handpicks a trunk of high-end clothes and ships it to you, so you don't have to shop or worry about selecting the right styles. It begins as an on-line experience that could certainly remain 100% on-line, but the Trunk Club adds a human element: After providing some After providing some information about yourself and your preferences, you're assigned a "personal stylist" who serves as your concierge. The stylist then calls you directly, to begin a human-to-human customer relationship.
Is this human conversation required to complete the transaction? Of course not. Many on- line retailers avoid this costly step for efficiency sake. But the Trunk Club uses these additional human interactions to create the emotional bond with their customers clicks can't do.
In his 1981 best seller, "Megatrends," John Naisbitt presciently advised us to balance high-tech with "high-touch" to preserve our humanness. This advice is more applicable today than it was 34 years ago, because technology is more prevalent, and more challenging to our humanness on a daily basis.
What are your competitive human touch points?
Where can you add more?