Monthly Archives: April 2015

Being Your Customer’s Hero: Interview with Adam Toporek.

cts_toporek-adam_headshot_main_300Your new book, Be Your Customer’s Hero, is launching next week. Tell us, what inspired you to write this book?

My desire to write this book came from the old business axiom of “find a need and fill it.” However, the need I was filling was first and foremost my own. Be Your Customer’s Hero is the book I always wished I’d had during my years of owning and running retail service businesses.

I’d always wanted a single book I could hand to frontline employees that would give them a comprehensive set of tools and techniques for becoming great at customer service. A book that spoke to them in an easy-to-read conversational way about the realities they face day to day. Despite all the amazing books on customer service and customer experience on the market, that book didn’t exist. So I wrote it.

In your opinion, what prevents most frontline service professionals from delivering superior service?

External factors are a big part. Store policies, lack of empowerment, and ineffective systems are just a few of the challenges frontline service professionals face. Organizational leaders need to always be looking at the structural impediments which prevent frontline professionals from delivering great service.

Internal factors are just as important and often more difficult to overcome. Most of the time, these boil down to mentality – how frontline reps view customers, how they handle their own emotions, and how confident they are.

Competence and confidence are particularly important to delivering superior service. Oftentimes with frontline employees, it may be their first job or it may be their first time working in that specific environment. By using culture and training to instill a customer-centric mindset and bolster service skill sets, organizational leaders can give frontline workers both the confidence and competence they need.

You mentioned organizations’ policies as possible obstacles to delivering great customer service. What can organizations do to make policies more customer-friendly? Can you share a couple of examples to illustrate that?

The first step is to identify the touch points that create the biggest hassles from the customer’s perspective. Study your feedback and survey data. Ask your customers directly. Also, ask your teams what policies, in their opinion, create the biggest challenges for customers. Look at both customer-facing policies and internal policies. Evaluate why you have them and how you could make them more customer-friendly.

Two quick examples:
Southwest Airlines has a customer-facing policy of not upcharging for checked bags. Now, admittedly, those fees might be passed on another way, but the policy still makes customers feel that they are not being nickel and dimed.

An example of an internal policy that is not customer-friendly is needing approvals for comps or refunds. Many years ago in a retail service business of mine, we empowered all frontline reps to comp services without supervisor approval. This internal policy change gave the reps the ability to resolve most minor customer issues in real time at very little cost to the company.

You mentioned employee empowerment, can you elaborate on that? What do companies that get it right do differently?

Empowerment is incredibly important to not only delivering great experiences but to proactively resolving issues before they have the chance to escalate. Now, empowerment is not a panacea, but it is a powerful tool that many organizations do not utilize enough.

Companies need to begin with actual empowerment, loosening the reigns in strategically focused areas and granting more authority and responsibility to frontline employees so that they can facilitate experiences and resolve issues. Organizations need to balance the risk of empowerment with the rewards; it’s an idea we call “smart empowerment.”

Whenever you expand authority or responsibility, you generally increase the risk that those expanded powers can be used in a way that hurts the organization. However, the risks must be evaluated because they are different in every situation. By way of extreme example, authorizing each frontline employee to issue refunds up to $100 is not as risky to the organization as authorizing each frontline employee to make wire transfers from the company account. Empowerment will always have limits. When you compare the risks of an empowerment initiative with the potential rewards, both to the customer and to the team, you can make an informed decision about the types of employee empowerment that are right for your organization.

Additionally, organizations should understand the difference between actual empowerment, which gives authority or responsibility, and psychological empowerment, which means the employee feels empowered. The employees have to know that they can make decisions without fear of repercussions, and they need a customer-centric mindset to want to use the authority they’ve been given to improve the customer’s experience.

What can organizational leaders do to better prepare their customer-facing teams?

We talked about competence leading to confidence earlier, but that rarely happens automatically. The expectations placed on frontline reps are often unrealistic. We expect them to be put under great pressure, sometimes being yelled at or bullied, and to not only manage that stress but to behave exactly the way we expect them to. It’s not easy to do, and I’ll admit right now, equipping front-line employees with more than only the most basic “here’s where the paper clips are” type of training is somewhere I’ve missed the mark myself before.

Think about how they train astronauts; it’s amazing. Astronauts in training are consistently confronted with a variety of adverse scenarios that they must learn to deal with. That way, when facing a critical situation, they can manage their natural reactions and respond calmly by working through the problem.

Now obviously, space flight is an extreme analogy—we don’t have the luxury of training our staff for a few years—but the takeaway is the following principle: The more you drill in practice, the more you can depend on your reaction in the real world.

So, training is key. Bring in a consultant, work through a book, or create your own trainings. Invest in the education of your leaders as well. Send them to seminars or invest in programs like the W. P. Carey Certificate in Customer Experience that gives the opportunity to work on frontline skills like service recovery or top-level CX skills like service blueprinting.

Finally, what does it mean to be your customer’s hero?

To be the customer’s hero means one thing above all else: It means being there when the customer needs you and making your personal interaction with the customer as memorably positive as possible. It’s not about over-the-top acts; it’s about consistent execution.

In the end, great customer experiences, or Hero-ClassTM customer experiences as we like to call them, create competitive advantage and lead to a better bottom line. Deliver them consistently, and your organization will reap the rewards.

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Adam Toporek is the author of Be Your Customer’s Hero: Real-World Tips & Techniques for the Service Front Lines (2015), as well as the founder of the popular Customers That StickTM blog and co-host of the Crack the Customer Code podcast. He is the owner of CTS Service Solutions, a consultancy specializing in high-energy customer service workshops that teach organizations and frontline teams how to deliver Hero-ClassTM customer service. Adam has an MBA from UNC Charlotte and the W.P. Carey Certificate in Customer Experience from the Center for Services Leadership at Arizona State University. Connect with him on Twitter.

What You Need to Know When Migrating your Customers to Digital Channels

Peter VerhoefBy Peter C. Verhoef

Firms constantly re-evaluate their service channels. Customers are serviced through multiple channels, but usually use their preferred channel most frequently. However, some channels are more costly for the companies than other channels. Channels involving service employees, such as call centers, are much more expensive, especially when compared to the digital self-service channels. As a consequence, many firms like to steer customers to their less costly channels. By doing so, companies can improve their bottom-line and eventually eliminate the more costly channels. Although digital channels can be perfectly suited to serve customers, steering customers to the digital channel can have negative consequences! We investigated negative consequences of steering customers to a digital channel in an experimental study with Dutch customers. Migrating customers can be a painful process, but as our research shows, the negative consequences can be softened or eliminated.

Typically firms have a number of different strategies for migrating customers to digital channels:

  1. Companies can offer customers the digital channel and customers can switch voluntarily.
  2. They can force customers to use the other channel, while eliminating the costly channel.
  3. Companies can use a carrot and stick approach. Customers using the old channel can be punished with monetary fines, whereas small monetary rewards can be given to customers migrating to the digital channel.

One core problem with forcing customers to use another channel – it makes the customers feel that their freedom is threatened. This effect is explained by a well-known psychological mechanism discussed by psychologist Jack Brehm in 1960’s. He suggested that when individuals feel that they cannot choose what to do, they feel a strong negative emotional reaction: reactance. In extreme cases this can even induce a boomerang effect, where initial positive attitudes become very negative. Consequently, reactance can cause dissatisfaction and customer defection.

Channel Migration and ReactanceShould firms then never attempt to actively migrate customers to new digital channels using some enforcement tactics? The main results of our study seem to suggest that. Still firms have to balance the two competing priorities: keeping customers happy and lowering the cost to serve. What is more, in some cases digital self-service channels are more strongly valued, because customers co-create value by participating in these channels. By using digital self-service channels, customers can have a stronger influence on the outcomes and make the service less dependent on service employees.

In our study we considered whether a good relationship with customers can help firms in migrating customers. And indeed we find that the negative effects of enforcing the use of the digital channel is substantially lower for more loyal customers. These customers are more forgiving, their feelings of loyalty act as a buffer. Therefore, our research suggests that creating strong relationships with customers will enable firms to actively migrate customers.

In sum, our findings suggest that, given that migrating customers can be a painful process, firms should carefully develop a migration strategy. Our findings clearly suggest that in order to overcome the negative emotional reactions, firms should not force customers to migrate to a new digital channel or punish for the use of the old channel. Rewarding customers to use the new channel has a more positive result. However, having good relationships with customers can mitigate the negative effect of reactance. This is yet another pledge for creating strong relationships with customers, as these good relationships not only will create loyalty, but can also help firms to implement unpopular measures, such as eliminating a service channel.

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The article Customer Responses to Channel Migration Strategies Toward the E-channel featured in the post was co-authored by Debra Trampe (University of Groningen, The Netherlands), Umut Konuş University of Amsterdam, The Netherlands) and Peter Verhoef (University of Groningen, The Netherlands). It is published in the Journal of Interactive Marketing, Volume 28, Issue 4, Pages 257-270.

Peter C. Verhoef is Professor of Marketing at the Department of Marketing, Faculty of Economics and Business, University of Groningen, The Netherlands. He also holds a visiting position as professor at BI Oslo Norwegian Business School. He obtained his Ph.D. in 2001 at the School of Economics, Erasmus University Rotterdam, The Netherlands. His research interests concern customer management, customer loyalty, multi-channel issues, category management, and buying behavior of organic products. He has extensively published on these topics. His publications have appeared in journals, such as Journal of Marketing, Journal of Marketing Research, Marketing Science, International Journal of Research in Marketing, Harvard Business Review, Marketing Letters, Journal of Consumer Psychology, Journal of the Academy of Marketing Science, and Journal of Retailing. His work has been awarded with the Donald R. Lehmann award for the best dissertation based article in the Journal of Marketing and Journal of Marketing Research in 2003, the Harald M. Maynard Award for the best paper published in Journal of Marketing, and the Sheth Award for long-term impact of the Journal of Marketing in 2013. He is currently an editorial board member of the Journal of Marketing, Journal of Marketing Research, Marketing Science,  Journal of Retailing, Journal of Service Research, Journal of Interactive Marketing, and the International Commerce Review. He functions as an area editor for Journal of Marketing Research and he International Journal of Research in Marketing. He has extensive teaching experience for undergraduate, graduate and Ph.D. students. He is also involved in executive teaching on customer management and is the founder of the Customer Insights Center, University of Groningen. He is department chair of the marketing department.

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