#8 Keeping things simple, six signs a company does not care about customer service


NewsletterWelcome to my latest newsletter covering customer experience and customer-centric business strategy. The four topics this week are:

  1. Customer-centric cost reduction, keeping things simple
  2. Recent blog posts.
  3. Two relevant Forbes articles.
  4. Book publishing status.

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The concept of customer-centric cost reduction

I first posted on this subject back in January. Clicking on the drawing on the right will take you there. The subject is dear to my heart. When I hear about companies who need to reduce cost, I always fear that a desire for ‘fairness’ will mean that customers will lose out. It is all too easy for a CEO to say “We need to reduce our costs by 20%. To be fair to everyone, I am giving all managers a 20% cost target.” Sounds fair, right? The issue is that it is not fair to customers. Customers don’t care what your office supplies cost, but they do care whether you deliver as promised. ‘Peanut-buttering’ cost targets means your performance on things that matter to customers will be affected. Then you will need to go through your next round of reductions, which I call the ‘corporate death spiral’. A better approach is possible. That is the subject of the article I posted earlier today.

January 17th blog post


Keeping things as simple as possible

Yesterday morning I read yet another proposal for a complex customer satisfaction index that a company in the financial services software industry has implemented. (Since someone from that company receives this newsletter and I don’t want to embarrass him, I am not going to provide a link, or name the company.) No less than 30 individual metrics are aggregated to come up with their Customer Health Index. Their marketing manager announced it with the headline NPS is Dead!

I have worked on customer experience, off and on, for over 35 years. This is by far the most complex metric I have ever seen. Some composite customer satisfaction indices, such as Bruce Temkin’s, combine three or four metrics and are better revenue predictors than a single metric. This new Customer Health index includes things like ‘$ partner co-sell’ and ‘number of closed won opportunities’ in the mix. It seems like an excellent sales management dashboard, and it may well predict the probability of the company closing the next deal, but it has little to do with customer experience. There is nothing about what customers want to see improved, for example. 

Composite metrics all suffer from one defect compared to NPS, whatever their benefits. They are much harder to communicate clearly and effectively. If you have to spend the first ten minutes of every presentation explaining how the metric works and why you chose a particular set of components, you are doomed. Keep customer experience metrics simple. Use Net Promoter Score, Customer Effort Score, or something else that uses a single question and whose trend relative to the competition predicts revenue for your business. And of course, remember that the metric is less important than understanding why customers gave you the score, and what they want you to improve.

Our latest blog posts

Older posts are of course still available on the blog page.

image Customer-centric Cost Reduction and ‘Hygiene Factors
Today’s post is a follow-on to my introduction to the concept of customer-centric cost reduction, back in January. You may recall that it is about how you achieve necessary cost…
image Customer research confusion reduction – There are six types of customer surveys
There is quite a lot of confusion about which types of customer research are useful for predicting revenue, and which serve more general purposes. No matter what type of research…
image Behavioral Economics and Customer Experience – Part 2 – Price Gouging and Revenge
Price gouging – a particularly insidious move The New York Attorney General has launched an investigation into Mylan Pharmaceuticals, the maker of EpiPens. An EpiPen is used to provide life-saving…

Notable customer experience items from other sites

Forbes article: Six Unmistakable Signs a Company Doesn’t Care about Customer Service

I normally find myself agreeing with Micah Solomon. Not so much this time. He provides six useful illustrations of symptoms. I believe the single most important one is far bigger and easier to spot. Companies that consider that customer service is not a core competency or critical to their business subcontract it to someone else. I have to say that my views on this particular point are well known. I believe that bad customer service can be a reason for customers to leave a company. I also believe that there is little value in providing ‘great’ service, compared to ‘good’ service, for most companies. Investment money is usually better spent elsewhere, once the customer service is good enough. Once the processes are good enough, you can consider transferring it all, including the people, to a company that is specialized in that sort of thing. Micah Solomon’s article is here.

Forbes again: Happy Employees Equal Happy Customers? Well, Yes, But It’s Complicated

(No, Forbes is not all I read.) Given my own meta study, I could not resist reading this article written by Rodd Wagner. While overstating, as usual, the relationship between the two factors, they provide interesting data from BI International suggesting that unhappy employees may not cause unhappy customers. “Sabotage is rare” is one notable statement. The three graphs are quite easy to misinterpret. Bear in mind that the measurements are relative, rather than absolute, as you look at them. The article is here.

Looking forward

On the book front, my brother and I continue to make progress, slightly delayed by my first strategy work for a new client this week. I am reasonably close to getting all Kindle devices to display the text and graphics the way I want. I have also decided to go ahead with print versions. My best current guess is that the Kindle versions will be available for pre-order within two weeks, and actually deliverable a week or so later. I suspect the print versions will take a further week or so. I have not yet gotten to grips with the graphic format required for print. And my current plan is that both electronic and print versions will be available on all Amazon sites.

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