When I asked him where my table was, he said in a very annoyed tone of voice that someone had stored it incorrectly and he couldn’t find it. I then asked why my pick up showed completed and he said he had turned it off because it was not his fault that the table was not in the wrong place. Before I could say anything else, he walked away from me and went into the store presumably to find my table.

After waiting a few minutes, I decided to go into the store and after wandering around a bit, someone asked if they could help me—it was the Customer Service Manager for the store. I told her my situation and she took my receipt and went off to solve the problem. 10 minutes later, my table and receipt appeared along with a $10 gift certificate for my wait.

The process made me curious about the accuracy of Sears’ process measurement process and how the data is used. The 15+ minutes it took for me to get my table is recorded as a having been completed in 4:27. By the employee’s actions, it seems as though he will get punished for failing to complete the delivery of the merchandise in less than five minutes even if the product is not where it is supposed to be.

Measuring process performance is the right thing to do, but if you don’t get accurate data, it defeats the purpose. Giving front line employees the ability to shut down the system when things go wrong undoubtedly leads to results that are better than they actually are and potentially hides problems from management. Getting your shipment quickly is certainly a key measure of process effectiveness and customer satisfaction, but it is not the only one. Speed of delivery when accomplished without regard for friendly and attentive customer service, will not delight your customers.

As the hotel chain began its improvements efforts, they reexamined the data they had received from comment cards. What they found was that while they had a lot of data, the data was not coming from their target customers. The cards were being completed on the weekends, not during the week when business travelers were at the hotel. It turns out that the majority of the cards were being filled out be families traveling with children on the weekend—exactly the opposite of their target market.

Not all things are equal. Your customers are not equal and neither are the elements of your products, services, pricing, delivery, and customer service that drive their future intent to do business with you or refer others. The challenge for organizations is to develop a clear understanding of the drivers of customer behavior for your key customer segments then measure performance relative to customer expectations on an ongoing basis. Basic surveys are typically not enough to provide organizations with sufficient data to make improvements in business operations. In fact, they can be misleading and drive organizations to do the wrong things for their key customers as in the hotel example.

If you are going to take the time to ask customers about your performance, it is worth taking the time to do it right. Surveys must include measures of the key elements of your offering that statistical analysis has shown to be linked to the desired customer behavior. They should be improvement focused—meaning that the intent of the measurement is to find opportunities for improvement as seen by your most important customer segments rather than to make your organization look good. And surveys should assess the customers desire to do business with you going forward given their last experience.

At the same time, retailers and consumer oriented businesses continually use this strategy as a way to drive repeat business. It is almost a surprise when a company does not offer you a chance to sign up for their frequent shopper program. The question is do these programs work? Do they build loyalty?

The program is pretty typical: you get a point for every dollar you spend and when you accumulate 300 points, you get a $10 reward. You also get to be a member of a special club (read: everyone who takes the 1 minute to fill out the application) and get a special newsletter, automatic entry in sweepstakes and contests, product reviews, and periodic friends and family discounts. Great value for the time and money spent!

But will this program impact my loyalty to Dick’s? The short answer is no. The reason for this is that I already considered myself a loyal Dick’s customer based on the difference in product quality and selection at Dicks’ as compared to the Sports Authority and the indifference of the service reps I encountered at the Sports Authority. I had already decided that Dick’s was going to be my first choice and I would only go to the Sports Authority if Dick’s didn’t have what I was looking for.

Typically loyal customers are willing to pay a premium to do business with a preferred supplier because of their product quality, excellent service, and the ease of doing business with someone who knows your preferences. These factors build the customer’s trust in the business and make them less likely to switch suppliers even in the face of lower cost options. Most frequent customer card programs, however, are built on the premise of offering a discount in the form of miles, points, gift certificates, etc. to get the customer to buy again.

Think about the last time you went out to dinner. Are you willing to go back to that restaurant if they don’t offer a discount? If the answer is yes, they are giving away profits by offering the discount. If the answer is no, is price the really the reason you won’t return or was it something about the quality of the food and service? And if the restaurant has a quality problem, how big a discount will it take to get you to go back?

So what is Dick’s getting out of this program if customer loyalty isn’t it? They are maintaining customer mindshare with the program, stimulating repeat purchases through permission based advertising, and increasing word of mouth advertising by frequent customers to their friends and family in return for effectively offering a 3.3% discount on their merchandise. The program may build customer volume, but that is not the same thing as building customer loyalty!

If your business competes in a crowded market where it is difficult to differentiate yourselves from the competition, you may want to create a frequent customer program, but do not automatically link price discounts to the program. Discounts should be related to your operating costs, so if the incremental customer volume makes it cheaper for you to serve your customers, then discounting through frequent customer programs makes sense.

A few weeks ago, I renewed my season tickets for the Orlando Magic. My sales rep, Leigh, was very helpful in getting me seats that met my budget and preferences. I though everything was set for the 2006-7 season—except for the Magic’s desperate need for a legitimate shooting guard (but not J.J. Redick!)—then Dave called.

Turns out Leigh got a promotion and I got reassigned to the new rep. Ever eager, he told me about a seat selection event at the arena where I could take 30 minutes and select the best available seat in my price range. Being 75 miles away from the arena, I declined to attend because I was happy with the seats I had selected with Leigh.

Much to my dismay, this is only the beginning of the story.

On June 8th, I received a call from Dave with “good news” saying that he had found me better seats and switched me to Row P, seats 15-16. He said that he had found seats that were closer to the court and with a better angle to see the action. I was shocked that he would move my seats with without my permission and it was clear that he had no idea what was important me.

When I worked with my previous account rep, Leigh, now Dave’s supervisor, we went through an extensive process to pick the best seats for my budget. I wanted to be able to see the Magic bench, I wanted to be close to the aisle, and I wanted to avoid having my line of sight to the court blocked by Bubba and Betty Jo walking up and down the aisles as was the case with my seats last year. I chose to be close to the right aisle in section 105 for these reasons.

If Dave has known my criteria and selected better seats, that would have been terrific customer service. But it is clear by his choice of seats he chose to move my seats based on his preferences, not mine. And it was also clear that none of the thinking that went behind my seat selection had been shared with him.

So who is a fault? Dave tried to do what he thought was best for the customer but didn’t have enough knowledge and experience to do it. And he definitely should not have made any change without my prior permission. Chalk this up to an overzealous (and under trained?) new rep.

Was Leigh at fault? Probably a little more than Dave given that she is responsible for training him on what to do and not do. She also didn’t give him the details of our conversation when she handed the account to him—with 13,000+ season ticket holders, this would be difficult to pull off—so he could not have known my expectations.
Are the Magic at fault? The team that drafted Fran Vazquez from Spain in the first round last year then watched him extend his contract with his local team and express no desire to play in the NBA is probably the most responsible for Dave’s mistakes. It is pretty clear that they do not have the system in place to capture customer preferences and easily pass this knowledge on to new reps. By not having the most basic way to capture and share institutional knowledge, they make employee transitions more difficult and put customer satisfaction at risk. They also need to verify that their processes and procedures for exchanging seats are documented, understood, and complied with by all staff.

Amber to the Rescue
Yesterday, I emailed the person who sent me my ticket confirmation. I told her my tale of woe and, 15 minutes later, she was calling me from the arena saying that there were better seats available in Row P, seats 3-4. She took the time to listen to my criteria, found something that matched, and called me back promptly to get my agreement to make the switch. Nicely done.

Maybe Dave will get better, but better systems will help him come up the learning curve faster and be more effective. Now if we can develop a system to create an athletic shooting card who can hit the three and wants to play for the Magic . . .

We arrived at the Emergency Room to find an empty lobby and an available physician. After examining Katie, the ER physician prescribed a course of care that included the injection of a steroid to ease the swelling caused by the antibiotic. Being an ESPN addict, I am hyper sensitive to the subject of steroids, particularly when it comes to by baby girl. So I wanted to check with our pediatrician that this was the best course of action.

I called the physician at 8:46AM to verify that the use of the steroid was the appropriate course of action. I got the answering service. I told the operator who answered the call that I was in the emergency room and wanted a second opinion on the prescribed course of treatment. She told me that she would deliver the message to our physician’s partner, who was on call that day.

Five minutes passed and we received no call. 15 minutes passed without a call. 30 minutes passed and still no call. At this point, the nurse came into the treatment room to administer the shot. Without the advice of our trusted physician, my wife and I gave the nurse the go give Katie the shot. Another 15 minutes later, after checking to make sure that Katie had no negative reaction to the shot, we were released from the hospital.

On the drive home, the phone rang. It was the on call physician returning my call. It was 9:54, 68 minutes after I had placed my call. She said she had just gotten my message! Good thing this wasn’t an actual emergency!

When we arrived home, I asked my neighbor, Brad, who is an OBGYN, what it meant to be “on call.” He told me that it meant that he had to be reachable (pager and/or mobile), but that sometimes physicians batch their calls (meaning that they only get called every hour or two with their messages) or they go “emergency only” (meaning that only critical calls are forwarded as they are received). He then told me that the trick to use with the answering service was to tell them that you want a call back right away and this will prompt them to pass the message through immediately.

Anyway, what struck me about this experience was the impact the 68-minute turnaround time had on my confidence in my physician even though he was not directly involved in the situation. I never would have guessed that I would have to tell the operator that I wanted a call back right away when I told her that I was calling from the Emergency Room. I would have expected that part of the training for operators would be to ask callers if this was an urgent situation (or give the operators a set of questions to ask to determine this for themselves). I also would have expected to get a clearer sense of when I would be hearing back from the physician. Getting back to you right away is measured in minutes if you are in the Emergency Room with a baby. If the operator had set clear expectations about when the call was going to be forwarded, then I would have insisted upon a more urgent handling.

The funny thing is that I am less satisfied with and less confident in our pediatrician as a result of this experience even though he had nothing to do with the way in which the call was handled. This is because the gap in quality of service I experienced with the answering service and the on-call process has a negative halo effect on my perception of him and his organization. It makes me wonder whether or not I can trust them to be there in a timely manner in the future? It makes me wonder what other tricks I need to learn from Brad to ensure that I get the best possible care?

What’s clear in this situation is that a process/training breakdown occurred. The operator should assume that if she hears the phrase “emergency room” an immediate call to the physician is warranted whether the patient requests it or not. She should also be trained to ask the right questions to assess the urgency of the situation, decide how the call fits with a well-defined escalation process and set clear expectations with the patient.

Getting the process and training issues in sync builds confidence in the medical care provided. It also increases patient/physician trust. Medical providers need to take care to this aspect of their service to ensure they are meeting and exceeding customer expectations at critical moments.

About a year about, Marc sold the business and things began to change. The first thing to change was the decorations (a major upgrade), then the atmosphere changed. Instead of being greeted by the friendly owner, customers were greeted by a series of ever changing college students. Over time, the changes in the staff resulted in a significant downgrade in the quality of the service. But at least they had free WiFi access.

Five minutes later, a scraggly looking guy brings my drink to me. No caramel, cinnamon instead. I asked him if this was a caramel macchiato and he said, “No, we don’t make those.” Okay, I thought, I will just get something else. I asked him to take my drink back as I explained that the clerk had said they could make the drink I requested. He responded, “She is my little sister and she doesn’t know.” And as he walked away he added, “We aren’t Starbucks.”

Being a regular Starbucks customer, I was well aware that the Sun Shoppe wasn’t Starbucks and I told him as much as I got up to go to the counter to get a new drink.
When we both arrived at the counter he proceeded to tell me that he didn’t like my attitude and that he was the owner (a lie, his dad is the owner) and that he could refuse to serve anyone for any reason. But I was an “awesome customer” and he didn’t want to not serve me.

Too late. It’s rarely a great idea to give customers “attitude.” It’s never a great idea to threaten them. Just as the owner’s son can refuse service to anyone, a customer can refuse to do business with anyone that doesn’t provide adequate service. If businesses don’t give you the service and attitude you deserve, vote with your feet and spend your money elsewhere.

Businesses can avoid this type of situation by doing a few simple things:

1. Train your employees on products and services. Everyone should know what you will or won’t do. It is not an acceptable excuse to say that the employee is new or “she is your little sister.”

2. Teach your employees the value of a loyal customer. If employees think of the value of a customer as equal to their last transaction, they won’t treat them with the respect and care they deserve. Help employees see that a lot of small transactions over time can add up to a lot of money over a year and the lifetime of a customer.

3. Develop problem resolution skills. The job of the service provider is to diffuse the situation, not to prove who is right or establish who is in control. “I’m sorry for the confusion, can I get you another drink?” will go a lot farther towards creating a happy customer than blaming your sister or telling the customer you are not Starbucks.

4. Remember the customer may not always be right, but the customer is always the customer. If you value them and their business, treat them like you want them to come back.

It’s time for a cup of coffee. I am off to Starbucks!

My recent experience with Merry Maids is a great example of how some organizations create policies without considering the impact on the customer. And it is a great example of how easy it is to get internal policies aligned with customer needs with a little bit of forethought.

Guess again. After my request to cancel the appointment, I received a lecture from the woman from Merry Maids saying that cancellations needed to be done 48 hours prior to the scheduled appointment and that I was at risk of being charged a $50 lock out fee because of the late cancellation. When I asked her why she was making her reminder call to me 24 hours prior to the appointment if cancellations had to be done 48 hours prior to the scheduled appointment, she said that they do this to remind people that they need to leave a key for the cleaning ladies or leave a check for the services. When I asked why then don’t make their calls 48 hours prior to the appointment, she said 24 hours was the company policy and she couldn’t do anything about it.

What’s clear is that Merry Maids is concerned about their internal issue of having their workers show up to a home and not be able to get access. They have to pay their workers for the time anyway and, without the lock out fee, they would lose money on each home where they can’t get access. Fair enough. They have every right to collect their lock out fee so they don’t lose money if the customer fails to give them access.

From a customer’s standpoint, the same thing could be accomplished if they called customers 48 hours before the appointment. It would allow them to address their internal issue and provide the customer with a sufficient window of opportunity to cancel the service is they need to. A win all they way around.

The reason they probably don’t do this is that operations has developed a set of policies that allow them to execute their part of the business. But in developing the policy, they didn’t get data from customers and/or marketing to understand the impact of the lack of alignment between the 48 hour cancellation and the 24 hour reminder. They focused internally on one policy without looking externally at the impact and reviewing other policies that impact the customer to ensure that there is consistency, fairness and alignment. Policies designed to protect an organization, don’t by default have to hurt the customer.

The contrasting conditions have existed for the two years since my mother moved into her home. It seemed with the pace of new home construction that it would simply be a matter of time before the construction site was developed and new homes were built on the raw land. So we waited to see what would happen.

Then the parking lot was taken out from the model home. Ground was broken to build a new house where the parking lot had been. The model home was sold. And the raw land became overgrown with weeds.

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{Do you know where Dirt Mountain is? The first person who posts a comment with the correct identity of the community and the builder will win a $50 gift certificate.}

Being a good son, I decided to make a few calls on my mother’s behalf to see what was going on with the land. I started with the builder’s website—the community was no longer listed as an active community. So I emailed the customer service department listed on the website and got a prompt response from Lenny which said, “I have been told that my company intends on continuing the construction process to develop the rest of the [community] and to do so a.s.a.p. However, delays are very common in this industry. Hopefully, you will be pleased to know that we are presently at permitting stage for the area across the street. This usually indicates the construction will commence in a short period of time. Thank you for your inquiry.”

When I pressed Lenny to define what a.s.a.p. meant in terms of actual days, I was referred to Howard, the VP of Sales. When I called his office, I was referred to Joan in the Sales Center. She did some research and told me that a.s.a.p. meant that sales would begin in 2007 and she referred me to Tony in customer service to get information on what would be done to clean up the construction site in the interim. Tony called, told me he would find out what was happening, and never called me back.

See picture of homes opposite "Dirt Mountain" by clicking on link below.

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I told a client of mine about the situation and he told me that he new the developer of the site and the developer, not the builder, owned the land. I made me wonder why the representatives of the builder did not tell me this. It also made me wonder whether the builder or the developer has more at stake in terms of reputation given the eyesore the construction site has become.

From the developer’s standpoint, the value of the site has not become less valuable because of the weeds and dirt piles. They have no incentive to clean up the site. As land prices go up, the value of the site goes up.

On the other hand, my guess is that the value of the homes across the street is being negatively impacted based on the ugly view from their homes. Wouldn’t you pay more for a house on a beautifully landscaped street than one across from an overgrown construction site?

I suspect that the homeowners don’t make a distinction between the builder and the developer and, frankly, think of them as one as the same. So a builder’s cries that they are not responsible for the construction site even though they may have an option on the land is likely to fall on deaf ears when a customer decides how much he or she is willing to pay for the house across the street.

It is ironic that the brand damage being done by the existence of the construction site is borne solely by the builder even though they are not responsible for the land. In this case, the builder seems to have no recourse to ensure that the developer maintains the entire site in a way that is consistent with the builder’s brand image or is not concerned with the impact that dirt mountain has on the willingness of their customers to refer them to others.

Don’t believe me? Imagine going to the Ritz-Carlton Orlando and instead of having dinner at Norman’s you find that Denny’s is you fine dining option. With no offense to Denny’s and its fine Grand Slam Breakfast, there is quite a difference in consumer perception of these two brands, and the dissonance created by the differences in brand image is much more likely to hurt the Ritz-Carlton’s image than it is to help the Denny’s image.

So let’s take a look at a real example of a brand disconnect. Last Thursday morning I was in a hurry to get my kids to school. I hustled them into the car, got the paper from the driveway and then jumped into the car. I turned the key and nothing happened! After a few expletives, I herded everyone out of the car, called my mother to ask her to take the kids to school and then searched for my AAA card so that I could call them to get them to get my car started.

When I went to call AAA to get a jump start, I noticed my card expired on July 15th. Oops. I remembered that as part of the deal when I bought Infiniti G35 Coupe was that I was given “free” roadside assistance for as long as I owned the car. So I called Infiniti, told them about my plight, and they called Pop A Lock to rescue me from my garage.

About 45 minutes after my call (just as promised by the Infiniti operator), a young lad from Pop A Lock arrived in a late 80’s sub compact car. He proceeds to jump start the battery and tells me to leave the car running for 15 minutes to charge the battery. He then warns me that when I turn off the car, it may not start again because I could have an alternator problem, but there was no way to know that until I turn off the car and try to start it again.

Since my day was off to a slow start and my car battery was still charging, I decided to call AAA to ask them why I had not received a notice to renew my account. The rep said that they typically give people an additional 3 months to renew and that my actual expiration date was in October. He then offered to send me new cards that had the real expiration date on them. This was a very pleasant surprise and would come in handy a few hours later.

Around noon, I am leaving a restaurant and my car decides not to start again. So I call Infiniti again and I am told that they will be there in 30 minutes and they will call me 5 minutes before they arrive. Time for another cup of coffee! 25 minutes pass and I get the 5 minute warning call. I go outside to wait by my car. And I wait and wait and wait.

After 20 minutes I call Infiniti to see what happened to the service. As I am navigating their call vectoring system, I receive an automated message asking me to confirm that the service had been completed. Not exactly. I skillfully negotiate my way to get a live person who calls Pop A Lock to see what happened to the service. I am told that because of the rain (which had just started in the past 5 minutes) that things were slow and that they would be their within 60 minutes.

Sensing I was getting mad, the rep offered to cancel the Pop A Lock service and call another service provider. They could not call the alternative provider, however, until they cancelled the Pop A Lock service. This meant that they had no way to assure me that another company would get there any faster. So I told them not to cancel the service. The rep then promised that she would personally call me back to ensure that the service was completed. I am still waiting for my callback.

Another 30 minutes pass (1 hour 15 minutes total at this point) without any one from Pop A Lock showing up or calling, so I called the Infiniti rep again to see what was going on. They called Pop A Lock again and found out that they had actually been delayed at the prior job (the rain had nothing to do with it) and they would be to me in another 45 minutes—a total of 2 hours of waiting time!

After I hung up, I decided to call AAA to see if they could get to me any faster. I was told by the operator that it would take 90 minutes to get service. I figured I had nothing to lose at this point so the race was on! Could AAA beat Pop A Lock to provide service despite the rain and Pop A Lock’s 75 minute head start?

15 minutes pass and the phone rings. Finally some action! It’s Fred from AAA who tells me he is on his way and would be there in 30 minutes. A few minutes later, the phone rings again. It is AAA central dispatch calling to tell me that service is on its way. 20 minutes, two calls from AAA and radio silence from Pop A Lock and Infiniti.

15 minutes later, Fred arrives in his spanking brand new red and white Mobile Rescue Unit! He is about 45 minutes ahead of the initial time set when I first called AAA and about 15 minutes ahead of his own estimates. He charges the battery and runs a test on the battery and alternator to tell me what the problem is. I cancel the Pop A Lock service.

In the race for roadside assistance, AAA was the clear winner. They overcame a 75 minute time disadvantage to provide service first, set clear expectations and exceeded them, communicated well, and conducted a value added test to tell me what the problem was. This is exactly the type of premium service I would expect from a premium brand like Infiniti!

AAA clearly has a better process than a local company like Pop A Lock. What is curious to me is why an upper end brand like Infiniti would tie their roadside assistance to a company like Pop A Lock and not a trust brand like AAA? By attaching their emergency roadside assistance to a local provider that, in this case, did not measure up to the Infiniti brand image or service standards, the Infiniti brand ends up taking the hit.

Before this incident, I did not know of Pop A Lock nor would I have considered using them. Their poor performance means I would not try them again or recommend them to others. This is exactly where I was prior to my experience with them. So Pop A Lock is only worse off to the extent that what was an opportunity to gain a customer and referral source has been lost.

Infiniti, on the other hand, is much worse of because my perception of the value I received when I bought the car has gone down because I can’t trust their roadside assistance to deliver as promised. Secondly, because Pop A Lock is to Infiniti as Denny’s is to the Ritz-Carlton, my perception of the Infiniti brand has gone down because of their decision to choose a partner that is not of the same level of quality as they represent themselves to be. Thirdly, as an existing customer, I am less likely to buy another Infiniti in the future or recommend others to do so.

When picking your partners, choose wisely. Make sure that they have the same brand standards as you do and treat your customers the way you want them to. If you don’t, your partner’s bad performance could come back to haunt you.

In your experience, are there any industries that are doing a good job of providing effective, personalized customer service today and what are they doing to differentiate themselves?

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Our fellow human beings are being systematically driven out of basic customer interactions and being replaced by Robo Ken and Robo Barbie whose friendly voices promise to help us with our needs. (Even though the reliability of the voice recognition technology leaves much to be desired.) And those companies that do provide the human touch are increasingly doing so through outsourced call centers in Asia where voice recognition can also be a bit of a challenge.

What is ironic about the trend toward using technology or outsourcing to handle basic customer transactions is that these organizations also want to increase customer loyalty and retention. They rationalize that customers want cost effective and convenient service and this is the best way to provide it. This cost driven focus results in companies missing opportunities identify emerging needs, surface problems that reduce satisfaction and loyalty, and cross sell value added products and services that are appropriate for the customer’s situation.

Probably the all-time low point of distancing the customer from an organization was when First Chicago Bank came up with the brilliant idea to charge customers $3 per teller transaction as a way to get customers to use the ATM. You give us the money and then pay us to get it back! The uproar was so great from customers that they canceled the plan.

So what should companies do to balance the need for cost effective transaction processing and building customer relationships without compromising customer satisfaction? Here are three ideas:

1. Companies should make it easy for customers to do business with them in the customer’s preferred style. The first call vectoring option should be a choice for the customer to use an automated system or talk to a human.

2. Develop technology application with the needs of the customer in the forefront as opposed to cost. Enhancing the service experience for customers should be the driver for technology service applications.

3. Use technology to develop a better understanding of potential customer needs based on the customer’s transaction history. This data can then be used for marketing and cross selling during live customer interactions.

Michael’s Screening had posted signs in my neighborhood advertising their screen repair service. After getting a bid from another company that was 75% higher than my insurance settlement, I decided to give Michael’s a call. When I got the answering machine on my first call, I was relieved not to hear the “we are not taking new customers at this time” message as had become the norm with other screen repair companies.

I did not hear anything from them so I called a few days later to see if I could get a live person. Lo and behold, a real person answered and I described my needs to them. They said they would send someone out to prepare an estimate in the next few days. I asked that the estimator call me before she went to my house so I could be their and show her exactly what I wanted. I was assured that she would do so. So far, so good.

A few days later, I receive an estimate. No phone call, no discussion, just a sketch and a price. Reasonable turnaround time, but the estimate was completely wrong because the enclosure I wanted was different than the previous enclosure. So I called the company.

“No problem”, was the response from Michael’s Screening. “We will send the girl back out later in the week to revise the estimate.” I asked again that she call me before going to my house so that I could be there to make sure she was clear about what I wanted. I was assured, again, that she would call.

A few days later, I received a new estimate. I did not get the phone call I requested so that I could be at the house to show her what I wanted. So I called to complain about bad estimate number two. The rest of the Michael’s screening story is a little like the movie Groundhog’s Day. I call, they promise to fix it, nothing happens. Repeat. Repeat again. Give up and call someone else.

My experience with Michael’s Screening in the sales processes makes me wonder just how bad the actual service would have been. Each time I called and they failed to deliver on their promises made me question the degree to which I could trust them. If I had gone forward with them on the project, I am quite certain that my skepticism would have carried over to a new set of people who were doing the actual work. If the sales function doesn’t get it right, then there is no reason for a customer to trust that the product and service people will be any better.

In retrospect, the businesses that I have developed greater respect and trust for are the businesses that told me the truth on their answering machines. At least I knew not to expect a return call or that they were booked for the next three months. A fast “no” to a customer is sometimes better than a long “yes” to a request. The customer may not like the answer but virtually everyone respects companies and people that tell them the truth.

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We arrived about 4:00 in the afternoon and were greeted by delightfully professional staff, a glass of champagne and an efficient and friendly check in process. I was pleasantly surprised to see that the front desk staff had clearly been trained to serve international guests (which we were not) as evidenced by the way they politely handed me my credit card using two hands (standard operating procedure for service providers in Asia). According to Michelle Valle, the Marketing Manager for the hotel, the front desk staff is trained in this technique to comply with a company-wide standard even though they have a relatively small percentage of customers from Asia.

Upon completion of the check-in process, the clerk came out from behind the counter to us point us towards the elevator and wish us an enjoyable stay. When we arrived in our room our 470 square foot deluxe, lake front room turned out to be a 700+ square foot executive suite with two balconies, two televisions, 1 ½ baths, but no partridge in a pear tree.

I was curious as to why I had been upgraded to an executive suite. Was it the non-discounted rate I was paying or something else? Ms. Valle said that staff members empowered to WOW their guests. They are trained to discreetly profile customers to determine customer preferences and special occasions, and the hotel has well defined policies on what staff members can do to delight customers in the moment without management approval. By determining that my wife and I were here for our anniversary (customer profiling during the check in process) and empowering staff to upgrade guests to the next higher category of rooms (clear policy), the front desk staff were able to provide my wife and I with an unexpected surprise.

The guest profiling goes into even greater detail. For example, a question about wine might lead to a welcome gift of a bottle of chardonnay as opposes to merlot. This attention to detail and customization of the service experience is in stark contrast to other hotels that may have a standard welcome gift (like chocolates) for frequent guests that may not be appealing to everyone.

Staff members capture customer preference data in a CRM system. This allows for preferences to be viewed from hotel to hotel. For example, the CRM allows customer preferences to be tracked at such a level of detail that a guest staying at another Ritz-Carlton might receive a soda without ice upon seating for dinner without asking for it based on preferences learned in a previous service encounter at a different hotel.

We had 3 hours to wait before our dinner reservation so we took a walk around the property and decided to have a drink and a snack by the pool. The bartender was quite friendly and having a good time doing his job, but needed work on his jump shot because in the process of throwing away a piece of fruit his shot was a little off and it hit the rim of the trashcan and splattered a bit of liquid on the bar. Nothing hit us or the other guests at the bar (nor was anyone offended by his actions), but he paid for our drinks anyway.

Ms. Valle explained that the service recovery philosophy of the Ritz-Carlton is that in order to justify charging premium rates, they must deliver a superior customer experience. For them, this means giving staff the latitude to do what they believe is appropriate to turn a potentially negative experience into a pleasant one. Said in the language of customer loyalty, they focus on converting potentially negative word of mouth about an experience into positive word of mouth about the service recovery effort.

Every service recovery incident is documented in a Commitment to Quality Report. The staff member is responsible for completing this report at the end of his/her shift in which he/she explains the incident and the recovery action taken. The next morning the reports are shared with the entire hotel shift! They use these incidents as learning opportunities for the entire staff to discuss ways to prevent these incidents from happening in the future.

Part of the reason I decided to stay at the Ritz-Carlton was the restaurant, Normans’s. Norman Van Aken is one of North America’s super chefs and was voted as the best chef in Florida by the New York Times. As my wife and I were wandering around the hotel, we stopped to look at the menu. It had a fascinating variety of flavors and fresh seafood, but what jumped out at us was the Foie Gras terrine with brioche. Yum!

Our light snack by the pool turned out to be a bit too filling thus the idea of putting on a suit for dinner and leaving our suite lost out to having room service so we did not get to enjoy the cuisine at Norman’s. Believing that if you don’t ask, the answer is no, I decided to call Norman’s to see if the were willing to deliver the Foie Gras to our suite. Norman’s menu, mind you, is not the room service menu, but I figured I had nothing to lose. “Absolutely, sir”, was their response to my request.

What struck me about this was that Norman’s approach to service was at the same level as the Ritz-Carlton. Norman’s leases space in the hotel and has its own selection process, but, buy contract, their staff members must attend service training provided by the Ritz-Carlton—a brilliant way to help ensure similar quality of service. The hotel tracks guest satisfaction with the Norman’s to ensure that the restaurant maintains the same high quality standards as the hotel and regularly provides this feedback to the restaurant.

My impression of the Ritz-Carlton’s motto of “Ladies and Gentlemen Serving Ladies and Gentlemen” is that it is more that a tag line. It is an operating philosophy that is driven through every aspect of the hotel’s processes ranging from hiring to training to customer service to performance management and measurement. It is this comprehensive integration of the philosophy into the day-to-day actions of management and staff that creates and sustains a differentiated customer experience.

Our day escape ended far too quickly yet in less than 24 hours the Ritz-Carlton Orlando left a lasting impression on me for their quality of service and attention to detail in seemingly every aspect of the customer experience. I never thought $400 dollars could be a bargain. If you are planning to travel to Orlando, I encourage you to check out the Ritz-Carlton. A truly exceptional service experience awaits your arrival.

Yet companies continue to spend $15 to $25 per mystery shop to get data that is of limited use and don’t routinely collect data from customers. They put more stock in the evaluation of people who don’t have a relationship with them or significant experience with their products and services rather than asking real customers to identify opportunities for improvement that impact loyalty and future purchases. The focus on mystery shopping rather than collecting real customer data has always baffled me. Does it make sense to you?

If you are unconvinced that mystery shopping has limited usefulness, here are some facts from a real customer situation that illustrate the point . . .

Here are some numbers for you to consider:

· With 50 branches getting shopped once a month (one Teller and one CSR get evaluated per shop), the minimum number of shops per year is 1,200. If you assume half the branches get shopped twice a month, then the number of shops per year is 1,800.

· With 130,000 customers, if we assume one branch or telephone service encounters per month, that equals 1.56 million transactions per year.

· With 500 CSR and Tellers, each person is getting shopped about once every three months. Over those three months, each person will handle about 780 transactions.

· Mystery shops are 0.11538% of the banks total transaction volume. For this data to be reliable, a good rule of thumb is that you need to collect data on 5% to 10% of total transactions, or 50 to 100 times what this organization is doing!

Still not convinced? Here are some other limitations to mystery shopping:

· You can’t link the data you get to your customer segments.

· The sample size is not large enough to make strategic or tactical changes. The feedback that you give employees based on their shop scores is not representative of their overall performance.

· Your customers have a vested interest in your business success—do mystery shoppers have the same level of interest and do they reflect the expectations of your customer base?

· Mystery shoppers can’t tell you what changes can be made to get more of their business or how likely they are to remain as customers. Without this data, it is impossible to identify which performance expectations actually drive customer behavior.

Mystery shopping, in and of itself, is of limited value. If you have a mystery shopping program in place and you cannot get rid of it, we recommend that you scale it back to focus on evaluating tangibles like physical appearance and traffic flows. These items have less variability than delivering the customer experience.

In high transaction volume businesses it is risky to drive strategic business decisions based on data extrapolated from individuals who are not customers, may not be representative of your key customer segments, and represent a very small proportion of customer touches to drive strategic business decisions. We believe that mystery shopping dollars will have a greater impact if used to measure overall customer satisfaction and loyalty of key customer segments on a consistent basis and check satisfaction with customer transactions over time.
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Not surprisingly, the homeowners were very upset with the situation and eventually sought legal action against the homebuilder. During a deposition a few years ago, the sales representative who sold the houses admitted to unintentionally misrepresenting to the buyers what the waterway would be like—the sales rep was apparently not told that the waterway would contain plants even though the plat map for the area showed that the body of water was designated as a conservation area with vegetation to cover 80% of the area.

To put the market damage in context, research has shown that negative word of mouth alone will influence 5% of people from buying a product they otherwise would have bought. A very unhappy customer will tell upwards of 20 people about their negative experience. Put another way, the potential market damage for this homebuilder of an event like this one might lead 22 potential customers who might have bought from you to go to the competition. At an average sales price of $150,000, that’s $3.3 million in lost revenue with a potential $330,000 negative impact on the bottom line.

The argument that the homebuilder could make for not resolving the customer’s claims in this case is three-fold: 1) the buyer should have read the contract and supporting documents carefully; 2) given the current strength of the real estate market, the market damage is minimal because of the excess of demand over supply; and 3) the appreciation in home prices has more than compensated the homebuyer for the problems they have endured. These arguments, while both rationale and legal, fail to address the emotional aspects of the situation for the buyer and provide no opportunity for closure.

If the real estate market continues to remain strong, perhaps the market damage over time will be minimal. But are you prepared to take the risk that these homeowners will eventually forget about the situation and stop telling their friends and acquaintances about it by the time the market softens?

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The details of what went wrong with the reservation, the room change that we had to make (even though I had asked not to be checked in if it meant that we would have to move rooms later!), and the not quite ready for prime time hallway that greeted us upon arrival at are new rooms are documented in detail in a previous article that you can access from our website. This article is about what transpired after the fact and the importance of getting service recovery right in the moment.

At the end of my stay, I looked for the ubiquitous customer survey cards that are typically found in hotel rooms so that I could share my experience with the company. The survey was nowhere to be found. At checkout, no one even asked, “How was your stay?” So I decided to send an email CEO of Wyndham. This was his reply 24 hours later:

"Allow me to seize the day—and the moment, for that matter—to apologize for anything less than a most enjoyable stay in Orlando. You were kind to share your thoughts with me. I, too, believe that recovery is most important when we fail to meet our customers' expectations.

Your continued use of our Wyndham Hotels and Resorts, Wyndham Luxury Resorts, and Summerfield Suites by Wyndham is very importance to all of us. I can assure you every courtesy should we be so favored."

Regards,

Fred J. Kleisner
Chairman, President and CEO
Wyndham International, Inc.

In addition to Mr. Kleisner’s response, I received a call from the SVP of Eastern Operations and three calls from the Resort Manager. A number of things struck me about their response that I would like to share with you.

1. Speed of Response. I was amazed at how quickly the organization responded to my email. Perhaps the story or the pictures struck a nerve with the CEO. What was particularly surprising about the response was that I was not a member of their loyalty program or a frequent guest at Wyndham properties. My hope is that they treat all customer complaints with this level of attention, but my guess is that given the number of customers it would be virtually impossible to respond with this speed to all customers.

2. Timing of Recovery Offer. During my conversation with the Resort Manager, he asked me what Wyndham could do to make this situation right. After some consideration, I told him that there was nothing that could be done at this time because taking advantage of any offer that they would reasonable make now that I am no longer on the property would create an additional inconvenience for me. While I considered asking for an all expense paid week in Hawaii (An inconvenience I am prepared to accept!), it did not seem appropriate to ask for it or, frankly, would it have made good business sense for them to give.

3. An Ounce of Prevention is Worth a Pound of Cure. What struck me about the follow up call from the Resort Manager was the importance of service recovery in the moment. As I reflect on the situation, I would have been happy to with a drink in the bar while my reservation was being sorted out or a sincere apology after the room/crib incident with a bottle of wine and a cheese plate (or something to that effect) while I was on the property. Whatever the cost of the above, it is considerably less than the cost of doing something after the fact.

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There are a couple of lessons that I take away from this situation that I would like to share with you:

1. Train and empower you employees to handle problems in the moment because the recovery cost gets greater the longer the timeframe between incident and recovery. Doing something relatively small in the moment is significantly better than doing something large after the fact.

2. A quick response to a customer complaint after the fact is critical in your service recovery efforts, but it will only be successful if you have something of value (from the customer’s perspective) to offer.

3. In businesses where the customer has to travel to experience the product/service, companies need to consider the cost and inconvenience to the customer of accepting a service recovery offer that is done after the customer leaves the place of business and have alternatives that are valuable and convenient for the customer.

4. Build in quality from the start. An ounce of prevention is worth a pound of cure. Make sure you are “customer ready” before you open your doors to your customers.