1

Treating Employees as Customers

to Reduce Frustration and Increase

Success

Dreamforce

December 8, 2010

12:15 - 1:15PM

by John Goodman, Vice Chairman

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Challenge to Developers

• Eliminate unpleasant surprises

• Enhance first level resolution

• Give employees clear believable explanations

• Aggressively get feedback and acknowledge it

• Empower the customer to manage their overall customer

experience

• Make technology either transparent or a delighter for both

customers and employees

• Create emotional connection

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3

Agenda

• What causes frustration and extra cost? Problems and the

inability to resolve them.

• Solution – reduce problems and increase success.

• Strategy:– Reduce problems by setting proper expectations

– Quantify the revenue and word of mouth damage to get resources

– Create an effective Voice of the Customer

– Make your front line successful with flexibility, clear explanations and

positive incentives

– Use technology to deliver psychic pizza

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About TARP

• Founded in 1971—39 years of customer experience leadership

–White House Complaint Studies 1970s-80s (instigated 800#s and

GE Answer Center)

–Assisted 6 Baldrige Winners and 43 Fortune 100 Companies

–Initiated concept of ―word of mouth‖ (TARP/Coca-Cola 1978

Study) and ―word of mouse‖ (eCare and Click & Mortar studies

1999)

• Offices in Wash., D.C.

• Credited with developing the approach

for quantifying the impact of quality

on revenue, cost & WOM for companies

like Neiman Marcus, Toyota/Lexus, Hyundai,

USAA, Cisco Systems, Xerox, 3M, Moen,

IBM, Intelligence Community, Qualcomm,

Ritz Carlton, Whirlpool, Museum of Modern

Art, USO and Chick-Fil-A.

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5

Customers, donors, citizens

will:

Use again

Use or donate more

Tell others to use or donate

Try your other products &

services

+ =

DOING

THE RIGHT

JOB

RIGHT THE

FIRST TIME

MAXIMUM

CUSTOMER

SATISFACTION

& LOYALTY

ImprovedProduct & Service

Quality

Respond toIndividual Customers

Identify Sourcesof Dissatisfaction

Conduct RootCause Analysis

Feedback onPrevention

EFFECTIVE

CUSTOMER

CONTACT

MANAGEMENT

Formula For Maximizing Customer Satisfaction

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Firefighting Mode

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Riding the Wave of Customer Experience

Management: Six Big Ideas

1. Staff doesn’t cause most customer dissatisfaction –sales, products, processes and customers do

2. It is cheaper to give great service than just good service, the revenue payoff is 10-20X the cost

3. An effective Voice of the Customer includes all kinds of data describing the overall customer experience

4. People are still paramount – make the front line successful with flexibility and clear explanations

5. Deliver technology that customers will enjoy –delivering psychic pizza via any channel

6. Sensibly create remarkable delight

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Employees Do Not Cause Most Customer Dissatisfaction

- Fails to follow

policy

The majority of customer dissatisfaction is NOT caused by employee error or attitude but

by products that cause disappointment and broken processes*

Customer20%-30%

Employee

20%

- Wrong expectations

- Customer error

-Fails to follow

policy

-Attitude

Company 40%-60%- Products and services

don’t meet expectations

- Marketing miscommunication

- Broken processes

Poorly designed products,

Processes, and marketing

create most unmet

expectations. Further,

employees are often not

equipped with effective

responses to problems.

Customer expectations

must be set and they must

be educated on how

to avoid problems

and surprises.

*Finding based upon TARP analysis problem cause

data in over 200 consumer and B2B environments.

At least

30% of

contacts are

preventable

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Assuring You Are Easy to Do Business With?

• Can easily find where to go to get need fulfilled

• Easily get access to source of answer

• Eliminate bureaucracy

• Answer completely fulfills need including

anticipating next need

• Follow-through happens as expected and is

confirmed

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Customer Expectation: Key Factors Driving

Satisfaction

• No Unpleasant Surprises

• If Trouble Encountered– Accessibility, Taking ownership, Apology

– Clear, believable explanation

– Creating an emotional connection rather than just

courtesy

– Money is often not the best solution

– Timeliness and Keeping promises

• Handle on First Contact Results in 10% Higher

Satisfaction and 50% Lower Cost

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TARP’s Tip Of the Iceberg

Why customers

and employees

don’t complain:

• Hopelessness

• Fear

• Don’t know

where

What you don’t

hear about

often does the

most damage

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1. Prevent Problems By Setting Proper Expectations

• Understand who the customer is

• Welcome packages and calls

• Encourage questions before customers get

into trouble

• Confirmations/Progress reports

Who has proactive education successes?

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1313

2. Make the Support Center the Focal Point

of the Voice of the Customer on Customer Experience

• Customer surveys

• Customer contact and interaction data

• Internal operations process, quality data

• Employee input

• Together, these elements can identify opportunities and

give employees a feeling of control

+ = Total view of the

customer

experience

Internal process

and quality data

and employee

input

+Customer

contact and

interaction data

Surveys of

customer

satisfaction and

loyalty

Take The Role Of Chief Customer Officer

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=

=

=

=

x xx

=

2,000

6,000

9,000

37,500

54,500Total Customers At Risk

200,000

Customers

with

Problems

20%

DissatisfiedMany Not

Repurchasing

Some Not

Repurchasing

50%

Satisfied

Most

Repurchasing

75% Do Not

Complain

25%

Complain

30%

Mollified

Some Not

Repurchasing

3. Get More Resources for the Support CenterDemonstrating cost of less than perfect support to the CFO, CMO and the General Counsel

Three strategies: Prevention, Solicitation of Complaints and Improved Response

At $1,000 per customer, $54.5 million at risk

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15

Finance Wants Higher Margins

10%

22%

46%

74%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

No problems 1 problem 2 to 5 problems 6 problems or

more

Percent of customers dissatisfied with fees rises with number of problems.

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4. Create A Culture of Success

• Stellar Leaders and Culture Are Great, But..

• Tools – issue driven flexible solution spaces

– believable explanations

– supported by tools and information on customer situation

• Training – ongoing training and story telling

• Motivation – celebration via victory sessions

& promotability

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ABC company employees

Very Satisfied1

(49%)

Somewhat Satisfied2

(33%)

Neutral to very dissatisfied3

(14%)

Overall satisfaction

with ABC

(% of employees)

% definitely continue to work for ABC Company

(% of employees)

84%

27%

8%

=

=

=

1Top box2Second box3Bottom three boxes

Very satisfied1

(48%)

Satisfied2

(39%)

57 point drop

Impact of Satisfaction on Employee Loyalty • The impact of satisfaction on willingness to continue to work for ABC

indicates a need for employees to be very satisfied with the company. Less than half of employees report to be very satisfied.

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IQuestion/problem

experience

II Contactbehavior

IIIContact handling

Employees

No problem

experience20%

Problemexperience*

80%

Non-contactors

21%

Contactors79%

IVMarketimpact

% Definitelycontinue to

work for ABC

Dissatisfied3

46%

Satisfied1

11%

59%

67%

37%

62%

% Extremely motivated

Mollified2

43% 49%

40%

52%

36%

33%

34%*In the past 6 months1Top box2Middle two boxes3Bottom two boxes

Impact of Problem Experience on Employee Loyalty

• An employee who has a problem, contacts, and is satisfied with how that problem was handled is more loyal and more motivated than someone who never had a problem to begin with.

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* Based on most serious problem

** All employees excluding ―definitely‖ and ―probably will―continue to work for ABC in the future.

Note that analysis by job title was not possible due to a resulting low N size.

Overall %

experiencing

any problem Most serious problem category

%

Problem

frequency*

% Not likely to

work for ABC

in the future**

%

Potentially

at risk

Servicing clients 45% 11% 8.0%

Information/internal communication 22% 20% 3.5%

Work environment 20% 32% 2.3%

Performance, leadership, and growth 16% 17% 2.2%

Other 7% 25% 1.4%

80%

TOTAL EMPLOYEES AT RISK 17.4%

Quantify Employee at Risk by Type of Problems

• As many as 17% of ABC employees might not continue to work at ABC due to problems.

• Issues of most concern to employees have to do with servicing clients.

TARP Paper: Treating employees as customers

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Specific problem

% frequency

of all

problems

% somewhat

or very at

risk

Servicing Clients

I have to call multiple times to get something done 40 6.7%

Other departments do not follow through on promises made 19 4.1%

I only get voice mail when calling other parts of the company 26 3.7%

Information/Internal Communication

Communication within the branch not effective 30 7.7%

Conflicts not surfaced openly within my branch 22 5.3%

Management objectives not communicated in a timely manner 16 4.6%

Work Environment

No/limited initial training on client service 22 9.5%

Hard to get things done within my branch 16 5.0%

No/limited opportunities to receive ongoing training 16 4.6%

* Multiple response variable

Employees At Risk—Most Damaging Problems• Servicing clients and getting needed training are biggest frustrations:

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Identification of Issues Requiring Improved

Response Rules and Processes

Transaction which is biggest opportunity for improvement

Problem reports % Loyal (Top 2 Box) # Contacts

Routine order 98 1.1

Shipment status 91 1.2

Product return 93 2.1

Shipping charges 88 2.1

Backorder status * 67 3.3

Call center overall average 91 1.9

Misuse of resources to intensively measure this transaction

TARP Paper: Your monitoring and coaching may be doing more damage than good

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Herman

―We’ve lost your stuff, but you get first choice of any

bag off Flight 601 from Athens.‖

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Provide Tools to Assure Action, Address Policy

Issues and Cross-sell

• Auto-edits to save employees and customers from

errors

• Desktop tools – auto implementation – ― It has been

done!‖

• SLAs to create confidence in back office

• Ability to set proper expectations for completion

• Time to address policy and process issues and

education on how to avoid in the future - delighter

• Ability to make input to Voice of the Customer –

plop in front of the desk

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5. Deliver Technology People Enjoy

• Why people hate technology– Wastes my time

– Gets in the way – phone trees

• Why they love it– Anticipates

– Simplifies

• Delivering psychic pizza

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Press 1

for Automated

Information

Press 2

Literature

Press 1

Feedback

Press 2

Faxback

Literature

Press 3

Online

Services

Press 2

Sales

Information

Press 1

Ad

Responses

Press 3

General Sales

Information

Press 3

PCI SCSI

Press 2

Drives

Press 1

RMA

Status

Press 6

Other

Press 5

Video

Press 4

Hard Drive

Controllers

Press 4

Technical

Support

(800) ASK-4-WDC

Support Phone Matrix

Get Customer to Right Place First Time: Print the

Menu Where You Print the Phone Number

20% increase

In both compliance

And satisfaction

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6. Delight: Heroics and Constantly Exceeding

Expectations is NOT Necessary Or Even Smart

Delight experience Average lift to repurchase or

recommend (Top Box)

Service beyond expectation - heroics 12%-14%

No unpleasant surprises 22%

Friendly 90-second staff interaction 25%

Personal relationship over months 26%

Tell me of new product or service I can really use

30%

Proactively provide information on how to avoid problems or get more out of your product

32%

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Ten Myths About Service Existing in Most Companies

1. Always exceed customer expectations

2. Answering the phone really fast is the key to success

3. People always prefer talking to people

4. The customer is always right

5. Complaints are down, things are getting better

6. Employees are the cause of most dissatisfaction

7. Price and cost cutting is the key to success

8. We’re at 90% satisfaction – let’s declare victory!

9. Measure Net Promoter and we’re done

10. We have a 100% satisfaction guarantee – everyone is happy.

TARP Paper: Marketing myths and service slips

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Challenge to Developers

• Eliminate unpleasant surprises

• Enhance first level resolution

• Feed employees clear believable explanations

• Aggressively get feedback and acknowledge it

• Empower customers to manage their overall customer

experience

• Make technology either transparent or a delighter for both

customers and employees

• Create emotional connection

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Grade 1-10

Evaluate Your Employee Success Factors Grade

Marketing responsible for setting proper expectations for major products

Overtly warn customers about problems

Create a VOC allowing understanding of end-to-end experience & non-complaint rate by issue

Quantify revenue left on table, cost and WOM impact by issue

Create flexible solutions for top 5 tough issues

Provide staff with clear explanations

SLAs exist with support and marketing units

Lead customers to self service via education

Use technology to deliver psychic pizza

Continuously celebrate all employees doing things right

If below 75 – you’re wasting at least 15% of your support budget

Total _____

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Summary

• Aggressively ask for frustrations and time wasters

• Eliminate unpleasant surprises

• Quantify the revenue cost of frustrations and touches by

type of issue at employee and customer level

• Deliver psychic pizza to reduce workload

• Use dead time to delight

• Practice continuous experimentation accompanied by

measurement

• Outlined in detail in Strategic Customer Service published

by AMACOM

• jgoodman@tarp.com or 703-284-9253