Table of Contents

CONTENTS

FOREWORD xiii

INTRODUCTION: WHY STRATEGIC CUSTOMER SERVICE? 1

Beyond the Complaint Department 3

Why Bother with Strategic Customer Service? 5

Everyone Has a Stake in Service 7

The Origins of This Book 9

The Structure of This Book 10

Starting Strategically 11

PART 1: THE IMPORTANCE OF CUSTOMER SERVICE

1. SEEING CUSTOMER SERVICE STRATEGICALLY:

Understanding the True Role of Customer Service in Your Business 15

How Customer Service Affects a Business 16

The Bad News 16

The Good News 18

Making the Business Case for Improvements in Service 19

Clarifying Key Concepts 21

A Model for Maximizing Customer Satisfaction and Loyalty 23

Do It Right the First Time (DIRFT) 25

Respond Effectively to Questions and Problems That Arise 25

Feed Data About Issues to the Right Parties 26

Capitalize on Opportunities to Sell Ancillary or Upgraded

Products or Higher Levels of Service and Create Connection

and Delight 27

First Steps to Strategic Customer Service: Economic Imperative

and VOC 28

Key Takeaways 29

2. WHAT DO CUSTOMERS WANT (AND WHAT SHOULD WE DELIVER)?

Understanding Customer Expectations and Setting Goals Strategically 31

Unexpected Reasons for Unmet Customer Expectations 32

Trends in Customer Expectations About Service 33

Broad Trends in Customer Expectations 34

Operational Expectations for Tactical Customer Service 36

Setting Service Goals Strategically 41

Operationalizing the Process Goals 43

Financial Goals 46

Key Takeaways 48

PART 2: IDENTIFYING IMMEDIATE REVENUE AND

PROFIT OPPORTUNITIES

3. TACTICAL RESPONSES AND STRATEGIC SOLUTIONS:

Dealing with Customers’ Problems and Addressing Their Causes 51

Tactical Versus Strategic Problem Solving 53

Five Steps to Tactical Problem Solving 54

Step 1: Solicit and Welcome Complaints 55

Step 2: Identify Key Issues 56

Step 3: Assess the Customer’s Problem and the Potential Causes 57

Step 4: Negotiate an Agreement 57

Step 5: Take Action to Follow Through and Follow Up 59

Six Tasks Connecting the Tactical Response to the Strategic Feedback

Loop 59

Task 1: Respond to Individual Customers (and Capture Data) 60

Task 2: Identify Sources of Dissatisfaction 61

Task 3: Conduct Root Cause Analysis 61

Task 4: Triage to Solve/Resolve Systemic Problems 62

Task 5: Provide Feedback on Prevention 63

Task 6: Confirm Improvement of Product and Service Quality 63

Unconventional Management Wisdom 64

Redefine Quality 64

Aggressively Solicit Complaints 65

Get Sales Out of Problem Solving 65

Assume that Customers Are Honest 65

Key Takeaways 66

4. FIXES AND FINANCES:

Making the Financial Case for Customer Service Investments 67

The Case for Great Customer Service 69

How CFOs Think 71

Questions to Guide Modeling the Customer Experience 72

The Market Damage Model: What’s the Damage? 74

Data and Output 75

Financial Impact 77

What Is the Payoff if We Improve? 78

Objections to the Market Damage Model 80

The Word on Word of Mouth 81

Quality and Service Allow You to Get a Premium Price 82

The Market-at-Risk Calculation: Identifying Customers’ Points of Pain

Across the Whole Experience 84

What About Customers With Limited or No Choice? 87

Impacted Wisdom 88

Key Takeaways 89

5. INFORMATION, PLEASE:

Developing an Efficient, Actionable Voice of the Customer Process 90

The Objective of VOC and Its Key Building Blocks 91

Three Sources of VOC Information and What They Tell You 93

Internal Metrics 93

Customer Contact Data 94

Survey Data 95

The Attributes of an Effective VOC Process 97

Unified Management of the Program 98

A Unified Data Collection Strategy 98

Integrated Data Analysis 99

Proactive Distribution of the Analysis 99

Assessment of Financial Implications and Priorities 100

Defining the Targets for Improvement 100

Tracking the Impact of Actions 101

Linking Incentives to the VOC Program 101

The Two Major Challenges in Using Customer Contact Data in VOC

Programs 101

Developing a Unified, Actionable Data Classification Scheme 102

Extrapolating Data to the Customer Base 104

Getting Started in Improving Your VOC Program 105

Key Takeaways 106

PART 3: RESPONDING TO CUSTOMERS’ QUESTIONS

AND PROBLEMS

6. DEFINING PROCESSES THAT WORK FOR CUSTOMERS:

Using the Eight-Point TARP Framework for Delivering Service 111

Framing the Work 112

Tactical Functions 114

Intake 114

Response 115

Output 115

Control 115

Strategic Service Functions 115

Analysis 116

Evaluation and Incentives 116

Staff Management 116

Awareness 117

Why Use the Service Delivery Framework? 117

The Flowchart of the Framework 120

Best Practices for Improving Specific Functions and Activities 122

Activities Within the Tactical Functions 122

Activities Within the Strategic Functions 125

Implementing the Framework 127

Map the Tactical Service Process with Visual Tools 128

Use Employee and Customer Input to Redesign the Process 128

Tweak the Technology to Enhance Tactical Service 129

Create or Strengthen the Analytical Functions 129

Enhance Strategic Service Across the Organization 129

Practice Continuous Improvement 129

Get Your System Framed 130

Key Takeaways 130

7. TECHNOLOGY AND THE CUSTOMER INTERFACE:

Creating Systems That Customers Will Use—and Enjoy 131

Why Customers Love-Hate Technology 132

When Customers Hate Technology 133

When Customers Love Technology 133

Getting the Customer-Technology Interface Right 134

Make the System Intuitive for Both Novices and Vet erans 135

Create a System That Will Save the Customer Time and You

Money 135

Educate and Encourage Customers to Adopt the Technology

Cheerfully 136

Start With a Few Functions to Guarantee Success 138

Which Technology Should You Apply? 138

Nine Technological Applications to Consider 138

Interactive Voice Response 139

E-Mail and Chat 140

Web sites 142

Web Video 143

Automated Web-Based Self-Service 144

Recording Interactions 145

Mobile Communications 146

CRM and Data Mining 146

Machine-to-Machine Communication 147

A Few Words on ``Push’’ Communications 149

Key Takeaways 150

8. PEOPLE ARE STILL PARAMOUNT:

Four Factors for Creating Sustained Front-Line Success 151

The High-Turnover Mentality and Its Subtle Cost 152

The Alternative to High Turnover 153

Factor 1: Hiring the Right People 154

Positive Attitudes Make a Difference 154

Proper Staffing Is Essential 154

Factor 2: Providing the Right Tools 155

Give Employees the Information They Need 156

Empower Them to Act 157

Use Feedback Channels 158

Factor 3: Offering the Right Training 158

Four Types of Training 159

Factor 4: Supplying the Right Motivation 161

Competitive Compensation 162

Superior Supervision 162

Excellent Evaluations 163

Avoiding Problems with Satisfaction-Based Incentives 166

Recognition and Advancement 168

People Are the Solution 169

Key Takeaways 169

PART 4: MOVING TO THE NEXT LEVEL

9. THE ULTIMATE CUSTOMER EXPERIENCE:

Boosting Revenue by Creating Delight 173

What Is Delight? 175

The Economics of Creating Delight 177

The Cost of Creating Delight 178

The Cost/Benefit Analysis 179

Five Ways of Creating Delight 180

Enhanced Product Value 181

Enhanced Transaction Value 181

Financial Delighters 182

Proactive Communication 182

Creating Emotional Connections 182

Discover Your Specific Delighters 183

Listening Programs 183

Asking Customer Service Reps 184

Customer Compliments 184

Surveying Customers 184

Watching the Competition 185

Cross-Selling and Up-Selling 186

The Right Way to Cross-Sell 187

Establishing a Cross-Selling System 188

Foster Creative Delight 188

Key Takeaways 189

10. BRAND-ALIGNED CUSTOMER SERVICE: Building the Service

Strategy Into Every Function 190

Customer Service as the Guardian of Brand Equity 191

Customer Expectations and Experiences 193

The Nine Building Blocks of Brand-Aligned Service 196

Clear Brand Promise Tied to the Company Heritage 197

Clear Accountability for the Brand 198

Focused Values That Reinforce and Facilitate the Brand Promise 199

Measurement and Feedback 200

Formal Process for Every Touch 201

Ongoing Communication to Everyone 201

Planned Emotional Connection with the Customer 202

Employees Who Deliver the Brand 203

Customized Brands for Market Segments 203

Tiered Customer Relationships and How to Handle Them 203

Brand-Aligning Strategic Customer Service 205

Step 1: Identify the Brand Characteristics Your Company Wants

to Reinforce 206

Step 2: Assess Your Current Level of Brand Alignment 206

Step 3: Identify Opportunities for Improvement 207

Step 4: Measure the Impact 207

Stand by Your Brand 207

Key Takeaways 207

PART 5: INTO THE FUTURE

11. RIDE WAVES WITHOUT WIPEOUTS:

Dealing with Trends in Labor, Technology, and Politics 211

Labor Trends: Challenges in Attracting Human Resources 212

Addressing the Labor Shortage in Customer Service 213

Outsourcing for Better or Worse 214

Technology Trends: The Challenge of Using Technology Intelligently 218

Addressing Product Complexity 218

Using New Communication Technologies 221

Political Trends: Challenges in Regulatory and Safety Concerns and

Environmental Issues 223

Coping with Regulatory and Safety Issues 224

Addressing Environmental Concerns 225

Respond, Don’t React 227

Key Takeaways 227

12. A THOUSAND THINGS DONE RIGHT: Translating the Strategy of Delivering

Superb Service Into Organizational Behavior 228

Appointing a Chief Customer Officer 229

The Rationale and Prerequisites for Hiring a CCO 230

Key Functions of the CCO 232

How to Make the Position of CCO Work 233

Focusing All Functions on the Customer Experience 235

Map the Process to Define the Roles in the Customer Experience 236

Rationalize the Process: Clarifying the Roles of Sales and

Customer Service 237

Linking Incentives to the Right Metrics 239

Twelve Guidelines for Linking Incentives to the Right Metrics 239

Use Incentives in Specific Environments 242

Delivering a Great Experience Through Channel Partners 245

Never Declare Victory; Forever Stay the Course 247

Key Takeaways 248

INDEX 251

About the Author

John A. Goodman is Vice Chairman and co-founder of TARP Worldwide, an organization Tom Peters has called “America’s premier customer service research firm.”

Reviews

Selected by Customer Service Newsletter as one of the best customer service books of 2009: "If your company's goal is to create a customer experience that builds relationships and increases customer lifetime value, Goodman's book offers the research data to support such an effort and a blueprint for achieving it."

[Five Stars] "People involved in company strategy or customer service should drop what they are doing and read this five-star book now. For others, it provides an excellent perspective on the value of customer service. Strategic Customer Service is the best book on customer service, in terms of concepts and practical solutions, I have read in a long time. Goodman's wonderful, well-integrated stories are the frosting on the cake." --Grazadio Business Report