Brighton School of Business and Management October 2011 Student Newsletter
Contributions from you, our students, are very welcome – if you have information, advice, website links, or ideas that may be of help to other students, please send them to us.
Personal & Career Development – Tip of the Month
In line with this month’s theme of Internal Customer Service, and against the background of recession that is continuing to affect organisations in many parts of the world, our tip is to adopt the approach found in this quote:
“In business you get what you want by giving other people what they want” Alice McDougall
When applied to personal and professional development, this translates into:
gain the necessary knowledge and expertise, needed to do your job, perform your role and responsibilities, to the highest standard
identify your internal customers – your team, your managers, your line manager, your colleagues in other departments, those who expect you to supply them with information, or resources, or completed tasks – analyse their needs, their requirements, and make every effort to provide them with what they need from you
learn about: the organisation as a whole, the sector that it operates in, its suppliers, its customers, its competitors, and the external environmental factors that affect it
if you become self-employed, do all of this for your own business
continue to do this throughout your working life, in every position that you hold
You will then be seen as knowledgeable and valuable, and highly attractive to organisations or clients seeking people who can help them to be successful.
The Importance of Internal Customer Service
Internal Customer Service
Explanation and Case Study
Recently the term Internal Customer Service has become a buzz phrase. We hear that great customer service (for the external customer) depends on excellent internal customer service. But what does that mean? Let’s start with some definitions.
The external customer is someone who signs a check, pays our employer, and ultimately makes our pay-check possible. External customers have choice, and if they don’t like your product or service can take their business elsewhere.
An internal customer or internal service provider can be anyone in the organization. An internal customer can be a co-worker, another department, or a distributor who depends upon us to provide products or services which in turn are utilized to create a deliverable for the external customer. In general, internal customers don’t have a choice. For example, if the sales department doesn’t like accounting’s credit policies, they can’t fire that department and hire another.
Great (external) customer service creates customer satisfaction, customer loyalty, and customer retention. So why all the fuss about internal customers, especially when retention isn’t an issue?
Outstanding internal customer service is simply good business. Internal customer service can flourish only in high communication environment.
To create positive internal customer service, all departments work together cooperatively, agree on processes and procedures, and negotiate expectations. Like gears meshing in sync, interdependent business units meet each others’ needs, work productively together to meet common goals, and deliver high quality products and service to the external customer.
The focus on developing effective internal customer service helps organizations cut costs, increase productivity, improve interdepartmental communication and cooperation, boost employee morale, align goals, harmonize processes and procedures, replace interdepartmental competition with interdepartmental cooperation and deliver better service to the external customer.
Excellent service to the external customer is dependent upon healthy internal customer service practices.
Internal Customer Service Case Study
The customer advocate for a large manufacturing company was concerned about the organization’s reputation for excellent products, but terrible customer service.
The view of most employees was that “Customer Service is just a department!”
When an external consultant investigated the situation, many expensive lapses in the company’s internal customer service came to light.
One example of this involved Engineering’s lack of response when Customer Service reps required an engineer’s input. (In this case Engineering is the internal service provider and the Customer Service reps are the internal customers).
The Customer Service reps were responsible for problem solving and taking orders for highly technical, often customized parts. Sometimes the reps needed clarification from an engineer to process a customer order for the correct part. Engineers viewed information requests from Customer Service reps as low priority, uninteresting, and annoying.
It was calculated that the cost to the company of one incorrect shipment alone was approximately $125,000 in wasted labor, materials, and other expenses. Many such shipments had been processed in this way.
In addition, the cost of frustration and delayed deadlines to the external customer was damaging to the company’s reputation.
Due to this and other discoveries, retraining and awareness sessions were introduced at all levels, and it was eventually accepted that a high standard of internal customer service was a priority and was essential to the future success of the company.
The company went on to be successful, and still thrives today.
* from an article by Donna Earl at www.helpdeskcoach.com
The foundation for outstanding internal customer service is excellent interdepartmental communication and cooperation.
Dialogue between internal customers and internal providers must include agreements about the following topics: Clear expectations An internal provider of service is responsible for setting clear guidelines about what internal customers can reasonably expect. Some organizations implement Service Level Agreements (SLAs) defining what internal customers can expect from internal service providers. Even without formal SLAs, internal customer service can be exceptional IF the internal service provider has clarified to internal customers what expectations are reasonable. Customer also must communicate expectations regarding timeline and quality in advance of request. Last minute requests are typically due to poor planning on the part of the internal customer. Expecting the internal provider to ‘hijack’ priorities to meet unreasonable needs is inappropriate, and should be dealt with on a case-by-case basis, with involvement by upper management. At no time should this become the norm, or the internal customer will become ‘trained’ to expect the unrealistic.
Customer Responsibilities To meet expectations, internal provider of service is responsible for clarifying what is needed from the internal customer, and also clarifying service provider processes and timelines necessary to meet quality requirements of customers. The phrase “Help me help you” from the movie “Jerry Maguire” applies here.
In order to provide the best customer service, internal providers need the cooperation of customers in allowing enough lead time and providing information and materials necessary to fulfill customer request. This is a communication responsibility of the internal service provider to let the customer know ‘what I need from you in order to meet your request is ….’ It’s essential to have an understanding with customers about realistic timelines and quality expectations. Internal providers who find they’re constantly working on customer ’emergencies’ must clarify to customers the strain this causes to provider. Constant emergencies diminish provider’s ability to give good service to all internal customers, and create a stressful working environment (not to mention interdepartmental animosity).
Service Provider Responsibilities Most internal customer service problems are a result of the ‘silo’ mentality where people and departments work in isolation, consider only their own priorities, and think others are sitting around twiddling their thumbs with nothing to do until an internal customer screams “Jump!” in a last minute panic. This is sure to guarantee lower levels of quality, resentment from provider, and a reputation for lack of professionalism on part of customer. Customers must take responsibility for understanding how their request fits into overall workflow of organization and internal service provider’s workflow. Internal service providers are responsible for explaining their workflow, so the customer will understand he or she isn’t the only priority.
Negotiated Priorities While most customer priorities are ‘urgent – must have right away’ this is counterproductive to any process. A clear communication between internal customers and service providers is essential. With internal customer service, most customers believe the provider should intuitively understand priorities because they all work for the same organization. This is false! A discussion about priorities must be part of the expectation-setting talk.
Advice for internal customer service providers
Always know your customers’ expectations, and be a part of their expectation setting. If they have false or unrealistic expectations, explain your workflow, priorities, processes and timelines in providing top quality service for them.
To help your customers utilize your services better, explain how they can be ‘good customers.’ Be explicit about what you need from them in order to meet their needs. Define timelines and quality levels. Let them know what they can expect from you. As an internal provider, tactfully tell the customers how they fit into your workload, and listen to their delivery needs. Negotiate delivery dates and quality levels.
Always keep customers informed on project progress. Nobody likes to be blindsided by delays or last minute requests for additional information.
Get out of your ‘silo’. Take a break with co-workers from another part of your organization. Talk to them during lunch about what’s happening in their department. We all work so hard we can become myopic, lack perspective and be ignorant about how other functions operate.
Open your vision to the big picture. When talking to co-workers from other departments, develop an understanding of how the whole organization works. How does your contribution fit into the big picture? What do other departments need from you to meet their goals? Think outside your function and department, and think holistically.
Advice for internal customers
Discuss your expectations with your service provider. Make sure your expectations regarding timelines and quality levels are realistic. Ask your internal service provider what you must provide so they can meet your needs. Ask what their process is, and understand what is involved in delivering your request on time, and meeting your quality standards.
Use effective time management practices. Once you understand your service provider’s process, develop your time line for delivering the request. Certainly ’emergencies’ happen, and service providers can be pressured to meet tight deadlines. However, customers who consistently expect providers to ‘bend the rules’ to meet emergency deadlines strain their service providers and disrupt everyone’s priorities. Customers who operate in ’emergency’ mode have a negative impact on the workflow as a whole, and cheat others who have planned more realistically.
Provide all information needed to fill your request. In your original request, include sufficient information to allow the provider to adequately estimate the time and resources needed. Be prepared to provide additional information requested by the provider.
Always be professional. Honor the provider’s priorities, workflow, and processes. Do not expect ‘exceptions’ to the rule, especially if poor planning has created your urgency. If your work were delayed due to another customer’s ‘crisis’, how would it impact your goals?
* from an article at www.helpdeskcoach.com
We’re all marketers now
* this is a comprehensive, strategic-level article, but important in the context of this month’s theme, as it describes the dramatic business changes which are driving the need for employees at all levels to focus on internal as well as external customers
Engaging customers today requires commitment from the entire company – and a redefined marketing organization.
For the past decade, marketers have been adjusting to a new era of deep customer engagement. They’ve tacked on new functions, such as social-media management; altered processes to better integrate advertising campaigns online, on television, and in print; and added staff with Web expertise to manage the explosion of digital customer data.
Yet in our experience, that’s not enough. To truly engage customers for whom “push” advertising is increasingly irrelevant, companies must do more outside the confines of the traditional marketing organization.
At the end of the day, customers no longer separate marketing from the product or service – it is the product or service. They don’t separate marketing from their in-store or online experience – it is the experience. In the era of engagement, marketing is the company.
This shift presents an obvious challenge: if everyone’s responsible for marketing, who’s accountable? And what does this new reality imply for the structure and charter of the marketing organization?
Companies of all types and sizes must not only recognize that everyone is responsible for marketing but also impose accountability by establishing a new set of relationships between the function and the rest of the organization.
In essence, companies need to become marketing vehicles, and the marketing organization itself needs to become the customer-engagement engine, responsible for establishing priorities and stimulating dialogue throughout the enterprise as it seeks to design, build, operate, and renew cutting-edge customer-engagement approaches.
As that transformation happens, the marketing organization will look different: there will be a greater distribution of existing marketing tasks to other functions; more councils and informal alliances that coordinate marketing activities across the company; deeper partnerships with external vendors, customers, and perhaps even competitors; and a bigger role for data-driven customer insights. This article provides some real-life examples of these kinds of changes.
Marketing’s cutting edge is being redefined every day. While there’s no definitive map showing how companies can successfully navigate the era of engagement, we hope to help senior executives—not just marketers—start to draw one.
The evolution of engagement
More than two years ago, our colleagues unveiled the results of a research effort involving 20,000 customers across five industries and three continents. Their work showed how collaborative the buying process has become and how difficult it is to influence customers by relying solely on one-way push advertising. In the words of American Express chief marketing officer John Hayes, “We went from a monologue to a dialogue. Mass media will continue to play a role. But its role has changed.”
Over the past two years, that evolution has only accelerated. More and more consumers are using digital video recorders to fast-forward through TV commercials and are consuming video content on Web sites such as YouTube and on mobile devices. Billboards alongside train lines and bus routes struggle to capture the attention of people absorbed by the screens of their smart-phones.
Meanwhile, today’s more empowered, critical, demanding, and price-sensitive customers are turning in ever-growing numbers to social networks, blogs, online review forums, and other channels to quench their thirst for objective advice about products and to identify brands that seem to care about forming relationships with them. Individuals even are posting their own commercials on YouTube. In short, the avenues (or touch points) customers use to interact with companies have continued to multiply.
The problem for many companies is that the very things that make push marketing effective – tight, relatively centralized operational control over a well-defined set of channels and touch points – hold it back in the era of engagement. Many touch points, such as calls to customer service centers and interactions between the sales force and customers, sit outside the traditional marketing organization, which has little or no permission to reach into other business functions or units. Companies have traditionally divided responsibility for touch points among functions. But a comprehensive strategy for engaging customers across them rarely emerges and, if one does, there’s often no system for executing it or measuring its performance.
More pervasive marketing
To engage customers whenever and wherever they interact with a company – in a store; on the phone; responding to an e-mail, a blog post, or an online review—marketing must pervade the entire organization. Companies such as Starbucks and Zappos, for which superior engagement has been a critical source of competitive advantage from the beginning, already exhibit some of these traits. But these companies aren’t our focus, which instead is the kinds of actions everyone else can take as they strive for world-class customer engagement.
The starting point is a mind-set shift around customer interaction touch points. Companies typically think of them as being “owned” by a given function: for instance, marketing owns brand management; sales own customer relationships; merchandising or retail operations own the in-store experience.
In today’s marketing environment, companies will be better off if they stop viewing customer engagement as a series of discrete interactions and instead think about it as customers do: a set of related interactions that, added together, make up the customer experience. That perspective should stimulate fresh dialogue among members of the senior team about who should design the overall system of touch points to create compelling customer engagement, and who then builds, operates, and renews each touch point consistent with that overall vision. There’s no need to worry about traditional functional or business unit ownership: whoever is best placed to tackle an activity should do so.
Designing a great customer-engagement strategy and experience depends on understanding exactly how people interact with a company throughout their decision journey. That interaction could be with the product itself or with service, marketing, sales, public relations, or any other element of the business.
When the hotel group Starwood sought to enhance its engagement with customers, for example, the company pored through data about them and identified clear demographic groups staying at its more than 1,000 properties. In 2006, the company unveiled a specific new positioning for each part of its brand portfolio, ranging in affordability from Four Points by Sheraton to its Luxury Collection and St. Regis properties.
Each brand seeks to deliver a different customer experience, on dimensions ranging from how guests are greeted by staff to the kind of toiletries offered in rooms. Crucially, for each type of property, Starwood sought to design not only the desired experience but also how it would actually be delivered. It therefore had to decide what coordination would be necessary across functions, who would operationally control different touch points, and even what content customers wanted in the company’s Web site, in loyalty program mailings, and other forms of communication.
Starwood’s experience underscores the fact that, despite the growing impact of digital touch points such as social media, effective customer engagement must go beyond pure communication to include the product or service experience itself. “At the end of the day,” says Virgin Atlantic Airways chief executive Steve Ridgway, “we fly exactly the same planes as everybody else. If we get our customers off the plane happy, and they go on to talk about that and get others to come and then come back again themselves – that’s a huge marketing tool.”
Once a company designs how it will engage with customers, it needs the organizational capabilities to deliver: adding staff, building a social-media network infrastructure, retooling customer care operations, or altering reporting structures. Functions far removed from marketing often have important roles to play, so one or more marketing teams at the center may have to build skills in other parts of a company. A global energy company took that approach and then largely dissolved the group when those capabilities were in place.
Allocating responsibility for building touch points is increasingly important because of the degree to which Web-based engagement is requiring companies to create “broadcast” media. Some have built publishing divisions to feed the ever-increasing demand for content required by company Web sites, social media, internal and external publications, multimedia sites, and coupons and other promotions. Many luxury-goods companies, for example, have built editorial teams to “socialize” their brands: they are transforming the customer relationship by producing blogs, digital magazines, and other content that can dramatically intensify both the frequency and depth of interactions.
Content-oriented strategies like these require creative employees who can feed the customer’s ever-increasing need for timely, relevant, and compelling content across a variety of media. They also provide an opportunity for productive dialogue within companies about the role of marketing versus other functions in building critical touch points that drive engagement.
Operate and renew
For companies in industries as diverse as consumer packaged goods and financial services, digital technology has upended the engagement expectations of customers, who, for example, want one Web site to visit and a relationship seamlessly integrated across touch points. Meeting such expectations requires extraordinary operational coordination and responsiveness in activities ranging from providing on-the-ground service delivery to generating online content to staying on top of a customer care issue blowing up on YouTube.
Behind the scenes, that new reality creates a need for coordination and conflict resolution mechanisms within and across functions, as well as budget procedures that allow flexibility and rapid action should the need arise. PepsiCo, for example, has sought to provide a single point of contact for its digital-marketing efforts by creating the role of chief digital officer: an executive without line responsibility who drives the application of best practices across the beverage group’s global digital efforts.
Companies also need a clear approach for monitoring touch points and renewing them as needed. At one major hotel chain, for example, a single group circumnavigates the globe acting as a “monitor and fix” SWAT team. It meets with hotel licensees, educates them about the company’s customer-engagement approach and management of key touch points, demonstrates new behavior, and trains the staff in new operational processes. Given the speed of information sharing today, constant monitoring and adaptation—indeed, continuous improvement of the sort that came to the operations world long ago—is bound to infiltrate marketing and grow in importance.
The marketing organization’s new look
As the chief marketing officer collaborates with the chief executive and other senior-team members to nail down a shared approach for designing, building, operating, and renewing customer touch points, he or she also will require a new kind of marketing organization. For marketing to truly become the customer-engagement engine that orchestrates the delivery of the end-to-end customer experience, it must evolve along four critical dimensions.
Distribute more activities
As marketing becomes more pervasive, the marketing organization will increasingly be defined by a core set of tightly held responsibilities, such as branding and agency relationships, and a set of responsibilities distributed among the functions and groups best placed to manage and use the information generated by customer interactions. Procter & Gamble, for instance, has created a group within the purchasing function to buy digital-media advertising space. The group spans geographic boundaries, reflecting the global nature of the medium, and while it sits within purchasing, it is staffed by people with marketing experience.
At companies where the marketing organization’s responsibilities will be split between core and distributed activities, CMOs will increasingly be held accountable for the performance of groups that don’t report solely to them. When CEOs ask for the marketing-org chart, they will see a complex web of solid- and dotted-line relationships showing the roles that marketing plays in designing, building, or operating touch points across the whole organization.
The chart will also show where marketing activities have been embedded in other functions. One major logistics company, for example, puts marketing resources within each sales district to adapt corporate-level marketing initiatives to local circumstances. This approach mutes complaints from sales reps who feel bombarded with marketing pushes from the head office by giving them simple, customized ideas for driving sales within their regions.
More councils and partnerships
While leading companies have long used marketing councils to boost management coordination, the new marketing organization will require many more of them, with greater representation from other functions. One global financial institution, for example, has created a digital-governance council with representatives from all customer-facing business units. The company’s goal was to ensure that data and analytics are shared, that customers receive the same experience regardless of channel (such as Web sites, branches, call centers, or automated teller machines), and that IT systems meet the customer’s digital-engagement needs.
More robust formal and informal external partnerships will be critical too. Customer forums, such as the one Virgin Atlantic Airways used to create a taxi-sharing app for smart-phones, are one example. More structured relationships with distribution partners also can enhance engagement. The consumer-packaged-goods company Nestlé, for example, manages its relationship with retailer Wal-Mart Stores via what it calls the Nestlé–Wal-Mart Team. This unified cross-business, cross-functional group is responsible for everything from in-store activity to promotion, logistics, innovation, and product design. As a result, Wal-Mart has a single point of contact with one of its largest suppliers, Nestlé enjoys a stronger relationship with the retailer, and, critically, both companies gain a better understanding of, and engagement with, packaged-goods consumers.
Elevate the role of customer insights
Generating rich customer insights, always central to effective marketing efforts, is more challenging and important in today’s environment. Companies must listen constantly to consumers across all touch points, analyze and deduce patterns from their behavior, and respond quickly to signs of changing needs.
One implication is that the types of talent required to derive such insights will change. A premium will be placed on problem-solving and strategic-marketing skills, rather than on traditional market research capabilities such as designing surveys and commissioning focus groups. Some organizations also may need help from external partners, a pattern that’s already apparent at several insurers and health care payers that have neither the time nor the budgets to build the necessary data-gathering and -analysis capabilities in-house and at scale.
The insights group’s position in a company could even change. At one high-end hospitality business, for example, responsibility for generating customer insights has moved out of the marketing function entirely. The group now reports directly to the head of strategy, who uses information from it to redesign core business elements such as pricing, sales targeting, and the selection of properties for development.
More data rich and analytically intense
Reinforcing the importance of all these changes is an exponential increase in the volume of customer data and the intensity of the analysis required to process and act on it effectively. Without cross-functional collaboration and a clear delineation of roles, it will be impossible to gather, collate, gain insights from, and disseminate data that streams in from every customer interaction. The sheer volume of data is extraordinary: social-media gaming company Zynga, for example, generates five terabytes (the equivalent of about 1.5 million song files) of data on customer clicks every day. What’s more, “Marketing is going to become a much more science-driven activity,” says Duncan Watts of Yahoo! Research. In the trenches, this change suggests a shift toward sophisticated data analytics similar to the revolution that has already taken place in industries such as financial services, as well as in airlines and other industries where yield management is important. Some marketing organizations are already making their moves: to send targeted e-mails to customers, retailer Williams-Sonoma, for example, analyzes an integrated database that tracks some 60 million households on metrics including income, housing values, and number of children. These e-mails obtain response rates 10 to 18 times as high as those sent randomly. Such capabilities don’t necessarily have to be built in-house: many companies will enter into creative arrangements with outside parties to exchange data and run joint tests of alternative marketing tactics.
The major barrier to engagement is organizational rather than conceptual: given the growing number of touch points where customers now interact with companies, marketing often can’t do what’s needed all on its own. CMOs and their C-suite colleagues must collaborate intensively to adapt their organizations to the way customers now behave and, in the process, redefine the traditional marketing organization.
* from a McKinsey Quarterly article by Tom French, Laura LaBerge, Paul Magill
Study Resources of the Month
Harris – Customer Service: A Practical Approach (Pearson 2009) ISBN: 978-0135109311
Timm – Customer Service: Career Success Through Customer Loyalty (Prentice Hall 2007) ISBN: 978-0132236584
Ziethaml, Bitner, Gremler – Services Marketing: Integrating Customer Focus Across the Firm (McGraw Hill 2002) ISBN: 978-0072471427
Ahmed, Rafiq – Internal Marketing: Tools and Concepts for Customer Focused Management (Butterworth 2002) ISBN: 978-0750648387
Quotes from the Gurus
Customers will not love you if you give them poor service, but your competitors will – Kate Zabriskie
Before the internet an unhappy customer might have told 10 friends about it – today, an unhappy customer might tell 1000 contacts, and those contacts might tell another 1000 … each … – Jeff Bezos
Big or small, you can’t give good customer service if your employees don’t give each other good customer service – Penny Handscomb
If you keep giving poor service, you’ll keep getting what you’re getting – less customers – Stephen Covey
Useful Study Links