Customer Service

Think of a Customer’s Complaint as a Gift

November 1, 2017 By Nagesh Belludi Leave a Comment

When managers become comfortable with the idea that complaints are gifts, they do not hesitate in responding to them.

According to A Complaint Is a Gift: Recovering Customer Loyalty When Things Go Wrong, the idea of complaints as gifts must be reinforced at every staff meeting and training session. The company’s policies must be aligned to support this philosophy. A Complaint Is a Gift‘s authors, management consultants Janelle Barlow and Claus Moller, restate some fundamental techniques for handling complaints:

Don’t get defensive. When managing complaints, managers can be their own worst enemies! Instead of taking complaints personally, managers should focus on the particulars of a problem. Then, complaints become less disruptive and constructive.
Say “thank you” and explain why you appreciate the complaint. Say something about how hearing the complaint will allow you to better address the problem. You create a more powerful rapport with customers by saying “thank you” than apologizing.
Apologize for the mistake and empathize when appropriate. Acknowledge the customers feelings You do not have to see eye to eye with the person to acknowledge how they are feeling. Saying “I can see you are upset,” or “I understand why this ordeal has been frustrating for you,” will go a long way toward diffusing any complainer’s anger.
Listen for what the customer wants to happen next, because it’s often easy to accommodate requests, as long as they’re not totally unreasonable. Promise to do something about the problem immediately. Then do something to fix the situation.
Ask for necessary information and correct the mistake promptly. Look at the problem from all perspectives and ask the customer to explain his or her expectations and the reality of what he/she experienced. Ask what it will take to meet their needs or to satisfy them. Rapid responses disclose you are serious about service recovery and customer service.
Check customer satisfaction. Call your customers back to find out if they are satisfied with what you did for them.
Initiate changes to prevent future mistakes, make the complaint known throughout the organization so this kind of problem can be prevented. Fix the system without rushing to blame staff or policies.

Idea for Impact: Managers who ask for complaints will find that customers express their concerns more openly and objectively. Inviting complaints reduces the likelihood a customer will be upset or emotional. It is a way to nip problems in the bud and solve problems before they can aggravate.

Curry Favor with Customers?

September 29, 2017 By Nagesh Belludi Leave a Comment

People know there’s great fame with getting things named after them.

The Scottish-American steel magnate and philanthropist Andrew Carnegie (1835–1919) was fully mindful of this.

Carnegie started with his empire-building (read biography) by manufacturing steel rails for America’s burgeoning railroad industry. With great fanfare, he named his first steel plant after his most important customer, Edgar Thomson, president of the Pennsylvania Railroad. The Edgar Thomson Steel Works has been in action since 1872.

Obsequious flattery is clever marketing indeed!

Bad Customers Are Bad for Your Business

June 6, 2017 By Nagesh Belludi Leave a Comment

Herb Kelleher: “Dear Mrs. Crabapple, We will miss you.”

Herb Kelleher of Southwest Airlines Southwest Airlines is a paragon of superlative customer service. Southwest’s happy and engaged employees routinely go out of their way to delight their customers. In spite of such remarkable devotion to customer satisfaction, there have been times when Southwest had to decide that some customers were just wrong for their business.

In the very entertaining and enlightening Nuts!: Southwest Airlines’ Crazy Recipe for Business and Personal Success, authors Kevin and Jackie Freiberg narrate how Southwest had to let go of a customer who couldn’t be less satisfied with her travel experience. This customer relations-story is best appreciated in light of the fun-loving and gregarious nature of Southwest’s legendary founder and ex-Chairman/CEO Herb Kelleher.

A woman who frequently flew on Southwest, was constantly disappointed with every aspect of the company’s operation. In fact, she became known as the “Pen Pal” because after every flight she wrote in with a complaint.

She didn’t like the fact that the company didn’t assign seats; she didn’t like the absence of a first-class section; she didn’t like not having a meal in flight; she didn’t like Southwest’s boarding procedure; she didn’t like the flight attendants’ sporty uniforms and the casual atmosphere.

Her last letter, reciting a litany of complaints, momentarily stumped Southwest’s customer relations people. They bumped it up to Herb’s desk, with a note: ‘This one’s yours.’

In sixty seconds, Kelleher wrote back and said, ‘Dear Mrs. Crabapple, We will miss you. Love, Herb.’

Bad Customers: Wrong for Your Business, Wrong for Your Employees

Customers are the lifeblood of any business. Customer satisfaction begets loyalty, and loyalty begets revenues and profits. Businesses can therefore never place too much emphasis on their customers.

However, with slogans like “the customer is always right,” many businesses fall into the trap—and the slippery slope—of trying to satisfy every customer’s every wish.

Although your business may need all its customers—even the irksome ones—the reality is that some customers can actually be bad for your business. You can’t sustainably run a business without trying to satisfy every customer—particularly those cranky, annoying, or unreasonable ones.

Be wary of customers that fall into these categories:

Customers who require high maintenance but cannot be charged more
Customers whose demand for price destroys your profitability
Customers who want a lot more (better product, better service, better schedule) but are tightfisted
Customers who require supplementary services or products (especially those that are not part of your business’s core competencies) and tailored solutions that you don’t provide and can’t profitably offer to the rest of your customer base
Customers who don’t subscribe into the future vision of your business or your industry, which they’ll need to strategically commit to as some point in the future
Customers who tend to be aggressive and hostile, and disrespectful to your employees, regardless of how well they serve the customers

Strategic Customer Management Involves Being Tough Minded with Some Customers

Strategic Customer Management Considering your long-term business goals, sifting through who should and who shouldn’t be your customers is an important element of strategic leadership.

With every product or service you offer, focus on who you want your customer to be, what expectations they have of you, and what you can profitably provide to them. Once you have figured that out, customers who don’t fit well need to be managed judiciously and decisively.

Without strategic customer management, you run a risk of disrupting your ability to converge around the needs of your principal customer base.

Remember the notion of opportunity cost—every ‘no’ is a ‘yes’ to something important.

Idea for Impact: Let Go of Some of Your Troublesome Customers

Sometimes, it may be better to lose certain customers by turning them down than to dilute your ability to serve other valuable customers profitably. Stop trying to delight every customer. Take a hard look at the past, current, and future of every customer and prioritize whom you can going to serve better and more successfully.

What it Takes to Be a Hit with Customers

May 19, 2017 By Nagesh Belludi Leave a Comment

Be Trustworthy. One of the most important aspects of being effective at work is earning and upholding others’trust through your actions, not through your words. You earn trust slowly but can lose it in a moment—as Warren Buffett often reiterates, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” Idea for Impact: Earn trust by making and honoring your commitments. Do what you commit to. Act with integrity. Do the right things for the right reasons.
Be Responsive. We live in a time and age of “instantaneous gratification.” People want immediate results—without delay or deferment. They don’t expect to wait. And if they have to wait on you, their resentment grows. Alas, responsiveness affects how people perceive you. If you’re slow, your customers will suppose you are indifferent or incompetent. If you respond promptly, they’ll assume you’re proficient and on top of your work. Idea for Impact: Respond immediately to requests unless there is a judicious reason to wait.
Be Strong, But Flexible. Respect the rules and traditions but be adaptable to changing conditions. Be watchful and absorb from whatever you can learn—as General Electric’s celebrated ex-CEO Jack Welch once wrote, “The desire and the ability of an organization to continuously learn from any source—and to rapidly convert this learning into action—is its ultimate competitive advantage.” Idea for Impact: Flexibility with rules can be pragmatic in its own right. Learn to make rational decisions by balancing facts and emotions.
Be Realistic, Not Overly Optimistic. Self-help gurus and the media have endlessly touted optimism as the “winning formula to success.” This obsession with cheerfulness has reinforced a false sense of realism and pragmatism. Optimists tend to overlook the reality—they develop a false sense of hope and become too attached to the possibility of positive outcomes. Unfortunately, realists are branded as skeptics and skeptics are quickly shunned as outcasts. Idea for Impact: Take an honest and levelheaded view, no matter what the problem. Embrace the possibility of failure. Plan for the downside. Don’t get caught up in trivial details.
Be Likeable and Interested. Highly competent but unlikeable people do not succeed as well as their fairly competent but likeable counterparts. The American poet and memoirist Maya Angelou aptly said, “I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” Idea for Impact: Be pleasant, enthusiastic, and friendly—make eye contact, smile, and say ‘hello’ more. Listen. Be open and approachable. Appreciate the individuality of people. Try to be interested, not just interesting.
Be a Good Salesperson. Much of success in life—from getting a Starbucks barista to make a special no-whip, extra-foam latte with half a packet of Splenda to finding a spouse—is really about selling yourself. Every selling situation involves making a connection with an individual who likes and trusts you. An anonymous sales guru once said, “All things being equal, most people would rather buy from somebody they like… and that’s true even when all things aren’t equal.” Idea for Impact: It is useless to work hard and be creative unless you can also sell what you create. Learn to be persuasive. You can’t just talk people into things.
Be Visible and Communicate Candidly. How you identify and respond to a problem or a crisis is the ultimate test of your character. If you do not communicate frequently, people will develop their own perceptions of the problem and its implications. Knowing when to step up your communications efforts to the right levels during difficulties can be a powerful tool in problem solving. Idea for Impact: Keep your eyes open for customers’ inconveniences, difficulties, and troubles as creative problems to be solved. Focus on problem solving. Be visible. Communicate and lead from the front. Learn how to handle upset customers.

Postscript: This Harvard Business Review article argues that, more than anything else, customers want just a reasonable solution to their expectations. Delighting them by “exceeding their expectations” hardly enhances customer loyalty.

How Starbucks Brewed Success // Book Summary of Howard Schultz’s ‘Pour Your Heart Into It’

April 18, 2017 By Nagesh Belludi Leave a Comment

I recently finished reading Pour Your Heart Into It, the personal story of how Starbucks founder, Chairman, and ex-CEO Howard Schultz built a major consumer brand and a stellar business model anchored in passion and values. He proclaims, “Success should not be measured in dollars … It’s about how you conduct the journey, and how big your heart is at the end of it.”

An Iconic Leader Built a Coffee Empire with Unyielding Attention to Customer Experience

Howard Schultz’s Pour Your Heart Into It (1997) begins with his formative years as a poor German-Jewish boy in Brooklyn and ends with Starbucks’ post-IPO journey to becoming a well-respected and recognized global consumer brand.

In 2000, three years after Pour Your Heart Into It was published, Schultz assigned Jim Donald as CEO and became Starbucks’ meddling chairman. In 2008, following quarter-after-quarter of disappointing sales figures during the Great Recession and a “watering down of the Starbucks experience,” Schultz returned as CEO in 2008 and led the company to commendable growth and profitability. His turnaround memoir (my summary here,) Onward: How Starbucks Fought for Its Life without Losing Its Soul (2012,) discusses how he restored the essence of the Starbucks experience during his second stint as CEO.

Earlier this month, Schultz entrusted a deputy with CEO responsibility, but remains chairman. In the same way as in 2000, he hasn’t left the company and focuses on developing Starbucks’ premium Reserve Roastery and Tasting Room stores.

Starbucks Created an Industry through High-profile Cafés That Promise a Lifestyle Experience

In fact, Schultz did not start ‘Starbucks.’ When working as a plastics salesperson in 1981, he happened into Starbucks—then, a chain of six high-quality coffee retail stores based in Seattle. He immediately fell in love with his experience at their Pike Place Market store. Schultz recalls, “A heady aroma of coffee reached out and drew me in. I stepped inside and saw what looked like a temple for the worship of coffee. It was my Mecca. I had arrived.”

In 1982, he joined Starbucks as head of marketing and retailing. On a business trip to Italy, he witnessed the allure of Milan’s café culture. He was specifically fascinated by the passionate connection that the Italians had not only with their coffee, but also with their coffee bars—an integral part of their country’s social life.

After returning to Seattle, he could not persuade the original Starbucks’ proprietors to open similar “coffee bar experiences.” Schultz then quit Starbucks and opened his own Il Giornale chain of coffee bars. Three years later, when Schultz was all of 34, Il Giornale purchased Starbucks and adopted its name.

Starbucks founder, Chairman, and CEO Howard Schultz

From Rags to Riches: Starbucks Became A “Company with a Conscience” While it Brewed Worldwide Success

The rags-to-riches account of Howard Schultz is one great American entrepreneur success story. Schultz grew up poor in Brooklyn’s subsidized housing projects. At age seven, Schultz was deeply upset when his father suffered after breaking an ankle. With no health insurance or other benefits, the senior Schultz (a blue-collar “beaten man”) worked very hard at dead-end jobs to atone for medical expenses and offset his lost pay. That incident left a profound impression on Howard. “As a kid I never had any idea that I would one day head a company. But I knew in my heart that if I was ever in a position where I could make a difference, I wouldn’t leave people behind,” he avows.

CEO Howard Schultz: From Rags to Riches Starbucks Brews Success Subsequently, Howard Schultz wanted to create an enterprise that treated staff with respect and nurtured them. He writes, “If you treat your employees as interchangeable cogs in a wheel, they will view you with the same affection.” Starbucks offered health benefits and stock options to all staff (called “partners”)—including part-timers—to demonstrate “that a company can lead with its heart and nurture its soul and still make money.”

The essence of Pour Your Heart Into It is that the Starbucks marvel is not only about economic growth and brand success, but also about its socially conscious corporate ethos: “We never set out to build a brand. Our goal was to build a great company, one that stood for something, one that valued the authenticity of its product and the passion of its people.”

A Well-respected Global Brand and A Grande-sized Ego

Schultz’s gracious and inspiring account in Pour Your Heart Into It, however, is speckled with lofty assertions and self-congratulatory superlatives. For instance, when recounting his epiphany of discovering the allure of Milan’s café culture, Schultz states, “it was so immediate and physical that I was shaking.” He labels a prospective joint venture with Pepsi an “earth-jolting paradigm shift.”

Schultz takes credit for turning coffee into a “national obsession” in North America (map of the coffee-producing nations in the world) and declares that his founding purpose was to give North Americans the opportunity to savor the “romance and mystery” of Italian espresso bars. When featured on the cover of Fortune magazine for an article titled “Howard Schultz’s Starbucks Grinds Coffee Into Gold,” Schultz writes that he felt “proud but, frankly, a little embarrassed at all the attention. It’s always been hard for me to celebrate success.”

Like I wrote in my summary for Onward, Schultz’s account of his 2008 return as CEO, his flamboyant tone is demonstrative of a fiercely passionate entrepreneur and a brilliant corporate cheerleader. Under his leadership, Starbucks has used its narrative of being a noble torchbearer of altruistic capitalism to brew global success. Schultz writes,

Starbucks was attempting to accomplish something more ambitious than just grow a profitable enterprise. We had a mission, to educate consumers everywhere about fine coffee. We had a vision, to create an atmosphere in our stores that drew people in and gave them a sense of wonder and romance in the midst of their harried lives. We had an idealistic dream, that our company could be far more than the paradigm defined by corporate America in the past.

CEO Howard Schultz and Starbucks's Race Together Campaign Over the last few years, Schultz has been increasingly politically active and has used the platform of his office at Starbucks to share views on matters that are peripheral to Starbucks’ business and operations. In 2015, for instance, Starbucks got into hot water after launching a bold “Race Together” campaign in the aftermath of the Ferguson racial unrests. With his characteristic flair, Schultz encouraged baristas to discuss race with customers at Starbucks stores “under the belief that it’s a critical first step toward confronting—and solving—race-related issues as a nation” according to this USA Today article. Alas, Schultz’s idea backfired and Starbucks called off the initiative.

More recently, after President Trump’s executive order excluding refugees from specific countries, Starbucks announced its intention to lead a global effort and hire 10,000 refugees globally by 2022. Trump supporters promptly boycotted Starbucks.

Schultz is speculated to be considering running for the 2020 Democratic presidential nomination.

Lessons on Employee Engagement from Howard Schultz's 'Pour Your Heart Into It'

Recommendation: Read Howard Schultz’s “Pour Your Heart Into It”

Howard Schultz’s description of how Starbucks transformed an entrenched commodity into a value-laden brand and a differentiated experience makes Pour Your Heart Into It an absorbing story of entrepreneurial success. Schultz portrays himself as a passionate, dedicated, and visionary entrepreneur. But then again, he appears impulsive as a manager and brash as a capitalist—often in little doubt that his own preferences for the Starbucks experience will reflect of those of its customers.

The significant take away lessons from Pour Your Heart Into It are,

Develop a close relationship with your customers through the quality of your product and your customer service.
Continually reinvent your product and your business, even when you are experiencing success.
When you start a business, work hard to instill values and beliefs. Set the standards and build the culture.
Any consumer business is only as good as its customer-facing employees. When an organization’s employees sincerely believe in its product, service, and business, they will care about the customer, perform at higher levels, and eventually increase the company’s value of the organization.

Coffee snobs—especially Starbucksaholics—will love Schultz’s impassioned portrayal of “the romance of the coffee experience, the feeling of warmth and community people get in Starbucks stores. That tone is set by our baristas, who custom-make each espresso drink and explain the origins of different coffees.”

Intel’s Andy Grove on Looking at Problems from an Outsider’s Perspective

March 28, 2017 By Nagesh Belludi 1 Comment

Look at Problems from an Outsider's Perspective

Fixation Hinders Creative Thinking

In two previous articles (this and this,) I’ve addressed the psychological concept of a “fixed mental set” or “fixation:” assessing a problem from a habituated perspective can prevent you from seeing the obvious and from breaking away from an entrenched pattern of thinking.

A period of rest, entertainment, or exposure to an alternative environment can usually dissipate fixation. The resulting shift in perspective can alter your point of view in a literal and sensory way, or it may change the way you think about or define the problem at hand.

A particularly instructive example of the beneficial effects of altering thought perspectives comes from Andy Grove’s autobiography / management primer Only the Paranoid Survive (1996.) Grove, the former Chairman and CEO of Intel who passed away earlier this year, was one of the most influential tech executives Silicon Valley has ever seen.

Japanese Onslaught on Intel’s Memory Business

Memory chips dominated Intel’s revenue, since the company was founded in 1968. In fact, Intel had a near monopoly in the memory business. However, by the late ’70s, a few Japanese competitors emerged. Grove reflected, “The quality levels attributed to Japanese memories were beyond what we thought possible. … Our first reaction was denial. We vigorously attacked the data.” In due course, Intel recognized the threat to its competitive position. (Between 1978 and 1988, the Japanese companies grew their market share in the memory business from 30% to 60%.)

At the same time, a small entrepreneurial team of engineers had developed Intel’s first microprocessor. In 1981, Intel persuaded IBM to choose this microprocessor to run their personal computers.

By 1985, when Grove was President, Intel’s executives engaged in an intense debate on how to respond to the onslaught of Japanese competitors in the memory business. One faction of engineers wanted to leapfrog the Japanese and build better memory chips. Another faction was in favor of disposing the lucrative memory business and betting Intel’s future on its promising microprocessor technology—something they believed the Japanese couldn’t match.

The “Revolving Door Test:” Getting an Outsider’s Perspective

In the middle of this intense debate, Grove was at a meeting with Intel’s CEO, Gordon Moore (of the Moore’s Law fame.) Grove had an idea for Moore; he recalled this episode in Only the Paranoid Survive,

I remember a time in the middle of 1985, after this aimless wandering had been going on for almost a year. I was in my office with Intel’s chairman and CEO, Gordon Moore, and we were discussing our quandary. Our mood was downbeat. I looked out the window at the Ferris Wheel of the Great America amusement park revolving in the distance, then I turned back to Gordon and asked, “If we got kicked out and the board brought in a new CEO, what do you think he would do?” Gordon answered without hesitation, “He would get us out of memories.” I stared at him, numb, then said, “Why don’t you and I walk out the door, come back in and do it ourselves?”

Andy Grove's Revolving Door Test: Getting an Outsider's Perspective The switch in perspective—i.e. asking “What would our successors do?”—provided a moment of clarity for Moore and Grove. By contemplating Intel’s strategic challenges from an outsider’s perspective, shutting down the memory business was the discernible choice. Even Intel’s customers were supportive:

In fact, when we informed them of the decision, some of them reacted with the comment, “It sure took you a long time.” People who have no emotional stake in a decision can see what needs to be done sooner.

From the time Intel made the important decision to kill its memory chips business, it has dominated the microprocessor market.

If existing management want to keep their jobs when the basics of the business are undergoing profound change, they must adopt an outsider’s intellectual objectivity. They must do what they need to do to get through the strategic inflection point unfettered by any emotional attachment to the past. That’s what Gordon and I had to do when we figuratively went out the door, stomped out our cigarettes and returned to the job.

People in the trenches are usually in touch with pending changes early. Salespeople understand shifting customer demand before management does; financial analysts are the earliest to know when the fundamentals of a business change. While management was kept from responding by beliefs that were shaped by out earlier successes, our production planners and financial analysts dealt with allocations and numbers in an objective world.

Idea for Impact: If You’re Stuck on a Problem, Shift Your Perspective

Often, you can find the solutions to difficult problems merely by defining or formulating them in a new, more productive way.

Consider employing Andy Grove’s “Revolving Door Test” and examining your problems through an outsider’s lens. This shift in perspective may not only engender intellectual objectivity but also muffle the emotion and anxiety that comes with momentous decision-making.

Book Summary of Peter Drucker’s ‘The Practice of Management’

February 21, 2017 By Nagesh Belludi 5 Comments

Peter Drucker (1909–2005) was the 20th century’s leading thinker on business and management. He was amazingly prolific—he produced 39 volumes on management and leadership and worked right until his death a week before his 96th birthday.

Drucker’s The Practice of Management (1954) played a pivotal role in the recognition of management as a professional discipline. Even six decades after publication, The Practice of Management remains relevant for its original, profound, and timeless ideas. Drucker’s conception for the organization as an integral part of society, his elucidation of the nature of managerial tasks, his emphasis on good governance, and his prescription for effective leadership have served managers well over the decades.

Here are some prominent insights from The Practice of Management:

Drucker accentuated the need for clarity about the meaning of a business. He argued, “‘what is our business’ is the most important question successful management groups have to address.” In corporate strategy, this inquiry has become the underpinning for business analysis and the formulation of mission statements.
A business exists to “create a customer.” Therefore, managers need to query who their customers are and what the business must try to do for its customers.
The Practice of Management contributed to a rich analysis of the role of business in society. Drucker proposed that a business exists at three constructs that influence each other and thus establish the organization’s performance, mission, and business definition:
1. as an economic establishment that produces value for its stakeholders and for the society,
2. as a community that employs people, pays them, develops them, and coordinates their efforts to increase productivity,
3. as a “social institution that is deeply embedded in society and values and as such is affected by public interest discussion, debate, and values.”
“The manager is the dynamic, life-giving element in every business” who defines the organization’s mission, develops and retains productive teams, coordinates various activities, sets goals, and gets things done.
Leadership gives the organization meaning and purpose—leadership defines and nurtures the organization’s central values, creates a sense of mission, allocates resources, and builds systems and processes in pursuit of the organization’s goals.
Management entails farsighted thinking about the future state of things and taking appropriate risks to capitalize on opportunities. Additionally, “managing a business must be a creative rather than adaptive task. The more a management creates economic conditions or changes them rather than passively adapts to them, the more it manages the business.”
Managers inculcate the dominant cultural norm in the organization through their actions. These values become evident in the decisions they make concerning whom they recruit, whom they retain and promote, the goals they pursue, and the ethical parameters with which they frame their decisions.
The Practice of Management popularized the concept of management by objectives (MBO) for the successful execution of an organization’s strategic plan. The MBO process ensures delineation of key objectives, prudent allocation of resources, dedication of effort on key goals, use of real-time feedback, and effective communication. MBO helps managers organize and motivate their employees, promote effective communication, develop employees, measure performance, and increase their sense of empowerment.

The Practice of Management is one of those books that his admirers tend to appreciate more with every successive reading. Drucker’s remarkable virtues as the “father of modern management”—viz., clarity, usefulness, and common-sense pragmatism—are all on display in this book.

Recommendation: Read—it’s the best book you’ll find on the responsibilities, tasks, and challenges that managers undertake. The Practice of Management will have a profound effect on your thinking.

How to Deal with Upset Customers

February 7, 2017 By Nagesh Belludi Leave a Comment

Servicing Angry Customers

From an angry customer’s perspective, the impressions left by customer-service providers are long-lasting and can heighten the impact of a service experience, for better or worse.

A failure to recognize and quickly respond to the needs of angry customers can make them feel ignored, frustrated, and powerless. Here are nine guidelines that can result in a constructive interaction with an angry customer and restore his perception of satisfaction and loyalty.

Don’t adopt an angry tone. Stay calm and professional. When an upset customer starts shouting or being foul-mouthed, you’ll gain nothing by reacting in a like manner. Actually, responding to anger with anger can easily escalate the hostilities and thwart meaningful communication. Exercise self-control and regulate your feelings. Without remaining calm, you cannot break through emotional barricades or preempt the customer’s frustrations going from bad to worse.
If the customer is yelling, ask him to speak slower. A louder voice often goes with a faster speech. When the customer slows down his speech, the level of his voice will also drop. Repeat this request as many times as necessary to calm him down.
Declare that you intend to understand the customer’s situation and help. Say, “Could you please speak more slowly. When I understand your situation, I can help you better.”
Let your angry customer vent. When a customer is upset, what you tell him matters less than what you enable him to tell you. The first thing an upset customer wants is to vent. Commonly, just the modest act of listening patiently can defuse the customer’s anger. Only after you facilitate getting the customer’s emotions off his chest can you have a constructive discussion.
Recognize that the customer’s problem does exist. Restate the customer’s analysis of what the problem is. “If I understand you appropriately, you have a problem with X and you don’t like Y. This has caused Z.”
Demonstrate sincere empathy for the customer’s feelings. Say, “I can understand why this situation would upset you. I’m sorry you feel that way.” Your best response to the customer’s anger is empathy.
Ask what the customer would like to do to have the problem solved. Ask, “What can we do to make this right for you?” By shifting the customer’s focus from annoyance to problem solving, you can determine ways to negotiate a satisfactory solution. If the customer’s request cannot be met, provide alternative solutions that may alleviate the situation or placate the customer.
Let common sense prevail over standard operating procedure. Much of current customer service initiatives (especially with outsourced call centers) has devolved into standard operating procedures, carefully formulated decision-trees, and scripted answers that customer service agents dispense mechanically. To an upset customer, these automated responses often seem hollow and inacceptable. Deviate from the canned responses and use good judgment. Exercise the autonomy you’re granted over how you can respond to help solve customer complaints. If necessary, involve your manager.
Don’t need to give a “yes” or a “no” answer on the spot. If the customer asks for more than you’re able to accommodate, defer your answer by saying, “Give me a minute to consider all the options I have for you” or “let me talk to my boss and see how I can help you.” After weighing the pros and cons, give your answer and offer a reason if necessary. This way, even if the customer doesn’t get a “yes” from you, he will still appreciate knowing that you’ve seriously considered his appeals.

Idea for Impact: Body language, phrasing, and tone can have a big impact on angry customers who are on the lookout for evidence of compassion and want to be reassured that they have chosen a good provider for their product or service.

Find out What Your Customers Want and Give it to Them

April 22, 2016 By Nagesh Belludi Leave a Comment

“Nobody asked the dogs what they wanted”

Once upon a time, a pet-foods company struggled to sell a new dog food product they’d recently introduced to the market.

The company’s CEO called the department heads together to discuss why the new product wouldn’t sell.

The head of production said he’d done everything right; it wasn’t his department’s fault.

The heads of the sales, advertising, finance, packaging, shipping, and distribution departments had done everything right. None of them were to blame.

The CEO demanded, “Darn! What happened? Why won’t our new product sell?”

A junior staffer shouted from the back of the room, “Sir, it’s just that the dogs simply won’t eat our doggone food. You see, nobody asked the dogs what they wanted.”

Idea for Impact: Customer Focus Drives Company Success

Your research and development efforts will be successful only if they’re driven by a thorough understanding of what your customers want. Engage your customers. Pay close attention to their needs in every phase of product/service design including idea generation, product design, prototyping, production, distribution, and service. Remember Peter Drucker’s dictum that “the purpose of a business is to create and keep a customer.”

The Opportunities in Customer Pain Points

September 15, 2015 By Nagesh Belludi Leave a Comment

The Opportunities in Customer's Pain Points

Ellis Paul Torrance, the American psychologist who devoted his career to researching and teaching creativity, observed that “the process of sensing gaps or disturbing missing elements and formulating hypotheses” is pivotal to the creative process.

This is especially true of solving customer’s problems. Many innovative ideas are born of a reliable formula: prudent attention to and empathy with customers’ experiences, as well as applying resourceful imagination to solve customers’ pain points.

Many an innovator—either as a provider or as a consumer—develops deep empathy for customers’ pain points and sees an underexploited customer-need for convenience. The innovator contemplates, “This customer’s experience does not have to be expensive, protracted, hard, or inferior, as it is with the incumbent provider.” The innovator then uses his/her imagination to convert that understanding into a business idea with broad potential.

Consider the following cases of innovation that could be traced back to customer pain points:

Crispy Potato Chips. Legend has it that in the 1850s, Chef George Crum of New York’s Saratoga Springs created potato chips. A cranky customer at Moon’s Lake House frequently sent Crum’s fried potatoes back to the kitchen complaining that they were mushy and not crunchy enough. To appease the customer, Crum sliced the potatoes as thin as possible and deep-fried them. The customer loved them. Before long, “Saratoga Chips” became popular throughout New England.
Airtight Packaging for Potato Chips. When potato chips were first mass-produced for home consumption, they were packaged and distributed in metal containers, in which the chips would quickly go stale. During the 1920s in Monterey Park, California, Laura Scudder conceived of packaging potato chips in sealed bags. Scudder’s employees ironed wax paper into the form of bags and fill them up with potato chips. This airtight packaging not only kept the chips fresh and crisp longer, but also reduced crumbling. After the invention of the moisture-proof cellophane wrap by DuPont a few years later, chips were packaged in polymer bags. Then, nitrogen gas was blown in to prevent oxidation, extend shelf life, and prevent chips from being crushed as they were handled and distributed.

Chips taste fresher in Cellophane: DuPont Advertisement

Netflix. At the video rental chain Blockbuster, customers who were paying the most in late fees were also the company’s most prolific renters. Even as they continued to patronize Blockbuster, these customers vented their frustration to Blockbuster’s employees, as well as to other existing and potential customers. In fact, in the ’90s, almost $300 million or 20% of Blockbuster’s pretax profit came from late fees. In 1997, Reed Hastings, one devoted Blockbuster customer, was charged $40 in late fees on a VHS tape of the movie Apollo 13. Frustrated by his fees, Hastings started Netflix, a mail-distribution movie-rental service. As soon as the business caught on, Hastings eliminated late fees. Netflix grew quickly, drove Blockbuster into bankruptcy in 2010, and is now valued at $50 billion.
Google News. After 9/11, Google engineer Krishna Bharat and his teammates repeatedly visited ten to 15 news sites looking for a wide range of news reports. Using Google’s legendary “20% Time” policy that allows employees to spend one day a week on side projects and collaborate beyond their immediate teams, Bharat wrote an artificial intelligence software to crawl thousands of news websites, cluster news articles based on topics and keywords, and aggregate a summary. Other engineers at Google loved Bharat’s prototype software and joined the effort to build Google News.
Corning’s Gorilla Glass for Smartphones. By 2007, cell phone makers and consumers were frustrated with the screens on their cell phones. The plastic screens broke too easily when the handsets were dropped, and keys and other objects left deep scratches. Sensing a business opportunity, some engineers at Corning dug into their corporate archives. They dredged up the formulation of a super-strong, flexible glass, Chemcor, which was unsuccessfully prototyped for automobile windshields during the 1960s. The engineers spent $300,000 to produce a trial run of Chemcor and discussed the results with cell phone manufacturers. The resulting cell phone glass was called Gorilla Glass and was widely adopted by Samsung, LG, Motorola, and other cell phone manufacturers. Gorilla’s thinness, strength, and resistance to scratches became the defining feature of touch-screen operation. Later Gorilla Glass became a core component on the iPhone, smartphones, tablets, and other portable devices. For Corning, Gorilla Glass has become a significant revenue stream.

Corning's Gorilla Glass for Smartphones from Chemcor formulation

Uber. In 2008, during a snowy night on a trip to attend a tech conference in Paris, American entrepreneurs Garrett Camp and Travis Kalanick had trouble getting a cab. Garrett purportedly said in frustration, “Why can’t we just tap a button and get a ride?” Before long, during a brainstorming session on ideas for new startups, Camp and Kalanick thought of starting a taxi company with a smartphone app to summon taxis. Instead, they built an app to hail taxi-rides on-demand and opened their app for use by established taxi companies as well as by casual autonomous drivers. In 2010, they launched UberCab in San Francisco. Uber is now worth $50 billion and operates in over 300 cities around the world.

Idea for Impact: Transform Customer Pain Points into Customer Delight

Customer pain points are a consistent pointer to potential opportunities not least because customers are usually willing to pay a premium to have their frustrations with a product or a service resolved.

Discover what opportunities may exist in your customers’ pain points. Examine product- and service-features that your customers find inadequate, more urgent, unpleasant, frustrating, or otherwise troubling. Consider how you could transform those product- and service-deficiencies into innovative features.

Don’t just satisfy customers; delight them by becoming more sensitive to their problems and reducing or eliminating their pain points.

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