October 1998, Volume 1 - Number 1
An organization is only as “intelligent” as its customer-facing systems and staff
Customer Loyalty Is Contagious
Terry Moriarty
Catalog Shopping: Mixed Results
Judi Reeder of Knowledge Partners Inc. (KPI), related her recent experience with Lands’ End. Her husband, Earl, routinely shops at Lands’ End, so Judi contacted the store when she wanted to purchase his birthday present. Armed with only his name and Lands’ End’s toll-free number, Judi started shopping. The customer service representative (CSR) was able to find the Reeder account and describe all of Earl’s purchases. The CSR had access to information about the style of pants that Earl likes, the colors he preferred, and even that he has the pants altered to a specific length. Using the best techniques in consultative selling, the CSR was able to advise Judi in selecting Earl’s gift. They even negotiated a delivery time when Judi knew Earl would not be home, so she could hide the present from her unsuspecting husband. The Reeders represent the best type of customers: Customers who share positive experiences they’ve had with the companies they like.
Most organizations behave in a satisfactory manner when a customer initially places an order. The assumption is that the order will be filled properly, customers will receive the product or service they requested, and they will be “pleased and delighted” with their purchase. In this case, it is almost impossible to tell if the organization is customer focused (intelligent) or not. Only when something goes wrong do we see how intelligent a company is. So what happens when things go wrong? Does the company use customer-focused policies toward its customers when things don’t go according to plan? How does the organization behave when the customer is dissatisfied or complains?
Last year, I purchased some office furniture from the JCPenney catalog. One drawback of shopping through the JCPenney catalog is that you must make separate arrangements for delivery and set up. I arranged to have the furniture delivered by a third party who carried it up to my office. Every piece of the furniture, which consisted of three large bookcases and an executive table, was damaged. When I called Penney’s customer service line, the CSR said that it was my responsibility to deliver the damaged furniture to them because the company had no means to pick up the furniture. This solution was not acceptable. I wasn’t willing to pay for someone to remove the furniture, especially since the company I bought it from delivered furniture all the time. But that department was separate from the catalog department.
The JCPenney CSR could have held to the official policy, which stated that the customer is responsible for returning all defective catalog merchandise. However, she understood the special circumstances of this situation. The furniture weighed more than 700 pounds. In order to save the sale and satisfy her customer’s needs, she suggested that I talk to the manager of the catalog department directly; maybe some sort of an arrangement could be made. It was the best advice I could have received. The managers of the catalog and furniture departments worked out a solution through which I ordered new furniture that we then swapped for the damaged merchandise when it was delivered. By investing the time to concoct an innovative solution, these managers saved the sale and the customer. If they had followed the official policies regarding returned merchandise, I would have returned the furniture and purchased replacements elsewhere; instead, I am a grateful customer who has continued to patronize the store.
Now compare my experience with JCPenney to my recent one with Dell Computer when I tried to purchase a 6.4GB hard drive for my new laptop. The saga begins with my decision to purchase a new laptop computer. In recent months, vendors have introduced a powerful generation of laptops with 266MHz Pentium II processors and monster hard drives. I have been a very satisfied Dell customer for the last three years and have been through three Dell laptops. I was such a fan of Dell laptops that when my employer gave me another company’s machine, I sent it back, demanding a Dell. So when I needed another new machine, I really didn’t do any shopping, but went straight to Dell. I did ask whether a larger hard drive was available, however, and the salesperson informed me that a 4GB hard drive was the largest Dell had available. I need as much hard drive space as I can possibly get, so I was disappointed to learn that this information, especially when I knew IBM provides an 8GB machine.
Despite my disappointment, I purchased the system with the 4GB hard drive. A set of events then followed that significantly affected my level of satisfaction with Dell. First, the computer that was delivered to me was defective and had to be returned. In the meantime, I received a catalog from Dell that included my new laptop with a 6.4GB hard drive. I was shocked because it had been less than two weeks since I had asked the question “Do you have a larger hard drive available?” Each Dell computer is built to the customer’s exact specification, so I figured I could modify my specifications to include the larger hard drive. Dell’s salesperson said that this could be done, but because the machine being built was a replacement, not a new machine, I would have to coordinate with customer service. My hopes for a megamonster machine were dashed, however, when the CSR told me that Dell’s policy was only to build replacement machines identical to the original order. When I received that machine, however, I could send it back, wait up to 30 days to have my money refunded and then order the laptop I really wanted.
As an information consultant, I can’t afford to be without my computer for one day, let alone for 30 days. While the CSR was sympathetic to my plight, she said that Dell’s policy was consistent with the regulations in the mail order industry and I should have ordered the system correctly the first time.
At this point, I became creative. How could I get the hard drive I wanted while getting around Dell’s return policy? I decided to purchase a second hard drive, giving me a 10.4GB of available space; I’d just have to live with swapping the drives. Eager to implement my clever solution, I once again called Dell’s sales number. Unfortunately, that number only connected me to people who sold new machines, so I had to talk to “Spare Parts.” When I finally was connected to the spare parts person, I was told that my machine was too new to require spare parts, so the 6.4GB hard drive could not be purchased from him. What a dilemma: Dell had something I wanted to buy, but its business rules prevented it from selling it to me. Unlike the JCPenney situation, none of the Dell staff that I worked with was willing to create any solutions that might let them satisfy my request.
As a customer, I perceive that Lands’ End and JCPenney behave intelligently while Dell does not. If an organization wants to be perceived as intelligent, it must embrace several basic principles for customer relationship management. Customers want to have their questions answered correctly and consistently. If I ask two different people the same question, I should get the same answer. With Dell, I received different answers from the salesperson and the CSR when I asked whether I could modify the specifications for the replacement machine.
Customers also need a single point of contact. We want to perceive that all the organization’s staff is working as an integrated team to make our interactions with them as pleasant as possible. JCPenney demonstrated this ability with three managers working together to create and implement a solution, but one person acting as my point of contact who kept me abreast of the status of my request. Similarly, Dell’s technical service and customer service departments worked together in completing the return transaction. When the Dell technician determined that the machine had to be returned, he brought the CSR online, explained the situation to her and did not disconnect until I was satisfied that the CSR understood the situation. The problem with Dell, however, arose because I, as the customer, had to be the one who knew what number to call for each specific question I had.
In addition, customers want a willingness to go beyond our expectations and ensure that we are so satisfied that we will sing the company’s praises to others. Judi Reeder’s experiences with Lands’ End have been so consistently favorable that she is willing to volunteer her stories. JCPenney’s managers did such a good job in turning a stressful situation into a positive one that I’ve continued to purchase furniture from them.
Assessing Your Business Practices
An organization must assess its business practices to determine whether any barriers exist that may impede the ability to meet its customers’ expectations. The company should ask itself the following questions:
Are the procedures designed with the customer in mind? Customers aren’t pleased until their requests have been completely satisfied. Most business processes cross functional lines, but from the customer’s perspective, the process is a single, continuous activity, and businesses need to develop procedures with this customer perspective in mind. The customer knows nothing (and doesn’t care) about how you’ve organized your various experts into functional areas. Sure, the sales activities require a different expertise from providing technical support, but all these people need to work in harmony so the customer sees an integrated organization. As Janey Frazier and Gail McKenzie state in The Swimlane Handbook (Frazier Technologies, 1998), “A customer can have a wonderful ordering experience, but if defective merchandise is delivered, the customer will not be pleased with the experience.” If your business procedures force the customer to call different numbers based on the type of problem being addressed, then the customer probably won’t perceive your company as intelligent.
Do the people interacting with the customer have all the information available to answer their questions? When I placed the original order, the Dell salesperson didn’t seem to know that a 6.4GB hard drive even existed. However, we know that knowledge existed within some areas of the corporation, such as product development and marketing, because someone had designed and mailed the brochures. The salesperson could not tell me that a 6.4GB drive would be available in two weeks because no one made that information available to the sales staff.
Do your people have a “can do” attitude? Are they empowered to assess the situation and behave in a manner that keeps customers’ interests in the foreground? Each interaction with a customer is unique; business policy can’t possibly anticipate every type of situation that may arise. Often the people who are actively involved in the event are the most qualified to determine the best course of action. I believe that the situation with Dell is solvable. It has within its power the ability to get that 6.4GB hard drive to me, but so far, no one has been willing to bend the business policy to make it happen.
What are my competitors doing? Bob Giordano, another KPI associate, observed in the May/June 1998 issue of the Data to Knowledge Newsletter that “A basic tenet of quality business management is that the best way to ‘beat’ your competition is to ignore them. A company should expend all its effort on servicing its customers, and when it does that better than anyone else, the customers eliminate the competition for it. As the actual ‘hard’ products of the industry become commodities with little to differentiate one from another, customer decisions are increasingly based on service.” Currently, Dell’s laptop is not yet a commodity. Despite my frustrations with Dell, for my needs, it still delivers the best product for the price than any of its competitors. However, it has turned me from any extremely loyal customer into a disgruntled one.
The Role of IT in the Intelligent Enterprise
IT organizations hold the information resource power that is possibly the primary enabler of learning and intelligence. Our responsibility is to model our information management systems so we can use them to facilitate positive interactions with our company’s customers. A company can’t evolve into an intelligent enterprise just because it delivers the right information to the right person at the right time, however. The organization must also implement customer-focused business policies and procedures and motivate the customer-facing staff to constantly strive to exceed its customers’ expectations.
Terry Moriarty, president of Inastrol, a San Francisco-based information management consultancy, specializes in customer relationship information and metadata management. She authored Enterprise View (originally the Repository Report and later the Data Architect) column for Database Programming & Design. You can reach her via email at terry_moriarty@compuserve.com
