Holiday season service lessons for retailers

 
Retailers typically take something of a hit to their customer service satisfaction levels during the holiday shopping season, due to the high volumes handled during that time. But Zendesk‘s latest benchmark report shows that customer service staffing was especially overloaded in 4Q13, with a resultant, oversized drop in customer satisfaction:

  • The sequential volume of tickets handled per agent was up 42% for 4Q13, compared to just a 34% increase in 4Q12; and,
  • As a result, customer satisfaction was down 6% sequentially in 4Q13, compared to just a 2% drop in 4Q12.

Zendesk compiles these results based on the service records of the 16,000 companies among the 40,000 customers of its customer service platform that participate in the benchmarking.
Inadequate anticipation of and preparation for demand
The trouble was that many retailers hadn’t adequately anticipated demand and ramped up staffing accordingly. According to Sam Boonin, Zendesk’s VP of Products, some large catalog-sales retailers are quite sophisticated in anticipating demand based on the mailing and return patterns of their catalogs, but e-commerce firms can have a harder time predicting demand.
So what can be done about it?
There are several ways that retailers can prepare to better satisfy their customers through the next holiday season:

  • Think strategically with a longer lead time. As Sam points out, service departments are not used to thinking strategically with the lead times by which retail marketing departments, for example, are already preparing for Christmas 2014. Better technological, tactical, and hiring solutions all need planning in advance.
  • Use technology to segment and triage service response. By targeting high-value customers, those nearing a subscription renewal, or other factors by which customers can be segmented for the level of support to be provided, retailers can minimize the damage if their staff and system experience an overload.
  • Test solutions in advance. Just as marketing departments have become adept at A/B testing of mailings, campaigns, and the like, service departments need to leverage the ability to similarly track trials before launching full-scale changes to their support processes.
  • Use technology to optimize specialization among agents. Increased efficiency can be achieved in part by tapping the specialized skills and experience of agents to handle returns, account inquiries, or other functions via the routing of tickets.
  • Stay ahead of customers’ rising expectations of service. Zendesk benchmarking has previously shown that customers are expecting seamless, omnichannel support across in-store, on-line and phone interactions. Leading retailers are upping the ante on customer service by providing unexpected value, such as personal-shopper, stylist-level knowledge and advice on products over the phone. Retailers as always have to balance costs with premium service, but the integration of an online knowledge-base and community with exceptional telephone support is enabling some retailers to manage costs while differentiating themselves with an old-fashioned level of service.

What we can learn from call centers: Humanize.

Call centers might be the front line in the war between traditional command-and-control approaches to management and the third way of work.

Alex Pentland found that the best predictor of performance in a call center he was researching was the level of engagement of the teams outside of formal meetings. It was the informal socializing that led to the best behavior, and so he arranged the almost unthinkable: instead of organizing their work schedules to optimize greatest numbers of staff on the phone, he organized to increase the number of workers on breaks at the same time, to increase socializing.

The result? As Pentland said,

It worked: AHT [average handling time] fell by more than 20% among lower-performing teams and decreased by 8% overall at the call center. Now the manager is changing the break schedule at all 10 of the bank’s call centers (which employ a total of 25,000 people) and is forecasting $15 million a year in productivity increases. He has also seen employee satisfaction at call centers rise, sometimes by more than 10%.

So, dismantling the ‘cut costs’ mindset leads to new sources of performance arising spontaneously from the social interactions of the staff formerly being treated like numbers in a spreadsheet instead of living, breathing human beings.

This can go even further. Jim Bush took over the Amercan Express service operations in 2005, as described by Rob Markey in HBR, and inherited the call center operations for the company. That was being managed with the same ‘by the book’ approach, including requiring staff to follow highly scripted responses to customer requests. He decided to through the book away, and dropped the focus on call time. He stated that the support representatives would set their own pacing, and — within clear limits — were empowered to help clients with all the tools at their disposal. He professionalized the job, calling them customer care representatives and providing them with business cards and other symbols of status. He began hiring for people with experience in retail and hospitality business instead of call centers, people with the right personality profile for making customer’s happy. He started paying higher salaries, to hold onto the best people. He upped training, and made clear the company’s doctrine to provide the best customer service within the restrictions of company policies.

Bush switched to a single metric: Net Promoter score — the percentage of callers who, when asked, said they would recommend American Express to a friend. And the company moved to a very fast feedback system, so that staff could see what they were doing well and where improvement was needed. And numerous opportunities were created to allow more training, both formally and informally between reps.

As Markey summarized the results,

Call-handling time edged up slightly at the very beginning, then dropped and kept falling. Likelihood-to-recommend scores doubled, indicating far more enthusiastic advocacy of American Express on the part of customers. Employee attrition was cut in half. Within just three years, the company saw a consistent 10% annual improvement in what Bush calls “service margins.” The company began to win the J.D. Power customer service award in credit cards year after year.

The bottom line is this: every part of the business needs to be made as human as possible, in order to gain the inherent leverage of social connection. That requires breaking the barriers between people, whether those are business processes, schedules, or policies intended to theoretically optimize the wrong metrics — like the length of calls — while missing the important ones, namely customer satisfaction and workforce turnover.

Netflix was 2011’s biggest loser in customer satisfaction

Netflix had a rough year ever since it announced a major price hike and an ill-advised plan to spin off its DVD-by-mail service. That’s led to a massive decline in customer satisfaction, as the once high-flying company saw its rating drop to its lowest ratings ever.

Siri plays a big part in iPhone 4S owner satisfaction

How much do you love your iPhone 4S? Chances are the answer is “a lot.” New ChangeWave research data shows owner satisfaction with the iPhone 4S is much higher than that of the iPhone 4, with 96 percent approval ratings and only 2 percent reporting dissatisfaction.

Apple still has little competition in creating happy customers

According to a survey to be released Tuesday, Apple is again the leader in computer owner satisfaction by a wide margin. Its lead in happy customers corresponds with an expansion of its overall business as well as the skyrocketing of its stock price. Coincidence? Not likely.

Want to be a gamification expert? Get certified

Gamification, that buzz word panned as hype by some, has increasingly won over companies, investors and even research firms like Gartner, which now predicts half of all companies will use gamification by 2015. So what’s next? How about gamification certification?

Apple Still Winning the Customer Satisfaction Game

A new survey measuring customer service among computer users was released today. To those who own a Mac, it probably won’t come as a surprise that Apple ranked highest. It was Apple’s best ever rating, though it wasn’t the only company to claim that honor.

iPhone Ranks First Again in J.D. Power Survey

For the second year in a row, Apple’s (s aapl) iPhone is at the top of the global marketing firm’s satisfaction survey for business users of smartphones, and the iPhone also wins among consumers, too.

jdpowers2009_business_survey

Based on a thousand-point scale, 1,148 business users were asked to rate smartphones on five weighted criteria: ease of use (29 percent); OS (23 percent); physical design (21 percent); features (16 percent); and battery life (11 percent). The iPhone scored 803, up from 778 last year, and far above the industry average of 724 for the 2009 survey. That number, 724, was also the score of the second place finisher, RIM’s (s rimm) BlackBerry. The rest of the survey, Samsung, HTC, and Palm (s palm) all scored below 700. Read More about iPhone Ranks First Again in J.D. Power Survey

Apple Customer Satisfaction: It’s the Experience

Apple (s aapl) has once again received top honors among computer manufacturers for customer satisfaction, and not by a small margin, either. The recent American Customer Satisfaction Index survey (PDF) has Apple beating their closest competitor by 10 points, something with which the creators of the survey are very impressed. Apple hasn’t always been so lucky. There was a period of time in the 90s when many were wondering if there was even going to be an Apple Computer anymore.

Since that time, though, along with the return of Steve Jobs, Apple has made slow and continuous improvements to the Apple experience, something that encompasses every part of owning an Apple product. From the quality of the packaging to booting OS X, Apple makes owning a Mac a different experience from just owning a computer. One of the most important aspects of owning a Mac is the quality of the construction. In my mind at least, plastic has been considered “cheap” for a long time, and metal considered “well built.” A lot of the toys from when I was a kid were made out of metal, and they lasted. Now they’re made out of plastic, and fall apart. Read More about Apple Customer Satisfaction: It’s the Experience