Entertaining Customer Demands

SAN FRANCISCO This past March, when MSN Money (money.msn.com) asked readers to share their worst customer services experiences via online posts, the result was 3,000 irate responses within 24 hours. Realizing it tapped a nerve, the site commissioned a survey to tally its first Customer Service Hall of Shame—U.S. companies ranked by the percentage of people who said their service was poor.

Topping the list were big brands with heavy-duty advertising budgets: Sprint was No. 1, followed by Bank of America, Comcast, Time Warner Cable and AT&T. In each case, more than one-fourth of the customers surveyed said the company’s service was below par. In Sprint’s case, a whopping 40 percent of customers disliked doing business with the company. The Hall of Shame, conducted with pollster Zogby International, broke on April 26 and quickly spread around the Web, no doubt negating some of the $4 billion these five marketers collectively spent in measured media in the U.S. last year to tout their value to their customers.

An earlier survey, released last year by Harris Interactive, reported that nine out of 10 people had a bad customer experience in the previous 12 months. Sixty percent of the 2,500 polled consequently canceled an order for a product or service. Their top complaints: no live agent to talk to, inability to find the information they need and being put on hold by service reps.

These and other polls and forums are reinforcing a message brands can’t help but hear: Customer service, thanks in large part to the power of the Internet, counts more than ever.

And as proved by the JetBlue fiasco—when customers were stranded, sans food, on flights that never took off on Valentine’s Day—no brand is invulnerable to the notoriety that can accompany bad service. The episode, dissected on blogs and elsewhere, even brought down the airline’s high-flying founder and CEO David Neeleman.

Blogs, online video, e-mail and mobile phones—not to mention company and brand ratings on sites like Amazon and Yahoo—give the average consumer an immediate, interactive soapbox on which to share how Company X let them down. In today’s consumer culture, a humorous video on YouTube featuring a cable repairman sleeping on the job gets far more attention than the well-established American Customer Satisfaction Index from the University of Michigan (see sidebar)—an index that due to its business press-oriented nature can’t compete with the Web.

This ability of the consumer to share bad brand experiences has the potential to create a sea change, say experts, in the way companies approach and interact with buyers. Perhaps the most important development is how customer service is being taken out of the realm of operations—e.g., telephone call centers—and placed in marketing departments, where a host of new strategies are being created to assist, advise and then follow up with customers via digital technology and in-person staff long after a sale is made. The goal: To turn customer feedback from an embarrassment into a strength.

At Forrester Research’s Marketing Forum in April, analysts called on marketing executives to push their companies to become customer-centric instead of product-centric by using better service and customer interactions to enhance the brand.

“Customer service is most often seen as an issue of how fast you can handle calls or respond to e-mails, so it usually reports to operations,” explains Forrester analyst Peter Kim. If marketing departments were in charge of service, he argues, “they would focus on solving customer problems.” Kim advises marketers to move money from TV ads to fund marketing that enhances customer service and other experiential-based marketing.

Customer service was taken away from the marketing department about 25 years ago “because marketing wasn’t doing its job,” Sylvia Reynolds, Wells Fargo CMO, told the forum audience. “But marketing people can bring back to their companies a deep understanding, affection and respect for the customer.”

In some industries it matters more than others. Per a Forrester survey of almost 5,000 consumers in Q4 2006, customers said service is most urgent in banking, health insurance, hospitals and travel services. This means, according to Forrester, marketers in those industries will find better service is the primary way they can differentiate themselves.

Brand-oriented customer service goes far beyond the typical warren of cubicles filled with operators answering complaints. Marketers and marketing experts see best practices being organized into three key steps: Learning what matters most to customers; managing sideways; and using technology to make life easier, not harder. These sound easy, but for today’s product-centric, compartmentalized companies, they can be deceptively challenging.

What They Want

Jonathan Tisch, CEO of Loews Hotels and author of Chocolates on the Pillow Are Not Enough, says marketers have to understand what constitutes value in consumers’ minds. “It’s not only about pricing. Customers can say their experiences at Target and at Saks each offer true value,” he tells Adweek. And expect to be surprised by what you learn, Tisch adds. Research by Loews, one of the leaders in brand-oriented customer service, revealed that guests worried about travel with their pets almost as much as they do travel with their children. So the hotelier recently instituted “Loews Loves Kids” and “Loews Loves Pets” programs with gifts and special services that are automatically given to people who arrive with children or animals. (The programs are featured in ads, Web site and promotional materials.) Travelers also worry about eating too much trans fat on the road, which is why the chain extended its customer service to include a ban on trans fat in its food offerings last year.

“Services like these are best if the customer doesn’t have to ask,” Tisch says.

Joe Tuza, vp of Del Monte pet foods, another leader in the area of customer service, says they seek to understand the pet owner at “every angle, not just their purchasing habit.” In a program accelerated late last year, company reps go to pet owners’ homes to watch them play with and feed their pets. The company also monitors pet-oriented online chat rooms and set up unbranded online communities. Del Monte invites people to online and traditional in-person focus groups. The company uses the pet owner insights to provide support and advice on branded microsites.

Orbitz’s CMO Randy Wagner says she and her team “listen with a different ear,” meaning they strive to understand the emotions behind the words when they talk to customers. Insights are gleaned from two-hour discussions with customers and then confirmed with metrics to establish “what’s important in people’s lives and how our brand fits in,” she says. When Orbitz learned that customers want to better control the time they spend at the airport, it began providing up-to-date information on flight schedules via e-mail and, more recently, cell phones. The company also learned that if customer service info was presented on the Web site in the company’s signature blue, it was easily overlooked. So it branded its suite of customer services as OrbitzTLC in January 2006, gave it a bright orange logo and made it the cornerstone of the company’s TV and online advertising campaign that broke this month. Its tagline: “Don’t you deserve a little TLC when you travel?”

Agencies can help with the learning process. Since marketers immersed in their brand tend to think they already know what matters to their target, “advertising agencies and other outsiders can give them the fresh perspective they need on how to better listen to and respond to customers,” says Forrester’s Kim.

Manage Sideways

While most companies are divided into departments—marketing, IT, finance, etc.—the customer’s life rarely meshes with those divisions. For this reason, both Orbitz and Loews make cross-department collaboration part of marketing managers’ job requirements and pay package.

At Orbitz, Wagner and the company’s COO meet with customer service managers for an hour each week to make sure the service department meets business and service objectives. And senior marketing execs meet weekly with the CIO “to make sure the tech department will build what marketing wants,” she says.

At Lowes, staff members who interact with customers are required to have a sense of the entire hotel so they can take ownership of any customer problem. “When any situation turns bad for customers, how you recover is more important than how you got there,” says Tisch. Recalling a recent stay at another hotel when the room he reserved was not ready and the air conditioner didn’t work in the replacement room, the worse part, he says, was how the staff shuffled him from person to person.

Examples of cross-managing cited by Forrester are Southwest Airlines, which cross-trains about 80 percent of its staff each year, and Four Seasons, which makes sure every employee spends a night at the hotel as a customer.

Agencies and other outsiders can assist in this integration, serving as a cultural bridge between departments, say experts. For example, Orbitz includes its agencies, Mullen, MediaCom and TPN, in sessions on how to use technology to provide better service.

Make Technology Serve

The new media and technology are potent tools, but the real question is, how do they create better service for customers? Loews’ Tisch says phone and online technology can be efficient and convenient, but they need to be harnessed. For example, an automated system should “always have a default option for the customer to talk to a live person.”

Del Monte positions its Web sites as trusted advisors that offer guidance to dog and cat owners. This year, the marketing department has been translating consumer insights into high-interest topics, such as caring for your pets’ health and teeth, choosing the best dog breed for your home and reassuring pets terrified of thunder. The sites “also give us a chance to address myths about our industry, such as that pet food is full of fillers,” says Tuza. “The Web was the first tool we called on to communicate details about the pet food recall.”

In the e-commerce space, customer service is expected to be innovative and tech savvy, adds Orbitz’s Wagner. Cell phones and PDAs provide quick access when customers want to book a room or flight en route, and alert customers about bad weather, air congestion, transportation strikes and civil disturbances that could impact travel plans. Another step: instant access to a live agent.

“We need to redefine customer service in Internet terms. It’s high-tech, high-touch service,” says Wagner.

New research bears her out. A Forrester survey of 221 marketing technology decision makers and influencers released in April found that their top goal is to improve customers’ experiences, especially online interactions. The “Marketing Technology Adoption 2007” report says marketers plan to improve Web site navigation, the online contact process and the way customer interactions are managed. Voters in the Customer Service Hall of Shame would agree it’s not a moment too soon.