© 2005 Stamats, Inc. - 1 Move Over Nordstrom: Building the Best Customer Service Program on the Planet Dr. Robert A. Sevier Senior Vice President Stamats,

© 2005 Stamats, Inc. - 1

Move Over Nordstrom: Building the Best Customer

Service Program on the Planet

Dr. Robert A. SevierSenior Vice President

Stamats, Inc.Cedar Rapids, IA 52406

(800) [email protected]

Southern Polytechnic State University


We are an award-winning, nationally-recognized higher education research, planning, and marketing communications company. Our mission is to help college and university

leaders achieve their most important marketing, recruiting, and fundraising goals through the creation of customized integrated marketing solutions.

Research, Planning, and Consulting

Services Image and competitive positioning studies Tuition price elasticity studies Alumni and donor studies Marketing communication audits Recruiting audits Campus visit audits Integrated marketing plans Brand clarification and communication plans Recruiting plans Strategy development and strategic plans Board presentations Project-specific consulting

Creative Services

Recruiting and fundraising publications Web site development Virtual tours Direct marketing strategies (search, annual fund) Targeted e-mail marketing systems Advertising Creative concepting Content management systems Dynamic news and events calendars Message boards/chats

About Stamats

• Offices: Cambridge, Richmond, Portland (OR), San Francisco, and Cedar Rapids


The Big Questions1. When you hear the phrase “customer service” what is your immediate

reaction?

2. What is customer service?

3. Why is customer service important?

4. Why should faculty and staff be concerned about service?

5. Are students the only customers on your campus?

6. Why do so many customer service programs fail?


QWhat are the indicators that you might have a customer service problem?


Caveat emptor

Cave emptorum


The customer is not always right, but the customer is still the customer!


• Only three planes will crash each day at O’Hare

• Only two million documents will be lost by the IRS this year

• Only 22,000 checks will be deducted from the wrong bank accounts within the next 60 minutes

• 18,322 pieces of mail will be mishandled in the next hour

• 1,314 telephone calls will be incorrectly routed by telephone companies in the next hour

• 12 babies will be given to the wrong parents in the next hour

• Only 493 financial aid applications will be mishandled today

If 99.9 Percent Is Good Enough, Then…


What Is Customer Service?

• The ability to effectively manage your institution’s moments of truth

• Underpromising and overdelivering

• A willingness to go the extra mile

• A recognition that you only have one chance to make a first impression

• The golden rule


QWhen have you experienced greatcustomer service?

When have you experienced bad customer service?


• A moment of truth is when someone comes in contact with the college and has an opportunity to form an initial impression of the institution that is positive, negative, or neutral

• Every college has thousands of moments of truth each day—thousands of opportunities to make positive, negative, or indifferent first impressions

• One goal of a campus-wide service program is to manage these moments of truth

Moments of Truth

Where are you most likely to find positive moments of truth on your campus?What about negative moments of truth?Q


Why Is Customer Service Important?• Why students choose a college:

– Availability of a specific major– Location– Safety– Cost/financial aid

• Why do students leave?

– Financial reasons

– Because of how they are/were treated

• Currently, about one-third of students attend three or more colleges while earning their BA


Important - continued

• Consider how much colleges spend to recruit students:

– A private 4-year spends about $1,562 to recruit a freshman (under 1,000 students = $1,968)

– Average public 4-year spends about $560

– Average 2-year spends about $225

• Reflect on retention:

– Institutions are hemorrhaging students

About 2.3 million students will enter higher education this year

About 1.6 million (57%) will leave without receiving a degree

Over the past 10 years, the average retention rate has actually fallen and will likely continue to drop


• Students who have a bad experience at an institution are very likely to tell others

Importance of Word of Mouth

• When a customer is satisfied they tell four to five people

• When a customer is dissatisfied they tell nine to 12 people

• Seven of 10 dissatisfied customers will stay IF you solve their problem in their favor

• 95 percept will continue as customers if you resolve in their favor on the

spot

Importance of Word of Mouth

• When a customer is satisfied they tell four to five people

• When a customer is dissatisfied they tell nine to 12 people

• Seven of 10 dissatisfied customers will stay IF you solve their problem in their favor

• 95 percept will continue as customers if you resolve in their favor on the

spot



• How much does a dissatisfied student cost?

– Lost TRBF dollars

– Decides to go elsewhere after a negative visit

Lost annual fund dollars, lost word-of-mouth support, lost legacies

• More than just students

– Poor service contributes to poor morale of faculty and staff– Poor service undermines your image efforts

Average four-year public for TRBF: $11,354; up 7.8%

Average four-year private TRBF: $27,516; up 5.6%

*Incorporates an 8% increase in annual tuition and does not include other campus spending

Public Private

Fresh $11,350 $27,500

Soph $12,258 $29,700

Jun $13,239 $32,076

Sen $14,298 $34,642

.5 Sen $7,721 $18,707

Total $58,865 $142,625



Increasing Interest in Transferring

More students will transfer more often because:

– Start out at less expensive institutions and transfer to better-known

institutions

– Increased use of articulation agreements and acceptance of credits

– Little stigma assigned to transferring

– Students will have an educational portfolio that summarizes each

person’s education from different settings, locales, and providers


Students and Customer Service

• Most students are very satisfied with what happens in the classroom – Fairly consistent concern about advising (except advising)

• Instead, students tend to find the most problems with nonacademic areas: – The business/accounting office– Financial aid– Registrar

• What really bugs students:– They didn’t get what they thought they were promised– Someone was rude– No one went out of their way to help them– No one listened to them– An employee projected a “can’t do” attitude


High Maintenance Families

• First generation college• Immigrant families• Helicopter families• Entitlement families• Special interest:

– Students with disabilities

– Home schoolers

– Commuting students

– Parents of athletes

Source: Pamela Horne


Counselor Role in a Greek Drama • Counselor as

– Messiah

– Scapegoat

– Gatekeeper

– PR agent and sales

– Oracle

– Messenger (in the Greek tragic sense)

Source: Patricia Rust-Kovacs


Beware the galloping psychology of entitlement


Rated on a 1 to 9 scale1 = Poor9 = Highly favorable

Student Perceptions of Support Services

0

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2

3

4

5

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9

Students - continued


Exactly What Partof the Word “NO”

Don’t You Understand?


For a student (or any other employee for that matter) to be successful, he or she must emotionally connect with a person

within the first three to six weeks.


• The most important person on the campus. Without students, there would be no need for the institution

• Not a cold enrollment statistic but a flesh-and-blood human being with feelings and emotions like our own

• Not someone to be tolerated so that we can “do our thing.” They are “our thing”

• Not dependent on us. Rather, we are dependent on them

• Not an interruption of our work but the purpose of it. We are not doing them a favor by seeing them. They are doing us a favor by giving us the opportunity to do so

The Student Is…


• Service is a people business– The most important element of service is people– People are the targets of good service– People are the purveyors of good service

• Understand the four basic needs of people: – The need to be understood– The need to feel welcome– The need to feel important/valuable– The need to feel comfortable

Remember:All contacts with an organization are a critical part of our perceptions and judgments about the organization. The

quality of the people contacts, however, are often the most lasting.


Evaluating Your Customer Service Program• You must regularly evaluate how you are doing:

– Service audit– Customer feedback program– Employee feedback program

• A service audit identifies and measures the observable and measurable key indicators of quality:– Is retention up?– Is employee absenteeism down?– Is turnover reduced?– What other measures should we consider?

• A customer feedback system is an organized and deliberate way of finding out what your customers think about the job you are doing:

– “How’d we do?” – Keep in mind that most customers don’t complain, they just leave


How Might You Measure…

• Faculty impact on customer service?

• Bookstore impact on customer service?

• Food service impact on customer service?

• Academic dean’s impact on customer service?

• Advancement’s impact on customer service?


QWhat would happen if we would organize retention data by faculty

advisor?


• Strategies for gathering customer feedback

– Get out and talk with current customers

– Query former customers

– Organize focus groups or surveys

– Use suggestion boxes

– Read their bulletin boards and newsletters

– Respond rapidly to all customer complaints and requests

– KEY: As evidence of your commitment to customer service, move oversight from the low end of the organization to the high end


Campus Customer Service Climate Assessment Scale

Low High

1. What is the level of employee commitment to organizational goals? 1 2 3 4 5

2. How much group cohesion and interaction exists on our campus? 1 2 3 4 5

3. To what extent do employees help and support one another? 1 2 3 4 5

4. How much opportunity is available for employees to develop new skills and knowledge? 1 2 3 4 5

5. How much involvement and influence do employees have in decisions that affect their job? 1 2 3 4 5

6. To what extent are employees rewarded and advanced on the basis of ability, performance, and experience? 1 2 3 4 5

7. To what extent can employees make progress toward career goals? 1 2 3 4 5


Low High

8. What is the level of positive employee/supervisor relations as reflected in fairness, honesty, and mutual respect? 1 2 3 4 5

9. To what extent does the organization treat individuals as adults, with respect and dignity? 1 2 3 4 5

10. How much confidence do the employees have in management? 1 2 3 4 5

11. To what extent do the physical working conditions provide a supportive work environment? 1 2 3 4 5

12. What is the level of economic well-being among employees? 1 2 3 4 5

13. How positive are employee attitudes toward their jobs? 1 2 3 4 5

14. To what extent do positive working conditions reduce job stressin your work environment? 1 2 3 4 5

15. To what extent does management and union (if applicable) recognize mutual goals and work well together? 1 2 3 4 5

Assessment - continued


Score interpretation:

15-24 You’re in danger 25-39 Nonsupportive40-54 Little support 55-70 Supportive 71-75 Very supportive


The Three Most Important Ingredients in Customer Service

• Empathy

• Intuition

• Follow-through


1. Obtain commitment from the top

• The administration must send a clear and unequivocal message

to all employees that customer service is critical to their survival

– Part of the campus culture—from the president to housekeeping

• Check your motivations and level of commitment

– Commitment is spelled $

– Commitment must be long term

– Commitment must be public

Components of a Customer Service Program

Everyone is someone’s customer


Institutions Committed to Customer Service...• Are attuned to the needs of their students, clients, and customers

• Are obsessed with making a positive impact at every moment of truth

• Have managers who keep policies and procedures in perspective

• Have managers who support front-line employees in every conceivable way

• Hire people who can and will exercise judgment

• Encourage employees to bend rules in order to resolve problems

• Are more interested in fixing the problem than in affixing the blame

• Keep their promises

• Have initial and ongoing orientation programs

• Reward and fire for quality

• Realize that everyone is someone’s customers


2. Designate a champion, someone who will serve as the catalystfor customer service:

• Powerful

• Respected/trusted

• Knowledgeable about basic customer service skills

• Effective champions always have sponsors

Program - continued


3. Listen to your customers. Conduct research to determine:

• Which programs, processes, and services are most important to your clients

• How your clients perceive those services now

• Whether, after implementing changes, those services are improving

Program - continued


After the first data were collected (the baseline), the institution implemented a series of strategies to improve performance in key areas. The

second bar shows data collected two years later.

Changes in Perceptions of Quality

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9

2002

2004


Pay-off Matrix

• As you struggle with prioritizing your options it is easy to get lost in the minutiae

• Juran’s the “vital few and the trivial many”

• Don’t major in minor things

• Make sure whatever you do is sustainable

– Expectation management


4. Examine policies and procedures that inhibit service

• Policies are often designed to protect the institution from a few students rather than being designed to serve the vast majority of students who are honest and sincere

• A surprising number of service problems are caused by nonsensical or irrational policies, procedures, or rules that prevent employees from responding quickly to customers’ needs

Program - continued


5. Within reason, and based on your research, define quality from the perspective of the client/customer

Program - continued

QHow do traditional-age students describe quality?Or adult student?

Or faculty?Or donors?


Based on Our Research …

• Students (of all ages) and donors expect:

– Respect

– Responsiveness

– Situational awareness

– Produce/service knowledge


• Apathy

• Brush-off

• Coldness

– TDC

• Robotism

• Rulebook

• Runaround


6. Set service standards and be prepared to enforce them

• Are your standards something that all employees can believe in and support?

– Defendable

• Can you communicate your standards and service program in concrete terms?

• Can you dramatize a service program to employees at all levels?

Program - continued


Welcome to Nordstrom

We’re glad to have you with our Company.Our number one goal is to provide outstanding customer service.

Set both your personal and professional goals high.We have great confidence in your ability to achieve them.

Nordstrom Rules:

Rule #1: Use your good judgment in all situations.There will be no additional rules.

Please feel free to ask your department manager, store manager,

or division general managers any questions at any time.


7. Select and train employees to work for the customers

• Employees at all levels must be concerned about customer service

– Understand its importance

– Understand the costs of poor service

– Understand their role in customer service

– Understand the resources that are available to them

– Understand their range of authority

– Understand what will happen to them if they do not willingly serve customers

Program - Continued


Hiring for Service• INC. magazine says a mis-hire costs an organization about 7x the salary

expended

• It is often more effective to hire for service than to train for service

– It generally takes months to improve a behavior


The Interview• The key to hiring for service: the interview

– Ask general, open-ended questions that do not suggest a particular answer

What do you consider most important when working with people?

Describe how you would handle an angry or difficult customer

What have you done in the past that reflects how you enjoy people?

What job accomplishment do you feel particularly proud of?


• Less traditional open-ended questions:

– Under what kinds of conditions do you learn best?– Give us some examples of times you've been criticized. How did you react,

and why?– If you could structure the perfect job for yourself, what would you do, and

why?– How would you describe your previous supervisor?

• Nontraditional interpretive questions:

– What is your interpretation of success?– What would you like to be doing five years from now?– What concrete steps are you taking to make sure this happens?


• A high motivation to serve others

• Enthusiasm

• The ability to listen

• A customer-sensitive orientation

• Flexibility

• A high degree of initiative—1% better each day

• A positive attitude

• Resilience

• Confidence in themselves and their job

• Unflappability

• Did I mention the ability to listen?

Look for Individuals Who Consistently Demonstrate


Key Customer Service Skills and Attributes• Know your job

• Remember the power of first impressions

• Watch your attitude

• While it may be chic to be cynical, it is also selfish and childish

• Make your appearance count

• Exercise tact

• Communicate effectively

– 93 percent of all meaning is conveyed without words

– Watch your V3—verbal, visual, and vocal


Dealing with an Angry Customer• Remain calm

• Let them vent

• Show empathy

• Restate the problem

• Find agreement with the customer

• Slow things down

• Get on with the solution

• Words to avoid: - Can’t - But- Won’t - Policy


Listen well

– Be prepared– Limit your own talking– Turn off your feelings– Concentrate– Put yourself in the shoes of your customer– Ask questions– Don’t interrupt– React to ideas, not the person – Don’t jump to conclusions– Listen for overtones– Take notes– Summarize– Let them know what you will do

Listening is more than waitingfor your turn to talk.


People don’t change that much.Don’t waste time trying to put in what was left out.

Rather, try to draw out what was left in. That’s hard enough.


Where Do Managers Spend Their Time• In the first column, write down the names of the employees who report

to you in descending order of productivity

• In the second column, write down the same names in descending order of the amount of time you spend with them

• Draw straight lines joining the names on the left with the names on the right

Productivity Time

1.

2.

3.

4.

5.

6.

1.

2.

3.

4.

5.

6.


QHow many of you would describe the training you received when you began your job as:

Great Good Not so good Really poor


8. Empower employees

– Training is not enough—employees must be encouraged and rewarded for extra effort, imagination, and initiative

– Their errors must be tolerated when their well-intentioned efforts fail to work out as planned

Program - continued


How Empowered Are Your Employees?

1. How empowered do you, as an employee, feel you are? What about other employees you work with?

2. Do empowerment levels shift and change within different departments in the organization? Do empowerment levels vary greatly throughout the institution?

3. Are managers more empowered than front-line workers?

4. What specific programs could be developed to improve the feeling of empowerment among employees?

5. If the level of empowerment is high, how will that affect the way you do your job?


Empowerment Grid

Clear Objectives

Clear Objectives

ResourcesResources EmpowermentEmpowerment AuthorityAuthority


Nine Strategies for Creating Trust

• Trust is the oxygen of a customer service team

– Have clear, consistent goals– Be open, fair, and willing to listen – Be decisive– Support all team members– Take responsibility for team actions – Give credit to team members– Be sensitive to the needs of team members – Respect the opinions of others– Empower team members to act

O2O2


9. Develop a reward and recognition system for front-line staff that is

attractive and meaningful

Program - continued

QWhat are some creative and inexpensiveways to reward front-line staff? Faculty?


10. Remove people who do not or cannot perform

• Relocate

• Terminate

Program - continued


You will never change an organization’s culture unless you are willing to change how people are evaluated and how they

are rewarded!


Kaizenis

theability

to make small

improvements in

processesand

productsevery day.

Sometimes the best way to achieve long-lastingcustomer service is one small step at a time.

Kaizen


• Share everything

• Play fair

• Don’t hit people

• Put things back where you found them

• Clean up your own mess

• Don’t take things that aren’t yours

• Say you’re sorry when you hurt somebody

• Live a balanced life

• Learn some and think some and draw and paint and sing and dance and play and work every day some

• Take a nap every afternoon

• When you go out into the world, watch for traffic, hold hands, and stick together

• Milk and cookies can solve any problem and make it a great day

Lessons I Learned in Kindergarten (Robert Fulghum)


Sources• Albrecht: At America’s Service

• Beckwith: Selling the Invisible

• Bennis: Organizing Genius

• Byham: Zapp! The Lightening of Empowerment

• Carlzon: Moments of Truth

• Chaleff: The Courageous Follower

• Cowan: Small Decencies

• Klose: Breaking the Chains: The Empowerment of Employees

Documents

© 2005 Stamats, Inc. - 1 Move Over Nordstrom: Building the Best Customer Service Program on the Planet Dr. Robert A. Sevier Senior Vice President Stamats,