Most organizations confirm that customer service is one of their highest values. Without customers, there would be no organization! This is true. AND it is also true that the term customers covers pretty much everybody. In our lives, we are all customers served by multiple businesses and all workers who earn a paycheck serve customers of some sort. So, to narrow the topic, let’s apply a strategic lens.
A Personal Exercise: Self as Service Provider and Customer
First, think of customers you serve, or would like to serve if you are currently seeking a new role. Here are some key questions:
- What characteristics do your customers generally have? This could include demographics, personality or other factors.
- What are your customers’ most common goals? Why do they come to you?
- What are the underlying needs represented by those goals?
- Why do you think your customers come to you for a product or service instead of your competitor? You may also need to ask who your competitors are if that is not immediately obvious.
- Finally, do you like your customers? What is it that you do or do not like about them? What does this tell you about your alignment with or disconnection from them?
Now, think of yourself as the customer. List three organizations you patronize and truly value the way they treat you. It could be a cleaning service that comes to your home and has intimate access to all your belongings. It could be your grocery store, that you rely on to have necessary items for your household or children and that you realize you count on for a friendly smile as you’re checking out on a hard day. Or it could be your financial planner, who you have developed a relationship with for years and who knows your hopes and dreams.
Now ask these questions:
- What goal, problem and/or need do you have that leads you to a certain provider?
- Why do you choose the service provide you do? What characteristics do they provide that others may not?
- Finally, do you like your provider? What is it that you do or do not like about them? What does this tell you about your alignment with or disconnection from them?
Understanding Markets and Missions
People will have different answers to the questions above. For example, two acquaintances were recently in car accidents.
- One reported it to the insurance company using an App on his cell phone – the process is now playing out through that App. He has not yet talked to a person, but is getting what he needs, and is pleased with the service.
- The other reported the event to the insurance company by going into their local office and talking to the agent he has worked through for the past decade. He is also getting what he needs and is pleased with the service.
Incidentally, overall, they are paying about the same amount for the insurance. The App user gets a low price in return for the high-volume, online automated service. The agent user gets a low price because the agent shopped around for the best match for his needs, and gets good rates based on alignment and loyalty.
These are wildly different customer service approaches – offered to different customers in different ways. Even though they are ultimately providing the same service – insurance – the companies have different missions and markets.
This is a great and common illustration of how customer service still needs to be viewed strategically, like any other element of the organization’s operations. Without that, organizations can fail – either by not anticipating needs or responding to trends or meeting so many needs at such a low price, it becomes unsustainable. Managers and teams need to regularly evaluate and calibrate both daily needs and strategic investments in customer service.
When thinking about your desired missions and markets, both as provider and recipient, the following areas are helpful to consider:
- Goal or need met, or problem(s) solved: Why does the provider exist?
- Timeframe of service: Is it generally short-term or longer-term?
- What is being transacted: Is it a product or service or both? Are the offerings standardized or customized? What are the concrete technical features being offered?
- Type of service or product: Transactional or relationship-driven? For example, buying a car may be transactional if you shop around each time, whereas buying a house may be more relational, because you work with the same realtor each time.
- Knowledge involved: How dependent you are on provider for their tacit knowledge and experience
- Roles and processes: How do the provider and customer interact, and who does what? Getting a customized sandwich at my neighborhood market is different from online grocery ordering and delivery. This set of factors also includes convenience, availability and accessibility.
- Quality: The degree to which the product or service meets certain expectations. This may vary across people and can include reliability and trustworthiness.
- Price: Cost, Guarantees, Insurance, Payment Options
- Intrinsic, Values-Driven Factors: Such as environmental friendliness and social responsibility.
Different factors may apply to different need and people. This is why many different businesses can offer the same thing and survive. The combination of factors generally results in the company’s or brand’s overall reputation, as well as customer perceptions and emotional connection.
Recognizing Your Match with Customers
Analyzing the areas above helps you strategically and operationally make good choices for better focus. Here are some examples:
- The car insurance company that provides services through the App may invest in Artificial Intelligence (AI) to provide standardized responses faster. The company that provides more personalized insurance brokering services may invest in more agents in specific areas, or in negotiating broad discounts with providers.
- A local grocer may realize that times have changed requiring them to consider delivery services to compete with online companies. However, they value their long-term relationships, and specifically hire delivery people with personalities who offer the same personal touch as provided in the store and emphasize that personal touch over speed in their marketing.
- In a more public example, Netflix reexamined customer shifts and decided to stop sending physical videos to people and instead focus on streaming. While this may lead to some customers leaving, they may realize there are few competitors which makes it easier for Netflix to shift customers to the streaming service compared to the ease of them going elsewhere.
In general, it is helpful to simplify customer service distinctions into Long-Term Customers and Short-Term Customers:
- Long-Term: Generally, more relationship focused. Customer service for long-term customers often prioritizes building and maintaining this relationship. It facilitates more personalization, as organizations have more data and history, allowing for more personalized interactions. Customer service representatives can address customers by name, understand their preferences, and tailor recommendations accordingly. Representatives may also have a deeper understanding of long-term customers’ needs and preferences. They can anticipate their requirements and offer more relevant solutions. Together, these features, pro-active engagement, and regular feedback loops contribute to a level of trust and loyalty, supported through customized, high-quality service.
- Short-Term: Generally, the primary focus is on completing a specific transaction or addressing a particular need. The relationship is less developed than with long-term customers. Customer service for short-term customers may prioritize efficiency and speed to ensure a quick and seamless transaction or resolution of an immediate problem. Representatives may have limited information about short-term customers, which results in more standardized interactions, less personalization and limited follow-up. Here, the focus is more on meeting their immediate needs than on cultivating long-term loyalty.
This basic distinction also helps anticipate challenges in feedback when values collide.
Case Study in Market Positioning
Let’s use this example to consider a hospital emergency room. The point of an emergency room is to address a short-term need or problem and get you on your way back to a regular health care provider. There is generally not a lot of personalization. In some cases, the hospital may be able to access your electronic chart, but often, they are flying blind and have a full waiting room behind you.
A quick Google search reveals that many emergency rooms have low customer reviews – this is because medical problems are inherently personal, with a perceived need for high customization in service. That’s not, though, the services these places generally provide. This can lead to challenges in the hospital’s positioning in the market – even though the expectations for service aren’t reasonable, the resulting ratings can lead to a reputational hit.
One regional medical network addressed this challenge by directly describing when and why to use different types of services in the area. Every office has a poster that describes when to use your primary care office, when to use urgent care and when to use an emergency room – and why. The poster even notes the “downside” of each. While the primary care office may not been open over the weekend, they provide personalized care that the emergency room cannot offer.
This approach directs people to the right place at the right time for the right need – while managing expectation to protect their brand. They are also consistently rated as one of the best health networks in the region.
Good customer service involves great strategy and great leadership. Pryor’s live online Strategic Thinking and Planning provides a great foundation for this type of thinking and decision-making. Our one-day training seminar, Strategic Goal-Setting can also be brought to your organization to help you work through these dynamics.
Finally, Pryor offers a number of number of online and in-person trainings on Management and Leadership to help you lead through the strategic choices and ground-level implementation to focus your customer service work in the direction that best aligns with your strategy.