The Last Word: Customer Solutions Profit Ideas

I recently watched a business show on global expansion of the fast food industry that had some interesting observations about the differences in customer experience management approaches that are necessary in different cultures. They explained in detail how KFC, McDonald’s and Wal-Mart had expanded into Asia.

WalMart & McD in Xiamen - courtesy becklectic

Having worked with global clients, I know all too well that customer service expectations, standards and even monitoring programs must be carefully crafted to meet the specific nuances of each global market.

All to often we (as Americans) assume that because we do something a specific way that everyone else will adapt to (or adopt) our methods.

Cultural influences are incredibly strong and must be considered carefully and respectfully. As this business show demonstrated when it reviewed how the first drive thrus in Asia initially failed.

The Chinese culture did not adapt well to the concept of driving through to pick up their meal. They would order their meal at the voice kiosk, and then park their car and go inside to pick it up!

Since the goal of the fast food restaurant was to maximize throughput and delivery performance, they needed to find ways to gently guide and encourage customers to use the drive thru (a first step was to have the employee at the window lean out and dangle the bag so the customer could see their meal in front of their car and would then drive toward it).

They needed their customer experience management to integrate with their customers’ expectations.

Another example was that Wal-Mart needed to alter their merchandising model to include cooked poultry. This was an important staple to Asians. Their first attempt at offering roasted chickens was fraught with issues related to not enough product, too few staff, and overwhelming demand.

In fact, the lines were so long, so demanding that they pushed against the glass of the warming ovens and broke them!

Alterations to store design, merchandising, staffing and product preparation and delivery needed to be made to master customer experience management differences here as well.

The lesson learned here is that we are in a global economy and we need to carefully consider how to implement our services, or sell our products, in a considerate way that respects foreign cultures and unique market nuances.

The US has to be careful not to be knows as the “Bull in the China Closet” and just railroad into new territories. It won’t work and both the brand and bottomline will suffer. A carefully crafted approach to customer experience management is called for that honors these distinctions across cultures.

If businesses are nimble enough to adjust to this economic environment, and carefully listen to the feedback from their market, they have a better chance of survival these days.

I read great examples of this in a recent New York Times article “Across the Country, Restaurants Feel the Pinch.” This article discussed how restaurant management has observed “less exuberant” party atmospheres; that “people are on more of a budget,” etc.

These managers are making changes that reflect what they are hearing and observing. Some are introducing:

Even with all of this effort, restaurants are still seeing declining volumes and check averages.

I also read the article “Furniture makers shrink designs for smaller spaces,” on boston.com, which described how this is being done in the furniture industry:

“Even before these days of shrinking economic expectations, furniture makers were getting the message from consumers: small is the new black – all from watching retail industry, consumer purchase and real estate trends.”

Listening to these early indicators has allowed the furniture industry to react and now be prepared with smaller and less expensive furniture options.

Earlier this year “Shopatron” wrote about retailers who were changing their product delivery model to meet customer preferences (e.g. self-service at checkout, and the growing trend toward ordering online and picking the product up in-store).

The ultimate goal is managing through this difficult time in order to survive and stay in business. Ironically, this means the small businesses will be able to be the most nimble, but change needs to happen within every business.

Every business will have to find ways through their operational, marketing, loss prevention (including, unfortunately, rising employee theft), purchasing, development and customer services leaders to find the points of impact and flexibility in order to make the changes necessary to stay alive. Changes that meet customer needs and market demands.

Customer service dependent companies continue to scramble to cut costs, manage performance, streamline operations and fight to stay in business.

The discussions going on in C-Suites across the country will determine how these economic pressures translate into the consumer-facing operational and service delivery. Some companies will cut staff, overhead and service (e.g. training, key management positions, marketing programs, closing stores, etc.) expecting to drop immediate saves to the bottom line.

Unfortunately, some of these actions will bring short term financial relieve, but long term disaster. At the same time, change is in the wind from the consumer’s point of view. Every penny counts for them now, and with Social Media taking the world by storm, consumer opinions spread like wildfire. One bad customer experience discussed on killer Social Media sites like Twitter, Facebook or Yelp can have a devastating impact to a business.

Consumers will quickly see where “cuts” impact their experience and frustrations will mount (being laid on top of the stress of economic pressures consumers are under) which will lead them to evaluate their choices. They now have the means to vent that frustration using these very public Social Media sites with HUGE audiences.

Companies who continue to carefully manage their service delivery and manage the entire customer experience spectrum well, while managing costs, will attract these frustrated consumers and when the economic tide turns they will come out stronger and with a solid base of loyal business.

One of the reasons they will come out stronger is also because of the power that Social Media has. Just as negative experiences can impact a company, positive ones will also be the subject of Tweets.

Let’s all sing like the birdie sings?

Twitter bird by Themetoday

Many magazines (from retail trade magazines to general business press) have written about the customer service approach of the nation’s largest electronics retailer – Best Buy.

I continue to be impressed with their service model. They have created customer profiles for their store types – so that they can align merchandise with the needs of these profile types. They do not pay a commission. They train to the “Best Buy complete solution” which encourages gentle and added value suggestive selling of accessories, parts, etc.

They have valuable services in through their home entertainment and repair services programs. The return program is robust. And, they even match the pricing of other competitors. It turns out that what they really have operating here is a comprehensive Customer Experience Management program. What’s more, they have:

Trained to it.

Committed to it.

Delivered on it.

And they are staying the course with it.

I call this “Extreme Customer Experience Management.” Yet what really makes it extreme is the breadth and depth of the program and their commitment to it. The idea is far from extreme, it’s just good business!

Will they give in to pressures of this current economic environment and out of desperation change their service standards? I don’t think so. I think they have proven (since they collect and analyze all types of operational and sales data) that this level of customer experience management pays off.

As I have said many times before – it’s companies like this who will maintain customer loyalty – even when sales go down they will have a higher percentage of the available customer population. Assuming they keep their other costs in check, they could survive this time and come out stronger.

Retail monitoring agencies are predicting that “free shipping” could disappear due to raising fuel costs and negative impact of the economy on retailers overall.

Unfortunately, “free shipping” has become a crutch for companies who didn’t build broader loyalty with their customers. Free shipping is the equivalent of “two for one” and other coupon offers which have plagued industries for decades.

When industries introduce promotional offers to drive consumers, and ultimate sales, they are creating a relationship dependent upon this specific financial commitment. To become dependent upon a financially-based offer in order to drive market share and sales, is shortsighted and destructive to the overall company brand and customer relationship.

All too often these are tactics by companies who have lost sight of the deeper and more lasting customer experience management – particularly as it relates to customer service skills that attract trial and build loyalty.

The pizza industry has been plagued with this situation – now dependent on offers of “two for one,” “fast delivery” and “free add on products” they have become a low-loyalty, coupon-dependent industry – consumers will buy from the company with the best offer, at the time.

Unfortunately, we are in an economic period where price will become a key driver in consumer purchase decision making. The companies who spent time building high service standards and consistently delivered high quality customer experiences will not have to be as aggressive with the price-based offers.

Customers will remember the value of the service and the difference it meant. These companies will keep a larger share of their customer base and will most likely be the ones to manage through this economic period with relevant and meaningful offers that don’t undercut their margins completely.

If you’d like to learn more about how a golf management company with over 15,000 employees operating on 300 courses used customer experience management tactics to “drive” up their customer satisfaction levels check our case study: Improved Customer Service & Relationship Profitability. It’s a quick read and you just might get some ideas you can use.