Good Customer Service Doesn’t Always Depend on Data Models

On the backside of marketing and customer service, you probably come across a lot of data and models. Maybe that is why when it comes to offering good customer service; we can often get caught up in what the numbers say we should do. That’s because we feel that if someone has taken the time to measure what qualifies “good customer service” or a “good experience” we should listen to him or her.

Personalization is the Key to Enhancing Customer Experience

This is the second blog post in a nine post series for IBM focused on the intersection of customer experience and technology, data and analytics. This post covers the First “R” of relationship and the concept of personalization.

Personalization is a popular term in business today. Before we go any further, we’d like to point out the irony. Business has always been personal. In the old world where individual artisans or merchants owned their own shops, they knew each and every customer who walked through the doors. Recommendations and personal touches were commonplace. Somewhere along the road to mass marketing…the concept was lost.

Today, we use the word personalization to describe our desire to go back to doing business on a personal level, but often forget it’s not about segments or cohorts. To personalize is to design or produce something to meet someone’s individual requirements. The key is the individual.

In our current landscape, focusing on the individual can be almost impossible for companies. Hindered by legacy technology and distributed workforces, personalization is difficult. But it’s the companies who overtake these barriers who tend to see impressive results.

Connecting the Dots

To accurately understand your customers, you must bridge the gap between online history and offline behavior. You need a view into the behaviors of your customer that goes beyond demographics and purchase history. This requires the ability to collect and present thorough and accurate information about individual customer interactions…and connect the customer context dots. The final step is delivering the data and insight – on demand and in context – to drive specific actions.

IBM Case Study: Fresh Direct

Founded in 2002 and employing more than 1,000 people, FreshDirect is one of the leading online grocers in the United States. With more than 600,000 customers in New York, New Jersey and Connecticut, the company has fulfilled 12 million orders since its inception.

The challenge: To drive sales and nurture loyalty, FreshDirect wanted to make its marketing communications more relevant and engaging – but first, the organization needed a better way to segment its customers.

The solution: FreshDirect implemented IBM solutions, enabling it to identify customer preferences on the digital channel and perform accurate customer segmentation.

The benefits: Today, FreshDirect reaches out with optimal promotions that are personalized for each customer, incentivizing incremental purchases and encouraging repeat business.

Read the full FreshDirect case study here.

Blue Goldfish Case Study: Erste Bank

Erste Bank is headquartered in Vienna, Austria. The bank uses analytics to determine the next best action for customers and analyze existing data that can recommend next best actions to customers via outbound and inbound touch-points.

Next best action analytics is driving impressive results for the bank. Erste makes these personalized offers through its call centers and online channels. They report a 95% success rate in determining the next best product for a customer using their data-driven approach. Getting this offer right is moving the needle for Erste as purchases for the next best product are up to 16 times above the average sale ratio.

Takeaway: The possibilities for enhanced customer experience are endless when you combine big data and little data into personalized offers.

Today’s Lagniappe (a little something extra thrown in for good measure) – here’s a video from IBM’s Amplify, an Ignite talk on infosense:

How to be Successful Online in 2017

Customer service is an interesting beast. Every time you think you have it figured out, it changes. It used to be that when people had a problem or a complaint about a service or product, they had to call a store and speak with a manager. Prior to that, they physically had to go back to the store where they made their initial purchase. Nowadays, many customers prefer to avoid the hustle and bustle of stores–they enjoy the ease of being able to go online. In 2017, the shopping path that customers use will continue to change, so it’s best to make sure you’re moving the same direction as they are.

Amazing Technological Advances Since the 60’s

We are entering a new era driven by technology.  That being said, we didn’t get to this inflection point without innovation over the last 50+ years. Here are just a handful of the major breakthroughs over that time:

1961 – The silicon chip was invented by two American electrical engineers, Jack Kilby, and Robert Noyce. Their creation revolutionized and miniaturized technology and paved the way for the development of the modern computer. Until the chip was invented, most electrical devices were constructed using large, power-hungry vacuum tube technology. The development of transistors partially solved the problem, but these still had to be wired to circuit boards. Kilby and Noyce hit on the solution almost simultaneously, combining separate components in an integrated circuit made of a semiconductor material. Intel founder Noyce, working in Palo Alto, California, favored silicon and can thus be credited as the man who put the silicon in “Silicon valley.”

Reducing Friction in the World of Insurance

In a past blog, I mentioned that orders and payments are two ways that a company can reduce friction. Keep in mind however that countless other companies are doing new and interesting things to eliminate friction for their customers. In fact one, insurance startup Oscar differentiates itself on reducing friction.

Take the Initiative to Target the Right Customers

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It’s a theme throughout my book, Blue Goldfish. The customer experience begins with leveraging data and technology that is available to you. Consider the following example: The year was 1981—the same year the first Space Shuttle rocketed from the Florida coast. A few weeks after STS-1 launched in April a sixteen-year-old Michael Dell, then a high school student, took a summer job selling subscriptions for The Houston Post.

Purple, Green, Golden, and Blue: Pal's is a Goldfish Paradise

Burgers, hot dogs, fries, and milkshakes. It’s the quintessential backyard American food and a staple of Americana fast food. But these establishment are a dime a dozen, aren’t they? Sure, there are the Chick-fil-A’s of the world. But isn’t it nearly impossible to carve out your own identity in this sea of sameness?

Pal’s Sudden Service, a double drive-thru fast food restaurant chain with 26 locations in Tennessee and Virginia, is certainly up for the challenge. Pal’s believe that an emphasis on its people, speed, customer service, and quality is what truly sets them apart.

Here are five quick facts about Pal’s Sudden Service that demonstrate that the proof is really in the pudding (or their milkshakes for that matter): 

  1. An astonishingly low turnover rate with the at the assistant manager level coming in at 1.4 percent, the hourly staff at 32 percent, and has only lost seven general managers in 33 years. In comparison, most fast food chains have an average turnover rate between 50-150 percent with management and hourly employees aggregated together.
  2. An average of 18 seconds at the drive-up window, and an average of 12 seconds at the pickup window to receive the order for a grand total of 30 seconds. That’s four times faster than the second-fastest quick-serve restaurant in the country.
  3. Pal’s makes a mistake only once in every 3,600 orders. That’s nearly ten times better the the second most accurate fast food chain, Chick-fil-A.
  4. 1,100-square-foot buildings accruing right around $2 million per year in sales. That’s just over $1,818 per square foot. The iconic Shake Shack and Chipotle restaurant chains come in at $387 and $250 in comparison, respectively. Remember, it’s not how high your sales are, it’s how much you bring home to the bank.
  5. One of two restaurant chains that has ever won the Malcolm Baldrige National Quality Award. This prestigious award caused Pal’s to create the Business Excellence Institute (BEI) as a way to share best business practices with others. The other restaurant winner of the Baldrige award is a BEI client, Mighty Fine Burger.

By now you’re probably very impressed but this all begs the question, how does Pal’s do it? 

Here are seven differentiators that Pal’s has instituted that you can learn from:

  1. An emphasis on great people – Pal’s has developed and fine-tuned a screening system to evaluate candidates that includes a 60-point psychometric survey, based on the attitudes and attributes of Pal’s star performers, that does an unprecedented job of predicting who is most likely to succeed.
  2. Top-notch training – Once Pal’s selects its candidates, they put employees through 120 hours of training before they are allowed to work on their own, and must be certified in each of the specific jobs they do. Pal’s also has assembled a Master Reading List for all the leaders in the company and it includes 21 books that must be read. Every two weeks, the CEO, Thom Crosby, invites five managers from different locations to discuss one of the books on the Master Reading List.
  3. Ongoing training – Pal’s believes that all leaders are trainers and educators. They also believe that people educate by their attitudes, their behaviors, and by their focus. At Pal’s, every leader needs to have a coaching and training target every single day. Management and leadership asks their employees at random, “What’s your target for today?” Every single employee has to have a person and a topic every single day.
  4. Technology – Pal’s has a proprietary “training tracker” software system that manages all employees. The software quizzes employees at random every single day whether it’s their first day on the job or they’ve been there for 10 years. The software goes through the basics, the most critical parts of the operations with employees. Management then conducts an observation to make sure the employees are still adhering to the standard 100% without exceptions.
  5. Development of leaders – Employees who have scored 100 percent on four re-certifications are eligible to become coaches within their restaurants and help their colleagues consistently develop and adhere to their standards. According to the CEO, “We are looking to get people to this mastery level.”
  6. A commitment to staying top of mind – Pal’s recognizes that all restaurants are chosen from a defined mental rolodex by customers. and believe that customers only ever think about 2-10 establishments. This is the reason why Pal’s created their website to have a unique and inspiring thought of the day, local movie theatre showtimes, and the CEO answers every single question through the contact form. This is what keeps people coming back to Pal’s site and provides a useful service to the communities Pal’s serves.
  7. A focus on culture – According to the CEO, “Sometimes I get that itch that maybe it’s time to step up and expand faster. But we want to make sure that we hand off all the cultural pieces to each store. I see operations that outgrow their cultures. They can’t pass on their culture so they go from a really great concept with great people to weaker and weaker operations and people who don’t understand the origin of the culture.”

What’s preventing you from instituting world class principles just like Pal’s? Does your business do anything similar? Leave a comment below.

Today’s Lagniappe (a little something extra thrown in for good measure) – Be sure to check out this incredible overview about living your mission from the president of Pal’s BEI, David McClaskey.

Reducing Payment Friction Through Subscriptions

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There’s no doubt about it– not having a good method in place for collecting payments can often lead to friction. Luckily there are many ways that companies can reduce friction through payment. One such was that companies reduce friction is through subscription programs. These programs often provide convenience to customers at a lower price point than they’d pay purchasing frequently used items one at a time.

Our favorite example is Dollar Shave Club. Not only have they done an excellent job of marketing via youTube, but they’ve also developed into a business with a 615 million dollar valuation.