Lean Service

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Have you ever doubled your investment in capacity only to find it eaten up by an unexpected increase in demand? Customer service and call center managers have this happen all the time. More equipment, more agents, more capacity don’t seem to show up in better customer experience performance.

Why does this happen? Over the next few blog posts we take a look at the use of “lean philosophy” within the customer service environment.
A friend of mine made a simple point: “if you want to reduce traffic jams don’t build bigger roads”. He explained that it actually encouraged more people onto the road and it quickly filled up with more cars.The supply in turn created more demand. Adding more capacity does not automatically give you the ability to do more.

Lean Start-Ups

Right now everyone is abuzz with the term “Lean Start-Up”, a phrase popularized by Eric Reiss based on some of the early work of Steve Blank. The breakthrough thought was that although agile development principles had been adapted by technical teams for some time, projects continued to fail because they had not defined the customer problem correctly. Companies don’t fail because of IT problems they fail because of customer acquisition problems. Steve Blank knew that:

  • The best place to test a product is in the marketplace with real, paying, target customers
  • Seeing the interaction between the customer and the product leads to faster feedback loops, which are then integrated into the product
  • When you have a number of target customers who want this product as it is now delivered, you achieve “product-market fit”, i.e. an addressable market.

The job of the development team in a lean start-up is to launch a Minimal Viable Product (MVP) of product features, functions, and properties that are barely acceptable to a new customer. Then you iterate, iterate, iterate until you have a real addressable problem that the customer cares about, and that your product solves better than anyone else. They key is that you have good interactions with the users of the product and that your platform is built for iteration.

Lean Service – Lean Communications

lean service

John Seddon of Vanguard uses the example of a local authority that was building endless call centers but making very little impact on the customer’s experience of their services.
The problem was that an agent would take the call and then a field service person would turn up at the property, and often, would leave the premises without the problem being fully fixed. Every call after that, every reschedule is termed “failure demand”. Failure demand adds no new value.

By looking at what it takes to get the job done first time the entire flow of activities takes on a different character. Imagine John says “if the customer called you and you let them pick a time that suited them? Imagine if you turned up at this time? If you fixed the whole job when you were there? Then customer service results would go through the roof wouldn’t they? Yes they would. If you are not examining the customer context and looking at the problem in terms of flows, you are missing the real drivers of both cost and customer satisfaction.

It also meant that the field service personnel had to be able to pull on the right resources when they were on-site; those plumbers, carpenters and other tradespeople would have to be available to assist. As a system “The Jobs To Be Done” were getting done, getting done for a lower total cost, and actual customer experience of the repairs and maintenance service had been vastly improved.

Some Thoughts

  1. Getting to the root cause of a problem is essential for resolving issues early and cheaply
  2. Companies don’t always count the down stream costs of not getting it right first time
  3. When you don’t manage the interaction points for outcomes you will drive more inbound calls, and this is failure demand
  4. You cannot deliver Customer Experience if your systems are designed to deliver internal efficiencies
  5. Achieving a change of orientation from “stocks of people” to “flows of people” is a key change in your organisation culture

In tomorrow’s post, I’ll take a look at how we did this at Portsmouth Hospital, and the day after we’ll take a look at some lean service principles.

Communications Enabled Business Transformation (CEBT) & CEBP: Some Thoughts

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(Again, these are my own thoughts and reflections and do not necessarily reflect those of the company I work for).

“All the new thinking is about loss. In this, it resembles all the old thinking” (Robert Hass).

Cisco came out with some very simple, deceptively simple, thoughts on what CEBP is and what their concept of Communications Enabled Business Transformation is. In short CEBP is about taking latencies out of business processes and increasing the process and business velocity. At VoiceSage we have been calling this “removing the lags and drags”.  CEBT has a wider frame and includes more “Collaboration frameworks”.

“Integrating communications and collaboration with business processes offers opportunities for hard and soft benefits, savings and business improvements. The methods for modeling and developing these applications have matured along with unified-communications solutions”.
—Bob Hafner, Gartner, “Driving Communications Efficiency Into Your Business and Processes,” October 2010

Cisco say that they are looking to extend the Cisco CEBT cloud with other Cloud Service Providers through Cisco’s Secure Network Interconnections, essentially forming an extended service delivery hub. At the moment Cisco extends the business processes with Collaboration solutions such as Webex, and soon with it’s next generation enterprise architecture Quad. But the key phrase above is “Service Delivery Hub”, a place where you can combine Cisco and non Cisco systems and processes “to get something done”.

This Service Hub theme was really brought home yesterday when Cisco announced the availability of AppHQ, where all Cisco partners will be able to publish applications that can be used through the new Cisco tablet the Cius (as in “see us” one would presume). I haven’t been a big fan of the very idea of the Cius because I have a bias against hardware solutions to software problems, and trying to solve problems outside the browser. Cisco want’s to offer a totally secure, policy driven, regulatory compliant solution set from server to screen. They want to be Apple for the Enterprise. To achieve this they want to control the device and presentation layer. In fairness, it is an Android Operating System which means it may end up being very useful for Google Enterprise Apps an can co-opt the growing Android ecosystem. If they make that ‘easy to use”, I could be interested.

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Now, this is where a different theme emerges. Writing over the last few weeks JP Rangaswami, Chief Scientist at Salesforce.com is putting some thoughts together on what the role of “Chatter”, an “enterprise conversation platform”  might be in creating more context for people’s decision making through unstructured, informal communications. I think there is something fundamental going on here and it involves how we communicate in order to get things done.

We all operate in organizational environments where formal processes “proscribe” how things should be decided upon, and completed. But very often “the real” decisions are made informally, maybe even emotionally, and are then encoded as “formal decisions”. How we come to understand what information, what situations, what changes are important to us is a refining process that often boils down to “that’s how we do things around here” and “it’s common sense”. But it is also down to an enterprise version of the “personal internet bubble”, i.e. we only experience the news through our personalized content access, and who we interact with.

The simple implication of this understanding is that there are many “formal sign offs” and “informal touch points” that go into getting a process completed in reality. Even in the formal sign off process, getting a simple document emailed to the next person in line in order to get “sign off’ can suffer significant delays as your email gets stuck in folders, stuck in spam, or just buried in the flow of what has to be done.  Thus the growing popularity of such systems as Sharepoint from Microsoft, and Google Docs. You don’t share the object, you share the conversation around the object.

Document Management Systems, Content Management Systems, Corporate Intranets all struggle to understand how better to manage the flow between People, Processes, and Things (things being real physical objects & social objects). But really we often only need to know what’s changed from their previous state.  We need to understand when the system that connects people, processes and things changes its state in a way that is meaningful to us, and to the job to be done (JTBD). Let’s be honest here, how much of our day is dictated to us by what comes through our email tray? It is the interruptions, and the interruptions in our interruptions, that create havoc with our planning and our scheduling. It effects what we all actually get done during the day. This is not an insignificant point. No matter how good your task planning is, the pattern of interruptions is significant dark matter.

How Do We Know The Change State of a Process?

I may be varying slightly from the intention’s behind the model quoted by Cisco, but this is how I see these issues “showing up” in everyday business.

Data Latency : do you capture data, the right data, and is the data real time, accurate, and relevant? Can you “get at this data” or is it trapped in other enterprise systems, or worse, in a partners enterprise systems?

Insight Latency: can you see the connections between various factors that influence “the jobs to be done”; do you have the people, skills, and tools on hand to generate these insights?

Decision Latency: do you know who the right people to connect with are in order to get a decision made and can you connect them effectively; as an organization can you literally “decide on things quickly”?

Action Latency: can you move decisions into actions coherently and quickly. In another life, we used to call this “mobilization”: sequencing actions in a coherent manner.

If you can imagine any supply chain in terms of these kinds of latency you begin to understand that for even the very well codified, formalized and well managed supply chain system, it is responding to the changes in the plans that matters, and collaboration modes are the way we bridge these latencies.

I imagine that the following situations are familiar to many of our clients:

- You have been performing Net Promoter Score questions all day long, and at the end of the week presenting the reports to senior management. You only question a few hundred people from hundreds of thousands and often with no accurate measure as to how long it was since the original customer service interaction occurred. Your collecting narrow, biased, and late data.

- You have undertaken a series of training programs, invested in new work systems, and yet the customer satisfaction levels just don’t seem to be going up. Are you capable of generating actionable insights into why this might be occurring? In short can you find “new levers”? In one client example, VoiceSage was able to trace customer satisfaction measures back down to specific customer-agent Interactions. The increased granularity and the fact that someone “ran the experiment” generated the insight that certain agents would not nominate a customer for a NPS survey if the interaction just ended wasn’t positive. The Net Promoter Score was thus ‘artificially high” and thus its effect was not coming through in other metrics.

- You receive a call telling you that you will be required to run a new contact campaign but you have not got enough agents to adequately service it; (mismatch of demand and supply). Where can you pull on these additional resources and will it be worth it given the value of the new campaign? Do you have all the details you need to make this decision and are you authorized to you make it? If you can’t make this decision within an adequate time frame, the decision latency becomes crippling.

- You are not receiving the planned level of confirmations that customers will be present on premises to receive and sign for a product delivery. Given calculations, everyone in the last 90 minutes of the day now has a 50% chance of not being properly serviced.  Now that you know this what do you do? Now that you know that there is a 50% chance that a few hundred customers are going to be badly left down you need to cancel some deliveries, apologize and compensate customers, and find new ways to go “that extra mile”. You know what the policies are, what the implications of each decision are, so how long does it take to organize and implement?

Conclusions

So what has Cisco and Salesforce.com got to do with all this “process stuff”.

Communications and Co-ordination need to occur around structured processes in a planned way, with approved processes that are policy compliant (security, compliance, legal, customer service policy based, etc.). You have to know in detail how these processes should work, how processes are inter-related, and how automate within this domain (By the way, this means that processes should be visible, searchable, and in some way “interrogatable”). To pull on the right resources at the right time, to get the right outcome, takes a lot of organization. This thinking has found an early example in Tibbr 3.0 (worth clicking on to read more).

But technology alone is probably less than 20% of your total success factors. The rest is down to management, culture and people. In an utterly simple example you know it when you meet someone that is genuinely happy to help you out.  That’s down to the person, and the culture, and the management that creates and maintains that culture. In nearly every ‘bad customer experience” I’ve had it was the technical and business systems that locked both the employee and the customer out of a happy and successful outcome. Where I’ve had really happy interactions I haven’t had cause to comment on the technology or the business rules. They had become invisible. The interaction did what it was supposed to do, usually no more than that, and I had as little work as possible to do myself close out that interaction.

I think this is going to be how we experience very many organizational processes. Processes have to be easy to interact with, demand ‘less work” on our part to complete within the interaction (i.e. no follow up calls, no hand overs, no you need to sign in on the portal when you’ve called customer service). Interesting to note that recent research in HBR “Stop Trying To Delight Your Customers” July/ Aug 2010,  points to the fact that customer failures loose you customers, but great service doesn’t create customer loyalty. So one way of looking at the cost of process fails is to look at the cost of customer churn.

I am beginning to think that maybe the manner and the degree with which companies embrace such “conversations around business processes” will be driven by culture. In another recent HBR Article The CEO of Salesforce.com explains that when their internal teams were trying out chatter pre-launch he was intrigued and realized that the many of the people that were actually knowledgeable and important were not known to management, and many of these people had no idea as to what senior management were thinking about. Mark Benioff thus broke open the “internal conversation” at Salesforce, and a $10bn company was re-connected to its mission and objectives with everyone moving in the one direction. That’s a little bit of the T in CEBT. Not every company will have a CEO like Mr. Benioff.

The openness of the conversational platform reconnected people because the formal organization and formal rules had not captured the true influence channels. This is one promise of “social enterprise”. How people connect to information, processes, and each other.  I think a long tail of Enterprise Apps will be able to reach those places that big procurement can’t reach, and make these connections happen in a fluid manner, but within an overall “policy container”.

Cisco and Salesforce.com are on the same continuum just coming at it from different ends. And to add a final twist, Cisco UC is available as a hosted solution within Salesforce.com. If you are a Verizon Enterprise customer, you can get Cisco UC as a Verizon hosted solution, and access your Salesforce.com as a hosted solution, through the one secure infrastructure. Things are getting pretty cloudy (sic). The technical challenges at the enterprise level are disappearing very quickly leaving the higher level issues of Latencies, Culture, and Business Transformation. We believe that these trends will inevitably foreground an engagement approach based on delivery of business outcomes, which you’ve guessed it, we’re passionate about here at VoiceSage.

Product Returns In Retail

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It doesn’t sound like a very interesting problem. Unless of course you are the person responsible for managing this process. What has tipped my interest in this subject is the association with the question of Deliveries and looking at all the elements around a delivery process, and of course other processes that are impacted by your desire to create a great delivery experience.

So what happens when you get this great product to the consumer, and then they decide they don’t really want it any more? Well, they get to return it that’s what.

How often do people return products? Turns out quite a lot. A reasonable sized retailer would have to call up to 100,000 a month to say “Hey, we have your stuff. It’s in the warehouse now. Your account is being credited over the next 3-5 days“. Let’s say that even this short message from a call centre agent would cost you around £1.50. So for an average sized retailer you are now spending £150,000 a month on telling customers “we’ve got the stuff you returned”.

It was with some interest that I then read that in Internet Retailer this week that a new consumer rights directive aimed at changing some elements of returns policy could cost retailers £8.8bn in 2012.

  • Change of mind period increased to 14 days
  • Refunds to be made in under 14 days not 30 days

Returns across the EU currently cost etailers about €5.7bn (£5bn) a year, based on a premise that 90% of retailers are domestic and 10% are cross border in the EU.

I have to say, I knew it was a big problem, but not how big.

And so too where there are large numbers, there is fraud. In the USA would you believe that a figure of around 8% of all returns or 1% of the retailers turnover? Stunning figures here from the National Retail Federation of over $17bn cost of returns and abuse of returns:

“NRF estimates for return fraud dollars are up 45.4% over 2009, while total return dollars are only up 4.5%, meaning that return fraud is increasing at a rate almost 10 times faster than returns as a whole”

VoiceSage is helping a range of retailing organisation communications enable processes that deliver great customer experiences around these questions.

Update On Delivery

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Following the last post on “The Delivery Problem” in Retail environments I was blessed with a number of comments and conversations, so I thought I’d do a quick update.

(1) A Dell Executive alerted me to the fact that certain online retailers enable you to pick a delivery slot yourself and if it’s not one of the more popular times you get your delivery “free of charge”. I am sure that ultimately this smooths out the logistics by reducing “peak requirements” and thus reduces the overall level of resources required.

(2) Tristan Bishop (@KnowledgeBishop) had a similarly themed blog post on the unattributed costs to the customer from waiting.  Tristan goes on to suggest 8 actions that you should undertake in the call center if you are to value the customers time.

(3) I’ve made reference to the Genesys Global Survey of Customer Attitudes Towards Self Service (2010) before, but GetSatisfaction have a great Infographic if you need a slide for a presentation that show “you need to reach out to customers” and “remove long waits” to  “deliver good service”. And it’s worth it.

And Now, for a little bit of CEBP Innovation: Post Denmark enable you to text a keyword to their shortcode and you receive back a unique number which you write on the envelope. Yes, it’s your stamp. (source:  the ever cool Springwise)

From Time To Timing, From Stocks to Flows

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Timing Is Everything

I’ve been reading a number of reports lately on the “problem of waiting” and more specifically what it costs us. Before I go “all internet geek” on this let me say that there are some very real world practical examples of where businesses are built around “not waiting”. It’s called the convenience industry. Indeed when we buy online it’s no mistake that we like the ease of purchase, the thrill of buying, the anticipation of knowing that it will actually be here with us, delivered tomorrow morning. Buying is thus also “a delivery experience”.

For some products like books and entertainment products that are “letter box deliverable”, the “Free Delivery” offer is compelling. It has the benefit of not requiring the recipient to be on-premises to receive and sign for the delivery. Free delivery also removes one of the obstacles to purchase in that a “fixed price” in your shopping cart is more comfortable than an “Additional Shipping and Currency Exchange Charges May Apply” type message. Great marketers know that what we are talking about here is “the customer experience” and sometimes just knowing for sure what you are paying, and when you will get it, “are the experience”.

It thus surprises me that companies (people) don’t look to micro-manage delivery to a greater extent, especially smaller retail companies.

So What Are The Costs of Waiting Times?

A recent report by TOA Technologies Cost of Waiting Survey points to some pretty dramatic “costs of waiting”:

  • 41% of Britons who wait switched or canceled a service because of long wait times, resulting in an average loss of £377.90 per customer per annum.
  • 53% of customers complained to friends about the company, and 16% posted their complaint online. 75% claimed they would recommend a company for an on-time arrival.
  • 17% of Britons have refused to accept or canceled a product because the delivery/service was late.
  • Britons wait on average 4.05 hours for each appointment. They are most dissatisfied with communications and utility companies.
  • 39% have taken a day’s holiday to wait in for a delivery or service appointment.
  • Customers estimated it costs them £457.20 annually in lost time and wages.

I really love that final point: what does this mean to the customer, what are the costs to them, and what are the hidden or “pushed out” costs of waiting?  This is what Umair Haque call’s the potential for “Constructive Advantage“.

Why Are We Waiting and How Do We Feel About That?

Well many of us clearly feel that the people we are buying from just don’t “give a damn about our time”, they make us wait, because they can. Just one hour late and 24% of customers would feel angry, and 27% would phone in (which by the way means that only 3% are phoning in ‘not angry’, yikes). It’s not any different in the call center or in the retail store; just ask yourself how long you would wait on the phone while it rings and no-one answers, would you wait 65 seconds for instance? how many calls are abandoned by the caller before they were picked up by your customer care agent or store assistant (would 13-15% surprise you? Report Here.)

Many reports for the Retailing sector (Snow Valley Retail Delivery Experience Report, 2011) point out that the customer expectation is shifting: Now is the new Norm. Yet many companies are still taking a reactive stance to customer communications. According to the Report:

  • Over 60% of email inquiries are taking more than one day to answer. Nearly 80% of retailers send a dispatch email but surely that should now be 100%? (note: how many customers can pick up their email via mobile?)
  • Use of SMS for pro-active management is still below 5% or 1 in 20 retailers. That is the way of the future: more customer updates, more reassurance, more advice if there is a problem, more visibility.

Availability and Delivery are of course key to “having it now” and this is enabled through supply chain infrastructure. In our experience of working with retailers they “mostly know” when customers are likely to initiate an inbound call, it’s nothing that should surprise you. Customers want to know that their order has been received, that it has been shipped, that’s it’s on its way, that it’s on time, etc. Yet many retailers seem to take the view that “fire and forget” is a good experience? Of course the great retailers are using automated outbound calling to deliver personalised, time sensitive, and dynamically capable updates to their customers.

Not using outbound notification (along with other factors) creates the need whereby customers need to pick up the phone and initiate contact themselves. This leads to higher inbound call volumes because a certain number of these customers are always going to ring in to find out “where their stuff is”.

Give The Customer A Menu of Delivery Options

Most products are available through different suppliers. The question for the customer is often where can I get it with the highest degree of convenience; which way can I literally “get my hands on it” the fastest?

  • Same Day Delivery
  • Next Day Delivery, Guaranteed
  • Delivery To Multiple Addresses
  • Free Delivery
  • Free Delivery When Order Is Above A Certain value
  • Did The Retailer Offer Ability To Add “Specific Instructions”
  • Did The Retailer Offer Gift Wrapping?

So the question I have for you is when was the last time you stood back and thought about the different potential delivery options your current, or future potential customer might value? Are there ways you could create differentiation from competing services that are meaningful to certain customer types?

Looking At Delivery As An Online Offline Experience

One part of this delivery mix is the instore pick up option where you make your choice online but pick up locally instore, yet only 19% of UK retailers offer this option. For those with bricks and mortar presence surely this option is common sense, and an integrated online offline approach is desirable if difficult to implement in reality.

Instore experiences and face to face relationships still matter that’s why your high street retailer (should be) taking such care in this area. Face to face communications with customers and how well they are delivered is a key customer satisfaction driver. If you’ve ever been unfortunate enough to have hired a “rude customer service” person, you know all about the damage that this person has done to your reputation. I wonder what more could be done to create “great experiences” for parcel pick up? I’m pretty sure that by looking at this in detail you would be surprised at the amount of areas where there is room for improvement, like “where is my nearest store“? and “where’s the pick up counter“? etc.

One of the reason’s I like Apple is the Apple stores. They know their products, they have the information I need to get things done, they are friendly. It hardly seems like service at all.

Some Conclusions

Customers value ease of use and convenience. Yet there does not seem to be very much innovation going on in terms of delivering a great delivery experience from the customers perspective. Great retailers know that a delivery promise is a compelling differentiator. Amazon Prime give you a fixed cost ‘all you can eat’ delivery price point, which is fantastic for the Heavy User. Some leading retailers are now offering “1 Hour Delivery Windows’ where they promise you delivery within that time slot. That enables the customer to make some plans around this window, and “save the rest of the day”.

So here are some questions for you with regards making great delivery, a delivery point:

  • What would a one hour delivery window promise mean to your customers? How could it change their “total experience”?
  • Would a certain sub set of your customers be totally wowed by this? i.e. does it mean more to some than to others?
  • Would these subset of customers become more “evangelical” or “vocal” in their support of you by speaking of you to others?

Was this post useful to you at all, did it stimulate any thinking? Why not let me know? You can email me at paul.sweeney@voicesage.com or follow me on twitter at @paulsweeney