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Service Encounters Of The Third Kind
by Ron Kaufman
Loyal Relationships of the Future...
are Built by Your Actions Today!
What makes a company successful over the long, long term? What
characterises the service relationship between companies and
customers who do business together for decades, even centuries?
How can your company stay close to your customers even as times
change, technologies change and expectations keep steadily
rising?
What can you do to ensure that your company's future offers are
relevant and valuable in the market? One step you can take is to
explore your customers' future needs and interests through
cultivating "Service Encounters of The Third Kind". But first,
let's look at Encounters of the First and Second Kinds.
Service Encounters Of The First Kind
In "Service Encounters of the First Kind", your company
approaches the customer with the most basic of all customer
service questions: "What do you want?"
Your customer replies with equal simplicity, "I want your product
"X" by time and date "Y" at your listed price "Z".
Your company's priority and service focus should be clear: "Get
the customer's order right, and get it right the first time!"
Campaigns to accomplish this objective are widespread and easy to
spot. "100% Right!", "WordPerfect", "Zero Defects" and "Six Sigma
Quality" are all examples of slogans companies use to focus their
workers on getting the basics right, first time, each and every
time.
In this kind of "Encounter", breakdowns in the service delivery
system are bad news. They are to be ferreted out, analyzed,
problem-solved and, most of all, eliminated. The service system
must be streamlined and standardized in every possible way.
Companies that consistently succeed in this undertaking
(delivering your product "X" by time and date "Y" at your listed
price "Z") earn their reputations in the market as steady and
reliable suppliers. This leads, as it should, to customer
satisfaction.
Training in these organizations is focused on product knowledge,
technical skills, thoroughness, accuracy and adhering to proven
procedures.
Marketing consists of powerful efforts to "push" proven products
into the market. In these companies, the customer is "sold to".
Looking into the management mindset of such an organization, we
frequently find a keen interest in cutting costs, increasing
volume and decreasing cycle time.
This "need for speed" is important. Competitors are often closing
in with similar products, shorter delivery schedules and
identical or even lower prices. In this competitive situation,
profit margins are paper thin and companies can only thrive
through consistent increases in volume.
So far so good. But if we look into the staff mindset of such an
organization, we often find a different way of thinking
altogether. Frontline service employees, focused on "getting it
right the first time", trained to "carefully follow all
procedures" and encouraged by management to achieve "more and
more results in less and less time" find themselves answering the
phone, opening the mail or meeting the next customer in person
while thinking to themselves, "I hope this customer is not a pain
in the neck!"
After all, customers with questions and unusual requests usually
take more time, lead to more errors and can result in a general
slowing down of the whole system.
No wonder so many customer requests for anything "out of the
ordinary" are met with the retort: "We don't do it that way",
"It's not how our procedures work", or in popular Singaporean
shorthand, "Cannot".
Service Encounters Of The Second Kind
In "Service Encounters of the Second Kind", your company
approaches the customer with a question that goes beyond standard
offers of "X" product at "Y" time and "Z" price. Instead of only
the basic question "What do you want?", your service
representative poses an additional, and more inviting question:
"How do you want it?"
Faced with such an open ended question, the customer naturally
replies, "I want it special. I want it... my way."
Your company's priority and service-focus changes. You deliver
what your customer requests, just the way your customer requests
it! Special products, unique combinations, odd-hour deliveries,
different schedules for pricing and/or payment; all are
challenges for your service team to understand, and accomplish.
With these "Service Encounters of the Second Kind", breakdowns in
the service delivery system are to be expected at first, and then
overcome. Responsiveness and flexibility become your prime
objectives. The organization focuses on being adaptable,
accommodating and open to changing requests. Your service system
improves, not through vigorous efforts to standardize, but
through your willingness and commitment to customize!
Companies that succeed in this challenging undertaking (giving
the customer what he wants, when and where he wants it, and in
just the way he wants it) earn their reputations in the market as
quick, responsive and open to ongoing change.
When a company is recognized for welcoming and fulfilling unique,
often "one of a kind" customer requests, the result is not only
customer satisfaction, but a well-deserved and valuable
reputation for customer delight!
In these responsive organizations, training programs include
active listening, creative problem solving, and attitude building
activities to "find a 'yes' for the customer" instead of rolling
out the standard company "no".
Marketing is not a broadside of mass advertising. It is a
selection of specially modified programs "gently pushing" custom
products into key segments of the market. The customer isn't just
"sold to", he is "served".
In the staff and management mindset of these organizations, we
find a shared sincere commitment to "bend over backwards" for the
customer. For example, one newly adapting company in Singapore
proudly proclaims, "We'll go out of our way for you!" This catchy
phrase reveals the remnants of a "first encounter" company being
forced into "second kind" levels of service. Here management say:
"We do still have OUR way, but don't worry...we'll go OUT of our
way just for you."
See an example of this contrast in the advertising of two fast
food chains in Singapore. A&W Root Beer used to have a large
advertising billboard near the national stadium that reads
"You'll love our way!" (Service Encounter of the First Kind.)
Compare this with the slogan and jingle for Burger King: "Have it
your way, have it your way!" (Service Encounter of the Second
Kind.) Which establishment would you feel more comfortable going
to and saying. "Give me two hamburgers, please; one with extra
ketchup and no pickles, and one cooked rare, hold the onions and
2 packs of mustard on the side."
Burger King goes even further with its button and poster
campaign: "Sometimes You've Just Gotta Break the Rules." That's a
direct invitation to highly customized Service Encounters of the
Second Kind: "Have it your way."
Service Encounters Of The Third Kind
In Service Encounters of the Third Kind, your company welcomes
the customer in a manner completely different from the
standardized "What do you want?" or customized "How do you want
it?"
In a Service Encounter of the Third Kind, your company looks to
the customer with sincerity, interest and patience, and asks the
somewhat unlikely question: "What do you want to become?"
Most customers, if they are given an opportunity to reflect on
this open-ended question, realize that they are, in fact, still a
bit uncertain about the future and will reply, "Actually we are
not entirely sure yet." And then, availing themselves of the
sincerity and interest you have shown, might add "Could we talk
about it together?"
Your question, and their response, opens the door to a new and
collaborative conversation; a Service Encounter Of The Third
Kind.
Your company's priority shifts again. You enter into this new
dialogue with the customer, seeking to understand and add value
to his plans and possibilities for the future. These
conversations, held in a mood of mutual discovery, are concerned
with more than just overcoming a customer's existing business
breakdowns. Exploring scenarios and possibilities together, you
and your customers work to resolve breakdowns that can only
emerge in the future.
For example, innovative financial service companies in Japan
consistently ask their customers, "What do you want to become?"
And customers consistently answer, "I want to become a homeowner,
and I want to pass the home on to my children." But housing
prices in Japan have climbed beyond the average customer's
ability to pay. What was the jointly planned and innovative
solution? Mortgages with payment terms spanning two generations
and customer relationships that endure beyond a lifetime.
In this "Third Kind" of unfolding customer service, companies
must be willing to adapt, modify, and in some cases entirely
reinvent the purpose and procedures of the business. Rather than
simply standardize, or even customize existing products and
service systems, "Third Kind" companies must commit to
"customerize" and become whatever the customer requires.
Railroads in America thought they were in the train business
years ago and nearly went
bankrupt asking the customer "What type of train car do you want
to travel in, where do you want to go to, and at what price do
you want to travel?" Since they never asked the customer, "What
do you want to become?", railroad companies did not foresee the
need for airborne shipping and travel, and missed investing in
airline companies altogether. Today, government support is
necessary to keep the American railroads alive.
Companies that evolve get noticed, and earn the respect of
customers as a relevant, dynamic, and constantly changing
organizations; focused on and committed to the future, not stuck
rigidly in the successes of their past.
Committing to Service Encounters of the Third Kind means that you
and your customers can enter together into an intimate and
closely-linked evolution. As changes in the business environment
demand greater innovations and even quicker response, you and
your customer will learn to adapt, anticipate and actively
support each other.
This is not an association based on customer satisfaction, nor
even customer delight. Instead, the inventive and interactive
quality of this relationship is founded on a level of customer
loyalty that is precious to both parties, and can become vital to
their shared futures.
Competitors can steal away a "satisfied" customer by offering a
little bit more satisfaction, and can lure away a "delighted"
customer by offering a little more delight. But a "loyal
customer" is one who sees his future emerging in part, due to
your joint commitment. "Win-win" agreements and "building
synergy" become passwords for communication between your company
and the customer. Adding long term value is a goal you take
responsibility for... together.
Training programs in "Third Kind" companies highlight the
principles of cooperation, collaboration, creativity, invention
and design. Real customers and suppliers are featured, and
frequently included, in the training and retraining programs.
The customer is no longer "sold to", nor simply and politely
"served". He is genuinely "cared for" through a conscientious
relationship that builds trust and momentum over time.
Your service representatives do not "hard sell" or "gently push"
their products. Instead, they work closely with customers to
ensure that appropriate products are "pulled" from your
organization's current capabilities, influencing your future
competencies and commitments.
Staff and management share the same mindset towards the "Third
Kind" customer: "We make your concerns, our concerns". And in
such an atmosphere of growing trust, your customer can make
similarly long-term and loyal commitments back to you. The
customer comes to count on you, rely on you, evolve with you.
In the fast-food industry, for example, McDonalds is now
test-marketing an all soy and vegetable "burger". This is in
direct response to customers who said, "We are becoming more
health conscious, and we want to eat healthier foods."
Insurance companies reap an ever greater slice of the savings and
investment pie. Agents no longer ask the simple question: "Do you
want whole life, term or endowment?". Instead, leading companies
provide their agents with entirely new categories of investment
and insurance products that address individual concerns and
respond to changing needs.
While these are some of the admirable success stories, other
companies have missed the importance of "Third Kind" service, and
teeter dangerously towards the edge of obsolescence.
General Motors, for example, suffered a serious erosion of market
share and loyalty before they heard what their customers were
saying: "We want to become more efficient, more cost conscious,
and more environmentally friendly." Other companies listened, and
delivered appropriately designed new cars. Customers responded,
and delivered back profits and gains in market share.
Intricate physical slide rules were famous for aiding calculation
in my father's day. Manufacturers diligently asked the engineers,
"How do you want it?" and built an impressive range of slide
rules in response. But they never asked what customers were
"becoming", and did not hear their customer's growing urge to
become instantaneous, hard-copy and electronic. Many firms that
built a wide range of precision slide rules are now gone. And not
one slide rule maker is included amongst the calculator or
computer manufacturers of today.
Carbon paper to photocopies, buggy whips to stick shifts,
typewriters to computers, copper wire to fiber optics, smoke
signals to cellular. Each evolution asks the questions: "What
happened to those companies?" Did they make the switch? Did they
survive? Did they move from "What do you want?" to "What do you
want to become?"
In an environment of continuously accelerating change, the only
certainty we have is that the future will be different from
today. The opportunities for evolution and collaboration with our
customers will be endless.
What about your company? Will you gradually go out of business
with a standardized service system that provides efficient
answers to questions your customers no longer ask? Or will you
change the tone and tenor of your Service Encounters from the
order taker "What do you want?" and the order maker "How do you
want it?" to the friend and business partner who patiently,
sincerely and intelligently asks, "What do you want to become?"
This requires a new mindset and methodology for engagement with
customers and suppliers. Learn it.
Copyright, Ron Kaufman.
Ron Kaufman is an internationally acclaimed innovator and motivator for
partnerships and quality service. For a FREE Newsletter, visit:
http://www.RonKaufman.com
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Mr. Ron Kaufman
Speaker/Author
Customer Service Expert
Singapore
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