Shep Hyken is a renowned customer service expert, author, and speaker. He is a New York Times and Wall Street Journal, the bestselling author. He talked to Questback about the opportunities for both customer amazement and employee engagement in today’s competitive economy.
Q: How challenging is it for today’s companies facing unprecedented competition and change, to attract the loyalty of customers and employees?
Well, I think there are two ways to look at this. A lot of companies are nervous and scared because the customer has a voice they have never had before. It’s louder, it can be broadcast to a much larger group of people. There used to be a statistic that says if a customer has a bad experience they may tell up to 8-10 people, and then 13% of those people will tell 20 others or more. Well with social media it’s amplified. You jump on your Facebook page, you shoot a tweet out, and all of a sudden, hundreds if not thousands of people learn about the situation. However, how I look at it is rather than be scared, take advantage of it. Do so well that your customers become your evangelists. So I view it as a greater opportunity, not something that’s making it harder to deliver service.
Q: Are older measuring tools like the Net Promoter Score (NPS) for example still as relevant?
I love NPS. I think any measurement that does a good job is relevant. Because while you may not get every customer you can get a sample size that’s relevant and indicative. And you’ll recognize you need to bump it up, our basic customer base is looking at us and saying we’re okay but what do we need to do to take it to the next level. It goes back to the previous question, I think that the people who measure and track NPS are more likely to create customer evangelists than does that don’t.
Q: What companies do you see doing very well, really mastering Customer experience?
Well, all you have to do is Google Top 10 customer service companies and there are all sorts of surveys out there, the American customer satisfaction index, you’ve got the various business publications. And then there are the typical rock stars. The Zappos.coms, the Nordstroms, The Ritz-Carlton’s, The Four Seasons. I wrote a book a year ago about a company that is in my mind a total rock star, and even more than a rock star they’re solid as a rock. They’re a recognizable company, but they don’t get the recognition these other companies do, and that’s Ace Hardware. And the reasons I love Ace Hardware are several. One, they’re you and me. They’re anybody from the standpoint of a small business where a family or an owner might own one small store, or a larger store or a small chain of stores and all the way up to the billion multi-billion dollar operation. So you have the gamut. From small business to entrepreneurial ventures all the way up to big corporate. More importantly, Business Week two years ago rated the top 25 customer service brands and they were number 10 and what impressed me was The Ritz-Carlton was number 12. How could that be! But nobody ever wrote about them, yet they won 8 JD power awards for excellence in a row in their industry, and they go up against big competition. And the only way they’re able to win and differentiate themselves is because of the customer experience the customer has. That’s it. They can’t compete on selection because these stores are 10 times bigger with bigger selections. They outspend. So how does Ace win? They win on service, they win on people, they win on the customer relationship.
Q: How are millennial employees doing with customer experience? What kind of things can corporate leadership do to support their teams?
The millennial employees are a different type of employee. I think the company has to decide what the culture is they want to create and then they have to hire to that culture.
And regardless of whether you’re a millennial or baby boomer, you need to decide are you capable of delivering on the culture and on the brand promise. A typical millennial is more entitled. They do things they way they wanna do things. They do like to feel included and one of the things that are really important to them is not just to have a job but to feel needed and heard in that job. So create that feeling of being wanted and needed and empower them with the ability to ‘act like the owner.’ To make good decisions. Train everyone well and make employees feel good about the decisions they make, that they know they are wanted and needed.
Q: What about the financial impact of customer experience? How do organizations measure it, put a dollar value on it?
You can only manage what you can measure. Take the NPS that’s a real simple measurement. So you take a look at where you are today and you measure and then if you decide at that point you’re trying to increase your customer service and you have the initiative to do so, and maybe part of that means a little bit more training; monitor, track, make sure all our employees are doing the right thing and getting the support they need. And six months later you take that measurement again. You always have to have a base measurement. Now once you see what your measurements are in customer experience you are also going to go back and look at what was the revenue you were generating what was your average purchase per customer what was the frequency of the customer? You will be able to measure all of these stats. These are black and white and factual and easy to capture. However, that customer stats score needs to have a base as well. So six months later you take the measurements again and you see how things have changed. It sounds simple doesn’t it, and it is in principle, but it’s not necessarily easy in practice.
Q: Much is heard about big data but you’re interested also in little data, describe the nature and value of little data when it comes to customer experience?
Little data is focusing on the individual versus a large group. Hospitality companies do this well. A restaurant chain may do it well. When you call they have a system that says “Oh Shep is coming back, and the last time they sat at this table”. And when you walk in the restaurant the manager says “Welcome back Mr Hyken, would you like the same table as you had before?” Maybe they even track what you order. Hotels do the same thing. You know higher ends hotel. It’s a really cool concept to be able to really deliver on information you have from a customer’s prior experiences.
Q: One of the points in your 10 reasons to deliver amazing customer experience is that it costs less to keep existing customers than it does to create new ones. How can companies do better?
Yes, the stats prove the point that customer acquisition costs are higher than the cost of servicing them to retain them. And it’s pretty much that simple. For example Morton’s, the Steakhouse. They believe their best marketing department is all of their employees. Because if they do a great job the customer is going to go out and talk about the great experience they had with Morton’s and they’re going to come back of course. More importantly, Morton’s doesn’t spend money on radio and TV and print ads. They rely on their employees to be engaged and do a great job to get the customer to want to come back and more importantly, to want to talk about them to their friends and associates.
Q: Your latest book is called ‘Amaze Every Customer Every Time’, tell us a bit about how it came about?
So there’s 52 very specific tactics and strategies that you can use to deliver amazing customer services. In The Amazement Revolution, I had 50 different countries represented in that as mini case studies where I used them as examples to cover seven really good tactics and strategies to deliver amazing customer experience. And then about a year and a half later, I’d written a number more, and I thought you know what I’ve got enough for another book. Which is why I said at the point I want to find one company I can use and represent throughout the entire book. What would that look like? And I looked for companies that hadn’t been written up before and that’s how I found Ace Hardware. So in the process of about 60 interviews, we came up not with the dozen of so new ideas that I had, but it was like wow this is grass roots entrepreneurial business-by-the-people, this is going up against the big competition and they are doing very specific tactics to be competitive. That’s what I am writing about. It’s 52 specific tactics that you can use to create amazement.
Q: And a final thought?
Not so long ago I was doing a speech and afterward, I met a woman who was in the top 5% of her entire company. I said, “you know you’re a role model? .. tell us the secret. What’s the one thing you do best? ” And she said, “It’s not one thing I do best, I do a thousand things really well.” And that’s what these companies are doing. If you just do one or two of the customer amazement tactics it’s probably not going to make much difference. But if you start doing three, four or five or maybe even a larger number, then it becomes wrapped into the culture…then it starts to make a difference.