Rethinking the Value of Customer Service

A participant in one of my leadership workshops asked me two intriguing questions this week – Why do the jobs with the greatest amount of customer contact always pay the lowest wages?  And doesn’t that create a problem for our company?  That night, I asked the CEO of the company about this issue, and he told me that more than 90% of all customer contacts happen with the lowest paid people in their company – a pattern that was true for his entire industry.

Now, this industry has a large retail component, and I don’t want to generalize too far, but I believe that this pattern creates very real problems for any organization – problems that technology doesn’t solve, and indeed may exacerbate.  I want to take this opportunity to discuss the effect, identify some possible causes, and propose some possible remedies.

I find that companies talk a lot about service but do a poor job of delivering value from the customer’s viewpoint – especially when I’m the customer!  One example is airlines.  As you may expect, I fly a lot to different locations, using various airlines.  I don’t expect any system to work perfectly, so I’m not surprised when issues arise.  My complaint is that companies do a poor job of enabling their people to take advantage of what could be a huge opportunity.  For example, assume that my flight is delayed due to a mechanical problem.  What typically happens is that passengers wait with no information, unless we influence (and even coach) staff on how to get that information for us – so we have no way to plan for contingencies.  Then, if a cancellation occurs, you have a mad rush to make changes that overwhelms the available staff.  So, instead of capitalizing on the problem by managing information and change proactively, the company alienates its customers.

So, what causes these self-inflicted wounds?  Why can’t most organizations see the value of customer engagement, and then make it a durable source of competitive advantage?

  1. The illusion of control – Most corporate performance management systems reinforce the illusion that managers can and should control all factors that affect results – events, regulations, employees, and even customers.  These people have been conditioned to believe that you can improve results if you reduce the uncertainty created by choice.  So, one powerful reason for low pay is that companies don’t want these employees making decisions, they simply want employees to follow direction.
  2. The illusion of strategy – The cause is a direct consequence of the illusion of control.  If you believe that you are in control, then you must also believe that your thoughts and plans are directly responsible for success (but of course not failure, which is the effect of outside forces).  However, so much of success – especially in service organizations – truly follows the maxim of “success in small things means success in all things.”  Great customer service is almost always the product of the small choices made by a single employee that leaves the customer completely satisfied, not the result of some innovation and overarching strategy.
  3. Big brains, small brains – If you wanted to lay this problem at the foot of one person, you wouldn’t go far wrong by choosing Fredrick Taylor.  Taylor was the person who designed Henry Ford’s assembly line process.  It is only a slight exaggeration to say that he thought employees were too ignorant to and lazy to operate the machines needed to produce cars.  Therefore, he “dumbed down” the job – designing very small, standardized chunks and then training the repetitive and boring tasks.  Taylor’s “scientific management” played a large role in removing judgment from tasks.

So, what can an organization do to reverse this self-destructive trend?  Following are a few options that can start improving customer service.

  1. Manage discretion from the customer’s viewpoint – Customers know that companies must make a profit, and we also know that no large system can be customized to the individual level, but there are times we need individual attention.  Emerson said “a foolish consistency is the hobgoblin of little minds” and with customer service that means when you treat everyone the same you treat some people very poorly.  Work with customers to identify situations where employee discretion is essential to satisfaction and then set expectations, train skills, and reward decisions and actions the implement discretion in those situations.
  2. Rethink job design – It’s true that some jobs are simple and repetitive, but that doesn’t mean that they need to be dumb.  Think about way to improve the role by finding the connection to company results, finding how to help people anticipate and prevent problems, and finding how to improve methods.  Each of these steps can make the job more rewarding for the employee and even more profitable for the company.
  3. Develop perspective, not just skills – Beginning with Taylor, training was focused on task performance, not the development of judgment.  However, to accomplish the results in step 2 above, you have to help people learn to think more broadly about the task.  Broader perspective is the surest path to more effective, efficient value creation.
  4. And, when you complete these steps, pay those people their money!