Friday, August 10, 2007

Satisfaction - Chris Denove and James D. Power IV

Subtitled: How Every Great Company Listens to the Voice of the Consumer. It is co-authored by one of the principals of the legendary J.D. Power and Associates, who pioneered the customer satisfaction survey 35 years ago. It is a must read. Now you might think sometimes, as I do, that it is ridiculous that books are written about concepts that are so obvious. Like Duh! Who does not understand this?

Well, it would appear that the majority of people do not understand many basic business concepts. Before I launch into my review of this book, I must share with you the little ironies that seem to rule my daily life. I was nearly finished this book, and decided to walk up the street from my house to a little Italian Deli. The weather was warm, but I thought it would be a great evening to sit outside, have a light dinner and a little wine while I read my book. It was very early on a Friday evening. I've been to the SfiZi Deli twice before and had unremarkable but acceptable service. That places me, in the JD Powers vernacular, in the deadly "Satisfied" category where generally a customer is so apathetic we don't discuss the company at all. To either side of that designation is "Advocate" and "Assassin." The idea being that all businesses should strive to cultivate a legion of Advocates.

My meal was good, I got a second glass of wine, and as the regulars started to arrive, I sat outside completely ignored. Now keep in mind, from a restaurant's perspective single diners are not desired. We take up a table and we don't generate the kind of tab a party of four is going to rack up. If you read Danny Meyer's book "Setting the Table" he talks about this. After being snubbed as a lone diner in restaurants in Europe, Danny made it a point that single diners are taken great care of in his own 10 restaurants in New York. His attitude is that it's an honor that a person chose his restaurants out of all the options they had to select from, and so they should be treated as if they have bestowed an honor on his establishment. Good attitude to take. Danny goes on to say that some of their most loyal and regular diners over the years have been people dining alone. Well Fairfax City is not New York City, let me just tell you that right away.

So here I am outside, with an empty wine glass and an empty water glass, prepared to order another wine and dessert. Only no one bothered to come out to ask. I see the manager meeting and greeting his regulars by name as they arrive for what is probably a regular night out for dinner. I'm sitting there reading a book on customer satisfaction until I am so annoyed I put the book down and just stare through the window willing someone to notice me. But they don't. So I finally pick up my empty glasses, flounce inside the restaurant, and ask if I could please pay my check. The waitress apologizes that she has not been out and says, "I hope we don't lose you over this." At which point, I silently sign the credit card receipt and leave - never to return. This is the birth of an Assassin and it happens in a very short amount of time.

But that's not the end of the story. I arrive home, aggravated to the extreme, and decide to check my email. In my Inbox, there is a third follow up from Yahoo Local Listings on why they haven't managed to change an incorrect address on a business listing 6 weeks after I requested it. A very nice customer service representative name Rohan is now apologizing for the third time over why this hasn't been done. I thank Rohan for his follow-up and then proceed to explain why this is simply not acceptable. Especially when I am paying for this listing. Changing an address can't possibly take a company the size of Yahoo 6 weeks to accomplish - this is not rocket science - it's just not. Meanwhile it's out on the Internet as an active listing with a completely wrong address. This is another example of how Assassins are born. All in the same day, all while I am reading this truly extraordinary book.

This is a long winded introduction to why books like this HAVE to be written. Because companies all over the world, every day, big ones and small ones, do not understand the basic principles of customer service and how that drives their bottom line profit. J. D. Power and Associates are uniquely positioned to paint a very accurate picture of customer satisfaction's impact on company profits after three decades of surveying customers and companies in a wide variety of industries. Their Customer Satisfaction Awards are like the Oscars of the business world.

They have wonderful case studies and profiles, and they display the metrics quite clearly to show correlations between survey results and profits by company, branch and even individual sales person. The book is such an enjoyable read. It's well written and incredibly interesting. They discuss empowerment of front line employees and how it's imperative that the people interacting with clients understand the company's philosophy about customer service rather than relying on rigid policy to dictate that employee's response. Nordstrom is held up as the classic example of employee empowerment. My daughter works in an upscale retail clothing store and we have these discussions about store policy versus the cost of customer satisfaction on a weekly basis. What is the cost of a refund or discount versus losing a regular customer and creating an Assassin? Upper management needs to make those decisions so that the front line employees on the floor can act with confidence to execute that philosophy on a case by case basis without fear of reprisal. But I can tell you right now - it's not happening. In fact, it's not happening more often than it is happening.

One of my favorite profiles is about Craig Newmark, the founder of the phenomenally successful Craigslist. He stepped down and replaced himself as CEO to work in the Quality Control Department of his own company checking apartment listings on their site in New York. Why would he do that? He's not even the manager, he's just an employee. He did it because that's where he felt he was needed the most in order to maintain the integrity of what he had started in the first place. It totally spoke to me. This is from the book: According to Newmark, "I call it 'nerd value,' which is to do something where you'll earn a comfortable living for yourself and beyond that, it's most gratifying to change the world a little bit."

And here is the most amazing thing of all - Craigslist continues to show incredible growth and profitability. Not because the founder set out to become rich, but because he set out to "change the world a little bit." He is focused on the consumer and the consumer's experience through his website. And as long as he stays focused and committed to that, he's likely to maintain and grow his legion of Advocates. This is not a complicated idea, it just runs counter to what many people believe are accepted practices in running a successful business.

I highly recommend this book. It applies to everyone. Whether you sell cars or lemonade at the street corner, you have to create Advocates to grow your business. And that means understanding how customers value not only the quality of your product or new technical innovations, but their emotional connection to your company and power of every single interaction they have with your company's employees. That is where our focus needs to be, and it doesn't take millions of dollars to change a company's attitude. It just takes a few key people understand why it must be done, and the ability of those people to execute on the decision.

No comments: