In most service environments, between 20 and 30 percent of serious points of pain (POP) for customers are also POP for service employees. Examples of poor internal service and support include ineffective guidance and empowerment for service reps; stale website and knowledge management system (KMS) data; and service staff’s inability to get answers from sales, marketing, and operations.
All three of these issues, in turn, cause their poor response to the customer. If the internal service problem is rectified, you also immediately fix the external response POP as well as reduce the cost of staff chasing answers they should have had. Attacking one joint problem can make you a hero with customers, the service staff, marketing, and finance.
Internal service impacts external service
Across all industries, one-third of all non-self-service issues consist of needing information or action on status, pricing, or a technical issue that the front line cannot immediately handle. This is especially true in B2B environments.
The two broad causes are poor internal communication and service and an inadequately maintained knowledge management system (KMS).
Poor internal communication and service include:
- Failure of support departments to respond to inquiries by email or phone in a timely (e.g. immediately or within two hours) manner.
- Failure to respond ever.
- Unresponsive guidance with no believable explanation and lack of empowerment and management support
- Surprise changes in production schedule or short shipment without notice
- Promises made to customers by sales and marketing that have little or no chance of being fulfilled
Inadequate KMS includes:
- Out-of-date sales and inventory data, e.g. Minimum order quantities and pricing
- No information on new policies and marketing offers
- Lack of product information, e.g., specifications, ingredients, dimensions, lead times, or availability
When internal service encounters any of the above issues, two things always happen. First, service cannot provide an answer to the customer and must beg off while they investigate. Several staff members have told me, “I’m embarrassed that I can’t answer the question because, in a rational world, I would have access to that information!” Secondly, service staff waste 10 to 30 minutes tracking down the information needed – purely wasted time.
Method for identifying the two-fer opportunities by quantifying dual customer and employee POP
- Ask employees their frustrations with giving external customers good service – identify their frustrations and ask them to flag when an external customer is also impacted
- Ask employees how often each frustration occurs and how much time they waste each occurrence trying to chase down the information as well as other damage. For instance, one technology company reported that when a custom quote could not be provided in less than 48 hours, the client almost always went on to the next vendor and the sale was lost.
- Present a random sample of at least 200 customers with a list of problems and needs for assistance they may have encountered. Be sure to include the timely response and information-access issues the employees have identified in step 1.
- For customers with problems, ask whether they contacted the company, the outcome of their request for assistance or information and the resulting loyalty and word-of-mouth behavior based on their service experiences.
- Compare the list of internal service problems with the customers’ external problems in terms of frequency and impact on loyalty and willingness to recommend the company.
- Identify the two or three issues that are prevalent on both the employees’ and customers’ lists. These issues are your opportunities for synergistic two-fers
Example of implementation of two-fer in an electronics manufacturing company
About 200 front-line employees were asked about their frustrations with giving external customers good service. As the arrows on the chart below show, five frustrations were:
- Calls to other departments not returned
- Short shipments to customers without notice
- Production changes without notice
- Emails to other departments not responded to promptly
- No response to emails requesting assistance from other departments
These five problems caused a third of overall damage to employees retention with 6% at risk of leaving out of 17% total. Further, when asked how much time was wasted chasing down resolutions to those problems, over 1400 staff hours were wasted each month costing over $100,000 in labor at loaded rates.
When a census of over 1,000 electronics parts customers were presented with a list of potential points of pain, the same issues raised by employees resonated with customers. As shown in the chart below, a conservative quantification of the revenue at risk due to these four POP, was $25MM annually out of a divisional revenue of $275MM. The four problems highlighted placed over 9% of divisional revenue at risk. Each of these problems (website data, order changes without notice, unresponsive service and delayed quotes) was rooted in an issue that had been raised by the front-line service staff in terms of poor communication and responsiveness from other departments.
Customers at Risk Due to Questions and Problems and How They Were Handled
Management mandated three actions to address the dual POP:
- Creation of a task force to update stale data on the website and in the KMS, starting with the most popular product groups
- Creation of a companywide communication standard where internal requests supporting external customers are given priority and high-quality attention. This policy also created a “Golden Rule” for all internal communications.
- Creation of internal service agreements to ensure that product management and operations responded to communications from customer support and notified them of production and pricing changes in advance.
The results of the three management actions were very significant. Within a year, sales increased by $40MM and sales lost from late quotes almost disappeared. Further, employee satisfaction increased dramatically. Finally, customers who reported their expectations were exceeded had NPS ratings 30 points higher than those who were just satisfied and 70 points higher than those who were only mollified.
Recommended actions to achieve revenue impact from POP two-fers
The following are the six steps to identify and operationalize potential POP Two-fers:
- Interview your most articulate front-line employees and determine their frustrations – especially those problems and questions that impact external customers.
- Incorporate POP into your next customer survey and include those that would result from the internal service issues identified by your employees. Identify their frequency and impact on loyalty and word of mouth.
- Conduct a short employee survey focusing on training, empowerment, and service vs. benefits and pay.
- Identify two or three overlaps and develop an action plan for each
- Implement internal service enhancement initiatives similar to the above case study
- Measure the impact with process (reduced problem occurrence, call-backs, and fire-drills) and outcome (survey) metrics and gain buy-in from Marketing, Sales, HR, and Finance.
The adage, “treat employees as customers,” is not only true but a key to enhancing CX. If you fix internal service you’ll enhance external CX.