In the late 1960’s and early 1970’s, Xerox Corporation’s Palo Alto research and development labs in California created embryonic versions of what would become the personal computer. They even developed a working model of the Internet.
However, Xerox didn’t capitalize on the opportunity this represented. Their executives only saw Xerox as the leading copier company, and no amount of effort by the Palo Alto engineers and researchers could change their minds. Instead, young entrepreneurs like Steven Jobs and Bill Gates, who were exposed to what was going in Palo Alto, incorporated Xerox’s leading-edge ideas into their own work. Today, Xerox is in a secondary position within the computer industry, rather than leading it, focusing on print and digital document equipment and services.
What are the key lessons here? We believe it’s that the voice of the customer wasn’t a focus within Xerox, and that the combined strength of staff beliefs and customer interest weren’t sufficient to move executives to support and encourage the development activity. Companies succeed in their markets – and succeed in keeping the customers they want – by using mechanisms which enable them, at all times, to be as close to their customers as possible. Perhaps the best ways to do this are through flatter organizational structures and formation of ‘customer first’ teams throughout the company.
It’s safe to say that most companies give little or no thought to creating a team-based culture that improves employee experience and optimizes employees’ efforts to create customer loyalty and value, and at the same time, building in team mechanisms to keep customers from defecting..
Creating a team-based customer culture requires an in-depth, real-world understanding of the customer, and then reflecting that understanding in the structure and systems that are designed. Two key questions should be asked:
1. How well and how often is teamwork directed at the goal of customer loyalty and value in the company?
2. What approaches can be taken to move from a traditional hierarchical structure to become a customer-focused organization?
Although somewhat rare, there are companies that have been able to effectively create teams, and demonstrate teamwork, where the customer is intimately involved. Examples of this are Southwest Airlines, where customers are included in teams making personnel hiring decisions and Chrysler Corporation, where their Design Center has customers participate with teams of technical company specialists in developing new vehicle concepts. In the car rental industry, one company created a cross-functional team which included customers to address a major customer headache – transaction time involved in the rental itself. One result of their work was the upgraded service which enabled customers to be taken directly to their vehicles without having to stand in line or fill out paperwork.
Teams Put Patient Service On The Road To Recovery
A fitting example of how customer-first teams can impact customer loyalty, customer win-back – and staff loyalty as well – comes from Baptist Hospital in Pensacola, Florida. Several years ago, Baptist Hospital had patient service performance which ranked them close to the bottom of all hospitals in national surveys. This situation also contributed to both declining patient populations and low staff morale.
Hospital executives were determined to turn this around. Quint Studer, then the hospital’s president, said, “We had to create the type of environment where people drive by two other hospitals to get here.” Baptist Hospital formed ten cross-functional employee teams to examine every aspect of value delivery to patients and their families. More than 150 hospital employees now participate as team members. Each team has membership as diverse as corporate vice presidents and cafeteria workers.
The product of the teams’ work has been literally hundreds of recommended and applied which, viewed collectively, have significantly upgraded patient care. Among the changes they made were:
– Development of a series of scripts for staff to use when interacting with patients. For example, after cleaning a room, janitors are trained to offer their help to patients, such as closing a window shade, changing the volume on their television set, or opening or closing doors. Calls to nurses for such chores have declined by 40%.
– Empowering employees to spend up to $250 to replace lost patient property or purchase flowers in response to patient complaints.
– Encouraging employees to be more proactive with patients. Accomplishments are featured in hospital newsletters and local newspapers. One example is a hospital cashier who voluntarily washes laundry for patients’ out-of-town visitors.
Patients and their families have seen the tangible differences in patient service. As a family member of a Baptist Hospital patient remarked, “We got lost when my mother was a patient here, and a cleaning lady, instead of pointing, took us where we needed to go.”
Today, Baptist Hospital’s service performance ranks among the very best in national customer surveys, its market share has significantly improved, staff morale is higher, and staff loss – and the money previously spent for recruiting as a result of turnover – has declined. Hospital executives do their part to sustain the culture of commitment. They regularly e-mail patient comments to department heads and key team members.
For instance, one e-mail described praise from a parent of a patient on the outstanding performance of Baptist’s ER department and Heart Center, and it speaks directly to the positive impact of teams on customer recovery: “Her son was a patient here recently, and she said the kindness, care and compassion exhibited by these people was incredible. In fact, she said she didn’t like Baptist before this encounter, but that she would seek her future healthcare here.”
Baptist Hospital is now using their superior performance in patient care and services as a springboard for moving to an even higher plateau. As described by a former Vice President of Marketing at Baptist: “We’re pushing ourselves to move past the passion of service excellence to the next stage: customer loyalty.”
What Kinds of Teams Will Enhance Customer Loyalty – Or Bring Back Lost Customers?
As demonstrated by Baptist Hospital, companies have lots of options with the kinds of loyalty-enhancing project teams they can form or the tasks they can accomplish. There could be a team that examines products and services. Elements of the company’s array of products and service offerings could be analyzed for potential negative impact on customer loyalty. Team members would evaluate trends in usage of the product or service by product group, setting up or drawing from a database of customer information on their usage, and perhaps conducting original qualitative or quantitative research or getting direct input from current or former customers during team meetings.
Another team might look at communication methods and contact processes. For instance, are there elements of the company’s customer service techniques, such as the words or the tone representatives use with customers, that can be improved? Are hiring and training practices optimal? Is it easy or difficult to reach the supplier to place an order, or ask a question? Finding out where staff require training, or processes need to be improved, can greatly increase the value created for customers, as can bringing in the most customer-oriented new staff. Do methods of communication convey value to customers? Do they strategically differentiate your company in a positive way? Does the company have listening posts for regularly hearing the customer’s voice, and understanding how customers feel about the company and its competitors? These can certainly be a team focus.
One company which has a customer relationship management team is Vistakon, the Johnson & Johnson company which produces and distributes disposable contact lenses. Vistakon is an organization which actively believes in using multi-level, cross-functional teams for addressing key decisions. This team was formed to survey their customers’ needs and expectations, measure the company’s effectiveness in meeting these needs and expectations, and deliver useful, actionable information to their internal business partners.
Does the company take advantage of new technologies, such as online customer personalization and targeted messaging? Is the company’s information system set up to aid in decision-making regarding customer loyalty and value delivery? Is the computer set up to use all of cross-functional teams could evaluate the company’s Web site for areas of greater potential customer value. A team could be assembled to analyze customer complaint data, both those that the customer communicates directly and the complaints that the company uncovers through proactive means, such as loyalty research. Some complaints, obviously those most closely related to perceived customer value, have the power to cause defection. Team evaluation of complaint root causes could yield significant process or communication method improvement recommendations.
With regard to customer loyalty programs themselves, teams could be established to look at frequency marketing or customer reward programs, perhaps conducting original research. There is such an array of points based approaches, added services, and volume purchase incentive techniques in use that this could even be addressed by more than one team.
The number and scope of cross-functional customer-first team possibilities is limited only by an organization’s willingness to embrace the concept. Bottom-line: customer-first teams enhance loyalty and value.