BLOG STARTUPS, VENTURE AND THE TECH BUSINESS

October 19 2010
by Thanasis Delistathis

Why is it so hard to offer good service?

I have been pondering this question for some time and have had a few conversations about it with VCs and entrepreneurs.  I think that offering great service will be an important strategy and opportunity for companies as more and more products are converted into service (e.g. cloud-based software).

How many times have you dialed into a phone system and prompted to enter a case ID number or account number or other information?  The system is then supposed to pull up the file and serve it up on the screen of a customer service agent (in cases you need to talk to a person god forbid).  Well; in my unscientific experience more than half the times I get the rep that asks me to repeat the information because it didn’t come up on the screen.  That is bad service and in the era or the 21st century should not happen.

I recently had a service experience with Sony that reminded me of the worst and best in customer service.  We have a 3 year old LCD large screen TV from Sony whose LCD went bad.  Upon further research on the internet I quickly discovered that it was a common problem with the specific model.  I went on the Sony website’s support section and discovered that Sony had decided to extend the warranty on those models until 2012 and immediately replace any bad LCDs.  Great, I thought.  Let me call the company and schedule an appointment.  My call was routed to a service person in the Philippines that robotically tried to read from a written script that my warranty had expired and there was nothing they could do.  I pointed to her that Sony’s own website was saying something else, to which she proceeded to robotically repeat what she had told me before.  That is bad service!  I tried to call a couple of days later to a customer relations department.  A friendly rep took some basic information and without any detail on my part, proceeded to apologize for the misinformation and maltreatment I had experienced in my first call.  I was really surprised.  Somehow the same system that was not able to record their own warranty policies, had created a record of a bad service call that allowed the second rep to try to rectify the situation.  Brilliant!  But why couldn’t they get the first call right??

I think this is an important question for technology companies and especially startups to think about.  McKinsey Global Institute predicts that one of the 10 biggest trends in technology will be “imagining everything as a service.”  Examples?: cloud computing or ZipCar replacing car ownership for some urban consumers.  Many of our companies use the internet to deliver a product or service, so getting it right is essential in a very competitive environment.  For some companies like Zappos, it can even be a source of significant competitive differentiation.  Tony Hsieh has detailed his philosophy in a book, but to me, as a user, it comes across with simple acts: shipping shoes overnight even when I didn’t buy overnight service.  I recently read this story in Fortune magazine about Vernon Hill building Commerce Bank in the US and recently opening up Metro Bank in the U.K. with a strategy solely driven by better service (while paying lower interest on deposits).  It is a fascinating story to me, because here it is, a strategy built on basic simple principles, which upon reflection seem obvious and sensible, yet there is a clear lack of them in the market.

In my experience, few startups are really good at service.  In my discussions we tried to speculate why.  One dominant theory is that the people who start most tech companies are technologists who are so focused on building a product that often times service comes second.  Building for good service sounds easy and sometimes feels less challenging than other things, but I would suggest that it is critical to business succeed and often takes hard work to execute.  A few thoughts on this:

  • It’s not a one time design exercise, it is a culture and a way of doing things that has to be incorporated into all aspects of managing a business: product architecture, interface points, skillset of hires, internal and external communications, etc.
  • As a CEO think like the customer, all the time, and think about removing barriers to the customer using more of your product, no matter how small.  And simplify, simplify, simplify.
  • Think: does your product/service surprise and delight the customer?  If not, plan ahead and make that happen.  That’s how you win loyalty.  Apple is the best at this I believe.  Jobs talked about this in the Apple earnings call yesterday.  Many people call Apple Appstore a closed system.  He called it an integrated system, which “offers developers a one-stop shop solution to get their apps to market easily and get paid swiftly.”

COMMENTS

October 19 2010
by Sam Aparicio

At Ringio we believe that good service is the catalyst that accelerates the impact of every other effort in the business.

Good service is the side effect of putting the customer at the center. It has such a powerful effect because it forces a more real set of priorities on everything that we do.

And startups can give good customer service too.

November 11 2010
by belinda

When applying for a 24 month payment plan, Sony asks a vague question that occurred over 10 years ago. I get the answer wrong by a few months and am denied. I have to wait 60 days to reapply. Really? I have a 700+ credit rating and take my credit very seriously, and missing a question that I would have to look up records for from 10 years ago keeps me from qualifying?! Really? I appreciate their interest in making sure I am who I say I am, but really, ask a question that is answerable without going through archives! One that I would know. And, by the way, they state that their question is not completely accurate as to the exact dates/months, but they expect ME to remember a 10-year-ago event and the exact date! Whatever. I WILL take my purchase and my $1500.00 elsewhere. I have great credit, take pride in that, and deserve better respect. Sorry Sony. You lose this customer, her money and her recommendation. I hear Panasonic is quite good…

November 16 2010
by Neil Rosen

For years I have initiated a policy in my companies we call The Hierarchy of Yes! In a nutshell this means that only the CEO can say “no” to a customer. Everyone else has the responsibility to find a way to say yes – to meet the customer’s needs. This obviously has implications all the way up the line and leads to thoughtful customer service training throughout the company, Obviously no-one wants people working for them to have to come to them every time a customer requests service.

November 17 2010
by Thanasis Delistathis

Sam, excellent points.
Neil, that sounds like a great policy. I might have to suggest it to some of out CEOs.

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