Signs of Hope for Customer Focus in a Down Economy?

Companies Strive Harder to Please Customers – WSJ.com

Lean is a customer-focused business and organizational strategy. Many companies, unfortunately, use a downturn as an excuse to cut costs, a move that often hurts quality or customer service.

Traditional companies might see a profit shortfall and cut costs by getting rid of customer service staff, or hiring cheaper employees or outsourcing, moves that, done badly, would hurt customer service. This might hurt revenue, thus hurting profit, and the death spiral continues.

Lean thinkers would first look to improve processes — adding more value to customers with the same staffing levels or cutting waste to eliminate costs in a way that doesn’t hurt the customer.

The WSJ reports that the annual customer satisfaction index from the University of Michigan shows customer satisfaction at record high.

What’s one example that sounds like a Lean type strategy? From Sprint Nextel, of all companies:

Sprint Nextel Corp., which often receives poor marks from customers, began a service-improvement plan at the end of 2007. Among other changes, call-center operators now are rewarded for solving problems on a customer’s first call, rather than for keeping calls short.

Finally, a customer-focused metric — solving my problems the first time. I hope they have the right criteria for what “solved” means, as there could still be opportunities for people to game the system if the rewards/punishment system is still focused too much on a result, not the process. But, still better to have anything other than a “keep calls short” metric, as that often encourages call center staff to just transfer you around to other people.

I do wonder, though, about Sprint Nextel’s decision to create a new executive in charge of customer satisfaction. Value or overhead?

Sprint created Mr. Johnson’s position in 2007, part of a wave of such appointments. Forrester says 57% of large North American companies employed an executive in charge of customer satisfaction in 2008, up from 27% in 2006.

Yikes. Customer satisfaction is top management’s job. I feel like I’m channeling Dr. Deming here… you can’t delegate customer satisfaction or quality! Does having a new executive (at a few hundred thousand a year, probably) really solve the problem?

Do you sense that customer service is getting better or worse in this economy? Are companies cutting costs for the short-term or investing in the future recovery through better customer service and quality?

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Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an eBook titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

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4 Comments on "Signs of Hope for Customer Focus in a Down Economy?"

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  1. David says:

    Last week, I spent about an hour on the phone with Sprint attempting to do a very simple thing: change a bank routing number.

    The cost of this call probably wiped out Sprint's profit on this account for the next 3 months.

  2. Mark Graban says:

    I was dubious about sprint being an example. Did it seem like a trainig issue? Was it a single employee you dealt with on the call?

  3. Rodney Cooley says:

    I think it's a little of both. Some companies that are hurting are trying to find any way they can to cut costs, but others are using customer service to put themselves ahead of the competition.

    I don't think that customer service should be an area that companies consider cutting because without customers, they don't have a business. Companies should treat them right.

  4. Jacob says:

    Quality product & or service and quality customer service should never be cut to save money. The fact is it will never save money it will only cost much more in the long run.

    http://www.rexxindustrialparts.com

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