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    You must manage your Customers

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    © All Rights Reserved
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    12 views20 pages

    You Must Manage Your Customers

    Uploaded by

    Camila Arango Pérez
    Para entender el servicio

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
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    Truth Number 4: You Must Manage Your Customers ‘Customers who can't decide what to order at McDonald's make the fastfood less fast for everyone behind them. Air- line passengers threaten on-time arsivals when they block the aisles while boarding, I 2 consulting firm's clients describe their needs in vague terms they undermine the value of the advice they get. Even if t's just by showing up late fora din- ner reservation (or by lingering over the espresso, restaurant patrons regularly disrupt thei experience and the experience of ocher diners. ‘We've spent a lot of time thinking about the special role that customers often play in service encounters, @ phenom- cton we call the castomer-operator When i takes a customer five minutes to supersize an order of ries, e or she in’ just a passive recipient of your company’s ingenuity and hard work. "This person is now playing an active role in the delivery of, the experience. Ssid differently, customers dons just consume anog seydey service; they also participate in creating it. And they're not alivays good at theie ja. ‘Customers can increase the cost and reduce the quality of whatever service you're providing, often with no advance ‘warning and very litle regret Sometimes they can help on both fronts (more on chat later), ue that’s the exception, not the norm. Given these dynamics fir question is why they ‘get any operating role tall. Afterall, Sony docsnt let its cus- tomers help to manufacrute the television they're buying, "The answer, in most cases, is that you have no choice. You chose ‘to work in a service industy. You can'tcut hair without 2 cus- tomer plopping down in front of you, and you can’t teach 2 course without students who are willing ro come to clas. So hhow do you get your eustomer-operators to behave? Customers (aka Your Unpaid, Untrained, Unmotivated Employees) [Here's one way to think about iif you run a service business then your customers “work” for you in many of the same ‘ways that your employees do. Bus these aren't your average employees. They're erratic, unskilled, and entitled. Theres ests and your interests regularly diverge. Employees are con- tractually bound to work on behalf of che fir, but castomers operate under no such constraints. Customers ate looking out for number one, s they have every right to do, (On the plus side, of course, customer-operators require no salary, benefits, or ettement contributions, and they show up precisely atthe time service is required. They also have & levelof insight into their individual wastes and quitks—insight chat your employees won't evr ave even afer throwing 2 forme at market rtenrch These factors suggest hat there's 4 lotto be guned by empowering customers to play a greater role in meeting thei own service needs. ‘Ul rece, many excess sa clear dtntion be: tween the people who prodice goods and services, nd the people who consume them-—berneen the employess on the ayoll and answerable ro management nd the canomers who exist somewhere out the company’s boundaries and its drex conto, These days growing number of frms are expanding the prodtve ole of customers o reduce coats or improre rere, orboth, with the proliferation of self-service asthe most visible example. ‘But to manage costomersin an operating oe firm neds new satis, since i ant rely onthe same systems iruses for employees. Customers arent dependent onthe company for thee livelihoods, They haves signed a We2 form and agreed to bide by certain rules and expectations in exchange for a weekly paycheck. Aes cent, powerful employee per formance incentives sch carer advancement and financial secuty are sing from the cstomer mahagement 0 Kt ‘There's sao rarely rigorous selection or ting proces, at leat notone focused on operational fit and so you often have to work with whoever shows up, rics of sil eve or aritude. Oh and there's pel a lor mote of them. Ces- tomers outnumber employees hy orders of magni most companies To complicate matters furthes, not only ae customer categorie different from employees, byt eusromers can also be deamatcaly differnt fom eich othet This diversity sioworeng sno eteunya ism 004, « dramatically increases the variability that is intcoduced onto the “factory floor” of service production. Variability of oper sting inputs (materials, processing ime, worker skills public enemy number one in a manufacturing environment. I's the barrier to the critical goal of 109 percent utilization. Bue ser vice managers are constantly being inundated with variabiley in the form of eustomeroperators who area litle bie differ ent from the lst one who showed up—a litle faster, slower, smarte,pickler, later, ealies, or more or less prepared to do the job, And every once in 2 while, through door number 2, comes a customer-operator who's a whole lot differene. Ivy ‘enough to make you crazy—and certainly enough to shrink ‘your margins and ensure a mediocre service experience. Hiere's the basic message: if you're in the service busi- ress, you essentially don't know which people are on your team, when they're showing up, and what they're going to do ‘once they get there. And so you need a plan for managing this uncertainty. Managing the Chaos of Customers In other words, variability is a fact of life with customer ‘operators. Here are the differen forms ican tke: + Arriva: Your customers don’eall want service the same ime ora times that are necessarily con venient for you, Grocery stores find themselves swamped during the evening rush hous, while the lines at Dunkin’ Donuts ean extend for half «block at 8:00am, + Request: Not everybody orders the same thing. Each sliene ofan advertising agency is executing 2 unique marketing strategy, and vacationers a resort want ferent amenives, Even customers of single- service businesslike Jiffy Lube show up in different makes and models of cars. © Capability: Customers have different knowledge, stil, physical bilities, and resources, which means ly while that some customers perform tasks ex ‘others need hand-holding. Ina medical serting, the ability of a patient to describe symptoms can greatly fest che quality of care. But so can the person's abil- ity to negotiate the medical bureaucracy. ‘+ Effort: Customer-operators decide for themselves how much effort vo invest in production tasks. ‘Company controllers don't slays and over well- ‘organized files to independent auditors, and shoppers don’t slays return ther shopping cars tothe store. ‘+ Preference: Even customers who want the same service may have very different definitions of qul- iy, One diner appreciates the servers introducing themselves by name another resents the presamption of inimacy. Some clients ofa law firm might con- true atop partar's attention to det as eeflecing the imporeance oftheir case; others might complain that those expensive billable hours could be doled out more judiciously ta less costly associates, Subjective preference adds a multiplier effect toll other forms ‘of customer variability Knowing which type of varabilsy you're dealing with can help you to manage it more effectively. Managing effort eat svowoqsng sno,aeunyy enw 905. = variability (often through incentives), for example, ean difer ‘markedly from managing cpabily variability (often through ‘customer trsining initiatives), ‘You can manage customer chaos in essentially two ways by reducing or accommodating it (figure 4-1), Reduction tends to favor efficiency. Accommodation tends to favor service, which keeps the two approaches in constant tension, Classic reduction strategies are menus and reservations. Limit your customers options—a wia for you, but a loss for your cus- tomers, who may be craving something offsmenu that aight and at some time other than 7:30 pan, Accommodtioa, other wise known as dealing, usually involves putting slack into the system and retaining a beach of experienced employees who «an skilfully adapt to the chaos that customers bring with Overcoming the trade-off between efficiency and service : = thei. This approsch is expensive. As a result, accommoda- ton often hinges on getting customers to pay a premium, not always an option for your business. But customer variability doesn't always force you into a stark trade-off between cost and quality. Selfservce isthe low-cost accommodation of choice in managing arrival and aquest variability. Self-servce asks customers to deal with their own preferences on their own time line. It allows you +0 forgo complicated, inefficient labor scheduling and the deep (and expensive) bench of employees. When customers are doing the work, the right amount of labor is provided at exactly the right moment to deliver exactly the right kind of ‘Asking customers to roll up their sleeves ise the only way around the tension between cost and accommoda- tion. When Dell Computer Corporation frst expanded into high-end servers, the company knew the corporate market for these machines would crest significant new service demands, which it would have to accommodate with around-the-clock, sistance, Dell faced choice between destroying its margins by cresting an underutilized and expensive service infrastruc tureorflling behind competitors tat had more-fficientoper- ations, Dell landed on creative solution—outsourcing service tos titd-party provider optimized fr these kinds of ewenty~ four-hour, on-site service ealls. By doing so, Dell reduced its exposure to customer variability by essentially handing of the challenge to a company better prepared to manage the chal- lenge. The move crested « buffer. Interestingly, Dell made bold decision to outsource the servicing ofits customers to its competition. Why? Because the strategy allowed Dell1o deliver ‘rawojang ino, a66URN IENHINO GL excellence without being overwhelmed by variabiley—and this advantage outweighed the risks of customer poaching ‘There are more aspects of the variability question, but ou point here is furl simple: customers can wreak havoe on your ‘operations. I's what makes us hesitae when we hear “the eus- tomer is always right” or that the path to service excellence is +o simply delight your clits. Performance can’t be sustained by placing customers on a pedestal and indulging their every desire! To ereate a system in which excellence isthe norm, You need to manage your customers every bitas much as you manage your employees. Unleashing Customers at Shouldice Hospital Inthe 1980s, HBS colleague Jim Heskett did a classi study of Shouldice Hospital, 2 Canadian instcution focused on hetnia surgery, which built a masterfl business model in close col- Iaboration with ts customers—the patients i serves? The ex traordinary care that Shouldice provides is evidenced not only by statistical outcomes, but also by the loyalty ofits clients. The Shouldice experienc is s0 postive that many patients ask to stay an extra day. The most common "complication” of a surgical procedure isa mild sunburn acquired while a patient strolls the hospital’ lawn. Seeds ofthe Shouldice model were planted in 1952, when surgson Earle Shouldice performed an appendectomy on a seven-year-old gel who refused to stay quietly in bed ducing the recovery period. Despite her incessant activity, the young Biel recovered right on schedule. When Shouldice performed hemia repairs on four men afew year later he allowed them FF to get out of bed right atthe outset of cher recovery. They, 00, bounced back quieldy, which solidified his belief that get- ting patients up and abou, also known as early ambulation, could be an important part ofthe healing process, The catch, of course, was getting patients to do their part Shouldice used these experiences to develop a new meth- codology for treating herni patients. Ie integrated eatly am Dbulation with an innovative surgical technique, a customized facility, and + very specific ecovery regimen. The protocol relied heavily on teamwork and paid particular attention to patient selection, The hernia sufferers that Shouldice agreed totreat were limitad to those who could participate fully and thereby benefit fully. This meant that hey had to be otherwise ing vo embrace the get-up- hey ao ovrwi and goes Stole argu approach was vel nso: an Tay Shue Hepa nare manag stoner sig rom the einige ori ends ou oni Son cl th eas hese eienent icing wht linia wl the oni dive rte For those who ae only meray overweight the ine of shin Sole oes «wes prog weigh guidlines arent ety th dae ached or hong ‘aint pen aad Once Shi usemers dear proce ih per son's jo us oly js bean Each ateroon on thy be fre the sched fo sre shut iy ne pene tives th lie While eng pei ts thy a taped to metand mingle with ie other mens ofc ining “css” Ath pit, pat bin ele they a rouoyang no, ABOU TENA POA + ‘re not passive recipients of cate but active members of apex «ial Shouldice community in which they have many important roles to play. tS pam, nurses provide a formal orientation with infor: ‘nation about what to expect, the drugs tobe adtninistered, the need for exercise fer the operation, and the early ambulatory covery routine. Patients theseat dinner together in a hundred-seat dining room, This is followed at 9 pum. by a kind of freshman sixes, where preoperative patients mingle with patients who completed their procedures eatier that day: Here, a tremendous amount of lesning passes from the ‘post-op “trainers” tothe pre-op newbies, with no employees insight, except for few roaming waitstaff carrying platters of cookies. After this orientationand swapping of stories it's ime for bed. ‘The next morning, during che procedure itself, patients ate usualy fully alere and able co converse with thee surgeon, ‘Thea, when the incisions closed, che surgeon extends a help- fol arm and invites the patient to get off the operating able and walk to the resovery room. Ninety-nine percent of pa ‘ents take this postsurgical stroll, which aside from promot- ing the bodys circulation, delivers a strong psychic jolt to the healing process ‘From that moment on, patents are encouraged by nurses snd housekeepers vo continue their gentle exercise. There are ‘80 bedpans at Shouldice, no telephones or television set in ‘the rooms Patients are expected tobe ovt sad about, walking the twenty acres of grounds, playing shufleboard or pool ne- {sotiating custom-designed stairs, and mingling with the other Patients. At9 pan. on the day oftheir surgery, they walk down | to the dining coom forthe tea and cookies orientation for in- ‘coming patients. On the fourth morning, they are ready for

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