Peter Alderliesten's Blog

…drives three successive waves flow through it’s outsourcing.

Introduction

Gordon Moore, one of the founders of Intel, in 1965 made the prediction that every 2 years the capacity of a central processing unit for computers would double. By now it is long forgotten by the average man since these hearts of a computer have achieved stratospheric capabilities since the early days of the start-up in Silicon Valley, however, most industries seem to go along by such generic patterns.

Without any pretension to come even close to the importance in history of Mr. Moore or the accuracy of his prediction, I dare to say that also Customer Service knows such long term trends. In this blog I would like to examine some trends in this industry a little bit closer.

The cost drive

Initially, non-core activities of Western concerns were outsourced for mainly financial reasons: large concerns with high employee cost and often extensive secundary employee compensation packages tried to save costs by outsourcing these tasks to suppliers with significantly lower cost levels. The outsourced activities were seen as non-core, and not significant. This pattern did not only apply to Customer Service-industry, but to all Business Process Outsourcing and manufacturing. Typically, services were outsourced to several suppliers who had to compete – sometimes even on a weekly basis – to get the business. Especially the outbound telemarketing saw examples hereof, since a client could compare conversion rates among suppliers easily. This practice contributed to some of the dubious practices that were deployed by ‘cowboys’ in this business segment. The negotiating power of the purchasers was exploited to the fullest here.

An interesting example of the drive to cut secondary employment costs, and driving it to the top was the initiative from KPN in The Netherlands, which bought a large supplier of call centre services, SNT, and merged it with it’s in-house call centers in a (largely failed) try to get rid of its pension liabilities for the in-house call center staff.

After the simple national outsourcing, the lower costs of developing countries was utilized in ‘offshoring’, and countries like India and The Philippines made great inroads in the Business Process Outsourcing industry. Interestingly enough, it was their colonial history that provided them with the competitive advantage to corner the services market: a large language knowledge inheritance made the difference and enabled e.g. the Philippines to develop a $9 bn industry employing 500,000 people in 2013. In that country, Teleperformance, a large BPO-provider, by itself already employs 20,000 employees.

The control drive

After these ‘quick wins’ were realized, it turned out that they might have been fairly ‘quick’, but not always a long term ‘win’. Increasing cost levels in developing countries sent manufacturing scurrying for new, unspoiled areas for manufacturing sites. Unspoiled here means still low cost. In addition, an ever increasing dynamism in the market required shorter lead times, where transportation times and cost from mainly Asia to the Western World became an ever increasing concern. Apparently, the activities were more significant than originally assumed.

Similar forces played in the services industry, although alternatives were more scarce: a conveyor belt can be placed virtually anywhere in the World, but many services are tied to a certain language capability of the staff.

I have once been in a position where a client of mine resisted moving the activity away from the city to the countryside because of the 2 hour ride to reach this new facility. On a larger scale, it turned out that the management of a facility on the other side of the World is quite a different cup of tea from managing the same next door. The reduction of the price advantage combined with the desire for increased control led for significant parts of the market to ‘near-shoring’. The fall of the Iron Curtain also made access to new supplier of cheap labor, and many sites were moved back to Europe again. So far, this is fairly common knowledge, but it sets the stage for the third trend that is now coming up in the Customer Service-segment of BPO.

The quality drive

Although control often can not be translated into the bottomline directly, the need for control did pave the way for further insights: more and more concerns are realizing that immediately identifiable costs are not everything. I have seen many change or investment proposals in customer service with unrealistic returns on investment in their Business Cases. It is very easy to calculate the savings of sending a bunch of temporaries home, much more difficult to calculate the costs of scurrying to replace them when volumes pick up unexpectedly, let alone the reputational cost of the resulting long waiting queues. Everybody knows of companies in their own market that got into ‘rough weather’ because the Customer Service Department could not handle the orders for new products, resulting into backlogs for new customers, double work for installation engineers and – lo and behold – evaporating earnings.

In several industries the cost of Customer Service is only 2-3% of revenues, when that business process experiences production or quality issues, it endangers the whole value chain. In costs, Customer Service might be not significant, but in profit impact it often is. Therefore, several parties are realizing that extreme cost cutting on this activity may look good for theoretical ‘quick wins’, but loses out on durability – and here I use the word without any environmental meaning.

Whether this will mean a trend towards theoretical overstaffing, ‘insourcing’ in it’s various forms, or more to local outsourcing depends on case-specific argumentation and I would not feel comfortable to provide a generic answer. There are also plenty of off-shoring arrangements that do provide the quality that is required. However, it has become clear to the more sophisticated parties that the extreme penny-pinching of the budget in this activity – regardless of inhouse or outhouse constructions – may be ‘pennywise but poundfoolish’.

(Originally posted on January 8, 2014)

The topic of abundance (= plenty, affluence, but also overgrowth, or having more than you need) is a topic that came up as ‘interesting’ a couple of years ago, in a period in my life where the focus was more on the ‘need’ than on the ‘having’. Since then, it amazed me in how prevalent the concept popped up in life. Extreme variety of choices is leading to overkill in society. Where at first glance the word ‘abundance’ may have been loaded with all kinds of positive connotations, at closer examination it turns out to be a mixed bag.

Below I will first apply abundance to customer service, where it helped me explain both some parts of personal efficiency, the demise of Microsoft vs. Apple, the changing business cases in the printer industry, customer choices in general, and the choices Google faces, just like Facebook, Twitter and LinkedIn.

Customer Service

Personal effectiveness

The most common way that most people are confronted with abundance is through spam, where through unselectiveness of a sender one’s mailbox is crammed with junk. The first lesson I learned in a personal efficiency training was to prevent spam: not just by having a spam filter, but also by stopping subscriptions to newsletters I did not read anyway, informing certain ‘relationships’ that this one-way street thinking was not appreciated at all and others that more consideration on their side on what to send wóuld be. After going through several steps, we ended the course with ensuring that we were pro-actively informed about topics we were interested in instead.

After a while it struck me that this way we were creating the spam of tomorrow: a change in interest would make the information from today the spam of tomorrow. In short, the ‘filter’ (in whichever way) needs to be kept updated. And that is exactly where I see several companies or industries making mistakes.

This also changes the concept of customer service: it is not providing as many kinds of (‘abundant’) services to the customer as possible, but a continuously updated filter to ensure the provision of the right (set of) services. I will leave aside the discussion whether the proper term would be ‘Marketing’, or ‘Sales’. I am talking about the interaction (‘Service’) with an ultimately paying party (‘Customer’).

Example 1:Microsoft

In a similar way, this concept of abundance explains the demise of the market position of Microsoft. When I started my career in Customer Service the battle between Microsoft and Novell was just starting, Bill Gates had just launched his book ‘Business is War’ and WordPerfect was swiped of the face of the earth by MS-Word. Apply was staunchly hanging on to a market share which at a point tumbled below 10%, defending it’s niche but hanging on the edge by it’s fingernails.

Twenty years later we see that the once almighty Microsoft has not made any increase in total stock worth for about 10 years and has been overtaken by Apple in that all-powerful net stock worth measurement. What happened?

Although there are undoubtedly multiple explanations that can be given, each with various reasons and supporting evidence, I would like to focus on the importance of the GUI. This abbreviation of Graphical User Interface only became meaningful to me when I lived in San Francisco about 25 years ago, and my new neighbor turned out to be a free lance GUI-designer working for Apple. My intuitive appreciation for the importance of the GUI was far outshone by the zeal with which my new friend fired away on the intricacies of GUI-design.

Next to the ‘look and feel’ of a GUI (which is a separate, more specialized topic than will be dealt with here) one can see a GUI as the filter on the abundance of functionalities available. Of prime importance is the selection of primary functionalities that is shown on the first screen, of secondary importance is their specific position or ‘the way towards’ the secondary functionalities. Not only is the original (logical or intuitive) positioning relevant, but also the consistency of this positioning in time/versions (ideally also based on similar logic or intuiton). Apple focused on GUI and ultimately excelled in the field by turning Apple-interfaces into a Unique Buying Point.

On the other hand, Microsoft purposefully switched GUI’s with every new release of Windows and Office. Who has not suffered the fate of the frustrated office worker (no pun intended) where she was frantically looking for the location of this particular menu-choice within the new release? Every release, Microsoft confused its customers: by pure market-power it forced us to buy new releases and new training programs since the GUI ‘had been improved’. Which new features were really added in the latest few releases of MS Office? Yes, there are a few, but most of us would have been quite content with skipping an upgrade and working with the older version a few years longer rather than eating the Microsoft ‘foie gras’ force-fed by the IT-department (pun intended). There we also saw the first cracks in the Microsoft hegemony: more and more customers were foregoing upgrades and working with older versions, skipping one upgrade until they were forced to take a next one.

This “War on the customer” was driven by short term financial objectives set in by one of the biggest philanthropists of our time, but not with the interest of the customer in mind. For me it is a ‘great’ example where customer service (by the way, which customer has the telephone number of the Microsoft Customer Service Department?) neglect led not to the demise of a company but to the demise of a reputation and a market position.

Abundance showed its ugly head when the features of the products were so manifold that nobody was interested in them any more. It became a real problem when through the changes in GUI’s users could not find specific functionalities at all. With the benefit of hindsight, I would dare to say that had the users had a chance to keep their GUI of a previous version, Microsoft would have had a better chance of defending it’s market position.

Ultimately there came even an abundance of product versions, which made even any new product launch superfluous.

Example 2:HP Printers

In earlier days I would buy an HP printer because of it’s quality and reliability. To ensure my guaranteed maintenance I would buy HP ink cartridges, even at a higher price.

In the course of time, the business model for printers developed such that printers themselves were put in the market at bargain prices to obtain a large installed base, after which a provider would make it’s money by selling the ink cartridges – with a significantly higher profit margin than the printer itself, of course.

At the same time, the service to printers was reduced and I remember talking to a Service Engineer telling me that it would cost more to repair my printer than to buy a new one. This general consideration made printers ‘abundant’ and significantly reduced my brand loyalty.

The next and for the time being final step was the entrance of abundant ink suppliers into the market, taking advantage of the already installed base of printers of the larger brands and selling their products as straight copies with the exact numbers of A-brands indicated on their packages. The main reason for not switching to these brands would be the idea that these ‘non-original’ inks would be of an inferior quality or that the maintenance on the printer would be compromised. However, since the printers are supplied at bargain basement prices anyway, this reason for the consumer carries no more weight, I would just buy a new one. Even an explosion in different versions of printers could not help the original vendors in confusing competition or the market, a simple numbering system of ink cartridges introduced by themselves also guides the competition.

This market development is growing to the extent that I wonder whether ‘original vendors’ will be ultimately selling any ink at all. By the way, when will an ‘original vendor’ start selling ink for competitors’ machines?

Example 3: Model numbers in general

Even though the number of different products at Apple is increasing as well, compared to other providers it is an amazingly small product portfolio. Take a look at vacuum cleaners, washing machines, telephone sets, printers or any other electronic device, and often it is virtually impossible to keep track of all the versions on the market. Several (copycat) ink providers already indicate that the total number of product versions on their packaging might not be complete. In their rush to segmentation, marketeers have sliced usage up to the extent that the extreme number of choices available is holding customers back in making that choice.

Several retailers have made deals with electronics producers that certain models are produced in two versions: one for the general market and one for them specifically, the only difference being the type number. This way they can claim a lowest price guarantee at no risk: customers confronting a sales person with a lower price for a model B119 elsewhere would be left empty-handed argumentationwise because the retailer carries model B120 instead. That this model has seemingly identical features is just a coincidence, in it’s furthest developed form the B120 would get a new useless feature not in any other model. That would make the claim of ‘lowest price’ at least misleading, as it might be more accurate to state ‘only for sale here’. It will be interesting to watch how long such practices will stand.

Example 4: Google

Thirty years ago, the Yellow Pages were a no-brainer for certain advertising expenditures: it was the dominant search method for finding businesses of various sorts by customers. That the main usage of this product now seems to be as a reference for rip-offs used by scammers to mislead naive advertisers is telling. Some attributed this decline in market position to a change in channels, and that the Yellow Pages were not fast enough to change to the electronic form. I wonder whether that is the whole story: there were electronic forms of the Yellow Pages as well. There was however one main reason why I personally quit using the product, which was that their results were dead wrong! The filters were adjusted so that non-matching-but-paying-advertisers were shown more prominently than matching non-paying advertisers. When looking for a furniture store in Amsterdam one was given a furniture store in Brussels “also delivering in Amsterdam”. The value of the product delivered to the customer was compromised under the pressure of the business model.

We now see the same thing happening with Google. The original search engine would bring up the best match, and a lot of corporate folklore is built on this phenomenon. However, in the course of time and under the financial pressure of the business model, more and more room has been taken up by sponsored results. One example is that in a filter (=’customer service’) with cookies-based information, search results and advertisements are ‘personalized’. There is only one major drawback of this system, which is the effect of advertisers buying space in those filters. Yes, this can be mitigated by having the click-through rate have an effect on whether the advertisement is being shown to the next customers, but it all starts with them being shown to start with.

Here I will leave alone the factor that one can de-activate cookies, since I am not interested in the legal situation that one can avoid it My main interest is in mainstream, the general case. In addition I will not even go into the ever decreasing difference between advertisements and actual search results, which also undermines the authority/reputation of the search engine.

In short, Google runs the risk of sharing the fate of the Yellow Pages: have commercial interests compromise the integrity of the filter that provides the right results to the customer. If this process is not managed properly, neglected customer service will claim it’s next victim.

Example 5: social media like Facebook, Twitter and LinkedIn

In the early days of social media one’s standing would be determined by the number of followers. Ultimately, this drive led to promiscuity in contacts that would make Casanova proud. This development led to slightly more sophisticated measurements like Klout and Kred. As I have proven before, ( How to gain 800+ followers (+29 Klout) in 5 days) these scores can be – at least partially – bought. Elsewhere has been shown that some extreme number of (mostly deadbeat) followers for some celebrity accounts result from these accounts being suggested to follow to new subscribers.

Another weird fact inn my personal situation is that my Klout score was somewhere in the low 20’s just before a period of inactiveness on social media, when this busy period IRL had ended, my score turned out to be 49, from which it has not moved since, despite a significant increase in activity.

The number of contacts one can follow depends upon various elements, both the activity of those followed, as the time the person spends on following and interaction herself. I dare to say that following more than 1,000 Twitter accounts is limited to those that seem to focus on sending(!) whereas in LinkedIn the number of contacts one can sustainably maintain might be significantly higher.

However, the real abundance in social media is not created by the number of contacts, but by the number and sort of interactions. Where some people might share their whole personal life on social media, the number of updates becomes impossible to follow, especially when automated updates are generated: Foursquare tells your followers where you are, Runtastic tells them how many km you have run and in which time, fllwrs.com informs them on how many contacts (un)followed you in the previous period and more of these ‘items of high interest’. The words of a few parties battling this (see my second blog, in Dutch) were falling on deaf ears.

Social media themselves have not understood this theme of abundance either. Most of them have artificially inflated their user base by avoiding to kick out inactive users (although Facebook now reports ‘active users’ which is at least a transparent and fairly stable definition) in a hypothetical race to be the largest social network, or maybe even more, to show the largest increase in users for their Venture Capitalists, or just for the plain ego-caressing of the Board.

The big danger of this all is that through the abundance of users, contacts or messages, the average value of each of them approaches null. When users have to make decisions on who to follow, a likely ‘unfollow’ will be the fate of those only communicating the agrandizements of their own ego. Or maybe that will be the ultimate kick: “I still have all these followers, despite these automated updates.”

Conclusion

One of the results of today’s affluence – regardless of a crisis left or right – is an incredible choice in products and services that are offered to the customer. This abundance in choices makes it necessary for customer service professionals to help the customer filter the appropriate products for her needs. With this ever increasing abundance, the degree of success in this filter-field will become increasingly important in the battle fields of business. There, Customer Service will determine the difference between ‘abundance’ and overkill.

(Originally published October 10, 2013)

In the past I have written about the hierarchy of documents in  https://peteralderliesten.com/2015/05/05/the-hierarchy-of-documents-in-business-process-outsourcing/  and that Service Specifications are a document that is highly undervalued by some. For some others, this is the most important document in the BPO-chain, since it communicates from the ‘Control’ center to ‘Operations’ exactly what needs to be performed. (Similar how the Training Documents and the Work Instructions might be the most important documents in Operations since it communicates to the Support Functions how they should do theirs.)

Roles & Responsibilities, and Communication Lines (‘Customer’)

The first and foremost document in the Service Specification is the ‘Roles & Responsibilities’-overview. This is not (just) the organization chart. A RACI-table might be more like it. This document defines who may decide on topics. A closely associated document – sometimes integrated – is the overview of the Communication Lines – or who communicates with whom – on what topic. The simplest way of creating such an overview is to start with a list of topics that need to be addressed on a regular basis. Per topic a forum (meeting/’gremium’) is defined, and soon one will see the pattern that e.g. all operational topics are to be discussed in an Operational Jour Fixe, and all commercial ones in a Commercial Jour Fixe. The various topics that have been thought off are then a great basis for the initial ‘standard’ agenda. Important in that respect is that also in such a set-up certain topics can be declared ‘off-limits’ to ensure the scope of the meeting is held. In that context, the setting of a price for a service might be deemed inappropriate for the Operational Jour Fixe, since it has te be decided in the Commercial Jour Fixe.

In larger constellations, it makes sense not to mention names of individuals but roles or functions. For instance, when all Country Representatives ought to speak to their respective National Account Manager, I usually make an overview of the roles that communicate with one another with then a separate listing of the Country Representatives and National Account Managers per country. Such an overview is also much easier to maintain…

If one wants to make the ‘Roles & Responsibilities’-overview very nice, it also includes a description of the tasks and the responsibilities of each role. (This overview could then be the basis for the job descriptions, which are not necessarily if not to say ‘usually not’ the same. In addition, this ‘Roles & Responsibilities’ usually defines the interaction of the roles around it: contact person at the clients’, Operations Manager, Key Account Manager etc., usually less the exact definition of what the operators perform, which is covered more by the Processes and Procedures)

Change Request Procedure (‘’Product)

Once people know their roles, one can start and define their actions (or ‘Operations’). Since the highest activity in the ‘Operations’-sphere is the ‘Products List’ or ‘Services List’ the Service Specification should define both a starting ‘Products List’ and a way of addressing changes to this document, the so called ‘Change Request-Procedure’. Whenever people hear a term like that, there is a large chance they roll their eyes in disgust, recalling some horrible administrative maze. This procedure usually is. When taking into account all aspects that might be relevant, forms to describe Change Requests are known to be ‘monsters’, the alternative being changes being implemented and retracted halfway because of some kind of oversight. Or worse, to be adjusted erroneously again…

Since in a formal sense Change Requests do not only cover changes in Products, but also in Processes and Procedures, one also – and easily – goes overboard. All kinds of minor changes will occur in processes or procedures all the time: the names of contact persons will change, e-mail addresses, telephone numbers to call etc. One could busy oneself with administering all of these changes with full-blown Change Requests. On the other hand, one also could define larger ones as ‘Process Adjustments’, with effects on the AHT or Training, and minor adjustments as ‘Procedure Adjustments’, which have no major effect on Average Handling Times, Service Level, or Training, and thus on prices or budget. There should be a quick acceptance check by the BPO-provider, but then it should be ‘just implemented’, preferably into the professionally designed Knowledge DataBase, of course.

Forecast Procedure (‘Product’)

The third most important component in the Service Specification, and ‘only’ in the realm of Products, is the Forecast Procedure. Where the (production of) the individual Forecast is part of ‘Product’, the process that controls the creation of the Forecast is an essential part of the Service Specification itself.

Where inhouse contact centers often see Average Handling Times as part of the Processes, in BPO the AHT’s often are part of the Price List in Products. There are 2 reasons for this:

1. as soon as definitive AHT’s have been agreed upon, the number of transactions performed or the contractual Total Handling Time often is the basis of the invoice rather than the actual number of FTE deployed. Usually, a provider obtain a a certain volume guarantee, to exclude the possibility that the outsourcer just voids the contract by shifting volumes away and to minimize the provider’s risks on the investments made when taking over a service. If not, this lack could result in a significant extra cost factor the provider charges to the client. This volume guarantee often is given on the basis of contractual Total Handling Time rather than on number of transactions to allow for flexibility on the outsourcer’s side.

2. in the currently quickly evolving world, there is little use of sticking rigidly to numbers of transactions. Crucial is the total workload that needs to be performed, since that is going to be the basis for the planning later on, which by itself determines the expected cost level.

Here I want to make a distinction between the Forecast, which predicts the number of transactions and their AHT’s that are predicted (the Total Handling Time, or ‘demand side’) and the number of people that are required to process these transactions, (the Planning the ‘supply side’). The latter will be covered in the section on People.

Crucial to making a proper Forecast are both a. an accurate data structure which allows for a proper measurement of historic data, the quantitative basis, and b. a qualitative view on how the future is going to look like.

a. For an accurate data structure, several hindrance are very common. When parties have not properly implemented the registration of multiple transactions per call or e-mail, no useable relationship between reason codes and volumes are possible to distinguish. In addition, when in one site transactions are registered as one and in the other as three components, no transparency of data can be achieved. It is not uncommon when implementing a new service that suddenly new tasks appear, that have been done in the background, totally undocumented, but on automatic pilot by people who have been doing the same job for years.

b. A professional outsourcer would provide the provider with a periodic overview of the changes that are planned from their side.

The pun in the first sentence of this section ‘b’ is intended: it should be clear that after the contract has been signed the relationship can not become a one-way street, both party’s will have to ‘get and give’

KPI’s and Report Processes (‘Processes’)

When both the qualitative and the quantitative parts of Products covered, we can turn our attention to the two parts of Processes: KPI’s and Reports. The Service specification does not only specify these two factors, but also the ‘how to’ go about them.

 Where the Reporting Procedure speaks for itself, the Countermeasures (or ‘Corrective Measures’) are the way how to achieve KPI’s, but less common. These are nothing but a predefined set of actions that need to be put into place in predefined situations. Later on we will speak about Emergency Plans, when typhoons or pandemics hit, when IT or Facilities’ break down, but Countermeasures relates to situations where Operations (threaten to) ‘break down’. A typical example would be where a Service Level would fall below a certain threshold: When do you inform the client (and when not, she does not want to be spammed with hourly warnings that an interval Service Level is not being met) , Who at the client do you inform? And maybe even more important, What do you do?

Personnel Planning (‘People’)

One then could argue that the creation of a Personnel Planning to ensure that the workload of the Forecast can be handled is the next major component of a Service Specification, but in my experience it generally is not. The reason is that the personnel planning is a purely provider topic. (Virtually) No client is interested in how exactly the personnel planing is executed. Furthermore, a provider does not want to commit to a certain way of planning, since she does not want the introduction of a new planning system to be aligned with all of her clients.

Work Instructions (‘Procedures’)

The next topic of the hierarchy of BPO topics is definitely something to be covered in the Service Specification. There is only one ‘But’. In almost all instances, procedures are voluminous works, with frequent additions and changes. In almost all cases I have seen (if not all), the Service Specification mainly referred to the place where these work instructions could be found.

One very specific set of documents in this realm is the training documentation. Based on the work instructions it goes into details to explain how to use them. By themselves they usually are separate documents and only referenced, but often certain agreements are made on the kind of selection (e.g. a security check for employees working for a bank) or the training requirements before agents become ‘minimum skilled’ (e.g. sales training for agents doing outbound).

Channels and Configuration (‘Systems’)

In general it is way to cumbersome to add all technical systems designs to a Service Specification. However, in some cases it may make sense to define the communication channels used: which points of entry does a customer have? Sometimes certain customers for certain purposes are allowed to use certain channels. In such a case the client generally has a very professional Customer Contact Strategy prepared and is able to provide forecasts per entry point.

Another element of Systems might also find it’s way into the Service Specification: the Configuration. This document – usually a schematic overview – shows how the systems have been set up for this particular account, e.g. an overflow for multilingual accounts. Although very ‘unsexy’, I dare to say that the intelligence of the configuration has much more effect on the effectiveness of the service than the intelligence of the underlying system. Too often did I see expensive systems being underutilized, too often did I use simple systems to achieve the same effect by just using a smart configuration. One example is ‘Skill Based Routing’: often this buzz word is great in convincing a client that she really has to choose for this particular system or provider. It would be interesting to note how many of theactually implemented configurations could not be copied by a simple agent group configuration (as we already used 20 years ago), used in an intelligent manner.

Emergency Plan (‘Safety’)

The Emergency Plan is a subject one could write a complete book on, ranging from a simple evacuation plan to a comprehensive ‘Business Continuity Plan’. There are just a couple of suggestions I would like to mention for it’s contents: focus on actions before, during and after an emergency; and do not limit the Safety to just Facilities, but also take into account IT and other Systems, and Operations. On the latter it goes further than in the Countermeasures:   what do you do when your total center has been devastated by a typhoon? And how do you bring back in a controlled manner the emergency capacity to the original site?

It is amazing how helpful it is if you then still have access to the implementation plan and the acceptance tests for systems and personnel…

Invoicing Procedure (‘Finance’)

After all is well and done, there is an Invoice to be produced, sent and paid. Purchase Order numbers are usually quite difficult to obtain, invoicing addresses and VAT-numbers should be correct to ensure a signature on the right dotted line. Somehow, this part is not often overlooked…

This is a living document. I will not administer all the changes that will be applied, but I expect that in the course of time it will be many

 (Originally published August 28, 2013)

Why it makes sense to ask for complaints.

In a traditional setting, feedback to an organization is often divided into two sorts: the compliments received, which are displayed on the worker’s floor like trophies or the ‘getting well’-cards some people display in a hospital, versus the complaints, which need to be addressed ‘To the Board’, are marked as ‘important’ by the general management, given to a super-specialist somewhere in the basement of the organization whose sole aim is to prevent the general manager be embarrassed in a consumer advocate program on TV.

Only very few organizations actively pursue customer feedback in a structured way. There are notable exceptions like organizations who very actively pursue a Net Promotor Score (NPS), make statistical analyses on them, and so come up with action programmes to drive change programs geared towards increasing the NPS (and the purchasing intentions behind it).

Other organizations spend small fortunes on another ‘sexy’ subject: market research, preferably executed by a big brand agency, so that the conclusions are shrouded in professionalism, and any mistakes do not end the career path for the buyer.

Here I would like to suggest a slightly different approach, which has only some small setbacks:

-relatively small budget, so no big internal exposure towards the Board;

– focused on existing customers, more focused on managing shrinking – or at least not growing – markets, so not focused on sexy ‘new’customers out in the ‘blue ocean’;

-fairly easy to obtain the first data, so no major obstacles to climb and show off your mountaineering skills.

The major advantage is that it provides a possibility to totally upset your data gathering: rather than just assembling all kinds of interesting customer service data (“the most frequently asked question is….”) where often it is unclear what action is derived from it, one will have to restructure the data according to the actual processes a customer goes through.

In an earlier blog (unfortunately for some readers in Dutch), I propose the following definition of a complaint: every(!) repetition or correction on a previous customer contact.

Where one could see all customer contact as a ‘fail’ for the producing company, because apparently the product is not intuitive enough to use or sufficiently failsafe (what I would call the ‘First step of the Rocket of Escalation’), this usually can only/should be solved in the primary processes of the producer. Again in general, this requires quite some effort. However, when you

• first organize and categorize your complaints in a sensible manner – otherwise the results will be useless – and
• then measure the repeated order/comment/complaint, you get a good measure where there is obvious waste in the customer support process. Fortunately, most consumers seem to feel the same and do not mind to order or change their product, only when they need to repeat their request they become annoyed.

The best way to improving your primary processes is to look at the incidence of your customer service requests, the best way to improving your customer service processes is to look at the incidence of your ‘complaints’.

In most instances, companies try to minimize their complaints, because it might result in bad publicity. But just imagine what impact one would have by saying: “I want to improve my customer service, therefore I want your complaint!”

Note: an additional aspect of this method that should be noted is that the Customer Service Manager/Director needs to obtain Board-backing beforehand, since otherwise she will be held accountable for the incredible increase in complaints that will take place under her responsibility.

(Originally published on July 25, 2013)