Tag Archives: failure demand

Outsourcing, The 95 Method and Government, The 95 Method and Management

Onshoring, Offshoring or Outsourcing – The Reasons Matter

November 25, 2012 Tripp Babbitt 1 Comment

The last American election “exposed” outsourcing as an evil, and in part, a reason one presidential candidate defeated another. The belief is that outsourcing – foreign or domestic – helps to optimize a business function. I heard this argument for the hundredth times on the Washington Times Communities website in an article titled, Outsourcing vs. Offshoring.

It is the wrong thinking.

However, organizations continue to perpetuate the “optimize each function thinking” as blindly acceptable. Sub-optimization results on a large scale. Locking in waste for short-term profit games has become a national pastime in the US. It is hard to find organizations that don’t lick their chops when they see the reduced costs in the form of lower wages in outsourcing.

Political and consumer backlash seems to be bringing back the jobs . . . and again for the wrong reasons. The problems with outsourcing go beyond politics. This is not to say that consumers should be ignored as they decide what organizations to place their business with.

The deciding factors need to connect with the waste service organizations are outsourcing. When the design of the work prevents customers from getting their demands satisfied – we get failure demand. When phone calls run 40, 60, 80% and higher of these types of demands -which I find in almost every organization – why would you outsource this much waste? It is more prudent to redesign the work. Service organizations that outsource this much waste are locking in costs, not reducing them.

So few organizations know what to measure that reduces costs and the result is managing by costs alone. The result is always increased costs.

Before the next onshoring craze let’s address the problems first . . . the right ones.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public). His organization helps executives find a better way to make the work work. Read his articles at Quality Digest and his column for CustomermanagementIQ.com. Learn more about the The 95 Method for service organizations. Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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The 95 Method and Contact Centers, The 95 Method and Management

Myths, Legends and Finding Ways to Get Me off the Phone

August 29, 2012 Tripp Babbitt Leave a comment

My AT&T package (phone, internet, wireless and TV) has been under-performing for the past few months. They replaced the modem which apparently they do quite often as the UPS store in my area indicated they got 6 – 10 a day through their store. Solved part of my problem – phone works – but didn’t fix the frozen TV or the internet problems.

I was saved by a technician that came out and found several problems that when finished made everything clear and (so far) working very well. That’s the way things go when you get a tech, things seem to work. The troubleshooters on the phone will tell you tall tales when management uses AHT and other contact center measures that predictably drive wrong behavior.

One contact center call to AT&T for a problem with my remote was especially egregious. I was told that the Sony TV I have had a known conflict. The tech told me that this was not true and that he isn’t sure why I was given such misinformation. He went on to share that the contact centers agents didn’t know how to troubleshoot and wished that management would actually see and understand the issues.

But why stop myths and legends when we can have BS?

More often than not, customers want something very simple . . . their problem solved. Unfortunately, companies are too focused on saving money than resolving a customer’s problem. The management paradox is that not solving my problem causes failure demand and adds to costs – as I have to keep calling back in to get my problem solved.

Sad, but true AT&T.

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The 95 Method and Contact Centers, The 95 Method and Government, The 95 Method and Management

The Customer Strikes Back – Are You Ready?

August 12, 2012 Tripp Babbitt Leave a comment

I recently read an article by Doc Searls in the Wall Street Journal called, “The Customer as a God.” Customers have long catered to service organizations by being treated in a herd mentality – meaning the customer has to adjust to to the service organization. However, the future holds a very different environment.

Doc Searls references it as Vendor Relationship Management. The Customer is King!

This is yet another strike to economy of scale thinking . Mass marketing soon will give way to individual marketing and economies of flow. This future means that service organizations will need to absorb great variety in customer demands. Standardization will not only cost more through failure demand, but will now not give what customers crave services fit for them in a customized manner.

Wow! Redesigning our thinking about the design and management of work is now more important than ever. Not only does it cost less, but it delivers service in a truly personal manner.

Are you ready for the future?

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Systems Thinking and Contact Centers, The 95 Method and Contact Centers

Complaint Line Con

August 5, 2012 Tripp Babbitt Leave a comment

You can find almost anything on the internet these days. I found a piece by A Current Affair on Australian TV that talks about how hard it is to voice a complaint in today’s IVR infected and functionally separated organizations. The piece highlights how fast sales lines are picked up and how slowly complaint lines are handled . . . if at all.

You have to love an voice recognition system that does not recognize “complaint” as something that should be routed. Of course, I believe that the world would be a better place without IVRs in general. Its not old-fashioned to have a human answer the phone, it’s just good business.

It doesn’t surprise me that sales lines are answered so quickly and most other inquiries are slow to be answered or even resolved. With many organizations – private or public – running failure demand upwards of 4 – 9 out of 10 calls means that these organizations are frustrating or even chasing away customers.

Imagine what it would be like in reduced costs to organizations if it could be designed out with different and better thinking . . .

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The 95 Method and Contact Centers, The 95 Method and Government, The 95 Method and Management

2012 Global Customer Service Barometer

June 13, 2012 Tripp Babbitt 1 Comment

I am not much for surveys these days, but I ran across the 2012 Global Customer Service Barometer prepared for American Express by Echo. The best way to find out how you are performing is to actually know before the customer hangs up. Because, once the call is over the opportunity has passed to provide service – one reason I am not a fan of customer satisfaction surveys (another is that surveys rarely ask questions “that matter” to customers).

Some things that stood out for me in the survey:

Customers are not seeing much change in customer service.
Businesses are more likely to miss your expectations than exceed them.
Customers will pay more for customer service.
Consumers expect excellent customer service and don’t expect to pay more for it.
Consumers are likely to tell 8 or more people about their excellent service.
Consumers are likely to tell 11 or more people about their poor experience.
Consumers prefer to speak to real person either by phone or face-to-face.

As anyone can see from the survey, consumers want good service. Just so few deliver it. Why is this?

Many organizations view customer service as a zero-sum game, where the belief is that good service costs more. This is not true, great customer service costs less.

This also means if customers want to talk to a real person, it will be less expensive than that expensive IVR and voice system you just bought to save money. I have often found these technologies entrap the customer and workers – increasing costs.

There are some numbers more nebulous than others. For instance, knowing how many customers say good and bad things is a very difficult number to know for your service. However, failure demand is something to sink your teeth into. When customers place demands on your customer service people that are failures it is very expensive. Worse, is the amount of failure demand hitting contact centers or other service workers. It is typically between 25 and 75%. That is the bad news, the good news is that in most service organizations it can be designed out.

A better service design also requires better management thinking about how to manage the work. Activity measures like AHT and service levels are the wrong measures. They play to the zero-sum game, failure demand measurement is a whole different game. To deliver better service, we have to reduce failure demand that reduces costs too.

There are other measures that are important too. These may be end-to-end measures derived from “what matters” to customers. These require others outside the customer service arena to support making a design that meets the demands of customers.

No matter what the survey says, it can not replace getting knowledge about that what and why of current performance of your organization. Learning about customer purpose, types of demand (value/failure) and the flow of the work will help you understand about the assumptions associated with design and management of work.

Come hear me speak at the CAST conference in San Jose, California! Re-Thinking Management . . . Re-Thinking . . . IT!

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The 95 Method and Government, The 95 Method and Management

ACS Fails Service Test

May 29, 2012 Tripp Babbitt 1 Comment

The following incident (with ACS) from a reader highlights the good problems with front and back office design and putting agents on the phone that can not help customers in any way. I love the IVR, which of course only adds to the frustration of the call. The amount of failure demand driven in from such interactions far outweighs the short-term benefits perceived by “dumbing down” the agent.

“I have a great one for you.

Just called ACS/Mellon (my HSA) because by recurring payments to dentist have not been working. I’m going to try to recreate my experience for your reading pleasure.

I initiated the call at 8:20pm and went through the regular 3 minutes of options before I could get to an option to speak to someone. Once I got through, of course all representatives were busy, and I was told my wait time would be greater than 5 minutes. During my 20 minute wait on hold, I was told 33 times by an automated female voice and 8 times by a male voice that “my call was important” and to “stay on the line and someone would be with me shortly.” In one instance, the female voice even interrupted the male voice. I finally got through to a representative who of course asked me for the same information I had already keyed into the phone. I was finally ready to address my issue.

The issue: I had set up $160.00 monthly recurring payments to my dentist for my daughter’s braces. I set this up last year, and everything worked fine for October, November, and December of 2011. I assumed everything was going according to plan, so when I checked my account sometime in March of 2012, I was surprised to see that no payments had been made to the dentist in 2012 and the recurring payment was gone. Thinking it was probably a new year thing, I went ahead and paid the dentist the two missing payments with my flex spending debit card, and set up a new recurring payment beginning with the April payment. I could then see payments queued for 3/30, 5/1, and 6/1, so I thought all was well. The week of April 9th, I went back in to check the account and saw that all three payments (including the 3/30 payment) were still in a pending status. Having exhausted what I could find on the website, I made the call.

The representative proceeded to tell me that she saw a pending payment from 3/30 to the dentist, that had not been issued. Duh! Wasn’t that why I was calling? She asked me to hold while she “checked the database.” She came back to me with the suggestion that I delete the transaction and re-enter it to see if it would go through. When I said I didn’t think that was the solution, and that I wanted to find out the problem (whether it be on my end or theirs), she said she could open a research request for her back office to look at it. It would take 3-5 days for a reply, and I could call back and get the results the the inquiry. When I questioned why I was calling them instead of them calling me when I didn’t even know when they would have an answer, she proceeded to repeat that it would be 3-5 days. She did say that she would make a note on the request for them to call when they had resolution (I’m not holding my breath. I don’t think she even asked for my phone number.) I then put my 95 Method hat on and got her to admit that she couldn’t see anything more on her end than I could see on my online application. Of course, at the end of the conversation, she asked if there was any else she could help me with (she hadn’t helped me with anything.) She then asked me if I would be willing to take a survey. My answer was, “Oh, yes!” When she tried to transfer me, she must have hit an invalid code, and I went into an infinite loop telling me that the code I entered was incorrect and to re-enter it. Needless to say, I didn’t get to the survey. How convenient!

Do I feel like my call was very important to them? YOU BETCHA!”

Apparently, my reader isn’t the only one with problems attributed to ACS – see Consumer Affairs website. ACS needs to discover the counter-intuitive truth that good service costs less. Remember, don’t blame the agent! The system designed by ACS management is the issue as they designed the system.

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Jet2.com – This is One Airline to Avoid

May 12, 2012 Tripp Babbitt 29 Comments

Boeing 757-200 takes off at Manchester Airport (Photo credit: Wikipedia)

Airlines have generally been poor performers in the customer experience. Pretty much every airline can not get it right. I was going on a trip to Portugal and found Jet2.com and thought, “OK, budget airline . . . how much worse could it be?” The answer is somewhere between a lot and criminal.

The website showed the really low fares, but there are fees for just about everything from breakfast, luggage and my personal favorite . . . checking in on-line. You see if you fail to check in on-line you have to pay about $27 for the privilege. I had forgotten this and although I thought $27 was a bit steep, I paid it.

However, while I was waiting to pay a couple in front of me had tried to check-in on-line and the check-in failed. I listened to the story as they spoke to a manager about the on-line issue. The manager asked if they had written the error message and error code down (who would think to do that?). Because the couple had failed to write down these two important pieces of information, they were out over $55 – at least if they wanted to travel that day. I thought to myself, “who would think it is intuitive to write the error message down, besides shouldn’t the website working be the responsibility of Jet2.com?”

I made a mental note to be sure to work out something with the front desk at the hotel to print my return ticket. When the day before leaving arrived, I went to work to “check-in” for the flight the next day. The website asked for a series of passport information. You have to select your country of issue (for the passport) and what country you lived in – both are the USA. The first drop down menu had USA, but the second one did not have “USA” as a country to select. Entrapping technology for customers is a huge problem in service, everyone wants to send customers to cheaper channels – they rarely become cheaper when you look end-to-end. Variety in service demand sees to that.

When I arrived at the Portugal airport the next day, I knew that I would be blamed somehow for the website snafu, I just wasn’t sure how – so, I played it out. The check-in desk told me I would have to go to a different desk to pay or plead my case. Two other families were already there because the had hit the wrong airport during check-in and the other was confused about the selection – both wound up having to pay.

My turn, I explained to the agent about the drop down menu missing “USA” and the response was even more egregious than I had expected, “We have had USA residents check-in on line before and they had no problem.”

Seriously! This is a response that has nothing to do with MY problem – are you kidding? I implored her to look on the website and see for herself, but she would have none of it. I paid my (close to) $30 this time and decided to use the power of the internet to exact retribution.

The issue to me is that this airline can not or should not survive. Allowing such poor service and getting away with it needs a public verdict or at least disclosure. With all the failure demand coming into the desk at Jet2.com, it will eventually collapse under its own cost structure – it requires people to deal with these problems even if they get paid. Add in the number of people that will swear never to fly them again and they will not last.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public). His organization helps executives find a better way to make the work work. Read his articles at Quality Digest and his column for CustomermanagementIQ.com. Learn more about the 95 Method for service organizations. Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

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Systems Thinking and Contact Centers, Systems Thinking and Management, Systems Thinking and Technology

The Secret to Great a Customer Experience

May 6, 2012 Tripp Babbitt 1 Comment

I have been reading a lot of customer experience articles and posts. Most of it is softball stuff, lots of syrupy language and like love your customers and think about the customer experience in all you do. Unfortunately, as I dig deeper the traditional design and management approaches make all this stuff a real yawner. Yet, people make a ton of money telling you obvious things with speeches and writing.

Traditional approaches still are based on incentives and having the “right” data. One is based on the flawed thinking that performance is down to the individual. And then – of course – data is needed to figure out ways to improve the customer experience . . . bring in the IT!

Sorry folks, dead end.

Getting a great customer experience requires a better system for front-line employees to work in. The 25 – 75% failure demand that customers experience is pathetic. Designing the work to customer purpose and demands. Management learning counter-intuitive truths about how system perform and that it is not down to the individual.

The fluffy and feel good customer experience gurus need more depth to what needs to happen to change the poorly designed systems. Just using words like “seamless” and “customer friendly” advances nothing. Some depth . . . please!

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Systems Thinking and Management

Wall of Shame: Ticket #2428124

March 11, 2012 Tripp Babbitt Leave a comment

I won’t pretend to be the only one to have service problems and some are more bearable than others. However, my experience at the Glasgow Marriott is legendary . . . in a bad way.

I have had problems with the Marriott in Glasgow previously, especially with the iBahn internet service. I understand the problems with using WiFi in an old building with high floors (although it could be solved). I have often suffered through the poor speed of the broadband as the substitute to the WiFi problem.

Unfortunately, the problem experienced was more egregious . . . I was completely kicked out of the system.

The first time I had the problem, the answer was a different room (a suite). The second time there were nor other rooms (apparently). Being Platinum with the Marriott Hotels, usually I get taken care of in these situations. No today or even the week I was there.

The problem started when things were working fine with the broadband connection and I was kicked off the system. Calling down to the front desk, I was told that iBahn handles these problems – why is it when a customer has a problem no one takes responsibility in service? This is failure demand (the failure to do something or do something right for a customer – 95) pure and simple. Regardless, I was passed to iBahn customer service.

iBahn customer service wound up resetting my system and my service was restored which is fine or so I thought. The problem became repetitive and I was continually kicked out of the connection . . . sometimes in 20 minutes, sometimes in two hours. I had to call down to the front desk and get transferred over 20 times over 3 days and I was out during the day!

One day they tried replacing the modem, didn’t work. The sad part is many customers get to pay for this privilege because they don’t have Platinum or Gold status with Marriott. A customer doesn’t want to have to fix a problem that is not theirs and to have to pay for it is ridiculous.

My problems as a customer that you create are yours to solve . . . not mine. Passing the buck and washing your hands of the problem because its the “vendor’s problem” does not wash with customers in any service. Marriott chose this vendor, not me. As a customer, I should be exempt from solving problems for Marriott.

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Systems Thinking and Management

The Psychology of Selling

February 26, 2012 Tripp Babbitt 3 Comments

Being from the United States, one becomes use to the constant “push” for sales. Car dealers are notorious for the dreaded “push” sale. Lots of tricks to get you to buy a car. They “hold” your keys for appraisal and don’t let you leave – I had that happen to me at a Tom Wood Volkswagen dealership in Indianapolis. I not only left mad, but I told many other people about how ridiculous it was I had to be put through this as a customer.

Years ago, I had training from the Sandler Sales Institute that made a lot of sense. I remember first understanding that customers don’t trust salespeople (because they lie) during the sales training. The Sandler system was set up to not make you look like a salesperson. The aim was to build trust.

Since, I have learned the 95 Method. The Method helps eliminate failure demand (demand caused by a failure to do something or do something right for a customer). Bad service in the form of failure demand helps undermine trust in the eyes of a customer. Try selling to a customer that has an outstanding issue can only make them mad. Overselling to a customer creates failure demand when they discover that they don’t need to overpay for a service that is too much for their needs or budget. This is all “push.” “Push” too often leads to failure demand. Sales organizations with revenue shortfalls often rely on more “push” to hit revenue targets which in turn creates more waste in failure demand.

There are many reasons for failure demand in service organizations, standardization and “push” selling are only two. The only way to learn what causes failure demand is to study your organization as a system. The 95 Method does this (we offer a free download at www.newsystemsthinking.com or even on this blog). No matter what the cause of failure demand, it is a barrier to greater sales.

The elimination of failure demand removes the barrier and gives customers the opportunity to “pull” for products and services. All customers like to buy, very few like to be coerced through “push” methods. Service organizations can build trust with their customers and that is the real winning psychology of selling.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public). His organization helps executives find a better way to make the work work. Read his articles at Quality Digest and his column for CustomermanagementIQ.com. Learn more about the 95 Method for service organizations. Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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