http://bit.ly/cg9iQW — I’ll be there…

Over the last year or two, I’ve been trying to replicate the magic of start-ups – where everyone is laser-focused on the mission of the organization. Everyone knows what needs to be done and just does it.

Unfortunately, this ‘honeymoon’ phase quickly dissipates during the transition to a middle-aged company and beyond.

I think I’ve moved one step closer to finding a solution, as this month’s article discusses. Two of my retainer-based clients are one year into the ‘alignment and measurement’ process, and have reported (mostly) amazing success.

One of the biggest unanticipated side effects has been the boost in employee morale, which has a multiplier effect on productivity, customer loyalty and so much more.

Get the article in a pdf format — http://bit.ly/cpFoMv or sign up for the next newsletter from my home page – www.verghisgroup.com

A highly under-rated and under-used partnership is between marketing and customer support/customer service. I’m working with a large client now where (as part of a larger engagement) we explored and developed a partnership between marketing and customer service that has resulted in more loyal customers that at the same time yields tens of thousands of dollars of incremental revenue a quarter.

Yes, it can be done without turning customer service and support into sales people. They always have to be the customer’s advocate. However, understanding the customer lifecycle, personas and churn risk points and making that part of the support DNA helps. Dramatically.

Embedded in this interesting article from the Economist is something similar that Cablecom (a Swiss cable tv/internet/phone provider) did.

“Like many telecoms providers, Cablecom has grappled with churn.  Using advanced data analytics, Cablecom discovered that although customer defections peaked in the 13th month, the decision to leave was typically around the 9th month (as indicated by things like the number of calls to customer support services).  To reduce defections, Cablecom offered at-risk customers special deals 7 months into their subscription. 

The results were impressive:  customer defections fell from 20% of subscribers a year to under 5%, enabling the firm to save significant marketing acquisition costs while boosting customer satisfaction.”

Andres Sanchez has published a book titled Technical Support Essentials – Advice you can use to succeed in Technical Support and has cited the Savvy Support model a few times as one of the new models for support.

Read all about it, and much more of what Andres has to say in his book.

Ah the simpler days of the Internet. Way back in 2002, during my Akamai days, we had team members manually mining public forums for customer comments during live events to ensure that we could pin point and resolve issues close to real time. Of course it would be impossible to scale staff enough to do that smartly today.

That’s why today’s New York Times article  (free registration required) on some of the tools available to mine blogs, Twitter and more caught my interest. Selected quotes from the article:

Scout Labs recently introduced a subscription service that allows customers to monitor blogs, news articles, online forums and social networking sites for trends in opinions about products, services or topics in the news.

Jodange offers a service geared toward online publishers that lets them incorporate opinion data drawn from over 450,000 sources, including mainstream news sources, blogs and Twitter.

Bo Pang, a researcher at Yahoo co-wrote “Opinion Mining and Sentiment Analysis,” one of the first academic books on sentiment analysis.

To get at the true intent of a statement, Ms. Pang developed software that looks at several different filters, including polarity (is the statement positive or negative?), intensity (what is the degree of emotion being expressed?) and subjectivity (how partial or impartial is the source?).

For example, a preponderance of adjectives often signals a high degree of subjectivity, while noun- and verb-heavy statements tend toward a more neutral point of view.

How are you tracking sentiments about your organization? Have you been able to strike a good balance between a rapid response and appropriate response (i.e. not over-reacting) ?

Boston, MA — Drawing on an impressive lineup of speakers, the 2009 “Voice of the Customer Conference” will focus on leading-edge issues in building end-user communities, improving satisfaction metrics, and creating customer-centric organizations. The conference, produced by the First Wednesday Roundtable, will take place in Bolton, Mass. on Nov. 3 with a day of optional workshops on Nov. 4.

Registration for the Nov. 3 conference is $385 per person. Additional information about the program and post-conference workshops can be found on the First Wednesday Web site:
http://www.first-wednesday.com/support_conference.html

In May 2009, I flew to Bangalore and Hyderabad, India to do four sessions (four hours each!) for a client. This covered a number of topics that were custom done for them based on requirements from the client (senior executive in support in a global company) and their HR team.

The talks went pretty well and I did them with no notes. About 60% of the content was common, the rest of it varied based on the audience and the feedback during the interactive homework sessions.

Sean O’Driscoll and I will be presenting as ‘experts’ for the SSPA Talent Management Community of Interest webinar on May 10th. We will be focusing on the big trends impacting service and support, and how communication and collaboration fits in to recruiting, retaining and developing talent. If you are interested in participating, and are a SSPA member, let me know if you want an invite.

For the first time in history, more than half the world’s population has joined the middle class. This startling development just happened in the past year or two. Why should you care? I believe this development will have a profound impact on service and support leaders all over the world.

Let’s start by defining “middle class.” Most economists agree there are actually two types. One consists of those who are middle class by any standard. Their income is somewhere between the average Brazilian’s and Italian’s (i.e., $12-$50 a day). While this segment is growing fast, they make up only a tenth of the developing world.

The second type consists of those who are middle-class by the standards of the developing world but not the developed (rich) one. This group earns between $2-13 per day. (I’ve always wondered about the significance of $2 per day. It turns out that amount is considered poverty anywhere in the world. $13 is the poverty line in the United States.)

But it is not just how many are rising into middle class status. It’s how quickly the number ‘tips,’ given the nature of the growth curve. Between 1990 and 2005 – just 15 years – China’s middle-class population soared from 74 million to an unbelievable 806 million. India’s middle class boom has just begun, with the middle class going from 147 million to 264 million during the same period. (Source: The Economist)

Now let’s see what this means to service and support professionals.

The single biggest source of profit for many technology companies is now services revenue. With intense pressure from CEOs and CFOs to keep bringing in this lucrative revenue, coupled with strong pushback from customers demanding discounts, many companies view selling services to this growing global middle class a smart strategy for growth.

Good idea, but -
* If you don’t take into account the two types of middle class, you will roll out services and products that a large percentage of them find simply unaffordable.
* Using traditional techniques and metrics to service them could choke earnings and even bankrupt you.

So what can a service and support leader do? Plenty, I believe. If you are serious about making profits under very tough economic circumstances, check out Prof. C.K. Prahlad’s Fortune at the Bottom of the Pyramid. Another valuable resource is one of the most downloaded papers on my own website, my white paper on “Cultural Implications of Service.”

But you probably want to do more than merely survive in this new, supremely cost-conscious world of service and support. What will it take to thrive? We’ll explore that in the next issue of my newsletter, the Verghis View.

(From the December 2008 newsletter. Sign up from my home page.)

It really doesn’t seem fair, does it? On one side you have senior management breathing down your neck, pressuring you to deliver more revenue and/or better margins from your existing services portfolio. On the other, your customers are looking to slash costs, and are unlikely to forget (or forgive) companies that force them to do anything that smacks of a price increase.

It’s not easy for you and your overworked team to add new services in this economic climate, so here’s another source of revenue to consider: service recovery. After all, mistakes are like death and taxes: inevitable. At some point we all will make mistakes that affect our customers. Stuff happens.

What’s important is how we recover from mistakes. The right recovery can transform them from a “Never Do Business with You Again Unless I Have To” to a “Wow” experience. Check out my blog for a personal example of this.

Continental Airlines has an interesting case study about this. A few years ago they tried an interesting experiment to discover how best to recover from “transportation events,” i.e., cancelled flights, long delays etc. For eight months, they randomly divided the affected passengers into three groups.

• One group got a form letter apologizing for the event.
• Another group received the form letter plus a complimentary trial membership in Continental’s Presidents Club.
• The third group got nothing.

The third group was not happy. That’s no surprise. But the first group, the customers who received a simple form letter, ended up spending 8% more with Continental, a $6 million increase. Among customers who received both the form letter and the complimentary Presidents Club pass, 30% ended up joining the Club – which resulted in additional revenue on top of the $6 million.

The lesson: No matter how hard it is to reach out and follow up with customers after you mess up, do it anyway. When handled properly (and promptly), it is not only good for your reputation, it’s good for your bottom line.

Question: What are you doing to ensure you recover properly from service exceptions?