This is the second of a four part interview with Rob Siefker, the Director of the Customer Loyatly Team at Zappos. In this part of the interview, Rob talks more about the service metrics that Zappos tracks, how the company empowers its Customer Loyalty Team Members (and has avoided bureaucracy), how escalations to managers work at the company, how the Zappos compensates its employees, and the extensive continuing education programs employees have access to at Zappos and how they work.

You can read part one of the interview here and part two here. To read this part, click “read more.”

Being a business that is focused on real value for customers is often talked about by CEOs but in our experience only sincerely acted upon by a few.

Its not enough to just believe in an idea, one must act to make it happen. A key reason for this failure to act is the lack of understanding of the economics behind customer centricity.

Fundamentally customer centricity is about building a sustainable profit generating capability for the organization but there is also a downside of not acting to create this type of culture.

Here are 7 ways of calculating the cost of a lack of customer focus:

1. The CEO loses touch with the marketplace.

As businesses grow on the back of an original powerful value proposition, success can disconnect a company with the marketplace.

A recent example is Netflix’s decision to raise the price without a perceived increase in value for their customers. The result was the loss of 800,000 customers in one quarter. Let’s assume it cost them $150 per customer, (based on this great case study by Neil Patel of KISSMetrics), that was a $12 million dollar investment wiped out in one quarter. Ok so many of those customers would have contributed revenue during their time with the company but what about the impact on Netflix’s reputation? How much will it cost to attract new customers going forward $175-200?

As I was down there, a colleague of mine e-mailed me some links about the company that makes footballs for the NFL, Wilson Sporting Goods.  These footballs are what are used in almost every football game across the country and are considered the best out there.  I actually owned one for a while and someone stole it from my garage so apparently they are pretty valuable. 

As I read about the company, it is quite amazing what they do to get the footballs ready for the Super Bowl which you can read about here.  What is more impressive is the apparent employee loyalty at this company.  If you look at some of these videos you will hear people talk about being part of the company for 40 years or more, and they seem excited to talk about Wilson and their job. You listen to Willie talk about the bladder in this video and you can just see the pride he has when he talks about his job, it is inspiring.  Look at how long many of those employees have been there.  Generally in a manufacturing environment, employee loyalty can be lower than other industries so to have what seems to be very high employee loyalty is quite impressive. 

A few weeks ago, I jumped into the compensation discussion with a post about commissions.  My opinion is that heavily and solely incentivizing a sales professional for their selling results might not be the most effective compensation model.  There are aspects of the sales process that involve the expertise, support, and follow-through of others in bringing new business and retaining existing business.  Providing a large portion of the rewards to the sales professional for these results diminishes the significant and valued contributions of others in supporting these outcomes.

The purpose of this post is to offer a follow-up to the commission conversation.  And, provide a little more perspective into what is rapidly becoming the organizational and process trend for most businesses.

Peter Gibbons (employee): The thing is, Bob, it's not that I'm lazy; it's that I just don't care.
Bob Porter (consultant): Don't...don't care?
Peter Gibbons: It's a problem of motivation, all right? Now if I work my ass off and Initech ships a few extra units, I don't see another dime, so where's the motivation? And here's something else, Bob. I have eight different bosses right now.
Bob Slydell: I beg your pardon?
Peter Gibbons: Eight bosses.
Bob Slydell: Eight?
Peter Gibbons: Eight, Bob. So that means that when I make a mistake, I have eight different people coming by to tell me about it. That's my only real motivation is not to be hassled, that and the fear of losing my job. But you know, Bob that will only make someone work just hard enough not to get fired.

Remember the film Office Space (1999), the satire on corporate culture that had us laughing at the many ways a company's managers humiliated its employees and how its employees exacted revenge. Did the movie exaggerate corporate culture? OK, perhaps a little bit. But too often, company executives pay lip service to the idea that their employees are their greatest asset and don't carry that idea beyond the PowerPoint presentation. If a company really does value its employees, it needs to consider the following:

Recently I executed an employee engagement survey across a client organization. When I compared the senior executive team with the blended front-line results I discovered a very troubling outcome.

The senior executives were almost unanimous in the belief that they had done an excellent job of communicating the core values of the organization — yet results from the front-line indicated exactly the opposite.

Even worse, some of the comments indicated that the values the front-line were observing were inconsistent with the “advertised” values.

Too many organizations believe that the values are clear in their organization. However, all too often, the values that are communicated are coming via actions rather than words — or the actions speak louder than the words.

Here are few questions to ask yourself.

Present voice of the customer to all employees, and you will be more likely to reap financial benefits and manage customer experience holistically, according to the 2011 Business-to-Business Customer Experience Management Benchmarking Study.

Although only a third of companies are presenting customer feedback to all employees, those who do reported at least 20 percentage points advantage in the performance of holistic customer experience management, as shown by the gaps in blue and red bar graphs below. Examples of business results attributed to customer experience management efforts include:

This is the second of a four part interview with Rob Siefker, the Director of the Customer Loyatly Team at Zappos. In this part of the interview, Rob discusses how Zappos motivates members of their customer loyalty team, what programs they have in place to recognize good service, and what service metrics the company tracks and how.

You can read part one of the interview here. To read this part, click “read more.”

Service Untitled: So how do you motivate Customer Loyalty team members? And then how do you keep that motivation up over time? A lot of companies institute programs and then see enthusiasm over time drop off.
Rob: Yeah, I mean that’s a great question. I think the biggest thing that we’ve been able to offer our employees to keep them engaged is opportunities to learn and grow and do different things. And you know we have a wonderful culture that we’ll strive to continue to make as solid as possible for our employees, and each and every one of us has a part in doing that. We invest a lot in the new employee’s right from the get–go so they see that there’s this tremendous investment in them, and there is a lot of enthusiasm for people when they first start in the call center.

Greetings.  Having teenagers has its special rewards.  Wait...I'm trying to think of one.  But seriously, having two teenage daughters is a source of great joy and, at times, lots of emotion.  But it's also a wonderful opportunity to learn, keep up with the wisdom and challenges of their generation, strengthen my understanding of digital technology and the fast-changing world of entertainment and improve my colorful language skills.  It is also an opportunity to learn about some of the best practices of companies focused on young people that are working hard to earn their attention and purchasing power.  Companies like H & M, the fast-growing Swedish retailer, or Chipotle which has reinvented the world of fast food, or Spotify which is innovating the way people find and share music.