After years spent heading contact centers and then consulting with businesses on how to improve customer service, CustomerThink Advisory Council panelist Bill Price has co-authored a book that enumerates the seven principles he believes will make your customers happier while lowering your costs. The book, written with David Jaffe, is The Best Service Is No Service: How to Liberate Your Customers From Customer Service, Keep Them Happy and Control Costs (Wiley & Sons, March 2008). CustomerThink founder Bob Thompson chats with Price about how those principles play out in today's economy.
Interview was conducted on April 10, 2008. The transcript below was edited for clarity.
Bob Thompson
I'm really pleased to have Bill Price, the founder of Driva Solutions. He and David Jaffe co-authored a wonderful new book called The Best Service Is No Service, with the subtitle, How to Liberate Your Customers From Customer Service, Keep Them Happy and Control Costs. Bill, thank you very much for being with me.
Bill Price
My pleasure, Bob.
Bob Thompson
Why don't you give us a quick background on your company and your expertise in this field?
Bill Price
Sure. I founded Driva Solutions a little more than six years ago. We're a customer service/ customer experience consulting and solutions company, based out of Seattle, Washington, where I've been for a number of years. I was the first global vice president and general manager of Customer Service for Amazon.com, also here in Seattle, for about three years before forming Driva Solutions. And before that, I spent about eight years with MCI, running a number of call center services, business units out of San Francisco and Seattle. Before that, I worked in the IVR field and started my career with McKinsey & Co.
Bob Thompson
So you've spent many, many years in the customer service and contact center industry doing consulting and being a practitioner. I found it intriguing that, after all this experience, it seems like you're trying to engineer your way out of a job because the thesis behind your book seems to be get rid of service by fixing the problems. Is that a fair statement?
Bill Price
That's exactly right. In fact, it was a notion that I was building during my earlier years, for instance, at McKinsey and ACP [an automated voice start-up MCI acquired] and at MCI. And so when [Amazon founder and CEO] Jeff Bezos interviewed me for this new position he was creating, the VP of Customer Service, he asked me what my philosophy was for running customer service, which is actually an excellent question for any CEO to pose to his or her organization. I quickly said, "Well, the best service is no service. You hire me, and I'm going to try and help reduce the need for customers to have to contact Amazon for service. Why should they? They order things online. Things should work out fine, right?"
And that led to us putting it in place together with the rest of my team at Amazon. So yeah, it actually is what I'm trying to do. I'm trying to reduce the need for service and reduce the pressure that happens all the time on service and support organizations to handle contacts they don't really need to handle.
Bob Thompson
What was your motivation to write this book, and who did you write it for, specifically?
Modern times
Bill Price
The motivation that David and I had was one of saying, "Wait a minute. Why are we continuing to build contact centers and manage them in what we call the "old-fashioned way," with a lot of speed metrics, a lot of productivity emphasis, when, really, we shouldn't be handling a lot of these contacts at all?" They should be handled, as I'll describe later, I think, through self-service and proactive measures. Or just eliminate them at their root.
Bob Thompson
You found a lack of fixing the root cause of the problem in your experience throughout the years, right?
‘They waited for customers to come in, often when the screen was just unreadable.’
Bill Price
Exactly. What we thought is that most organizations do what we call "cope with demand." They figure out how to budget for it and train and hire and motivate all of these other help functions, when they really ought to be taking more of a clean sheet of paper. So we sort of took the zero-based budgeting notion—why are we having service at all?—and then built up justifications from that. So we're aiming this at the CxO level: the CEO and the CFO, in particular, but also the head of customer service and customer care, to give them a break. David and I both had that background. We know how difficult it is to run a support operation if you don't have the support from your CEO and from other department heads. So we're trying to aim it both at the CxO level and at the heads of customer service.
Bob Thompson
You made a very provocative statement in your introduction of the book, saying that, "providing awesome customer experiences shouldn't be hard." Of course, there's been a tremendous amount of publicity about customer experience management and customer experience loyalty. We did some research a couple of years ago that showed, once again, that customer service is—not the only—but a very important part of the customer experience. You're saying being awesome shouldn't be hard. But why is it so hard? Obviously, companies are struggling with this.
Bill Price
It's really a provocative point on purpose, in that it shouldn't be hard because the notions that we bring across, these seven principles of best service, are really pretty fundamental.
They're pretty easy to do individually. The challenge is really trying to combine those, so they become part of an ongoing process, almost a DNA or a new way of thinking in the organization.
Bob Thompson
It's putting it all together that's important?
Bill Price
Exactly. It requires breaking the mold of coping with demand and doing what we call "challenge demand." It's really asking the question: "Why are our customers contacting us?" Even posing that question gets a lot of people to scratch their chin. Why is that?
Bob Thompson
Clearly, clean sheet can be pretty challenging, can't it?
Bill Price
Yeah.
Bob Thompson
Rather than keep doing what you've been doing only faster.
Bill Price
Exactly.
Bob Thompson
What are these seven best service principles that you discuss in your book?
Seven best service principles
Bill Price
All of them are based on this fundamental idea of challenging the demand for service. In order, they are:
- Eliminate dumb contacts. Don't handle contacts they shouldn't need; in other words, reengineer them.
- Create engaging self-service, by which we mean with a very high success rate in the web or IVR self-service channel.
- Be proactive. If you know something's wrong, tell your customers. If you need to send an alert, go do that before they have to contact you.
- Make it real easy to contact your company. Don't hide behind web sites that have no 800 numbers and channels that don't mix together. Just make it really easy to find out what's really going on out there.
- Own the actions across the company. Very few customer service support issues are caused by customer service. They're really caused by other groups. So figure out how to get the ownership back to them and work with them.
- Listen and act. There's terrific information streaming all the time between customers and the service center, so listen and act on that.
- Deliver great service experiences, taking a different approach, in terms of metrics and training and so forth, to deliver a great service experience because we're never going to get rid of the service center, the contact center. We just want to reform what it does.
Bob Thompson
Great! So you said together that all of these things are important to take this concept and put it into practice. But in your experience, is there one that is a natural starting point, or is there one that tends to, in your experience, have more leverage than the others, even though they may all be necessary?
Bill Price
Well, we think there is. It's really the first one, the one about eliminating dumb contacts. We've been using that term for a number of years now, and when I share it with clients or in public settings, like in conferences and so forth, everyone knows that they're dumb contacts. These are ones that are providing no value to the company, no value to the customer. For instance, customers call up and say, "My invoice doesn't make sense. I thought I paid this, and it doesn't make sense," and the agent does a little research on the phone and figures out that the bill is wrong, that the invoicing system is wrong. Not only will that customer have the problem, but so will many, many other customers. So if the company simply answers that call and resolves it for that individual customer and then moves on, that's really a dumb contact. They really ought to say, "Wait a minute, why are we doing this? Let's get this back to the billing people, to the IT folks. Let's fix this at the root, so we don't have to deal with this, anymore."
If you do that, we believe you can eliminate 25 percent of the volume that comes into the service and support center. Doing that really starts to build a much better situation for handling the other aspect of that service.
Bob Thompson
Would you generally expect that people would kind of step their way through these seven principles in that order?
Bill Price
They do form, in our mind, a logical sequence. If you can assess the reasons why customers are calling, you wind up eliminating about 40 percent of the volume by getting rid of the dumb contacts and doing better self-service and being proactive. That gives you the opportunity, almost a license, to then open up the channels more, listen to more contacts coming in and doing the other principles that we advocate.
Bob Thompson
I want to turn a little bit to where the proof is in the pudding, so to speak.
Bill Price
Sure.
Bob Thompson
First of all, do you consider this practice part of the company being customer-centric?
Bill Price
Right.
Bob Thompson
And if So how? Because you know, CustomerThink is about customer-centric business strategy, which is somewhat of a nebulous term. How does this apply to that?
Bill Price
We actually think it's fundamental to being customer-centric, Bob, and here's a quick example. By just pausing long enough or taking enough time to figure out why customers are bothering themselves to contact a company for these issues—and some of the issues are important and other issues, as I've mentioned, are dumb or unnecessary—the company puts itself much more fully in the customer's shoes, thinking about it from their point of view. As an example of that, most coding and reason coding or contact coding systems that are used by companies use company language and company terms and company products and not what the customer's really saying. By changing that around and modifying significantly, actually, changing significantly the coding scheme to what the customer's saying, you all of a sudden have much more of a voice of customer or customer-centric way of looking at it.
Business case
Bob Thompson
What about, again, thinking about your audience? You're pitching this to top management CxOs, who are very bottom line-oriented, I would think, even more so this year. At least in the U.S., the economy is a little bit shaky, to say the least. People are looking for ways to increase revenue, cut costs and, somehow, maintain profitability, if not grow it. What is the business case for this? Can you maybe highlight an example of a company you feel has really taken this concept to heart and has really developed a strong financial case—not just a "feel good" for the customers? Not to diminish making customers feel good, But hey, this is a good business practice that they saw on their top or bottom line.
Bill Price
Sure, I'd be happy to. One of our early clients is a firm called, CheckFree Corp. They've recently been acquired by Fiserv. CheckFree is about a billion-dollar company, headquartered out of Atlanta now. And they probably process about 85 percent of all the online checking, online banking in the United States. So that would include products under their own name, the CheckFree service, but also they handle Wells Fargo, Bank of America, Citibank and many, many other brand banks.
Bob Thompson
So a massive amount of volume?
Bill Price
Exactly. It's a huge amount of volume. So by being CheckFree to the consumer, they manage those transactions and take care of the payments for you, as a consumer. So this is pretty sensitive stuff. These are customers who are paying their mortgages. They're paying their credit card bills. They're paying all sorts of things using the CheckFree service. So whenever CheckFree gets contacts, they have to really focus on them because there's money at stake for the customer and for themselves and for their corporate customers.
So CheckFree had a strategy going called "contact elimination." And they brought us in to help flesh out what that strategy should be. How they did it, taking the long story short, is in the last five years, they have quintupled the number of transactions that they handle from their customers. It's gone up by a factor of five. Their revenues have only gone up by a factor of 21/2 and a half, so they're actually, as in many companies, getting less revenue per transaction. That's a real typical situation we're seeing all over the world. But at the same time, their customer service headcount has gone down by 20 percent. So transaction's up by a factor of five, revenue's up by a factor of two and a half and their headcount is down by 20 percent. They identified errors that they were making that were causing repeat contacts. They've gotten rid of almost all of those.
They've identified the owners in different parts of CheckFree and even the marketing side of their customers that were causing confusion, and they've eliminated a huge amount of that. They've created new channels on the web and in IVR to handle self-service questions that didn't need to be handled by the customer service agents. They were already profitable five years ago; they were even more profitable and more successful. And that was probably one of the many reasons why they were acquired by Fiserv and are now a big part of the Fiserv Financial Group.
Bob Thompson
So this is really an integral part of their business strategy, not just a how to optimize customer service for its own sake?
Bill Price
That's exactly right. And talking about customer-centric, as we mentioned before, they've got two levels of customers. They have the end users, like you and me, that might have a CheckFree account. But they also have the BofAs or the Citibanks and other companies—MSN and so forth—for whom they're doing the CheckFree service. They need to make sure they kept both those levels of customers really happy or else they would have invited competition and not been as successful as they've been.
Bob Thompson
Do you have a quick example of a company, maybe from your own experience, that just doesn't quite get the concept here? And they just keep either repeating the same mistakes or trying to optimize fixing the same mistakes.
Bill Price
I'll give you sort of an A-B example, sort of a good-bad example at the same time. We quote it in the book. We call it "walking on razor blades" or some sort of nickname like that. But the RAZR phone, the Motorola RAZR phone, when it first came out actually had some bad batches. These are the little flip phones that Motorola was very successful having years ago. That phone actually had little holes on the side of it, which are meant to dissipate the heat from the mobile phone, the cell phone. But they also introduce lint or dirt even underneath the screen, so you couldn't see the screen over time. The mobile companies—the ones that were carrying and selling the RAZR Phone—all knew that.
But two companies that we cite in the book, one by name and one we don't name, took very opposite positions. The first company, which was formerly Cingular—now AT&T Wireless— figured out that many of its customers were going to be affected by this. So they sent an email alert out and they called those customers proactively and said, "You may have one of these affected phones. These phones have been repaired. They've been fixed. The new phones don't have this problem. Please come into one of our stores, and we'll replace it for you." Very high reaction, high customer satisfaction. It wasn't even affecting some of the phones yet, but customers were happy that AT&T, then Cingular, was looking after them.
Another carrier, who I can't name but is another big U.S. brand, knew the same exact information because they were the ones that sold the phone to subscribers in the first place. They waited for customers to come in, often when the screen was just unreadable. Those customers were really quite upset, especially when they found out when they got to the counter that this was a known problem.
So fitting under the principle of "be proactive," AT&T Wireless-Cingular was able to actually build on what had been some problems they had had in the past. None of these companies is perfect, but they really built on problems and restored a lot of customer satisfaction. The other company continued to have trouble because it was waiting for the customers to find out the problem when they really knew it, themselves.
Bob Thompson
Great example. The last topic I'd like to get into briefly here is thinking more about the leadership of companies. We're doing some new research this year to examine how customer-centric leaders behave. How do they measure and reward the organization? Things like that. Thinking about leaders of this movement toward this "best service is no service" type of thing—whether it's top management or the leader of customer service or whoever—what would you look for? What kind of characteristics do these leaders have that you would say, "Hey, this is a person that can make it happen within this organization"?
Contacts per order
Bill Price
I'll give you two quick examples that we think fit that really well, Bob. One is that the leaders that really get this are the ones who demand and track metrics that really support what we're saying here. And one of the best metrics we know of is one that my team and I put in place back at Amazon (in fact, it predated me at Amazon, but we pushed it further), which is this notion of contacts per order. It could be contacts per transaction or contacts per customer. I gave the CheckFree example, where the transactions went way up and the headcount went down. CEOs or other leaders who demand and look at that type of a metric, not average handle time, not speed of answer, not those types of old metrics, but the new ones that really focus on "What is the contact rate? Are we doing a better job by reducing the rate for contacts?"
Bob Thompson
Not just the speed of handling, but getting the percentage of what's actually occurring?
Bill Price
That's exactly right. The contacts we're talking about are the live-handled contacts. We fully endorse more and more contacts on the web site or using IVR, so the way you look at it is that with those contacts, you still need to have an agent or a customer-facing employee handle it. So it's customer support contacts divided by, let's say, transactions or customers' orders. So that's the first thing I'd say. And the second one is: A leader needs to really listen to what the customer is saying.
Bob Thompson
Personally?
Bill Price
Personally. Personally. We've moved away from executives having a personal pulse or feel for what customers are saying. They look at reports only. They listen in meetings. They look at PowerPoint presentations. But it's for them to personally listen to phone calls, to be on the front line. Jeff Bezos used to handle, probably still handles, email several times a year. He used to do phone calls in his name just because he wanted to get a sense of what it was like, in addition to looking at reports, of course.
An example we use in the book that we like is an Indian airline called Kingfisher Airlines, which has a full-page open letter on its web site from its CEO, saying, in essence, "If anything goes wrong, if you want to contact me about a problem or something you think we should be doing better, something you'd want to see us do differently, please email me." He puts his email address on the web site. He's gotten hundreds, if not thousands, of responses. And he's turned those into new actions: new ways to do the check-in process, new ways to actually have the boarding process work well, ways that his team can really listen to customer reactions. They're now one of the highest rated airlines in all of Asia. They're now beginning to fly from where you live, Bob, in the Silicon Valley area, directly to Bangalore.
Bob Thompson
Yeah. I've heard good things about them. So to take this idea, this strategy, and make it work, just like any strategy, you need to have somebody who's personally invested in it and believes in it and lives it, as well as measures the right thing.
Bill Price
Exactly right.
Bob Thompson
I think most people would say the U.S. is either entering or in a recession. It's going to be a tough economy this year and, maybe—who knows?—next year. So budgets are going to be tightened everywhere. How does a CEO or CFO or anybody go about this strategy in this type of environment?
Bill Price
Well, I sort of am a big fan of the mandate strategy for budgets, and I'll give you another story from back at my Amazon years. We had a CFO named Warren Jensen, who went on to Electronic Arts; he just left EA as CFO there. Warren, working with me and with Jeff Bezos and others, said, "Year over year, I had to have a lower budget than I had the year before or at least a lower budget per order or per revenue. And the mandate effect made my whole team scramble, made us work more closely with my colleagues in shipping and manufacturing— meaning the web site and other parts of Amazon—to make sure that, collectively, we could reduce the need for contacts, build better self-service, etc.
"So the mandate effect says, ‘If revenues go up 20 percent next year, you're not going to get a 20 percent increase in cost for customer service. It's going to be flat.'"
Now figure out how to do it by putting in place some of these principles and other aspects of better management of your center. If your revenues are flat every year, then customer service needs to contribute its part to reduce the need for contacts, to reduce the emphasis on its cost position.
Bob Thompson
Right. So you don't necessarily have to cut the quality of service—
Bill Price
Not at all.
Bob Thompson
—if you do it right. You can deal with the economy, reduce budgets and so forth, if you're creative about getting the root cause of these problems fixed.
Bill Price
Yes. In fact, I'm glad you mentioned that. Nothing in the book says that. In fact, we say quite the opposite. To your point, we say, "You can increase the quality of service, increase the customer satisfaction by doing this; at the same time, cut costs." That's why the subtitle you mentioned earlier fits: How to Liberate Your Customers From Customer Service, Keep Them Happy and Control Costs.
Bob Thompson
It's been a pleasure talking with you, Bill. Congratulations on this book to you and to your co-author, David Jaffe.
If you're interested in learning more, you can pick up this book at Amazon and your favorite bookstore. I've spoken with Bill many times over the years and have always been impressed with his knowledge of this area. If there ever is a great time for a book like this, it's now because I think people are really struggling with the question of how you keep the quality of service up. And still financially, everyone's trying to be as efficient and as cost effective as possible.
I think this book should be quite popular, Bill.
Bill Price
Thanks very much, Bob.