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About good Service Management Best Practices

February 13, 2015

This article is about how to apply good service management practices from non-IT Service organizations to IT Service Management, and vice versa.

Service Management – Not Just for IT Anymore

The expansion of the principles of IT service management to areas outside of IT has been a topic of conversation for several years. Anyone who has been engaged in the IT over the past few years has noticed significant changes.

In order to learn how service support practices have been adapted as a result of changes in the industry, and whether ITSM has expanded beyond IT, HDI and itSMF USA collaborated on a survey to learn more about what organizations are actually doing and establish a context for potential future research.

See Service Management Not just for IT Anymore Whitepaper by HDI and itSMF USA.

The Highlights include:

  • More than half of the organizations surveyed are either applying or planning to apply service management principles in business areas outside of IT.
  • And ITIL is the most common set of service management practices being applied in non-IT areas.

Which SM Principles shall we apply? Let’s start learning from Non-IT first!

We know these Service Management Principles from the ITIL books. They are all about good or best practices. And there is one top goal for the IT Service Provider: It is the business alignment. But isn’t exactly the business orientation a weak point in many IT Organizations? So what principles shall we apply to non-IT Service Organizations to make them more successful?

Or the other way around: Wouldn’t it be better to apply the non-IT service management good practices to the IT management practices first?

That’s why we should start learning from some of the experiences Non-IT Service Organizations has collected in supporting their customers over the last few years…

Reference Story provided by the Harvard Business Review

A Harvard Business Review article from August 2010 is showing us important insights into the success of support organizations and customer loyalty.

The idea that companies must “delight” their customers has become so engrained that managers rarely examine it.  But ask yourself this: How often does someone foster a company because of its over-the-top service?  How often do consumers cut companies loose because of terrible service? All the time. They exact revenge on airlines that lose their bags, cable providers whose technicians keep them waiting, cellular companies whose reps put them on permanent hold, and insurance companies who don’t understand what vitally important means.

Consumers’ impulse to punish bad service— at least more readily than to reward delightful service—plays out dramatically in both phone- based and self-service interactions, which are most companies’ largest customer service channels.

In those settings the Harvard Business Reviews research shows, loyalty has a lot more to do with how well companies deliver on their basic promises than on how dazzling the service experience might be. Yet most companies have failed to realize this and pay dearly in terms of wasted investments and lost customers.

About the links of customer service and loyalty / a study with more than 75,000 people

To examine the links between customer service and loyalty, the Customer Contact Council, a division of the Corporate Executive Board, conducted a study of more than 75,000 people who had interacted over the phone with contact-center representatives or through self-service channels such as the web, voice prompts, chat, and e-mail. They also held hundreds of structured interviews with customer service leaders and their functional counter- parts in large companies throughout the world.

The research addressed three questions:

  • How important is customer service to loyalty?
  • Which customer service activities increase loyalty, and which don’t?
  • Can companies increase loyalty without raising their customer service operating costs?

About the Research: worldwide cross industry and product or service

The Harvard Business Review team efined “loyalty” as customers’ intention to continue doing business with a company, increase their spending, or say good things about it (or refrain from saying bad things).

During a three-year period, more than 75,000 B2C and B2B customers were surveyed about their recent service interactions in major non- face-to-face channels, including live phone calls, voice prompts, web, chat, and e-mail.

Two critical findings emerged that should affect every company’s customer service strategy.

  • First, delighting customers doesn’t build loyalty, but reducing their effort— which is the work they must do to get their problem solved— really does building loyalty.
  • Second, acting deliberately on this insight can help improve customer service, reduce customer service costs, and decrease customer churn.

The Bad-Service Ripple Effect – negative service experiences are stronger!

Everybody is thinking customers are more loyal to firms that go above and beyond. But the research shows that exceeding their expectations during service interactions (for example, by offering a refund, a free product, or a free service) makes customers only marginally more loyal than simply meeting their needs.

But, like others before this team, they find little relationship between satisfaction and loyalty. Twenty percent of the “satisfied” customers in the study said they intended to leave the company in question; 28% of the “dissatisfied” customers intended to stay.

Customer service can do little to increase loyalty, it can, and typically does, do a great deal to undermine it.

We buy from a company because it delivers quality products, great value, or a compelling brand. But we leave one, more often than not, because it fails to deliver on customer service.

Obstacles All Too Common! So make it easy – remove obstacles!

The report identified several recurring complaints about service interactions, including three that focus directly on customer effort. Customers resent having to contact the company repeatedly (or be transferred) to get an issue resolved, having to repeat information, and having to switch from one service channel to another (for instance, needing to call after trying unsuccessfully to solve a problem through the website).

Some companies are doing it better. Tactics that every company should adopt

During the study, the research team saw many companies that had successfully implemented low- customer-effort approaches to service.

Following are five of the tactics they used—tactics that every company should adopt.

These tactics are regarding thinking about the next related issue, customers’ emotions, reduction of channel switching, customer feedback and empowering of the first line.

We will go into the details and bridge back and try to apply these findings on our Service Management approaches.

Tactic #1 Don’t just resolve the current issue— head off the next one

Tactic number one: Don’t just resolve the current issue— head off the next one. By far the biggest cause of excessive customer effort is the need to call back.

For instance, a high percentage of customers who ordered a particular feature called will call back for instructions on using it. Therefore you should build, maybe by big data analysis or just by using common sense, so called event clusters, to find out what the customers next issue will be.

When somebody orders a new phone the next question will be about how to transfer his phone book to the new device.

Tactic #2 Arm team to address the emotional side of customer interactions

With some basic instruction, reps can eliminate many interpersonal issues and thereby reduce repeat calls.

You should sift through your call transcripts to pinpoint words that tend to trigger negative reactions and drive repeat calls—words like “can’t,” “won’t,” and “don’t”—and coaches your team son alternate phrasing. Instead of saying “We don’t have that item in stock,” a rep might explain, “We’ll have stock availability for that item in two weeks.” Amazon is doing this since a decade!

Tactic #3 Minimize channel switching

Minimize channel switching by increasing self-service channel “stickiness.” Just implement modern state of the art ITSM toolsets. They provide superior Service Catalog capabilities and can automate the Request Fulfillment processes to increase quality and reduce time to value as well as overall costs.

E-Mail In is complete unstructured and ends up in a phone call. Providing forms with selections and suggestions can reduce effort of more or less unstructured incoming messages by up to 80%.

Tactic #4 – Use feedback from customers to reduce customer effort.

The fourth tactic is: Use feedback from disgruntled or struggling customers to reduce customer effort.

Many companies conduct post call surveys to measure internal performance; however, they may neglect to use the data they collect to learn from unhappy customers.

When a user calls your Service Desk the Agent should know if the user was searching on the portal fist but didn’t find a solution. By asking a few questions this could give important information about improvement possibilities.

Tactic #5 – Empower the front line to deliver a low- effort experience

Tactic number 5 Empower the front line to deliver a low- effort experience.

Incentive systems that value speed over quality may pose the single greatest barrier to reducing customer effort. Better remove systems and processes that get in the way of making the customer’s experience easy.

Freed to focus on reducing customer effort, frontline reps can easily pick low- hanging fruit. With a state of the art ITSM solution providing one single truth and one single data store for all integrated ITSM processes this should be easy to handle.

The immediate mission is clear: The Service Managers must focus their service organizations on mitigating disloyalty and increasing customer satisfaction by reducing customer effort.

To verify your success you should use the Customer Effort Score (CES). It is measured by asking a single question: “How much effort did you personally have to put forth to handle your request?” It is scored on a scale from 1 (very low effort) to 5 (very high effort). Customer service organizations can use CES, along with operational measurements of such things as repeat calls, transfers, and channel switching, to conduct an “effort audit” and improve areas where customers are expending undue energy.

Enhance your Self Service Portal, it is the key to satisfied and loyal service customers for all types of service organizations!

The key channel for customer service interactions is the self-service portal. And this is the new thing like described in the paper of HDI and itSMF US. It is the same for all service organizations.

For a good service portal we need all answers for all questions the users can ask. Provide information about all provided services -what they do, how much they cost, how to buy them, how to apply them, how to configure them, and of course how to repair them when something is broken. Additional all policies should be published here.

To enhance the 1st line capabilities all knowledge for the daily support should get transferred from the specialists in the 2nd and 3rd Line to the first line. And the first line needs access to all configuration information.

As a third step increase the automation for all fulfillment processes. In IT we know latest since ITIL that there is a difference between Incident, Change and Request. And the request fulfillment is different again for each service. Maybe some other organizations still do not know how to differentiate yet.

The next step in your improvement is to collect the ‘suggested next steps’ for your customers.

And then measure Customer Effort Score by asking: “How much effort did you personally have to put forth to handle your request?” Go back to the dissatisfied customers and try to understand why they were unhappy. And then start over again.

And please do not forget to do this for all service organizations within your company. You can use the same service portal, the same fulfillment automation engine and the same methodology!