- Jan 13 2015
Guest Post: Determining the ROI on Innovative Service
By Chip R. Bell
Assume you were charged with a random act of kindness. Your accuser claimed you wasted company time and resources going out of your way to be nice to a customer. Since time is money and resources are scarce, your charge is rather serious. Your only defense before the ROI judge will be to show an irrefutable, concrete financial impact for your specific act. That means you must show a direct cause and effect between your actions and the financial bottom line of the organization. Where would you begin?
If you think the question is silly, you are right! But, every day in some organization somewhere a leader with a bean counter view of the world is asking for an ROI on the most important part of customer service—the experience. Customers assume they will get the outcome they seek and ascertain value based on the experience. We can easily determine if our plane lands on time (an outcome) and safely (another outcome). We can do a cost-benefit ratio on the maintenance cost versus ticket revenue. So, why can’t we isolate the worth of interpersonal and experiential excellence?
Measuring customer service is more complex than simply asking customers if they would recommend to a friend. And, since it is more a correlation than cause-and-effect, we are not always able to put a precise yardstick on an emotional feeling. The cause and effect of drinking a bottle of arsenic is that you will die…for certain. But, apply cause and effect to smoking and you come up short. My 94-year-old uncle has been a two-pack-a-day smoker since he was fourteen. He should have been dead long ago. How he missed emphysema, lung cancer and heart disease is amazing to everyone. But since smoking-to-cancer is only a correlation, not cause and effect, he has beat the odds.
How can you verify the real worth of a great customer experience? What measuring sticks capture the true value to customers that can then be objectively placed in the arithmetic formula of financial achievement? In a phrase: you can’t! And, those who attempt it are futilely trying to drive a nail with a B flat? Nothing wrong with B flats, mind you; Mozart used them a lot. But, when he went out to the shed to do a bit of carpentry, the hammer was his tool of choice.
While cause and effect might be out, correlation is clearly in! When you Google “Top Customer Service Companies in the U.S.” three companies make the top 10 across all this list—Amazon, USAA, and Chick-fil-A. So, how about their bottom line? Amazon, the largest e-retailer in the country has tripled sales in the last four years. USAA profits were up 33% over last year. And, Chick-fil-A’s sales passed its number one competitor, KFC, and they did it with one-third the number of stores and six days a week since (unlike KFC) they are closed on Sunday. Ask their CEO’s—Bezos, Robles and Cathy—about their wisdom of investing in great service and you will hear the passion and certainty of an evangelist!
A skeptic could blame their success on the weather, the alignment of the stars or, like Uncle Pete, just plain good luck. But, as a customer of each of these, my subjective, non-logical, intuition tells me it is the consistent great quality of the experience they create for those they serve. Smart organizations focus on doing what it best for their customers and they know a great experience is one of them.
John Steinbeck’s description of a fishing expedition in his book Sea of Cortez puts an insightful finger on the dilemma of ascertaining ROI. Read the passage below and consider what it communicates about the implication of “metrics without methods”:
- The Mexican sierra has 17 plus 15 plus nine spines in the dorsal fin. These can easily be counted. But if the sierra strikes hard on the line so that our hands are burned, if the fish sounds and nearly escapes and finally comes in over the rail, his colors pulsing and his tail beating in the air, a whole new relational externality has come into being—an entity which is more than the sum of the fish plus the fisherman.
- The only way to count the spines of the sierra unaffected by this second relational reality is to sit in a laboratory, open an evil-smelling jar, remove a stiff colorless fish from the formalin solution, count the spines and write the truth…There you have recorded a reality which cannot be assailed—probably the least important reality concerning either the fish or yourself.
Steinbeck’s prose reminds us that no matter how comprehensive and accurate our modern metrics may be, they will never completely capture the magic and mystery of an engaged and spirited customer relationship, especially one that is innovative. By focusing too heavily on objective data, tidy calculations and sterilized reports, leaders risk losing touch with the fact that they are putting precious energy on the “least important reality concerning” the customer or the organization.
Chip R. Bell
Coming Soon! If you enjoyed best-selling book, The 9½ Principles of Innovative Service, you are going to love Sprinkles: Creating Awesome Experiences Through Innovative Service. Endorsed by marketing sage Seth Godin, famed executive coach Marshall Goldsmith as well as the CEOs or Presidents of Ritz-Carlton Hotels, UPS, Nationwide, Wolfgang Puck Worldwide, Kimpton Hotels, Lucchese, and Edible Arrangements, this fun book will light up your life as well as your bottom line! What makes a great cookie special? Sprinkles! What makes great service special? Innovative service. Release date is February 10, 2015. Check out the book trailer at http://bit.ly/1uiK36N. Pre-order your copy today!
Chip is a provocative, cutting-edge keynote speaker—read about his keynotes at www.chipbell.com/keynotes. Global Gurus ranked him in 2014 the #1 keynote speaker in the world on customer service. Visit www.chipbellgroup.com to learn more about the Chip Bell Group and the consulting/training services they provide to organizations around the world. The Chip Bell Group was in 2014 ranked #6 in North America among mid-sized leadership development firms. See HR.com for details.
President & CEO, CoFounder
Scott Broetzmann has over thirty years’ experience in advising companies on how to invest limited customer experience dollars wisely to ensure happy customers and investment return.