Customer experience, human resources and analytics

Recently, within the span of a few weeks, I’ve had both one of the most positive customer experiences I’ve ever had, as well as one of the worst. Let’s start with the bad part. WWD recently made a sizeable IT purchase, through a company I’ve done business with many times in the past; for legal reasons let’s just call them OldPotato. We discovered that some of the equipment was very flaky less than 2 weeks after receiving it. Seeing as how it looked to be a problem right from the get go, it seemed reasonable to have OldPotato handle the RMA process, so off we went to the OldPotato website to figure out how to return it.

After spending 15 minutes waiting for someone on the other side of their “live chat” feature to pick-up, we decided that it would be best to simply email them. After hitting send, we promptly received an auto-reply email stating that they would answer our email within 3-5 business days. Three to five days, not start the process, just to have a human answer the email! My jaw dropped to the floor, I was in complete shock. In the past, I’d always been so impressed by their quick and fair resolution to any issues that I’ve had, so much so that I was willing to pay a premium over other vendors. I figured that the 3-5 days was just a disclaimer in case things got really backed up. After 3 days, and still no reply, it was time to call.

After a 30 minute wait, we got a hold of a CSR that could help; only he really didn’t want to. Firstly, he said that the returned item must be with all of it’s original packaging. Given that the equipment worked initially, we got rid of the packaging. I asked he he could ship us another one and we could swap it out,  something I’ve done many times in the past, no go. I even authorized them to take a deposit, no luck. Not only did he flat out refuse to help in any way, he was just plain rude and clearly not happy to be working at OldPotato.

Now lets talk about the great experience I had; again, 2 companies that I’ve done business with in the past and been very impressed. My family and I recently went on trip to Dominican Republic. Bringing our 2 young kids on their first Caribbean trip, we didn’t want to leave our choice of resorts to chance, so we picked a place from the AMResorts chain. My wife and I had been to one of their adults only resorts in Jamaica and were overwhelmed by the friendly and attentive staff, impeccable attention to detail, and beautiful facilities. We figured AMResorts was a safe bet, and we were not disappointed. Not only were the staff wonderful, the treated our kids like they were family. We also had a great experience with the flight down with Westjet, which was part of the Westjet Vacations package. I’ve flown WestJet many times in the past and always appreciated their top notch service.

How do some organizations like AMR and Westjet stay on top of their customer experience game, while others like OldPotato fall quickly from grace? It comes down to the value that organizations internally place on customer experience. For WestJet and AMR, that is their main competitive differentiation even though they are both in industries that are very price responsive. It is at the core of their fabric. Both of these organizations are under massive and constant cost pressures, and yet they do not cut corners with customer experience or safety. How do they do it though?

To start with they have happy employees, who they treat fairly, but which they demand hard work in return. In comparison to its peers, the level of employee ownership at Westjet is very high in part due to a stock purchase plan. Unlike it’s peers, it has almost entirely avoided the creep of unions into its workforce. The unions they do have are not your typical United Something Workers of Canada Chapter 1234, they are a self organized forum for Westjet employees to present a coherent message to management about issues. I’ve witnessed a number of times WestJet employees pitching in to work on something that isn’t in their job definition, not your typical union workers.

Same goes with the resort we stayed at, I saw employees picking up trash from the grounds as they walked by or a security guard playing high fives with my son. Despite the relative lower wages in Dominican Republic, many of the resorts staff were wearing dental braces, no doubt a good health plan is a perk of their job. Talking with the employees at the resort, the work they do is very hard and demanding, talking them away from there families for weeks at a a time. But they all are happy because only the best employees are brought in to work there, their employer treats them with respect, and they are relatively well compensated.

So where’s the connection to analytics in all this? There are so many areas that analytics can help with customer experience. Firstly, lets mentally picture a mountain as the perfect customer experience system, one in which all the trade offs of competition, risk, cost, complexity, employee compensation and morale, etc. are perfectly balanced and you are at your peek. Once you are there, it’s very easy to walk along the ridge as long as you can look down, but what happens if you start sliding down one side of the face? How will you know? That’s where descriptive analytics and data visualization can help identify small issues before they turn into big problems that are very costly to recover from. Watching the right internal metrics, along with conducting customer surveys, and leveraging social media analytics are all key tools to help you climb up or keep you on that ridge.

What about cost? How can I bring down the cost equation to deliver great customer experiences at a lower price? Analytics is key to solving that issue, here’s how. Let’s go back to the example of OldPotato. There is probably no place that cost pressures are so great as in the world of online retailers. The instant access to prices from so many relatively undifferentiated vendors is a boon to customers looking for good deals, but particularly harsh on the retailers. One way to be responsive to your customers in this environment is to know ahead of time what they will need.

Statistical forecasting methods are a great tool for ensuring that you meet customers request in a timely manner without incurring excess costs. For online retail, the future is actually very predictable from a customer service standpoint. Your time of purchase is an accurate leading indicator of a future demand for customer service inquiries and RMA’s. Segmenting by product type can yield very accurate results. Let’s use a simple example of a network switch. You may on average see that 2 weeks after purchase, 1% of switches need to be returned. Aggregating this concept across all sales and product categories gives your RMA department forecast (in reality it’s not quite that simple). Leveraging the forecasts to set up appropriate staffing schedules and levels is key to reducing costs, while at the same time improving customer service levels.

Forecasting as customer experience tool can apply to even physical retailers. Line-ups at the tills of grocery stores could be virtually eliminated by leveraging forecasting techniques. How much extra would you be willing to spend on groceries knowing you’ll save 10 minutes in line? There’s a whole lot more that can be done with analytics to improve your customers experience, but this post covered just a few of the basics. I’ll continue this topic in future posts.