Understanding Value from the Customer's Chair

In my last blog post about the airline industry, I spoke about the low cost pricing strategy currently used by many airline companies. These companies are trying to ‘create’ value. In essence, they have stripped bare every single service as a separate consumable. The logic here is to provide consumers with freedom of choice. You can pick this service but not that service - everything is a la carté. 

When you fly with most airlines, you pay separately for:

• The flight
• Your checked baggage
• Your choice of seat
• Possible flight changes
• Food
• Select beverages

Here’s the fundamental problem with this pricing structure: it completely fails to consider HOW value is created and WHO creates it.

Customers determine value. A product or service has no value until it is assigned by the customer. Me.

Value is determined through a combination of a) the quality of the product or service, b) the responsiveness of the service provider in every single interaction, and c) the ability of the product or service to solve my problem.

Low quality products have little value. Those items that you bought at the dollar store over the weekend have a low quality. They might have solved your immediate problem, but if/when they break, you won’t be crying about it. Responsiveness (listening) builds value; when the barista at the coffee house remembers my coffee and preps it when I walk in the coffee house, I become a loyal customer. Finally, products / services have to solve problems. Every single company needs to understand that they are in the problem-solving business.

When you choose to segment your offerings into separate items, in some cases you are actually making it harder for your customers to deal with you. You are punishing them instead of rewarding them.

How about this – all flyers get one checked bag free. Always. On every route. If they show up to the check-in counter without a checked bag, you instantly give them a $20 voucher that can be applied to their next flight. Fully transferable and always redeemable. Let customers use as many of them together as they like! This would be seen as a massive bonus, a victory instead of a punishment.

Charge people once, then pile on all of the products and services that give greater quality, that show me you’re listening, and that solve my problems.

Porter Airlines has figured this out. Porter is a regional airline that has chosen very specific routes to maximize passengers and minimize costs. They use the same planes on most/all of their routes. Very efficient. When you purchase a ticket to fly on Porter, you get the flight, two carry-on bags, one checked bag, in-flight snacks and beverage (both non-alcoholic and alcoholic) all included. Everything you need to get from, say, Toronto to Boston is included. No additional fees, no extra costs. This also means that each time you see a Porter staff member, their only role is to make sure your travel is smooth and to thank you for flying Porter Airlines.

Businesses have the opportunity to create offerings, but customers always determine the value. Every single time business makes it harder or put the work back on the customer, the value of the offering suffers.

Value is a perception, not an equation.

Observations on Customer Service from 40,000 ft

Take Off

Just recently, I returned from a trip to Hawaii. It was quite a fantastic trip, one that I hope to be able to do again...soon =).

Yet, anyone who has travelled can appreciate that moving two adults and two kids from the east coast of Canada to the beauties of Honolulu has a number of challenges. Timing, food, activities, entertainment, and the necessary naps all need to be thought out in advance. When spending close to 15 hours in transit each way, there are more than enough details and situations to keep us busy.

Our airline, Continental Airlines, decided that our journey needed a little more action. As someone who studies and teaches customer service for a living, here are a few of my observations, captured under “The Good, The Bad, and The Ugly”.

The Good

The ‘good’ was shown in two standout moments of service.

The first came during our flight home on the red eye. The flight attendant was passing by offering drinks. I, of course, had a sleeping 4 year old nested on top of me and could not move. When she asked if I would like something, I jokingly said that I’d love a glass of wine but my wallet was buried under a 40 lb sack of potatoes. Without blinking, she placed a bottle of red and a glass on my table with a note that I should just come find her when I was freed. What awesome heads up service and a demonstration of trust!

The second moment came during our last leg of the trip home. Again, the flight attendant (seriously, these front line gems really do make all the difference!) had a ‘Good Morning Vietnam’ attitude and an in-your-face charm that created a relaxed and fun trip. Her landing script: “We’re putting this plane down in Halifax so your seats need to be in the upright position. For those of you that are confused about this, you push that little silver button on your arm rest then lean forward. If you are sitting in the most uncomfortable position possible, you got it right.” She was a shining example of the character found with SouthWest or WestJet.

Observations: Your front line people are the face, brand, and voice of your company. When they treat customers as real people through active listening, appropriate responses and authentic interactions, they exponentially magnify value.

The Bad

The ‘bad’ stemmed from a combination of miscommunication and horrible service recovery.

About a week before our trip, I was having challenges with the airline’s website, so I (gasp) called their service centre to ask about baggage sizes and fees. Over the phone, I was told that the first bag from Canada to Hawaii was free; I still have the notes and confirmed the details twice. I called because we didn’t need any hiccups at the airport.

When we arrived, the self check-in system (see below for the ‘ugly’) was trying to charge us $25 per bag. Looking for help, we found two agents talking at the front counter but they kept pushing us back to the self-service kiosks before they would speak with us. After some tension, we explained about the telephone call. The response: they just pointed to the fee sign. “But I was speaking with someone from your company?!” I said. Another point of the finger to the posted fees. Finally, a supervisor jumped in to move things along. Two things happened: A) The information that was passing along by the agent to the supervisor about my phone call was referred to as my ‘claim’, right in front of me (read: you’re lying), and B) we were told multiple times how wrong we were before they finally waived the fees.

Observations: The customer may not always be right, but the customer is always the customer. Even if I was horribly wrong, your role is to take care of me and make things right. Rubbing salt in the wound means you lose.

Side note to all airlines currently charging for luggage: If I can check one bag for no charge on a 3 hour flight to the Caribbean, I should be able to check one bag for no charge on a 12+ hour flight to Hawaii. They are both international. Seriously – get over this flawed business plan. Better yet, charge me $25 more for the ticket and give everyone, everywhere their first checked bag free. This instantly raises the value of your service; people willingly pay for greater value.

The Ugly

Like most airlines today, Continental has self-service kiosks. Frequent travellers know the procedures and can navigate this system quickly. However, other travellers need more assistance, so they need to use the staffed service counter. Sure, self-service kiosks can create efficiencies and reduce wages. But if they are your only source of service, it is a prime point for bottlenecks.

At the Honolulu International Airport, Continental Airlines has 10 self-service kiosks. Yup - ten. On the day we were departing, eight were functional, and the line up to use these machines was nearly out of the airport. This is because many leisure travellers are also infrequent travellers who require more time to navigate the self-service processes.

Here’s the kicker: As I waited in line for nearly 40 minutes, I counted seven Continental staff members working behind the self-service kiosks helping passengers get their boarding passes, weight and check luggage, and have various travel questions answered.

If you have seven staff members monitoring eight self-service kiosks, you can no longer call it self-service. Period. Full stop. End of story. Bring in an additional person, staff every functioning station, and label it correctly: customer service.

Observations: Every time you dehumanize contact with your customers under the name of efficiency, you erode the value. And each time you dehumanize an interaction, you will need to infuse the human touch at another point.

Landing

Continental Airlines isn’t the only company missing a service focus. But they are the one that I spend 30+ hours engaged and interacting with, encountering dozens of staff members. Some individuals were absolutely wonderful. But the underlying focus on people seemed absent.

Service industries need to shake off business processes designed for the industrial age. Luggage can be transported efficiently through an airport. People have needs, emotions and perceptions; handle them with the care they deserve.

In today’s business environment, especially in any service industry, putting processes in front of people will be the quickest path to failure.

Don’t forget the ‘social’ in social media

Back in my early days at university, I knew a guy on a quest. He would go out every weekend to the clubs. He was brutally honest about his end game – he wanted to ‘pick up’. (One day my kids might read this; I’d rather explain the concept of ‘pick up’ over some of the other terms.) His technique was always the same: walk up to his first potential target, make introductions, ask if she was interested in his ‘sale’, duck, control the damage, move on to the next girl. 



When asked why he used such an incredibly aggressive approach, he would always reply that if he asked enough people, he would generally find one person who would say yes. To him - this meant success.



"Let's try listening!"



However, the metrics of his actions were always lost on him. Horrible success rate! Terrible conversion! Too much talking and absolutely no listening.

But much more important: How many people did he leave insulted and offended in his wake? And how many of these people talked to others about him? His reputation as a weasel (sometimes ridiculously classified as a ‘player’) was solidified quickly and lasted an incredibly long time.

In the social environment, he was less interested in engagement and more interested in closing the deal…a deal…ANY deal!

This story jumped into my head today as I was scanning my twitter feeds. I noticed a bunch of tweets directed right to me from people I have not yet spoken to or engaged with. Many of them wanted me to go to their Facebook page, their webpage, read their business model, or look at their Amazon book.

I’ve just met them in a social media universe, and there is nothing social happening. Twitter and other such online tools are social in nature. Whether you’re communicating, collaborating or putting out multimedia, it’s all primarily social. You share with me, I share with you. We get to know each other over time. Within our first 50 tweets, the odds that I’ll look at your twitpic of a rain puddle or a cute puppy are exponentially higher than the chances I’ll like anything on your FB page.

I’m relatively new to the twitterverse (@williamcmurray), having been there about 5 months. I have 300+ followers, made 1700 total tweets with an average of 11 a day, and I’m following nearly 500 people. However, following some early advice from Scott Stratten (@unmarketing), I’m maintaining a reply / retweet percentage of over 70%. Seven out of every 10 tweets I make are either engaging in a conversation with someone or sharing content that I think is cool. My community is slowly growing at a manageable pace, equal to the amount of time I spend engaging.

To my friends in social media, both today and tomorrow, let’s make a pact. We’ll keep listening, continue to engage, commit to interacting with each other, and agree to stay real. And no, you won’t need to sign up for my newsletter to do that.

6 Things To Do When Exams Are Done

For university students, nearing the end of your exam period in April evokes the same feelings as an eight year old on Christmas Eve. Visions of sugar plums and a semester full of course notes dance through the air.

Euphoria that this day has once again finally, magically arrived!
Go celebrate! Enjoy yourself - you've earned it.You are justified to let loose after your exams, embracing the feeling that all of your work has finally come to an end. For many, this means four months without textbooks, assignments or classes.

Yet, this time is a perfect period for preparation. Yup. It’s a wise idea to tie up a few loose ends before you leave your school for the summer and lay the ground for success next year.

Think about it – at this moment, you are keenly focused on your educational path, immersed in both the details of your program of study and the processes of your school. This is the ideal moment to put some plans into place for the coming semester so that you do not come back in the fall cold and ill-prepared.
To help, here’s a quick to-do list, tasks that you should consider before you being your summer adventures:

• Check your academic progress

It will likely be a few weeks before you receive your final grades from the winter semester; however, you should have a fair idea of how you’ve performed based on feedback throughout the semester. Are you reaching your goals from a GPA perspective? Are your overall study skills improving? Review the last year both from a numbers (grades) and process (learning outcomes and habits) perspective. List out your key successes and areas to improve next year.

• Review your degree course check list

Most degree programs have a very specific list of required courses to be completed in order to earn the degree. Some of these courses are offered quite regularly while others are available only on an irregular basis, requiring some deft planning skills. Completing an undergraduate degree with a single major is fairly straight forward, but many students miss out on the opportunity to double major or earn both a major and a minor because they start planning too late in the process. Whatever your goal, why not get the greatest value out of your time at school?

• Pick your courses now

Ninety nine percent of all schools have released their course schedule for the 2011/12 academic year. Many have already opened up course registration! Take this time to pick out at least some of your courses for the upcoming year and either sign up now or, if your school has yet to open registration, make a clear note of the first possible dates to register. It’s always better to be the first person signed up for the courses you want than to be scrambling in August to get into courses you have little interest in.

• Seek the assistance of an advisor

The best part of this time of year is that everyone is still on campus and easily accessible. Faculty are marking exams and submitting grades; the registrar's office is bustling and financial services has few line ups. It is an excellent opportunity to take in a couple of meetings, get questions answered, and sort out issues.

• Review available bursaries and scholarships for the coming year

If you have a reasonably strong academic record, you must (repeat – MUST) take a moment to review all of the available bursaries and scholarships at your school. There is all sorts of money available in a variety of forms to all sorts of people. Are you an athlete? There’s money for that. Have you volunteered a significant amount of time? There’s a bursary to celebrate your work. Perhaps you or your parents have belonged to the Eastern Sisterhood of the Pine Tree Quilters? I bet there’s a scholarship of $500 just waiting for you to apply for. The critical issue here is that many scholarships and bursaries go unused every year simply because no one applies; if you think you are somewhat qualified, get your application in.

• Make decisions on living arrangements for the fall

Arrange for residence or sign that lease before you leave for the summer break. Line up people that you are interested in living with. Nothing starts the fall semester off better than meeting up with your chosen roommates in an apartment/house of your preference. Leave the desperate, last minute room hunting for those that didn’t prepare.
Congratulations on making it to the end of another term!

5 Simple Tips to Help Prepare for Exams

April is always an interesting time of year.

As I look out my window, the sun has climbed over the horizon to brighten another beautiful spring day. Birds are singing as they gather around the feeders for their first meal of the day. The first tiny buds are developing on the trees; signs of life are everywhere.

Unfortunately, many students won’t have the pleasure of enjoying this sight today. Heads are still on pillows after long nights of studying. It is, after all, exam season.

As a student myself for 14 years of post-secondary education, having taken far more than my fair share of exams, I’ve learned a few tricks and tips. Mostly, planning is key!

1. Understand the exam you will be writing. Will it be multiple choice or short answers? Calculations or essay questions? This will fundamentally change how you will need to prepare for you test. Some question styles allow you to be familiar with concepts while others require that you have clear, concise definitions and examples ready.
2. Review the course outline and notes from your first class. During the first class, your instructor discussed the goals and desired outcomes of the course. Most exams are written to test against desired skill sets and outcomes; you can easily forget the ‘purpose’ of the course after 13 busy weeks of course work. Start at the beginning.
3. Understand your course and instructor. Subject matter is important, of course. However, the person crafting the exam will have certain styles and preferences that you can pick up on. Note that if it’s a large, common exam for many instructors teaching the same course, you should to try to gather this information ahead of time.
4. Take care of your body and mind. Granted that during exam periods, a lot of studying will take place. It is during this time that you must pay special attention to your diet and sleep habits. Caffeine-fuelled all-nighters might seem like a bright idea, but you can hardly do this for a whole exam period. Sleep and nutrition keep you calmer and help you focus. Plus, you’ll avoid the energy spikes and crashes that inevitably come with CWC (cramming with coffee).
5. Schedule everything. Yes, everything in your exam period should be scheduled, including study time, eating, and sleeping. A schedule will boost your confidence that you have sufficient space to prepare for your exams. This is not the time to take on those extra work shifts or catch up on visits with family and friends; they can all wait until you are finished your exams. Stay focused.

Finally, relax a bit. Exams are meant to test your knowledge on subject material and allow you to demonstrate new skills. Faculty (for the most part) write exams as a way to examine your knowledge, not to trick you.

Remember that everyone is invested in your success!

It’s a Matter of Trust

We have a new member of the household. Her name is Luna, a kitten about 1 year old. She’s been a part of the family now for a couple of months, figuring out the dynamics and finding all of the good spots to hide. Hiding spots are good when there are two young, very active boys always in search of the cat ‘to play’ with. Understandably, Luna has taken more to my wife and I; we tend to leave her space and live at her own pace.

Recently, Luna has built up enough trust to nest on my shoulders. She’ll relax in a perfectly balanced position as I go about my normal routines working on the computer, making coffee and wandering from room to room. Gentle, consistent movements that she can predict and few expectations that she’ll stay; she’s up when she wants and gets off when she feels it’s time to depart.

Of course, my sons see this and continually ask why Luna won’t ride on their shoulders. I’ve caught them more than a few times heaving her up on their backs with instructions like “Sit down Luna”; often these commands come with a vice-like grip, holding her in place momentarily. Yesterday, that resulted in someone getting a nice scratch down one arm (taken without complaint, but with the comment “Luna, that wasn’t very nice." as the cat ran away).

They’re confused as to why I can successfully get her to ride on my shoulders while they can’t. They’re confused when I tell them that I don’t put her there; she comes on her own. She wants to be close and cuddle, but on her terms, not mine.

Many of our relationships are like this, especially in the service industry. When we can find it, we always prefer to do business with people that we trust. When I eat out, I want to trust that my server is really listening to me. In a hotel, I want to trust that my room assignment meets my needs. The sweet lady at the coffee counter on campus knows that I like a large, single cream with two cups because I'll be walking across campus.

Trust takes time to build, a commitment to slow, incremental steps of consistent behaviour that create a comfortable, predictable environment. Safe, but not in the boring fashion – rather the safety that comes from knowing someone has your best interests in mind and is looking out for you.

Building up a trusting relationship takes time and intention. There are no shortcuts. It cannot be transferred from someone else. And trust, just like your reputation, can be quickly damaged. When building a trusting relationship, consider:

1. Moving slowly – jumping into action, demonstrating too much intensity, or jumping to the end of the interaction (such as trying to close way too soon!) will not build a foundation of trust. It’s not about you – it’s about building trust
2. Being fluid – be aware of changes happening, whether it’s with the people you are dealing with or the context you are working within. Cookie cutter responses used in changing, fluid situations do not demonstrate authenticity. Remember that it’s not about you – it’s about building trust.
3. Showing patience – sometimes relationships make progress, while other times they slide backwards. Invest time being with people, talking to them and demonstrating that you will be consistent in how you deal with them. (It’s not about you – it’s about building trust.)
4. Investing time – trust comes from establishing a historical base of actions that meet or go beyond our expectations. Sure, an initial WOW moment is great for getting attention. But remember that flames make a fire pretty, while the coals are what gives it real heat. Coals take time to develop and are much tougher to extinguish. It's not about you - I think you've heard this before.

Somehow, we forget that our business relationships are just that – relationships. The pressures of the quick sale, of increasing today's business levels, of upselling and cold calling have shifted our focus away from the basic building blocks of human interactions. Building trust is one of those blocks.

These are tough concepts for my boys right now. They are hardly fluid, rarely move slowly, and patience is measured in seconds around here.

Luckily, Luna knows some pretty good hiding spots.

The Power of Two Pennies in Communication

There is a coin that lives on my desk. It's a very special coin.

More than a few years ago, when I worked in a different place, decisions were being made about an upcoming 'big' event. I was reasonably new back then - the kind of new where you might understand some of the political dynamics but really fail to appreciate historical context. And because it was more than a few years ago, I was a tad greener about organizational realities than I am now.

This 'big' event was the naming of a new facility, one that I watched grow from conception through construction. People around me were grumping about what it was going to be named; I too was on the grump band wagon. It seemed to me only fair that those involved with its design and development should have a share in the naming process.

The announcement came down one afternoon that the facility was going to be named after the patroness of the region, much in the same way many other buildings and centres had been in the past. To me, this was just a bunch of people selling out to political pressure and I was none too pleased. I could have just let it go. I could have continued to grump about it. I could have learned more before speaking. Nope, not me.

I wrote an email. A permanent, on the record, saved in the files kind of email addressed right to THE person in charge of the decision. As the organizational chart went, it was directed to my boss's boss's boss, the very same person who took the risk of hiring me in the first place just a couple years earlier.

Long paragraphs were crafted about the need to be our own organization, not caving to pressures outside of our four walls. I wrote of pride and honour, and questioned the wisdom of the decision at more than a couple of levels. With misplaced confidence, I ended my note with 'Just my two cents." and hit send. Essentially, my note was a “what not to do" in the digital age. Luckily, I was smart enough to keep the email address to only one person.

Just a few days later, my phone rang. Being neck deep in teaching and students, I wasn't thinking much about the email I had sent a short while prior. On the other end of the phone call was the person in charge, asking if I had time to chat; he would come to me. It's amazing how quickly you can retrieve and reread information when panic strikes, and I consumed my past prose with fresh eyes.

I was doomed. This was bad – really bad.

He joined me in my office, coming in with a calm, patient demeanour. No beating around the bush today, he got right to it; he told me that he was here about my email.

“Thank you” he said. I paused, taken off guard slightly. He appreciated that I took the time to express my feelings in a passionate and thoughtful way; it was refreshing, he said. Without notes or cards, he walked me point by point through my email, agreeing in some places and disagreeing in others. At the end of the day, he said, facilities are named because of money. Our patroness had pledged 10 times the next largest financial commitment, an amount that put us over the required investment; however, her estate didn’t wish the specific dollar amounts released. The exact amount they gave was not to be the news story.

At the end of our chat, he paused and reached into his pocket. He said that he’d been travelling a lot lately. From his pocket, he handed me a coin. “Do you know what this is?” he asked. I looked the coin over. “It’s a tuppence.” I answered after reading the coin, having not actually seen one before. He nodded. “That’s right – two cents. You gave me your two cents. I’m returning the favour.”

An agreement was struck that day. Should I ever feel the need to express myself about an issue, I need only include the tuppence with my comments as a way of signalling their importance. He would in turn return the coin to me after we had the chance to speak about it face to face.

I’m no longer with that company, but I still have that mentor. And I still have the tuppence. It lives on my desk to remind me of the responsibility that comes with using your voice, along with the importance of using it with intention, with conviction and with compassion. It symbolizes the effort involved in listening to others and valuing their input, especially when they disagree with you. It’s a simple tool that encourages and celebrates civil, honest discourse and promotes critical thought while protecting and respecting people.

I think we need more tuppences in circulation.

But that’s just my two cents.