Started business

RON AND THE SERVICE ENCOUNTERS OF THE THIRD KIND

A graduate of Brown University, author of several books on Leadership and Management, USA, Ron Kaufman is certified in Applied Neuro-linguistics and is a professional member of the National Speakers Association.

Renowned for his unique approach to leadership and learning, Kaufman has been featured in various media and has clients from diversified nations and walks of life. A frequent visitor to the UAE, Kaufman was here recently to talk on The Secrets of Superior Service at The Renaissance Hotel Dubai and Le Royal Meridien, Abu Dhabi.

When you talk of staying close to customers through ‘Service Encounters of The Third Kind’, which is essentially shifting focus from standardising and customising to customerising, what exactly do you mean and how is this workable in today’s scenario?

It’s important for any company, and I’ll start with a commercial enterprise first, to be clear about what kind of business model they want to undertake. Now this may change over time, but it is important to be clear on what you are trying to stake out initially in the market in your customers’ mind and related to competition. So in a ‘servicing encounter of the first kind’, the intention is to achieve customer satisfaction and the way you do that is by not making mistakes. It is by getting things right and you need to do it at high speed and low cost because in a customer-satisfaction-oriented market, competition is fierce. But this is an entirely valid business model, where a lot of companies make a lot of money doing that. They have designed their businesses to be able to function at very low costs in terms of labour they use, technology to be able to accelerate the speed of things, their turnover is very high and inventory in stock is very low, they use lots of just-in-time and they use manufacturing only to order. This is not the kind of organisation that customers can go to, expecting to receive great flexibility. What you want is, good product, good price, good delivery. And service in that space is an entirely valid word to use as long as the customer’s expectations matches that what you intend to promise. Cargo shipping is one example where this kind of business model works to advantage.

Pg. 26: “Customers expect you to keep your promises”

“Customers expect you to keep your promises”

ont-family: Arial;”>The second business model which I call ‘service encounter of the second kind’ is where you’re inviting the customer to ask for something done, just the way they would like it to be done. You actually invite the customer to ask you for it, ‘their way’! If you go to a restaurant and the waiter says ‘how would you like that — would you like it ‘mild, medium or spicy’, he’s inviting you to tell him how you want the order, ‘your way’. This is service encounter of the second kind. An organisation following this model needs to design and prepare itself to be able to do that; you can’t just go for speed. You need the flexibility, the responsiveness and you need to train your staff differently as well. Because now you’re asking them to make more decisions, to work more effectively as a team to be able to handle special situations. Your company’s priority and service-focus changes. You deliver what your customer requests, just the way your customer requests it! Special products, unique combinations, odd-hour deliveries, different schedules for pricing and/or payment; all are challenges for your service team to understand, and accomplish. In this model you ensure customer delight and not simply customer satisfaction for which you can charge a higher amount. This business model is also entirely valid. A good example of this is Starbucks.
‘Service encounter of the third kind’, you’re not any longer in a business model; the company knows exactly what they want to offer; it’s just a matter of getting you to understand what they offer. In this model you’re looking at the future of the customer and of the company in relation to the customer. You no longer ask the customer what he wants or how he wants something, rather ‘what he wants to become’, ‘how do you want to evolve’? You’re interested in knowing how the customer wants to grow over time. Consider the example of a university. A university might say to that the whole incoming classes over the next five years: “what do you want to become” in the course of your life? Then the university needs to become what it needs to become in order to continue to give value to that customer group. For instance, you might have young people today saying ‘we want to become much more virtual in the way that we work! We don’t desire to go into an office any more; we want to be either able to do work from home, from an aeroplane or from a conference room or wherever we want. In which case, the university has to ensure it has the wherewithal to be able to deliver this, to enable students learn how to run this virtual business, how to run a virtual team. I wonder actually how many universities have courseware designed for this right now! Now I’m not saying that they would give up their classes following service encounters of the first or second kind. But the university would be ‘customerising’, inventing new courseware to give the students what they want so that students can become what they want to become over the course of their lives.
But we are in a constantly and rapidly changing world, in terms of mindset, technology, beliefs, tastes and habits.

Yes, that’s right. The conversation in service encounters of the third kind never ends. It’s an ongoing, re-inventing process. It’s a tough business model because what was successful two years ago may be obsolete by now. But then what can happen is that you take what you can learn in this model, you deliver it successfully and then it drops back and becomes part of your offer in a service encounter of the second kind and eventually would drop all the way back and become a commodity ‘service encounter of the first kind’.

You also talk about marketing, not about being broadside mass advertising and ‘bending over backwards’ to accommodate customers. But to what extent?
It depends entirely on the business model again. For example, I would not recommend McDonald’s start advertising, promising ‘come on in and tell us exactly what you want your hamburger to be like’. If they did this, they would go broke because their entire kitchen is engineered to be able to churn up exactly the same hamburger all over the world — high speed, low cost. If you want to position yourself as the optimum ‘delighting’- the-customer company, like Starbucks, then you need to keep varying and inventing and designing. If you look at Starbucks menu, it’s just got bigger and bigger and I think, now they’ve got 7,200 different combinations of coffee you can ask for! You’re not going to get that in McDonald’s. But neither does Starbucks want to become a service encounter of the first kind organisation because they wouldn’t be able to charge enough for their coffee to make a nice healthy profit. But what’s interesting is, I’m sure, somewhere in the world, Starbucks is interviewing its customers, saying, ‘what do you want to become’? And so you get these situations like, ‘I want to become thinner, a better boss, or somebody who sleeps better at night’ and then Starbucks would start to come up with new products that match that cult and we may have the Starbucks Sleeper!

How do you deal with the minority of customers who are a ‘pain-in-the-neck’ lot?

Somebody who is totally price-dependent, is not necessarily a pain-in-the-neck. If your business model is not to serve those people, don’t serve them; pass them on to somebody else. The ‘pain-in-the-neck customers could be anywhere along the spectrum; they’re just insatiable. It’s impossible to ever satisfy them because they kind of like being in that argumentative adversarial style in their action. These people are very expensive for you because they suck up your staff time, demoralise them. These customers are not worth having. The question is what do you do with them! Number one is Damage Control. You want to isolate these customers from your other staff and have them work specifically with people who are exquisitely well trained to deal with these folks. Don’t keep doing nice things for these customers. Secondly, isolate these customers from other customers. You don’t want them blowing up in front of your whole line of people, say waiting to check in at a hotel. Third is, if you can isolate them from your brand. In other words, when you’re working with them, you wouldn’t want to do it in the office that has all of your icons and logos and slogans there. Take them somewhere neutral, take them off to a coffee shop, walk them across the street and buy them a cup of coffee or cake somewhere, work with them away from your brand so that their anger and frustration is not mentally, for them, associated with you.

Another area of consideration is legal liability. Often, a pain-in-the-neck customer will threaten you! This is culturally distinctive. There are certain countries where people will immediately threat a sue. Just say goodbye to these customers because you don’t have time to accommodate such folks! Sometimes these are idle threats; nevertheless in today’s world, you have to be careful because people could do physical harm. And you don’t want to ever expose anybody in your organisation to that. That’s the appropriate time to call in the security; it’s not a customer-relationship any longer; it’s an issue of civility, of safety and security for your staff.
The final thing is, if you really don’t want this customer, pass them to someone else who can serve them well.

In one of your articles, you talk of ‘today’s actions building up customer loyalty tomorrow’. But in money-driven, fiercely competitive world, is customer loyalty not a thing of the past?

Loyalty does exist; it’s just that you can’t get it the way you used to get it! Earlier, if you kept your promise, you had a loyal customer; today, customers expect you to keep your promises. That’s service encounters of the first kind. It used to be that if you do something special for me, you did something ‘my way’, I’ll be loyal to you. But today there are a lot of people who’ll go out-of-their-way for you. Today, loyalty comes from the question of ‘do you really understand who I am!’ ‘Do you really try to understand what I’m trying to accomplish? Do you understand the future that I’m interested in building for myself’. And if I get the sense that you understand it and are committed to it and I see you behaving in ways that help me accomplish what I want out of my business and my life, now I’ll be loyal to you.

Right Selection - Event Management invites professional speakers, trainers, and consultants to share their expertise in various fields of learning with the corporate community. The Events division organises: * Success Seminars inviting participation from the corporate community. * Customised Workshops for individual companies

Article Source: ArticlesBase.com - RON AND THE SERVICE ENCOUNTERS OF THE THIRD KIND