Lean, efficient – and obsessed with customers

Peter Day’s latest programme for the World Service is about the principles of lean manufacturing applied to service industries.  The download is here, but probably won’t work for more than a few days.  The link to the programme web page is here.  As usual, he finds some interesting people to talk to.

One of them is James Womack, one of the authors of The Machine that Changed the World, an early account of lean in Japanese car manufacturing, who talks about why so many call centres are horrible:

Well the view is that to take people seriously costs too much

If you ask any company that has people waiting on hold or waiting in any kind of queue, “Why do you have people waiting in a queue?”  and the answer is, “Well it would cost too much to deal with them instantly.”

Queuing is always costing money to the provider organisation.  It’s costing a lot of money that they don’t really quite know how to account for. 

A bit later, there is a manager of a call centre run on lean principles:

I can tell good customer service from bad customer service immediately now.

As soon as I get told I am wrong about something, I know that they are not applying lean.  And if I get a very quick answer, I know that they’re not applying lean.

And after a quick foray into the lean-based customer obsessiveness of Amazon comes a man from GE Money:

All your marketing leaders and marketing managers will probably have satisfaction surveys that they used many times and over many, many years, and we have proven our satisfaction surveys really are not linked to change, growth or volumes…  

We are using something called net promoter score, which actually is asking your customers, “would you recommend us to a colleague or friend?” and asking only two or three questions, not a twenty five line survey that a call centre somewhere asks.  This is about getting direct feedback from customers and actually doing something about it. 

It’s linked very much to trust.  If you are recommending a product you have, it’s much more of a significant link to growth opportunities for a business than “yes, I am satisfied with a product” … a personal recommendation is much stronger, and if you link that recommendation to your lean philosophy, what you are saying is, “I am listening to you and then we are acting and doing something about it”.

Womack rounds things off with a great provocation:

Just ask yourself what would happen if the provider had to pay the customers’ value of time.  Do you really think you would be waiting in all those queues? 

This is all salutary stuff because it really brings out the fundamental link between customer service and lean, which is too often obscured by lean being thought of as being purely and directly about efficiency. 

I had not heard of net promoter score before, but it turns out to be a well established idea with a web site of its own.  The explanation is very simple:

There is one question that provides the best predictor of customer loyalty and for the vast majority of business: How likely is it that you would recommend (Company X) to a friend or colleague? The “Net Promoter Score” or NPS, is simply the percentage of customers whose answers identify them as promoters minus the percentage whose response indicates they are detractors.

The concept of recommendation clearly cannot translate directly into a public sector context, or anywhere else where there is a monopolistic provider, but the distinction between a relationship and a level of trust about which people are willing to speak positively to others and more passive satisfaction is a critically important one for any service provider – we may just need to think about quite what question we want to ask.

Of course whatever the question, if there is no means by which the answers are heard and responded to, there isn’t much point.  But that’s another challenge.

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