The message was unmistakable. A senior executive of a large department store chain calls a senior executive of the computer company that sells the store an average of $8M worth of equipment every year. The message isn’t what a vendor executive ever wants to hear: the store is experiencing too many failures, the computer company's latest products are junk, and the executive is personally sick of the fruitless efforts to fix the problem. A certain amount of profanity was used.

This story demonstrates some important concepts in creating effective customer service. Let's analyze what was behind the phone call and what the computer company did to resolve the problem.

The store executive can’t serve his customers and, according to his staff, the reason is computer failure. There have been repeated efforts to fix the problem, but nothing’s worked. He also knows the holiday shopping season is coming. Angry and frustrated, he finally makes the angry phone call described.

The service engineer is also frustrated by his inability to fix the problem. He’s done everything he or the corporate experts can think of. Morale is sinking. The engineer is aware that he’s repeatedly replacing the same parts and feels that his own company is undermining him by providing what appear to be unreliable parts.

This situation exhibits a common tendency of customers and vendors alike: blame the product. Product defects often are the root cause of problems, but it’s dangerous to assume that -- especially in complex environments such as the store's data center. There are so many potential causes that making this kind of assumption could easily result in solutions to the wrong problem -- and customer problems that keep coming back.

In this example, if the computer company continued to assume the problem was defective product, more resources from both the company and its customer would have been wasted, the customer would have continued to experience failures, losing revenue and becoming increasingly dissatisfied. The customer would certainly have delayed additional purchases, and ultimately might have moved to another platform.

The solution lies in using metrics effectively and building a relationship with customers based on trust and shared responsibility.

Choosing and using metrics
The first question of what metric to use isn’t trivial. The metric must indicate success and failure to both the customer and the vendor. In this case, the obvious choice for a metric would appear to be system crashes but by the time a system crash occurs, it’s too late to avoid the problem. The customer and computer company both needed a leading indicator, so they decided to use unscheduled service call rate to measure overall system and service performance. To provide a solution to the problem, the metric had to be:

• Easy to understand. The indicator had to be obvious so everyone would easily understand what it meant. In this case, everyone certainly understood that unscheduled service calls were bad.
  
• Easy to collect. Though service calls were already being logged routinely, using them for this purpose required new analytical tools.
  
• An effective driver of improvement for both customer and vendor. Service calls are expensive for both parties, so reducing the call rate benefited everyone.

The top level metric, overall service call rate, acts as a thermometer, indicating the general health of the account but not providing any diagnosis. If the overall rate is high compared to other accounts, then additional data is collected to help pinpoint the cause of failure.

The call rate graph (fig. 1) for the store's system showed that for a period of time, the call rate was quite stable. Then something changed causing the call rate to skyrocket.

Figure 1: The call rate graph showing the customer’s service call rate over time. The call rate returned to below normal levels after the computer company and customer implemented new processes based on the data they were collecting.

This type of graph enabled the computer company to verify that, indeed the store was experiencing an unwarranted number of hardware failures, but also to highlight several other key pieces of evidence:

• The failure rate was much higher than experienced by other customers.
  
• Only certain systems owned by the store were failing.
  
• The failing systems were located in the same building.
  
• The same components were replaced multiple times at that location, with new components failing rapidly after installation.

The data told the computer company that something unusual was happening at the site, and suggested a probable cause in the environment or support processes (either the customer’s or the computer company’s) rather than in the product itself. It would be impossible, however, to effectively use this information unless the company's relationship with its customers is strong enough to allow the exploration into these other possibilities.

At this point, the computer company executive presented these findings to senior store executives. After the meeting, one of the store officials commented, "That was the best presentation we've ever seen that tells us that we have no clue as to what the source of the problem is." The reason everyone was pleased with the progress, despite not yet having a solution, was because possibilities were being systematically eliminated based on facts rather than guesses—and the logic of the investigation was open to everyone. The process was systematic, clear and repeatable.

Build dynamic partnerships
An effective partnership is a dynamic working relationship. It’s based on trust and mutual regard, which are earned with demonstrated honesty, integrity, and commitment to shared success. This is a very different model than the traditional approach where the customer presents a list of demands and the vendor responds.

In a dynamic partnership, both the customer and vendor accept responsibility for the things in their purview. In a partnership, "the customer is always right" is an ineffective model because it closes communication and can prohibit the partnership from fully investigating a problem and learning the truth.

If the parties in our example had already developed a partnership relationship, the angry phone call probably would never have occurred. However, although belated, the company was able to change the relationship—initially through intervention by an executive from the company who personally had a good relationship with the store, and later by the account team using clearly defined methods to sustain the relationship.

Results
One reason this situation worked out so well is that the computer company invited the store to participate in the team to analyze the data, identify possible root causes and verify them, and develop and implement a mutually agreed upon action plan to eliminate verified root causes. As the team began working, the relationship started to change from adversarial to one of true partnership. The focus became the problem to be solved rather than assigning blame.

Working from the actual data, the joint team was able to isolate the symptoms and identify possible causes. Key information supplied by different team members led to calling in an independent grounding specialist. Together, the team and the specialist were able to determine that the cause was current circulating through the systems from the local telephone company's T1 installation. The problem was further exacerbated by the janitor's using polyester dusters—when the janitors dusted, systems failed. Each team member had different bits of information that had to be put together to solve the problem. Neither the customer nor the vendor could have successfully solved the problem alone.

Because the store had participated in the entire analysis process that identified the cause, the store quickly fixed the problem—without wasting additional time arguing, and without embarrassment or anger.

The situation ended with the customer happy, not only with the system performance, but with the relationship. The computer company saw an improvement in morale, with account team members happy to participate in a productive relationship rather than feeling abused by both the customer and the home office.

Conclusion
Based on this event, the computer company standardized the process and had similar success with more than 100 customers worldwide. The standard method includes specified steps for profiling system performance (using unscheduled service calls), analyzing the performance and identifying risks, analyzing root causes, and developing and implementing an action plan that eliminates the root causes.

Every company has a relationship with its customers, either by default or by design. Both a company and its customers can achieve significant financial advantages by:

• Explicitly designing their relationship.
  
• Basing the relationship on mutually beneficial, measurable service objectives.
  
• Creating and using defined procedures for working with customers.

A company's service relationship with its customers is too important to leave to chance.

About the author

Jeanne Sawyer is an author, consultant, trainer and coach who helps her clients solve expensive, chronic problems, such as those that cause operational disruptions and cause customers to take their business elsewhere. These tips are excerpted from her book, When Stuff Happens: A Practical Guide to Solving Problems Permanently. Find out about it, and get more free information on problem solving at her web site: http://www.sawyerpartnership.com/.