I recently had an experience with Lowe’s (both online and in one of their stores) that crystalized some thoughts that I have been pondering for way too long. In this post, I am going to put them to paper.
Here is the story. I ordered some shelves for a closet in my office—there were four of them. My plan was to place the order and pick them up at the store—which is a five-minute drive. The website would not permit that. I was only allowed to order them for delivery. So, I did.
I will not include pictures of what arrived. What I will say is that the merchandise did not arrive in good shape, they (and these are shelves that were going in a closet, so it is a low bar) were no longer fit for purpose. There were a couple of issues:
- I am guessing here, but the person who packed the order was being measured on how many boxes they packed per shift and not whether the merchandise arrived in good working order;
- Shipping this product (4 particle board shelves, 36”x12”x 1” weighing 7 pounds each) directly to the customer had to be the most inefficient/costly way possible to transfer the merchandise to the customer; and
This meant that Lowe’s had spent a lot of money (labor, materials, shipping) just to make a customer unhappy.
I had to take the product to the store (which as I have already pointed out was five minutes away) where I spoke to a “customer service representative” who initially let me know that it really was not his (i.e., the store’s) problem. He talked about the Lowe’s fulfillment center like it was a different company.
When I refused to accept that assertion, he got himself into problem solving mode and finally said that he would get the product into the store in the next day or two. He also said that he would have a store manager call me. He did neither.
This was a colossal waste of resources. Time was spent processing, packing and shipping the order. I then returned it to the store which wastefully consumed an hour of my time and 45 minutes of the “customer service representative’s” time. And, then another hour and a half of my time sourcing a similar product from Home Depot—which is a 26-minute (each way) ride. Not to mention, the Lowe’s product was damaged and not fit for sale. These were all costs associated with the transaction.
I see a lot of this: Companies thinking that they are saving money by keeping costs (personnel and training, logistics) down when they are really lowering productivity, alienating customers and slowly/painfully killing their businesses. Over the past several months, I have had conceptually similar experiences with Spectrum, Lenovo and Walmart (twice) where their lack of understanding of business processes design and optimization leads to significant inefficiencies and is costing these businesses their margin and reducing productivity in an extremely tight labor market.
I come from a place where our focus was optimizing business processes. I spent much of my career helping my clients improve their business processes. While my focus was developing/implementing technology to support business process reengineering, I understood that the real gold came from my colleagues who figured how to optimize business processes. At Textura we help our customers eliminate large quantities of wasted work. Our sales process involved mapping the customer’s current (as is) payment activities and then generating a target (to-be) process that often eliminated 40% to 50% of the steps involved in paying their subcontractors.
We found that an effective/efficient process results in improved productivity, happy customers and higher profit margins. As a consultant we helped our customers take unproductive steps out of their business processes, understand what kind of organization changes were necessary to support those processes and what kind of personnel plan (training and motivation) would be necessary to deliver the desired results. This made an enormous difference in our clients’ competitive positioning.
I offer a second example, this time using a service rather than a product example. My broadband service started having intermittent issues. Over the period of two weeks (so far) I interacted with 4 technicians, one of who spent the better part of five hours looking through the company’s inventory for a working cable box. The technicians who attempted to remedy the issues with my broadband were clearly motivated and had been taught how to use their tools but did not understand how to methodically troubleshoot an intermittent service problem and had not been provisioned with adequate spares.
In this case the broadband provider, Spectrum, did some of the right things (their people were clearly focused on serving the customer), but missed on others: 1) troubleshooting process; and 2) the logistics involved in making sure that the technician had the spare parts likely to be needed in the repair. Economizing on training and spares ruined productivity and made it impossible to achieve any kind of customer satisfaction. And don’t make the mistake of thinking that my experience was a one off, it is pretty clear the issue is systemic.
You might think that I am just taking an opportunity to complain about vendors who failed to deliver. That might be part of my motivation 😊, but the real point is that in a time when: 1) employees as a group are not particularly happy; and 2) there is a deficit of labor which is not likely to resolve itself anytime soon, we really might want to think about improving processes and training our workforce so that they can add value.
To provide counterexamples I offer both eero and Big Ass Fans and (of course) Textura. While none of these organizations is perfect, they understand the value of investing in process and providing their staff with the resources to effectively and efficiently deliver. From a customer service prospective all three make sure their organizations have the resources necessary to do their jobs right the first time. This includes:
- Good training. This means providing staff with a good understanding of the product or service you are supporting. At Textura, the folks at the help desk were motivated by understanding that doing well on the help desk (and this meant understanding the product inside and out as well as being a good communicator) meant a promotion to directly serving clients in the field. Deep knowledge of the product, by highly motivated staff eliminates the need to “escalate.” The first person you talk to is capable of closing the ticket;
- Having robust data collection, analysis and internal communications capabilities. Knowing the product is only one dimension of helping customers troubleshoot issues. Having knowledge of the current top issues (and their resolutions) is key to quickly resolving customer inquiries.
- Having an organization that effectively deals with exceptions. Exceptions (which can’t involve more than 5% of issues) take up an inordinate share of any organization’s resources. When true exceptions (not excuses to shunt a problem off to the next person because you do not have the training that you should have to solve the problem) come into the queue, the process should direct them to a group with the skills to evaluate and resolve them. I would note that some “exceptions” are in fact just the first instance of a new class of issue that will become part of the routine set of issues flowing into the queue.
My experience suggests that investing in “doing it right the first time” has a payback that: 1) reduces the direct costs associated with running the business; and 2) improves the customer experience, thereby improving net promoter scores and reducing customer churn. This is good for your customers and your business!
PS I wanted to say, because I believe, that making these changes could add 20% to 30% to the productivity of our economy, but I didn’t because I don’t like to make assertions that I can’t support.
Copyright 2022 Howard Niden
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