Nobody likes a crisis or a failure – even if it’s happening at competition. It’s expensive, annoying, wastes time and causes pressure, stress and dissatisfaction among employees. But failures are a reality and a constant reminder that we are indeed human…and these can actually become profitable!
Failures have three fundamental qualities: they take everyone by surprise, demand swift action and – thanks to social media – expect appropriate answers to be available quickly.
So when, a few years ago, a leading multinational bank suddenly showed up in the press for all the wrong reasons, I panicked. I banked with them! Was my money safe? Would there be litigation? I was worried – needlessly. The very same day, the bank’s relationship manager dropped by. He reassured me that the bank was on top of the situation. Yes, there was a problem, but it was an isolated incident. My money was safe and their products very robust. Also, that the bank’s management was conducting a thorough internal investigation and, in parallel, helping the authorities nab the culprit. I should rest assured. And, most important, they valued my business!
Through this gesture, the bank had prevented a potentially unhappy interaction and ensured my loyalty.
My relationship manager was poised and confident as he answered my questions: the obvious ones about my money –even the snide ones about the impact on the Bank’s good name. Narrating this to a friend, I found out that she had received similar comfort from the bank’s call center earlier that morning.
This love and care was not some isolated individual initiative. Rather, it was a well planned, properly executed strategy coming from the top.
I still bank with them….
Crisis management usually begins with the CEO – i.e. at the top – callingher/his leadership team together to discuss and hammer out the plan of action. A team is constituted to manage the crisis or failure at hand. Two key players of this team would have to be the Public Relations (PR) team and the Human Resources (HR) team. The former for keeping the external pressure at bay while the latter to deal with very real people problems. The strategy would need to cover the employees, customers’ products and shareholders – key constituents of any organization.
Given that human beings and human emotions are under test, how can organizations bring in the personal element to help its key constituents weather a crisis?
For the boardroom it may be all about strategy and execution – spit and polish. But for a company’s People, Product, Customers and Shareholders, maybe the Gelusil should be replaced with…Love
Love thy people: In a crisis, the employee, the first line of defense, faces the most vicious onslaught. Angry customers demanding refunds, chain rattling press anchors baying for ‘justice’, meandering ‘expert’ analyses, even those looks of pity from friends and nosy neighbours – all take a toll on employee morale.
Start with the truth: Employees expect their leaders to be truthful to them – irrespective of the politically correct and diplomatically worded communication for the press and the rest of the world. What happened, how is it being fixed. Briefly explaining the situation, accepting the problem and outlining the company’s action plan.
Educate employees on the front line – salespeople, reception and front-office staff and the customer services helpdesks. Thesewould typically be the first ports of call for customers, press…everyone who needs information. Employees who have the requisite knowledge of the situation,and are trained on what to do, are better able to protect the brand. They are better able to handle the natural ire being hurled at them – and not get overtly stressed out.
Reassure employees that the leadership team is on top of the situation and there’s a strategy in place to resolve it swiftly. If the crisis has been caused by some employee(s) with a warped sense of purpose, then an additional message should be emphasized: that of swiftly identifying the culprits and punishing them. Some employees take a failure to heart. Some expert counseling would help too.
Seek employee support to stay united and committed to the organization by following the rules of confidentiality. Companies usually prohibit employees from speaking with the press – or anyone, for that matter – about the situation. External questions are politely routed to a person authorized to respond appropriately.A singular message helps!
An educated employee handles a crisis much better, feels empowered and cared for. Care –aka, love!
Love thy customer: In a crisis, the customers immediately feel extremely vulnerable. If they’ve had a long-term relationship with the organization, or if they have a significant investment in that relationship, fear creeps in as well. Customers are the reason companies are in business. However, they only stay loyal if they feel comfortable with an organization – and the organization makes efforts to build that comfort level!
Customer loyalty is usually limited to their last interaction!
Interestingly, a crisis is possibly the best possible opportunity to reverse the almost oxymoronic status the term ‘customer service’ has evolved into in the mind of the customer. That of a superficially friendly automaton, reading out of a script and desperate to get the customer off the phone – quickly!
The good news is that companies are making serious efforts to change the aforementioned, unfortunate, perception.
Jim Bush, Executive Vice President of World Service, American Express, in an interview to Fortune Magazine last year talked about how he transformed the way his customers were treated. He mentioned how he often observed front-office staff at hotels welcoming guests in. He incorporated front-of-the-house best practices into what has traditionally been a back-room operation. And the results have been outstanding!
The principle being to capitalize on every customer interaction. Converting it from being a cost of doing business into an investment in building relationships. All along customer services training investments have focused on completing the transaction. Not anymore. Now everyone focuses on building the relationship with the customer.
Jim Bush’s strategy? Some highlights:
Change of title for his front line staff,from Customer Service Professional – a much flouted, little understood title – to Customer Care Professional. And, when he said ‘care’, he sure meant it!
Eliminate the use of scripts! Many of my friends who’ve been running customer service organizations would balk at the idea. No scripts! People would go all over the place without a script!
Instead of a script, Customer Care professionals are trained to read and interpret a well-constructed customer profile. This allows them to customize their conversational style to the customer’s personality, tenure, product usage, etc.
Duration of the call no longer a measure: Liberated from this Sword of Damocles, customer care professionals can now focus on caring for the customer. It is the customer who now determines the duration of the engagement – an engagement that drives value.
Net Promoter System to track productivity. The Net Promoter System developed by Fred Reichheld of Bain & Company asks the question: “How willing would you be to recommend this company to a friend?”
Rated on a scale of 1-10 where customers who rate from 1-6 are termed as ‘detractors’ – equal to a 60% pass mark! Those who rate 7-8 are deemed to be ‘passively satisfied’. Only those rating 9-10 are referred to as Promoters. The percentage of Promoters, minus the percentage of Detractors, is referred to as the Net Promoter Score.
Some of the world’s most respected companies use the Net Promoter System,along with a few of their own metrics, to great advantage.
Now it is no longer about problems – it’s about care. How’s that for true love!
Love thy Product: Everybody knows that products have a life-span, they are not entirely perfect and they tend to…fail. It does not matter if it’s touch and feel product or a service that can only be experienced. Both product types are human creations and are therefore not entirely perfect. A product failure often leads to a crisis.
However, a product failure is a good opportunity to review the product itself, its delivery mechanism, its servicing infrastructure, even its sales and marketing. Maybe bring in those software upgrades, change the message in the advertisements, fine-tune the delivery mechanism, retrain the staff…. Not only should the entire product ecosystem be constantly tweaked and updated to work properly, it should also be perceived positively. Or else zillions of customers with itchy fingers will launch the failure into cyberspace in a fraction of a second.
After a series of high-visibility accidents involving their products, BMW India held a series of customer education camps.Why? They produce a top notch product! However when these accidents were constantly referred to as ‘the BMW case’, it was perceived that the blame shifted from the errant drivers to the cars themselves. Perception is, after all, reality!
So, even customers who had been driving all their lives were invited to BMW’s camps! The events not only gave BMW’s customers a deeper understanding of their cars, they also made for some excellent and positive PR. Most importantly, it gave the BMW team an opportunity to deliver a huge feel-good experience to their customers – while feeling good themselves!
Being machines with hundreds of moving parts, automobile manufacturers are constantly researching and developing more modern solutions for their vehicles. Sometimes, thankfully not often, they discover that a part or a system in their product is unsafe. And this despite years of pre-launch research, testing and regulatory approvals.They order a recall – a very expensive recall!
Toyota, Ford, Honda and others have not ducked their responsibility of ensuring a safe product. True, the primary purpose is to fix the fault – maybe even avoid litigation. But some of these companies turn the crisis into an opportunity. Company employees, educated to deliver a common and positive message, freely mix around with customers. Confidently and honestly reassuring them, answering their queries and appreciating their loyalty.
The positive message to customers: we care – another word for love!
Love thy shareholder: Shareholders are usually a hardy lot. Resilient to the ups and downs of the business, they expect to see a crisis being handled not only strategically, but also cost-effectively.
There is no denying that a crisis is expensive – meaning: it gets paid out of shareholder earnings. All the more reason to keep them in mind – and in the strategy.
In today’s opportunistic world, one can always find a segment of individuals who will demand the earth: replace the entire laptop! Why, just because the software crashed? No way! But they’ll press on nonetheless…there’s always hope!
Failure of a product or service warrants retribution of some sort - financial, in kind, or a combination of the two. Something to pacify the noisemakers.
While focusing the lion’s share of the expenditure to actually repair and redress, many organizations do budget for these little ‘gestures of goodwill’– just so that people feel that they have got a bit more. These could take the form of the company’s own products – either free, or by way of a future price-off. Some extra loyalty points, some accessories, free tickets,an upgrade, etc make good pacifiers.
These are manageable if budgeted for, so that no over-enthusiastic employee can give the shop away!
There are some things to keep in mind when planning for gestures of goodwill:
Circumstances under which these are to be offered should be properly defined and documented.
Not to be given as exceptions: Which means that two customers with identical problems should be offered similar gestures of goodwill.
Gestures of goodwill and not dole: Recipients of these goodwill benefits should not feel humiliated. True, these gestures are not contractual obligations – but these are not alms either!
Should be of value to the customer: The biggest mistake a company can make is to offer stuff that is expired, or obsolete –pulled out from some storage shelf, dusted and sent off!
Limit the time frame: Gestures of goodwill should be offered only for a limited period of time. But this is not to be confused with first-come-first-served – which is vague and only adds to customer ire.
Pre-budgeted gestures of goodwill boost customer satisfaction, for a limited period of time, and at a fixed cost. They allow the company time to fix the problem, emerge from the crisis and move on to doing business – taking a happy bunch of constituents with them!
Companies view failures and crises stoically – as events that do happen. Many have elaborate strategies called business continuity plans that are periodically tested. All part of that spit and polish mentioned earlier.
But why waste a period of iniquity? When these failures, crises, and even full-blown economic recessions, can be transformed into brilliant opportunities to delight customers, shareholders and employees–with love.