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Should Processes Trump Customer Loyalty?

Over the last 20 years, there has been a huge push on process improvement.  There was the TQM (Total Quality Management) mantra, which preached a stifling discipline of striving for perfection.  Then the Lean movement, which was all about streamlining processes surrounding ‘customer value.’  Then, of course, the mother of them all – Jack Welch’s cult-like Six Sigma.

Processes have a great appeal in the executive level of most organizations because they are both controllable and quantifiable.  You can put metrics around them.  You can put dollar numbers on things.  You can streamline and better control your costs.  Processes look great on paper.

The problems arise when people start to get excited about the efficiencies to be had with a process,  then manage to convince themselves that those efficiencies are more important than the overall customer experience.  Here’s a great personal example involving the hotel industry:

I travel a lot, often spending over 100 nights a year in hotels.  A lot of it is one-night-stands in different places around the world, as I fly in and out for speaking engagements.  There are, however, a few hotels that I find myself in on a fairly regular basis, year after year.  They’ve become almost a second home.  I know the staff, and most of them know me.  When I show up, I get a genuine warm welcome, and I feel as though I have a great relationship with them.

These hotels work hard at keeping this relationship.  When I call to make a reservation, for example, the employees recognize me.  They know my room preferences. And if I happen to be driving and can’t give them a credit card number fo confirm a reservation, I get, “No problem Mr. Belding, I will make sure there is a room when you get here!”  I really get the feeling that they value having me as a customer.

So, why would I ever stay anywhere else?  Ask anyone who travels a lot for a living, and they’ll tell you the same thing.  Makes sense right?  The more solid a relationship between a guest and staff, the greater the loyalty will be.  This would strike me as something a company wouldn’t want to mess with. Right?  Right?

Wrong.  A couple of days ago, I called the local number of the Four Points Sheraton in St. Catharines, Ontario to make a reservation.  I picked the local number over the toll-free number specifically so that I could connect with someone in the hotel.

When I asked the cheerful front desk person who answered if they had any rooms for the night, her response was, “Absolutely!” followed by, “let me just transfer you to reservations.”  And with a click of a button, I was then forwarded on to the Sheraton call centre somewhere in the Southern U.S.

Really?  Did you just do that?  Did you just take a potential opportunity to strenghten a bond with a customer who stays in the area about 25 nights a year, and transfer him to a call centre?

It wasn’t the front desk person’s fault, of course.  That is the Sheraton process.  Somewhere along the line, someone convinced them that this was a better way to do things than just having  individual hotels do it themselves.  No doubt there were Very Compelling arguments.  Centralized call centres make it easier to ensure that phones are answered in a timely manner.  It’s easier to monitor scripting and the sales process.  Most importantly, no doubt, it is likely tremendously cost-efficient.

The compelling thing about those arguments is how easy it is to measure the apparent payoff.  We can point at ‘results’ and talk about the grand successes in cost recoveries, reduction in labour hours and so on.

But what about the things that are harder to measure?  What about the customers, like me, who now have a little less of a link to that hotel and less of a bond with the staff?  How will this impact my decision process in the future, or the likelihood I will recommend a hotel in the future?  Is the payoff in this process really that much greater than the loyalty that is created by the people? And that’s the real question, isn’t it?

The people who would defend the process will refer to the Very Clever IVR systems these days that can ‘seamlessly’ transfer customers back and forth between the hotel and the call centre.  They will brag about how most customers won’t even realize that this is going on.  Yup, as long as we can fool the customers, they will tell you, then all is well.

They will tell us that their Starwood and other ‘loyalty’ programs more than compensate for this old-fashioned concept of loyalty.  Do these ‘loyalty’ programs work?  Absolutely.  Until, that is, one of your competitors comes in with a better deal or a better offer.

Don’t get me wrong.  Outstanding, well-thought-out processes are vital to creating a world-class customer experience.  But as a general rule of thumb, I’m not convinced that any organization should ever entertain a process that negatively impacts its ability to create stronger relationships with customers.  

Be careful of the lure of bright, shiny Big Data metrics.  Beware the rationalizations that cause us to stop looking at customers as individuals, and the individual relationships we need to have with them.  Ask yourself every day, “What reason does Mr. or Mrs. Smith have to be loyal to us?”

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