Customer Service Revisited: The Three Levels

Scott McKain has redefined “Customer Service” in his excellent book What Customers Really Want. He identifies three levels of Customer interaction.

Level One: Customer Processing

This level is about expediting the transaction. The computer screen or preprinted menu tell the clerk what to do and say — they never have to even look at you or use your name. Just follow the procedure, finish the transaction, and on to the next in line. You see this level any time there’s a line: in the grocery store, in the fast-food restaurant, at the toll booth… The emphasis is on turnaround time, not on hearing or satisfying the Customer. Example: I enjoy a good Subway sandwich. In fact, I think they have single-handedly redefined the fast-food industry. They want to know what kind of bread, meat, cheese, and toppings I want. And it’s all Processing. Sure, it’s customized a little bit – but not much. They’re all the same, and after minimal training, just about anyone can do it. Strategic implications: Customers appreciate improving the speed and efficiency of a transaction — but it’s easy for competitors to duplicate.

Level Two: Customer Service

At this level, the emphasis changes to understanding the emotional dimension of the exchange. The focus changes to listening to what the Customer wants and actually needs — there’s some effort to understanding “the job” the Customer is trying to do, and what it will take to accomplish the goal. It’s more “human being to human being.” True Customer Service invokes a relationship, even if it’s a short one, where the Customer and the Provider are both involved and actively engaged in achieving the desired outcome. Example: I went to the Apple Store so I could get a good microphone to record Podcasts and PowerPoint narratives. The representative listened to and understood my needs, then presented three options along with the “plusses and minuses” of each one as it pertained to my purposes. “By the way,” he said, “Have you ever tried Keynote?” (it’s Apple’s alternative to PowerPoint.) “Never heard of it,” I replied. “Watch this!” he exclaimed, and walked me through a brief demo and showed me some of the innovative features. Wow! Guess what I bought…???  Strategic implications: True “service” is people-dependent, and technology enabled. To achieve this level, you have to hire smart then train and invest in excellent people, and empower them to do what they know how to do so well. It’s very hard to replicate this level of delivery — you can probably name just a few firms who truly deliver on the Customer Service potential.

Level Three: Customer Experience

At the top of the pyramid is the total Customer Experience — the sum total of everything that happens from the time the Customer first learns of the company’s offerings (advertising, word of mouth, referrals, etc.) through contact with the company (on line, on the phone, or at a store), through the purchase experience, on through support, billings, upgrades, renewals, service failure recovery, Customer Satisfaction surveys, and so on. It includes all the sensory and emotional dimensions in addition to the physical and financial portions of the transaction. Remarkable Customer Experiences often leave long-lasting memories. They also build Customer loyalty, along with the positive word of mouth, referrals, and increased patronage (spending) that go along with a totally happy Customer. Example: I guess the Disney organization is most frequently mentioned in this category, but they’re not the only leaders to consider. You can think of one true industry leader in most fields who exemplify the remarkable Customer Experience (retail? On-line shopping? Automobiles? Even groceries!) Strategic Implications: A Remarkable Customer Experience is a powerful differentiator. It tends to remove Price as an issue, and it builds long-term brand loyalty.

Look at your own business to see where your Customer interaction falls. Do you Process numbers in a line? Or do you deliver personal Customer Service? What would you need to do to deliver a consistently remarkable Customer experience? That’s where the long-term gold is! 

//Richard