Based both on a macro view of today’s markets plus lots of ground-level observations, I’d estimate 95% of companies say they put customer interests first; 10% understand what that means; and perhaps 3% actually do so. With potential competitive gain in migrating from company interests first (inside-out) to customer interests first (Outside-In) dangling like a carrot in front of business, why is there so little movement?

Putting it plainly, migrating from I-O to O-I is much harder than it looks. It’s change. Lots of change. And to answer the title question, disruptive change, especially at the organizational level. Yes, line employees do struggle with having to learn new skills or working with different people in different roles. But when making the I-O to O-I migration, resistance at this level usually pales in comparison with the fights going on overhead―struggles to protect silos, gain new turf, rule over the largest number of employees and even have the largest office (or largest sunroof on the company car).  

So we have irresistible force (customers) versus immovable object (corporate silos). And buyers are at worst in a punishing mood, or at best quick to leave when seller operations start going south. Just ask GM, Ford, Chrysler, the ghosts of Circuit City & CompUSA, Sprint, Nortel, Bearingpoint, etc.―all of which lost ground or went under because they ignored customer needs and preferences, not because of the recession.

Does anyone see any give on the corporate side? Or will fear of change and change avoidance create lots more casualties?

Believe me, I’m not trying to use Wells Fargo as a whipping boy. But when customer service gets this intolerably bad, someone in San Francisco needs to wake up. Or are they dead?

My wife & I had an HSA (Health Savings Account) with Wells Fargo. I won’t bore you with all the customer-unfriendly stuff they pulled, but recently and for unknown reasons they decided to change our account number and issue a new card with a new PIN, despite our old cards being valid until 2011. Only they sent only my card, without one for my wife. Hey, not more than a minor inconvenience no? No. I tried calling them, got into a waiting queue, and waited and waited and waited. For over an hour.

While I was waiting I tried to reach HSA customer service over the web. You can’t. Then I tried to access general customer service but faced drop down fields for questions giving no appropriate answers. Should I call an HSA account an “auto loan?”Guess where that e-mail would wind up. So I tried their general “call a banker” service for telephone banking. Got through in about 10 minutes. The first question the “banker” asked? “What’s an HSA?” She finally agreed to try contacting HSA service using their internal phone numbers, and I made her promise not to transfer me back into the same queue.

I don’t have to tell you what she did. So, right now, I have no means of getting a second card. Their contact center is that understaffed, despite skilled people galore on the streets, many willing to work for whatever paltry wage they offer phone reps. And I’ll bet most already know what an HSA is. As a customer, I am disgusted WF lets customers stew on the phone for over an hour (maybe multiple hours, who knows?) without dipping into the endlessly deep unemployment pools to put more agents on the phone. Just one more example of how they put customers last.

Why are we still with them? Actually, we used to be 100% Wells Fargo – two businesses and all our personal banking. Private banking, even. We shifted our accounts to a smaller, regional bank two years ago, but forgot to transfer our HSA. When we started having trouble – as in having our HSA debit cards rejected when we had more than ample funds in the account (you know, we used the card too many times in one month, or went over our “limit,” which happens to be less than what’s in the account), we were sort of stuck. As impending empty nesters we’re city-bound, but we don’t know where exactly so don’t know where we’ll bank. But this is so over the top that I’m going to get my wife a card by switching our HSA to a different bank, any bank.

A couple years ago, when we pulled all our other business from Wells Fargo, I posted a blog in CustomerThink titled: “Wells Fargo, 50 Ways to Leave Your Customer.” It drew over 16,000 hits – a near record. Guess lots of others have similar stories.

PS: I wrote this while on hold the second time. When I finished, I needed to go out for lunch. So I decided to leave the call on hold while I was out. When I cam beck, guess what greeted me? “Your call is important to us…”

PPS: A half-hour after the initial post someone did pick up the call. They switched to a new data system that can only generate one card per account. Brilliant, eh?

The North American BBB has released its 2009 compilation of which industries drew the most complaints and how well they resolved them. Of course, “resolved” is a relative term for BBB complaints. It can mean “customer gave up,” but the majority of resolutions indicate at least partial satisfaction of customer claims. While you have to discount some high “resolution” numbers, you can reasonably use them to differentiate addressing complaints among industries.

Here’s the list – from “least worst” (10) to “worst.” The number sequence represents: # of complaints / % “resolved”

 10. Retail furniture: 12,313 / 76%

Having worked with clients in this sector, my educated guess is that going out of business without returning deposits triggered lots of these.

9.  Auto repair:  12,410 / 65%

Hey, these blokes finish lower than used car dealer. Again, based on with a client providing technical back-up not knowing what they’re going and ginning up problems Click & Clack have never heard of are the primary culprits.

 8.  Wireline telcos:  13,166 / 96%

They answer to state regulators, so they can’t afford to just stick it to customers outside of what they’re allowed to do.

 7.  Used auto dealers:  13,235 / 69%

Most (but not all) new car dealerships have cleaned up their act here, so likely a high % of “used only” sellers.

6.  Collection agencies:  15,628 / 85%

There is no more predatory and less ethical industry out there, but state regulators are final;ly clamping down.

 5.  Internet merchants:  21,154 / 69%

I cannot believe the ads some consumers take seriously. Want to inherit a fortune from a dying Nigerian? Hong Kong’s really getting in the act now, too. Most legitimate web merchants are actually very responsible, but far from all are legit. A little trick. If you don’t see an “unsubscribe” link at the bottom of the ad, get the hell out of there.

 4.  New car dealers:  26,019 / 83%

Thank you, Toyota. A number of dealer networks have really cleaned up their act. But obviously lots haven’t.

 3.  Banks:  29,824 / 95%

BBB acknowledges the “resolution” rate is inflated, probably because the FDIC satisfied lots of claims. If left to the banks own devices, and especially to credit card departments, the 95% would probably drop lots.

 2.  Cable & Satellite Television:  32,158 / 98%

Comcast for one is trying to straighten up a little, but basically we’re talking about two packs of liars caught in a life or death competitive struggle. A whole lotta these folks would qualify as politicians. But, they’re regulated, at least in part, which forces lots of make-goods.

1.  Cellular providers:  36,086 / 95%

Verizon wireless is a pretty straight shooter, but watching AT&T defend its “Swiss cheese” coverage and lack of bandwidth to handle iPhones tells us just how low the industry can go. Sprint used to a service nightmare. Now they’re just a bad dream. Viral attacks have hit some so hard that all of them tend to roll over and make good rather than risk bad PR. Yeah, angry customers!

 Two lessons here: 1.) If a company screws you, consider going to the BBB. No half-way sane (and legitimate) company wants to be on the black list; 2.) All those BBB window stickers you see at used car dealers and repair shops come from auto-supply distributors.

What do computer virus attacks have to do with customer-centricity and customer experience? Not much. To the jerks that just launched the so-called “Softmetalgroup” virus -which locks down your whole computer – “customers” are victims.  No customer-centricity required to lock down your machine while dangling in front of you non-stop offers to “let you out of jail” if you’ll just buy their virus removal program, and then download pornography if you refuse their “offer.” Hell of a customer experience, though.

Double bad luck

You expect that from hackers and other computer miscreants. But in the title I said “Alert X 2.” Technically, “X 2” isn’t another virus alert, but an antivirus alert. While you don’t expect hackers to have an ounce of concern for the havoc they wreak, you do expect your anti-virus company – the one that failed to detect the malicious Trojan horse that triggered to whole sorry affair – to give a rip. But I had the misfortune to be using Spyware Doctor + Anti-Virus from PC Tools, which apparently doesn’t. At least not a big rip.

Infected on a Monday

My computer didn’t cough or sneeze beforehand. About 10:00 a.m. this past Monday morning it just seized up. Tried to activate Spyware Doctor, but the virus had disabled it. Tried to get on the web, but the virus blocked access. Then I tried rebooting in Safe Mode. Still couldn’t run Spyware Doctor but could get to the web. So I uninstalled Spyware Doctor and ran it off the web onto my computer for a two hour plus full scan. Didn’t find a thing. So I Googled the virus and discovered various people near the end of their rope trying to get rid of it. Checked several sites claiming to offer instructions on how to get rid of it. Funny, they were all PC Tools sites, actually. Hmmmm. Can’t stop it from infecting. Can’t detect after infection. But still trying to sell software to get rid of it (you know, free scan but you pay for the software before it will disinfect you). But if it doesn’t find anything, how’s it gonna get you to buy it…? Oh, and I found another site that listed the primary malware files with instructions about how to remove it manually. It was brain surgery in the registry, and I have trouble taking out a sliver with tweezers, so I passed.

Frustrated by a Tuesday

So I went on PC Tools’ website, logged in, and filed a support ticket. No response. Filed again. No response, except to say I already had a ticket number. While waiting, I downloaded client files onto my laptop so I could get at least some work done, while waiting…and waiting.

Finally, I went back on the site looking for an alternative method of contact. I’d seen “Live chat” before but couldn’t find it again. Then I lucked out. I found Live Chat by not signing in but proceeding as if I was still a free trial user. But you can’t use Live Chat unless you are a registered user. Very cagey, showing Live Chat to trial users to get them to pay, but hiding it from people who have already paid. So I got on live chat.

Request after request from them to do stuff you can’t do from Safe Mode, the only place I could do anything. A couple of dropped connections later, the day slipped into Tuesday. They kept trying to send me a “findmalware.exe” file or some-such that embedded Windows protection kept rejecting. Then we remembered FTP, and I was able to import and execute the program, which found pages of infected files. I sent the report to them, and they said I’d hear back from the engineers who were going to evaluate the mess in 24 – 48 hours. Sorta like an ambulance crew driving to an accident and stopping for coffee every 50 feet.

Disillusioned by a Wednesday

I tried to get a status report late Tuesday, but the “chatters” were in the Philippines and the engineers here in the U.S., so all I could get was, “they received your file.” Another technology company that doesn’t know how to use technology, at least not for customers.

Tried for a status again midday Wednesday, after not hearing from them. “They received your file…” I had a sinking feeling my work station wasn’t going to get fixed, at least not by PC Tools, and I had video conferences scheduled for which I needed it. So I threw in the towel and followed a recommendation from Bob Thompson, who runs this here site, and went up on MalwareBytes.com. Cute name. Neat anti-virus stuff, too. Downloaded it, ran it, and was infection-free in 20 minutes.

But I was still honked and pressured a “chatter” to actually call engineering for a real update. “They’ll be e-mailing you shortly.” Can’t wait. And I actually did receive an e-mail a couple hours later. Guess what? My computer was infected. Yup. And they reeled off a long list of files they wanted me to track down and send them for evaluation. How nice. But the file names looked familiar. Guess what. Same file names, at least some of them, from the list of files for the manual removal routine I read back on Monday. And this from a company actively promoting its ability to disinfect computers of the “softmetalgroup” virus. Smelled like dead fish. Or rotten eggs.

Now who treats customers worse? The hackers or PC Tools? And remember before you answer, I didn’t have to pay the hackers.

Of course, management always thinks process is for those “beneath them.” It’s hard to imagine anyone of “Director” rank or higher (never mind the VP level) submitting to having their own work and decision-making influenced by process guidance, except with respect to production quality principles.

But Outside-In is process of a different color. It can and sometimes does provide management guidance for decision-making affecting customers. On more than several occasions C-level execs have adopted our O-I mantra – “Adding value to customers in ways that add value back to the company.” And when they start saying it, they start thinking it – especially when we’ve managed to involve them in a strategic planning process designed to produce customer-centric outcomes.

Driving this question is Toyota – which would have a much brighter near to mid-term future had a pervasive, customers-first process culture guided strategic planning and strategic decision-making, both of which became progressively more customer-insensitive over the past 10 years (at least). And despite those saying Toyota has only to straighten out production to rebound, I don’t think they’ll get much bounce without changing a culture that supports hiding known mechanical problems from customers (and regulators), which resulted in destruction of life and property.

But do you believe that a customer-first process culture – especially one that identifies customer needs, preferences and opportunities before going to literal “process”- can penetrate management thinking on a widespread basis? And if “yes,” what will it take?

Toyota might have been a customer-centric company for parts of the 80s and 90s, or it may never have been customer-centric, which I now suspect.  Toyota thought that understanding what customers wanted to drive; converting that understanding to car design; and then superbly manufacturing cars that fit customers tastes; made it customer-centric – and bulletproof. But two fundamentally flawed asuumption have stripped Toyota of its body armour.  

First, Toyota got caught breathing its own fumes – believing its vaunted Toyota Production System was so scalable the company could grow at will. As stuck accelerator pedals and failing brake systems demonstrate, bad assumption. And these maladies follow a string of other problems that had already stripped Toyota of its top quality ranking.

But second, and I believe much more important long-term, Toyota failed to realize there’s more to customer-centricity than excellent products (which it can no longer claim). Research that David Mangen Ph.D. and I conducted several years ago identifies that customers now consider product excellence and service excellence two halves of the same coin. Without one, companies have neither. And even if it grasped this fundamental truth, Toyota failed to realize that “service” was about far more than fixing cars.

Going back 10-years, Toyota started failing to deliver one of the most important service components – honesty. I won’t go into the whole litany of Toyota subterfuge here. I’m saving it for a full article I’ll write once I’m confident all the major discoveries are discovered. But turns out Toyota has been hiding serious defects from customers and government agencies for years. The company’s behavior has been outright smarmy, going back to 2002 when it tried to pawn off sludge collection in engines to drivers failing to change oil. And even after the U.S. DOT forced them to extend engine warranties to 8 years, they tried to obstruct customer filings. And today, they continue obfuscating like mad. Fortunately, the DOT and perhaps even more so the Japanese Ministry of Transportation, are up to their tricks.

I’ve read many comments from Toyota loyalists (most of whom don’t yet know what Toyota’s been doing, unless they’re reading the excellent investigative reporting in the New York Times), to the effect that “Toyota will snap right back.” From mechanical problems, perhaps. But from deeceptive business practices, I seriously doubt it.

And as a sidebar for process folks reading, Toyota has provided living proof that neither the Toyota Production System nor Toyota’s Lean culture created a customer-centric company – one that puts honesty and integrity with customers on a pedestal, towering above business instincts to put profits first - especially when that means putting customer lives at risk.

I have on many occasions in many places and in many ways complimented Best Buy for its ascendancy from a rat hole electronics seller of ill-repute into a very customer-centric, Outside-In enterprise. But an incident today (extending back over more than a week) has stopped me in my tracks.

My dear wife is a private practice psychologist. She’s responsible for keeping case records, billing, filing insurance stuff, etc. While I leave her to deal with practice software selection and maintenance, I do help with hardware and network issues. So when she bought a new, Windows 7 laptop at Best Buy, a place where we spend way too much money (or have in the past), I said I’d network it and add non-practice software. That’s what I said. But when I started trying to introduce a Windows 7 computer into a network of Windows XP devices, reality set in. What a mess. Since I was extremely busy with my practice and traveling, I punted and suggested she bring in the Best Buy Geek Squad to set up the network, install her practice software and transfer data and install Outlook and Word and bring her Outlook data across the network.

So the geeky guy shows up, and lickety split he’s all done. He hands her his card, tells her to call if she has the slightest problem, reminds her their work is guaranteed for 30 days, hops in his bug and geeks off. Fine. Until she goes to download e-mail on her new machine. Outlook wants to download all 20,000 messages in her in box. Oops, better bring him back. Calls him and leaves a message. Then she goes to do e-mail on her old computer, which now won’t boot. Ookay. Wait for callback. One day, call again. Two days, call again. Three days, call the store.

But, up until now, one rogue employee could have been the source of all this.

So she calls the Geek Squad office number (which I would have done days ago). She gets voice mail. Leaves a message. Wait for callback. You know the rest of this. So she finally calls the store, after more than a week. She gets transferred to home theatre. Well, anyone can hit the wrong key. But it turns out the woman in home theatre deals with computers, too. Multi-talented. Not really. She tells my wife she’ll have to pay for a service call. That’s Best Buy policy. Unless she bought the extra cost warranty offered at the register. But there’s my wife with the Geek Squad contract, including warranty, in her fist. Finally this very offputting woman acknowledges my wife does have a guarantee. So she says she’ll schedule something. First available appointment is in 10 days. Never mind they’re disrupted her practice in the worst way. Anyway, after two escalations, and numerous intonations of “Best Buy policy this” and “Best Buy policy that” – and my wife using language she never uses to describe anyone but me - she gets a next-day appointment with yo-yo geek who screwed up initially but wouldn’t call back. But still no assurance she won’t get charged again. Hey, have to see if she screwed up yo-yo’s work *%&@!!

You know, there was a time when Best Buy was trying to take care of customers. But after hearing about all these “it’s all about us” company policies they threw at my wife, it appears they’re no longer trying. Too bad. It was nice having them to write about while it lasted. At least write good things. Now they’re on my “A” list.

Oh, and guess who’s going to be there waiting for yo-yo between 8:00 and noon tomorrow?

Postscript:

He arrived this morning right at 8:00 and manually deleted the 20M messages from the server, using blocck deletes on webmail. Apparently the original mistake is irreversable. Then he smiled and left., turning off the machine.

When my wife ducked out between sessions to check e-mail, she booted up, clicked on Outlook, and received a little error message saying “Operation failed.” No Outlook. She was so angry she couldn’t even pick up the phone. I did. I called Geek Squad Central, explained the situation, and was transferred. Stuck on hold for a long time (listening to some recorded message about “outstanding customer service”). Finally someone picked. Once again, the extended warranty department. Can’t even see into Geek Squad records. Another transfer. More interminable hold time.

Finally, a person! Explained everything again, but this time added, “I want it fixed today.” I’ll let you imagine the tone and volume. Anyway, back he came. Still smiling. Fixed whatever was wrong. We hope. And we still don’t know if they’re going to bill us for additional visits.

Froma company supposedly supporting customer-centric business policies, this sucks.

Post-mortem:

Talked to my wife after this was all resolved (hopefully). Actually she talked to me. She believes the “mistaken” transfers to the “extended warranty” department were deliberate and really represented attempts to deny her rights under the Geek Squad warranty. She has lost all respect for Best Buy. And she is very slow to reeact to stuff like this, whereas I have a faster trigger. I support her view. Based on our mutual experience, believe transferring customers with Geek Squad complaints to extended warranty, where they have no rights, is policy. Best Buy not only needs a serious competitor, it deserves some serious viral communication so customers know what to expect. I’ll say it again, “This sucks.”

BusinessInsider.com just released this list of abusers – not only of customers but of stakeholders, employees and the general public. While the selection process factored in data from Consumer Reports, JD Power, the MSN/Zogby poll, Vanno, and the University of Michigan American Customer Satisfaction Index plus indexes reflecting public perception, obviously some subjectivity crept in, but the list resonates very strongly with me.

 I’ve included links to this list and two other relevant compilations at the end of the post, but before sending you off I’d like to offer several observations.

• Customer relations played a key role:  12 of the 15 companies were cited for poor customer relations.
• So did employee relations:  the same 12 of 15 companies were cited for poor employee relations. While 12 out of 12 is not a bulletproof statistic, the inference is too strong to ignore.
• Stakeholder approval was on a par:  10 of the 15 were cited for providing poor shareholder returns, but three of the 15 are private companies. What I believe is so important here is that the Ross School’s ACSI has clearly demonstrated that companies with high CSAT numbers perform financially better than competitors with standard or lower scores.

I also cross-referenced this list against MS Money’s “Customer Service Hall of Shame” nominees for 2009. Three companies made both lists, but the “Hall of Shame” list focused heavily on financial services whereas the “15 most hated” included only Citi.

What struck me after reviewing both lists is the 22 separate companies named all operating “inside-out” by putting company interests ahead of company interests. In fact, several of these outfits are frequently cited for showing the futility of trying to operate inside-out in today’s marketplace. In contrast, when I reviewed MS Money’s “10 Companies That Treat You Right” selections, all 10 are commonly cited as examples of how “Outside-In” thinking produces successful customer and business outcomes both. For more information on Outside-In visit: http://tinyurl.com/yd6rrdf

Here are the links:

15 Most Hated Companies:  http://tinyurl.com/yzkn6cm

2009 Customer Service Hall of Shame:   http://tinyurl.com/larogw    

10 Companies That Treat Your Right:  http://tinyurl.com/ml57oj

According to Accenture’s 2009 survey of customer satisfaction with customer service, only 40% are satisfied with the service they’re receiving. Of course, without seeing the questions or knowing the scoring method applied, that means little in absolute terms – except that 2008’s number was 45% and 2007’s 53%. And considering the survey’s “n” was 5,000, these variances are statistically significant. Customers’ satisfaction with the service they’re receiving is down significantly over the past two years.

Is this about social media?

The question is, “Why?” By giving customers opportunities to vent and share their dissatisfactions, is social media accentuating negative aspects of service. Or have recession layoffs triggered the satisfaction plunge. Or are customers expecting more? Or are other factors at work.

Without conducting primary research myself, I can’t confidently say these are the only possibilities. But now that I’ve lured at least some readers into the story by including “social media” in the title, I will share my opinion that social media matters about as much here as a pimple on the face of humanity. Hey, I love social media, at least Linkedin. And we profit from it. But knee-jerk supporters are getting dangerous close to giving SM credit for sliced white bread – the stuff that probably caused the pimple on the face of humanity.

Then what is it about?

The default opinion is certainly the economy. And no doubt that’s the case for customers in industries where service cutbacks have been common. However, based on two decades plus monitoring customer behavior in the marketplace, I’d say “the recession” has powerful competition for being the root cause.

Today, as we approach 2010, customer expectations are growing at an awesome rate (if you’re a seller, at an alarming rate). We are not 2008 customers. We know we have many sellers, even whole industries, in a tight spot. They need us more than we need them. So we demand more and more. And after the treatment we’ve received at the hands of financial services companies, health insurance companies, through-the moon prices “star chef” restaurants, Needless Markup fashion stores, exorbitant consulting and legal fees and the like – we’re up for turning the tables. Most customers would not say they’re extracting “revenge,” but that’s exactly what many are subconsciously doing.

Why is distinguishing this phenomenon from direct recession affects on service so important? Because the recession will go away…eventually, unless we do something really stupid with the economy. But customer empowerment and increasing customer demands on companies aren’t going away. Not for the foreseeable future.

A whole lotta companies don’t get this. They’re going to be blindsided. And some will become victims of the recovery.

Have you been clenching your fists because our large banks got bailed out and are getting away scot-free with being shamelessly greedy?  Are you gnashing your teeth because they appear to be going right back to their old ways? And are you starting to think they have so much control they can get away with total customer-insensitivity?

You can relax. They got a reprieve, but it’s only temporary.

Round two of their troubles is, as they say in the movies, “coming soon.”

·         Thanks in part to consumer (voter) pressure, the Consumer Financial Protection Act looks likely not just good to pass―but withe sharp teeth.

·         Thanks again to consumer pressure, regulation of derivatives and the other “exotic” instruments is also on the way.

·         Even compensation regulation for banks not holding TARP money is a possibility.

·         All the large banks have loan portfolios overstuffed with bad commercial loans, which will start hammering them in 2010.

·         “Too big to fail” legislation to prevent future bailouts without exposing our financial system to major disruption from major failure is also on track.

·         Reinstatement of the separation of investment banks from commercial banks is getting support from none other than Goldman Sachs (which would love less investment banking competition).

·         The shame the large banks are bringing on themselves has cut into the percentage of graduate students prepping for Wall Street. A whole lotta young people don’t want to be associated with these bad actors. Would you like to go to a party and respond to the “what do you do?” question by saying, “I’m in investment banking?”

As good as things look right now for major banks, the combined factors above will give many consumers (and small businesses) the pound of flesh they’re after. And through a combination of raw, consumer political power and legislative guilt for letting banks trash our economy, the balance of power is swinging in the other direction. That will be hard to reverse.

Best of all, consumers are rearing up in other markets as well, including influencing the health care debate. Customer empowerment is real and long-term. Companies that go Outside-In and adopt the credo of, “Adding new value to customers is the only sustainable manner of adding new value to the company,” will thrive in all this. So many companies continuing to resist customer empowerment will help them thrive.

And I also boldly predict that at least one large bank, perhaps from the second tier, will get customer religion and go Outside-In. They’ll be welcomed by customers with open arms.