1. Materials taken from the following presentation: Bill Price, President of Driva Solutions; Co- Founder LimeBridge; Chair Global Operations Council (GOC) February 2008

8. Increasing Cost Increasing Profit Ladder to Success or Failure Compounding effect of customer response Lost Customer Mgt Decision Tech Support Level x Tech Support Help Desk Web Support Reliable Core Function Easy Configuration Auto Discovery Self Healing Repeat Business Referred Business Pressure on Competitors

11. The Amazon Case Only 10% of calls to service resulted from problems in service Waaaay too many “reasons for calling” codes Nobody was accountable for why things went wrong Too little executive focus

12. The Amazon Solution One “killer metric” by which to measure service: –Contacts Per Order (CPO) Reduced “reasons” from 350 to 30 –Also changed names to things people understood like “Where’s my stuff?” Reported service trends Assigned executive responsibility –If your people made or did it, you’re responsible for service calls for it Increasing focus on service management

13. Amazon’s results CPO dropped 30%/year for over 5 years –Allowed rapid growth without scaling up the support effort/$ Morale & motivation for service front-line staff improved because what they did actually mattered Staff turnover declined

14. Closing the Loop Service is how you find out what needs to change in your product or service If an issue cannot be closed on the first call, the front-line person should be empowered to stay on the case until the root cause is solved

15. Cautionary Notes Service requests are a symptom, not a problem –If you kill requests by making them hard for the customer to do, you make the problem a lot worse –If you simply ignore requests, the same thing happens If your customers never interact with your service, you have become a commodity –Customers have no reason to come back if the other guys have a lower price

16. Effect of Corporate Fragmentation If you out-source your support and they are paid per incident, they have no incentive to reduce incidents –Find a way to compensate them for participating in the improvement process –Perhaps: Charge support incidents to the cause of the problem Goes counter to Deming’s idea that you should focus on process rather than blame

17. Summary Customer support is not merely a cost, it indicates a malfunction If customers feel the heat of this, they will leave Empower and engage the entire support chain to solve problems rather than merely dealing with them Take a long view of support –It isn’t merely a cost, it’s part of the product you want to sell the next customer –Good design and creation is part of the support process