Chain or Group? - Depends on how you define customer experience

Just last week I was going through this blog of mine and was wondering why couldn't I keep it ticking. Glad I got a spark thanks to Dr.Sheen S.Levine who tweeted a link to the article 'Call it what you like, but not a chain'.  This is a story about Legal Sea Foods, which has 35 restaurants in the USA but its CEO insists it's not a chain. It's a contrarian thinking but a brilliant one.

A chain often means standardization of products, processes, systems, etc. Irrespective of the restaurant you walk into you would get the standard experience, as a customer, at least that's the idea of standardization in chain of restaurants. The chain concept, when used to define how you function, has its own benefits. Everything from customer experience, revenue, cost, infrastructure, ambiance can be standardized and increase rate of repetition. It will be costly and take more time to start a restaurant from the scratch than to start a restaurant of a chain. Many global brands have taken this route and reaped profits.  Legal Sea Foods, though might have standard infrastructure and ambiance, thinks it's not for them. Their CEO Roger Berkowitz thinks of the term 'chain' as,

"When anyone thinks of a chain, they think of cookie cutter, institutionalized, dummied down, and those aren’t the best adjectives,” Mr. Berkowitz said in an interview." 

Here in India we have both the global and domestic brands having their chain of restaurants. Every time I walk into an outlet of a leading chain, I know what to expect. Isn't it good? Yes it could be but won't it be great if I can walk in knowing it would be good but not sure what will make it so? If there are 10 different restaurants offering same type of food, say Sea Foods, but each separate, as a customer you have a variety waiting for you in terms of taste, menu, and of course service. But then the downside of it is, you can't be sure they would all match when it comes to quality and service, two major determinants of customer experience. Obviously it's got to do with the differences in management, experience, business values, financial position etc. If a customer can get variety across restaurants but is assured of quality and service, that surely will be divine, at least for a foodie like me :)

This is here where I find the idea of Legal Sea Foods, as brilliant. It gives scope for localization in terms of taste and menu, yet deliver on quality and service fronts like a chain does. You can even have a totally different menu from that of your other store(s).

“People never associate chains with the kind of passion or quality that we put into our food,” Mr. Berkowitz said.

Not sure about the quality but definitely the passion will be missing in a chain. It's all standard and most of the ingredients are shipped from a central point, which leaves little scope for the local staff to innovate and experiment.

There are two sides to a customer experience, one is the hard part dealing with the physical aspects of a product or actual outcome of a service. The second one is the soft part, which captures the after effects of using / consuming the product or service, which is your feeling towards the whole experience, your satisfaction. So whether you vary the experience of a customer on the hard part or not, you got to deliver consistently on the softer side to be successful in the long run. Standardizing on the harder aspects of a customer experience may reap cost and other benefits but that is susceptible to boredom. So without standardizing its offering, Legal Sea Foods is standardizing customer experience across its 35 restaurants. When you pull it off your customers are going to love you. Very challenging task, but refreshing one to think of.

Keeping your customers

On the other day I was having a discussion with my new client when he popped the question, why do customers leave despite same offering from competitors? He was making an assumption that the offering from his competitor is similar to what his company offers. It was difficult for me approve or contradict that without knowing the details however I told him, "tangibles may resemble but intangibles may not" and there could lie the difference. Intangibles that I am talking about are given in the diagram below. There may not be anything new about them but just that one needs to realise that they, the intangibles, are very much part of an offering by a company to its customers.

Intangible aspects of an offer to customers

Pre-sale service
Few years back, in a seminar, one sales manager shot back at me saying 'service starts only after sales' when I drew the attention of audience to 'pre-sale service'. But when I asked him about information support given to customers on order status, delivery time, despatch etc. he said "they are part of the process". Then isn't post-sale service part of that process?

It's important to classify any interaction between a customer and a company, with regard to a sale, as service as it underlines the importance of the activity being performed. Any service before the product is delivered is part of 'pre-sales service'. The reason why I am emphasising on 'pre-sales service' is because people across the company are involved in this and not just sales department. Manufacturing, Accounts, R&D, Transportation are some of the departments that are responsible for some of pre-sales service activities. A well co-ordinated, unified approach is necessary to ensure that the customer gets what he is made to expect from the company. It's very easy for a company slip up here. Customer focus across the company is the only way forward in this regard.

Post-sales service
Ensure high quality standards timeliness in the delivery of your service. Keep improving your service standards through feedback / learning.

Commitments
Commitments are of two types, one is authorised and the second unauthorised. Many companies face problems with unauthorised commitments made by their sales team to gain a sale. Some of these don't get documented and quite a few may never reach any other person except the concerned sales executive. Every commitment that is violated creates a deep hole in a customer's trust. A company should be mindful of commitments it makes in the form of concessions, additions, terms etc. and honour them without fail. With respect to unauthorised commitments made by salesmen, the customer should not be made to pay, for the mistake is not theirs. Companies must set their house in order and drive home the message that unauthorised commitments will not be tolerated and those who make them will be made to pay for it.

Relationship
Beyond tangibles, service and commitment what else can a company offer? A relationship, certainly. In mid 1990's, besides poor service standards, many customers jumped over to new private sector banks due to poor treatment meted out to them by staff of Public Sector Banks (PSBs) in India. In fact the tide is now turning and more and more people are leaving for PSB's. Nowadays, customers get much better treatment from the staff of PSBs and their service standards have improved greatly.

Never betray your customer's trust

Customers can get vocal when their expectations on tangibles are not met but may not waste their lung power to get the message across when it comes to intangibles, barring may be post-sales service. They will just move away and the onus will be on you to learn why they did so. One of the basic tenets in business management is "never betray your customers' trust". When a customer decides to buy your product or avail your service he / she starts building trust in your offering and remember both tangibles and intangibles are part of an offer. If this trust is taken for granted or played around with, then those customers who leave you will take away much more business than they brought you in the first place.

Final words

Tangible aspects of a product / service may win you a customer but it is intangible aspects that help you retain customers. Intangibles carry your own mark and are difficult to duplicate unlike tangibles. They even mask some shortfalls in your products and services, albeit for a short period, therefore be mindful of them.