Stu Reed has a lot to keep track of. As the president of Sears Holding Corporation’s Home Services division, he runs an organization that has more than 170 million customer contacts every year, employing tens of thousands of field service techs, call center employees, and warehouse employees, all while helping generate $3 billion in annual revenue.
But what he really wants to know is if his field tech asked you where he should park his van.
Founded in 1886, Sears is one of America’s largest and most storied retailers. That said, it’s in no way exempt from the economic pressures traditional retailers have faced in the last decade: Internet retailers have tremendously devalued Sears’ main assets — its products and stores — by giving consumers access to them cheaper and from the convenience of their own home.
Raising the bar on customer service
But Reed sees a huge opportunity for Sears to focus on the one thing the Internet will never be able to do: fix your refrigerator. And that, he says, will leave customers with a smile on their face, ready to come back to Sears the next time.
“Customer expectations have been low in the (service) industry and that’s actually a real opportunity,” Reed told the SmartVan Tuesday at the Service Council’s Executive Symposium in Chicago. “As products commoditize more and more, service becomes a real differentiator, so it makes sense to focus 100 percent on the customer.”
Overhauling such a massive service department is no small job: Sears Home Services division offers more than a dozen services spanning everything from insurance to carry-in and remote repairs, installations, parts sales, and a huge call center operation that, in itself, handles about 85 million customer contacts each year. Reed’s edict is that every time a Sears employee interacts with a customer, the service is so personalized, effective, and efficient that the customer will become an advocate for the company.
“If I can delight them, own the customer relationship and get them to come back and tell their friends, I don’t need marketing,” Reed said.
Sears’ ‘Pro-Advocacy Model’
Reed calls it the “Pro-Advocacy Model,” a re-imagining of Sears’ service culture that’s focused entirely on returning customers. The strategy is to turn the company away from what he called “a call-center mentality.” It involves all of the pillars you’d expect: Give customers the dates they want for scheduled service, no rescheduling or canceling; showing up as promised; and fixing problems the same day. But Reed says that it’s actually another pillar — developing a relationship with the customer and treating them with respect — that’s actually the key.
Initially, Reed’s division spent most of its efforts reorganizing its processes and technology to improve results in the field, but hadn’t really taken a hard look at how to deal with its people-skills. It took a bit of internal field research to that around. Consider that after focusing on improving the actual service itself, the company’s customer satisfaction rating stood at 58 percent. But by changing nothing at all, except for making a point of treating customers respectfully, they garnered an 83 percent satisfaction.
“We’re sitting there, and we had spent so much time restructuring everything, thinking we had done everything we needed to,” Reed said. “Then you get the 2×4 across the face that says, ‘Dude, you can be the most inept service organization in the world, but if you just treat customers with respect, they’ll be happy.’ That really made a difference.”
Now, Sears’ Pro-Advocacy Model is a blend of people, process, and technology. It all starts with a catalyst — your dishwasher breaks, or you want to buy a new dishwasher. The customer comes in to a Sears store, or goes to the company’s website directly or through a call center or through social media sites. They’re immediately entered into a CRM system that is uniform throughout the entire organization. The customer’s problems or requests are carefully documented.
Training programs designed for service techs
After the initial contact, they’re either routed quickly to the purchase experience (usually Web-based), or set up to have something delivered or serviced. Reed said this step, where the respect and relationship come in, is incredibly important because it softens the ground for further or repeat service.
“We want that culture of respect and delighting customers to seep down in to every crack and crevice of our organization,” Reed says.
To do that, Reed’s team has taken an educational approach to training — working with people instead of talking at them. So, they designed training programs that let techs learn how they wanted to learn. For example, Reed said he set up a series of conference calls for the less-socially inclined techs.
“You have guys that really don’t know why they have to do this training. ‘I repair refrigerators for a living, not customer service. Can’t I go just go home?’” Reed said. “We’d get someone on the phone with them who would give them a couple ideas that they could literally just steal and use on their own — just one or two things — and it’s done.
The program’s success, however, is tough to measure, Reed said, because they’re constantly aiming at a moving target. But as a clue that they might be on to something, he pointed at a program called “Blue Ribbon,” designed to handle service calls that had gone bad. Those go to a special team where the techs are totally empowered to do whatever they need to do to make the customer happy — without interference from managers or anyone else up the organizational chain.
“We had one delivery that was screwed up 11 times. Can you imagine? But they came back,” Reed said. “There was another where the woman was talking about getting a lawyer when the tech got there, and by the end she was discussing options to buy something else.”
Reed said Sears Home Services currently retains 96 percent of its “Blue Ribbon” customers.
“Recovering a customer after you’ve screwed something up is the most profound thing an organization can do,” he said.