So It Goes

Customer Service -- What a Concept!

MARC GUNTHER, one of the leading observers these days of corporate social responsibility, talks in a recent blog post about companies' "ethic of service—to their employees, their customers and their shareholders" and how that translates into loyalty from those same critical groups of stakeholders.

"I’m willing to bet that Southwest [Airlines] customers are less grumpy about flight delays than those on United or Delta because they have a sense that the company wants to treat them right," writes Gunther, who profiled Southwest's "ethic of service" in his 2004 book, Faith and Fortune: How Compassionate Capitalism is Transforming American Business.

Funny he should mention that, because just a week ago I was impressed yet again by how much better Southwest is at accommodating me, the customer, so much more than many of companies (not just airlines) I interact with as a consumer of their goods or services.

This time I was calling to rebook a flight because of some changes in my own schedule. That's something we have been conditioned by the other airlines to avoid like the plague, what with their pricey change fees and processes that are about as clear and simple as the federal tax code.

Not only does Southwest allow you to make changes easily and without penalty, get this: when I called Southwest to make the change (unfortunately, their Web site didn't allow me to do it by myself online, but I'd rather talk to a real person anyway), a recorded voice told me that, because their people were busy with other customers, there would be a delay of five to eight minutes. Nothing unusual about that; this is par for the course in customer service land these days.

But then the voice said they could call me back when my turn came up. I would not lose my place in the queue. So long as I punched in my number and stuck by that phone, I could hang up and go about my life until they were ready for me.

I tried it, and it worked! True to their promise, a real person called me back in about five or six minutes. The first thing I told her was how grateful I was for this feature and how much I love Southwest for treating me like a human being. She sounded almost startled by how effusively I praised her company. So not only was my transaction with her good for me, she wasn't dealing with a crabby, cursing customer, which must be a drag for anyone on her end of the line.

Gunther's right that even when Southwest has done some things that I normally find annoying (and for all the many times I've been on Southwest, I can only remember two), I'm much more forgiving than I am with other airlines and other companies I patronize from time to time -- phone companies, retailers, computer companies, cable TV providers, etc. From their impenetrable customer service systems on the phone or online to their tendency to bounce you from one customer service representative to the other (none of whom admit to being responsible for addressing your problem) to their inability to live up to their promise (as Southwest did) to show up at your house or deliver what you want within the timeframe they set for themselves, these companies have worn most of us consumers down.

We have come to expect lousy customer service and, with pounding hearts and clenched teeth, look forward to settling a disputed invoice, changing a ticket, getting the insurance company to pay for a claim or receiving technical assistance for rebooting our cable boxes about as much as we would getting into a car accident. We feel out of control, enraged, ripped off and let down.

I'm obviously not the only one to notice how relatively pleasant it is to deal with Southwest -- what with their no-nonsense approach to price and booking, their ingenious and fair way of boarding passengers at the gate to their good prices, all of which gives one the impression that the really do have the customer in mind and are not forcing the customer conform with inscrutable and inconvenient rules. As Scott McCartney reported recently in the Wall Street Journal, an independent customer satisfaction survey "covering the first quarter of this year, puts Southwest Airlines as the highest scoring passenger carrier. Southwest’s score rose 3% from the same period last year to 81 out of 100—a record for the airline industry. Southwest has continued to offer value and reliability, and has pushed its product into new areas across the country. Maybe that accounts for the gains – or perhaps Southwest’s decision to not charge customers for checking baggage."

(The good news for everyone, customers and airlines alike, is that, as McCartney adds, "customer satisfaction with airlines increased for the first time since 2003, according to the latest University of Michigan American Customer Satisfaction Index." But, "despite the gain, airlines remain one of the lowest scoring industries measured by the ACSI.")

As Gunther says, by treating its customers well, companies win the most valued prize: loyalty. Look at me; I carry a Southwest credit card, which gets me points for free flights on the airline, and I will go out of my way to book myself on Southwest, whether it's for personal or business travel. That's not often a hardship, as their fares are typically lower than others. I've found myself doing the same with other businesses that establish a more customer-friendly relationship with me, the customer -- for example, shoe stores, with real, old-fashioned shoe salesmen, who really know how to fit my fit into the right shoe, as opposed to the people at the discount stores whose only job is to point me to piles of boxes and ring up my sale.

Let's hope features like the call-back systems that I encountered recently with Southwest catches on and becomes the industry norm. And let's hope others, seeing how doing well by their customers, follow suit overall as well. At the moment, though, I feel the customer-service landscape is a scary place for most customers to tread. You've gotta wonder what the marketing geniuses are thinking and how they got us all into this state of affairs.

Jeff

CSR Bona Fides

AN OBJECT LESSON FOR US PR TYPES trying to counsel clients on corporate social responsibility:

A friend of mine, who is responsible for corporate social responsibility at his company, told me a story about an episode he witnessed at a CSR conference he attended recently.

A journalist (from a fairly prominent media outlet, I can't remember which) verbally attacked a young woman from a prominent PR firm who was speaking on one of the conference panels. The journalist asked how her firm could be purporting to advise clients to do good when the firm had for many years helped a major oil company with its public campaign denying the existence of global warming.

The PR person was completely knocked off base. My friend said that she was probably too young to have ever had anything to do personally with the oil company campaign (not that that matters), nor had she any sense of what her firm's role was (not that that matters, either). He actually felt bad for her, and, he said, everyone in the room seemed to have a pained look on their faces, too. She had been blind-sided.

Cheap-shot or not, the journalist had something of a point. How can PR people claim to dispense advice about doing good when we sully ourselves with ethically or morally questionable work at the same time?
But what exactly is ethically or morally questionable work? There are many journalists and other self-proclaimed purists out there who tut-tut some of the things PR people do on behalf of their and call it ethically challenged. We might say that a lot of it involves debates about which there are two reasonable and ethically defensible points of view. Indeed, I haven't seen anything my firm has worked on that would qualify as anything else. We're pretty careful about that, realizing that the reputation we maintain is as important as the money we make (and that's what we tell our clients). But some may see it differently depending upon their point of view. 

A good example of this came through in the article that appeared a few weeks ago in The New Yorker about the PR firm Edelman and its work for Wal-Mart. More specifically, read the part about Leslie Dach, the former Edelman exec who went over to Wal-Mart.

What's interesting is the discussion about Dach's strategy with some crisis clients. Rather than fight NGOs that were peppering the clients with all kinds of complaints about their ethical problems, Dach co-opted them, as one might cynically interpret, or, by another more charitable interpretation, convinced his client to do the kind of good that the NGO was asking.

All through the article, the journalist looks for ways to paint Wal-Mart and Edelman as bad guys. But -- especially if you're in this business, as we are -- you can interpret everything in two ways: as cynical "p.r." ploys or as genuine responses to what "the people" want.

I'm not sure, even after reading the New Yorker article and all the other stuff on Wal-Mart, where I am on that. I think it's a complex issue that no amount of sanctimony, on the one hand, or cold business sense, on the other, can catalogue.

But, anyway, it makes you think: what about what we in the PR business do gives us the right to tell others how to "do good?" I think there's a good answer, and that we have the bone fides to counsel others on social responsibility. But I'm not sure we can assume it's readily apparent to everyone else.

Jeff

Can Business Do Good? Should It?

WHEN I WAS IN GRAD SCHOOL, getting a masters degree in urban planning, I took a class from a guy who ran a land use planning consulting firm that worked for a lot of real estate developers. At one point during our class, he became exasperated with many of the students, who assumed that developers were, by definition, evil, self-interested despoilers of the land and the people and that it was the planner's job to keep them in check.

To those students, our instructor asked, "Do you think it's possible that a developer might actually want to create a project that enhances the beauty and economic viability of a place and generally improve the lives of everyone in the community around?"

An awkward hush followed his rhetorical question. The students felt challenged, a bit put on the spot. I don't think he ultimately won over the hearts and minds of these students (though I'd be curious to hear what they think today after nearly 20 years of practicing urban planning).

Yet his point stuck with me, even though I wasn't one of those who needed his persuasion. In fact, my interest in getting into urban planning (a discipline I, alas, never pursued beyond my degree) was in part to figure out how we can use "the existing system" to improve the urban environment, not tear down the system. It is entirely possible, I thought, that private business can be part of the solution to social challenges, not necessarily the source of those challenges. Indeed, we can't as a society make any progress without business.

Of course, there are plenty of businesses that are part of the problem, led by pretty bad people, who have given the rest a bad name. They have induced many to throw around the adjective "corporate" or the noun "profit" like they are dirty words.

It's true, too, that study after study has shown that large numbers of Americans (and I would bet this is true in other parts of the world, too) have relatively little trust in big businesses' inclination to do the right thing by society and by their own employees.  Fair or not, those perceptions sometimes make it hard for businesses to do what they need to do to pursue activities that even might do some good for the world.

Partly for this reason, there is a whole discipline within the public relations industry called "reputation management," which is aimed at helping businesses and even nonprofit and government institutions improve and maintain a positive image. And to do it helps a lot to do and be good. Fortune Magazine has an annual ranking of "most admired companies" and "best companies to work for," which are to some extent measures of reputation.

As Fortune Senior Writer Marc Gunther detailed in a terrific book (Faith and Fortune: The Quiet Revolution to Reform American Business) on the subject of corporate social responsibility, there's no dispute that a growing number of companies are seeing the value of being part of the solution.

Some, he shows -- Starbucks, Southwest Airlines and Timberland Shoes are perhaps best known but by no means the only ones -- try mightily and sincerely to wrap their mission to make money with a mission to improve the world. They are part of a growing movement toward "social entrepreneurship," which in summary is aimed at getting businesses to make a more positive social impact and helping nonprofits and other organizations with social missions become more financially sustainable. Most are motivated by secular ethical or religious values independent of their involvement in business. Others do it not out of any genuine sense of social mission but because they're convinced it's good business. I find it hard to be too judgmental of those in the latter category. Isn't it good enough to do good, even if you don't really mean it? (Grist for a good discussion, I think.)

There are skeptics, of course. Just the other day, Financial Times columnist Stefan Stern criticized British Conservative Party leader David Cameron for "seem[ing] to think business should be nicer. He has spoken about the question of work/life balance. He has argued that GDP (gross domestic product) figures might be accompanied by another statistic: GWB -- general well-being. This is the kind of flimsly, wishful thinking that gives corporate social responsibility (CSR) a bad name. It denies or ignores the competitive intensity of today's global markets. It also fails to grasp the basic facts of commercial life: the need to make a profit and build market share."

If the sunny Mr. Stern is right, then there are a lot of companies out there following one another like lemmings over a cliff (not his metaphor, but his point). And I guess that findings such as those from a recent study on CSR, commissioned by Fleishman-Hillard (for which I work) and the National Consumers League, are bunk.

The random-sample survey of adult Americans found it is "extremely" or "very" important to work for (79 percent), buy products and services from (65 percent), and socialize with (72 percent) those who have similar values and principles. Given five choices, including "lower price," respondents most frequently selected "being socially responsible" as a factor most likely to make them loyal followers of a particular brand or company, and nearly two-thirds said that a company's record on social responsibility is an influential factor when they decided whether or not to buy its stock. Another finding showed, notably, that the largest number of people measure a company's social responsibilty by the way it treats its employees, far more than even how much it gives in philanthropy.

All that said, this study shows, yet again, that relatively few Americans perceive American corporations as sufficiently socially responsible and that they have improved their CSR records over the years. They may very well be right, though the reality probably resides in some hazy space between consumer perceptions and what corporations are actually doing.

In spite of the pretty impressive evidence that CSR is important to consumers, skeptics like Stefan Stern for now still have something to grab on to. As Marc Gunther points out in his book, "I would like to be able to tell you that [the many books on CSR], academic research on the topic or my own reporting provide irrefutable evidence that practicing corporate social responsibility builds shareholder value. None does. What I can say is that there is a growing body of evidence that links companies that are great places to work, or have good reputations, or take their pursuit of social and environmental goals seriously -- firms guided by spiritual values, if you will -- with superior stock market performance."

But there doesn't seem to be evidence that CSR is bad for business, that it is mutually exclusive with the quest for the bottom line. So why not try it? Great things could happen -- and already are happening. As Gunther concludes his book: "Corporate power has transformed America more than once.... I believe it has begun to transform America again, to give us a way of life that is humane and sustainable. That is what the quiet revolution is all about. What it will take to drive it forward are people -- workers, consumers and investors -- who are determined to act collectively to get corporations to embrace spiritual values and serve the common good."

Jeff