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Customer service in a hyper-connected world: Google vs. Zappos

July 1, 2011

Two icons of the Internet age — Google and Zappos — with two very different approaches to interacting with customers: self-service vs. super-service.

Representatives of the two companies contrasted their philosophies at a recent conference in Washington, DC sponsored by audit and advisory firm PwC. The event, titled “Business works when life works: Flexibility in a hyper-connected world,” reviewed how recent technological developments are changing our workday — in ways both good and bad. Mobile devices, cloud computing and broadband communications have made it easy to work from wherever we happen to be — at home or on the road as well as in our office at corporate headquarters.

These were my key take-aways from the sessions:Typing on keyboard

The benefits of flexibility. The new technology allows for greater “work-life flexibility.” That flexibility can been a boon for stressed-out caregivers — a category that increasingly includes fathers and sons as well as mothers and daughters — who feel pulled in many directions at once. It can give all of us a greater sense of autonomy which, as speaker Daniel Pink explained, is one of the key drivers of satisfaction at work.

It’s not just workers that benefit from the new flexibility — employers have much to gain as well. Companies that embrace the new technology can reduce turnover and hold onto employees longer — which translates into a higher payoff to investments in recruiting and training. At the same time, more engaged employees are likely to be more productive.

But there are disadvantages. Of course, there are drawbacks to the new connectedness, “inattentional blindness” being one of the major ones. There’s so much going on around us that we can’t see the elephant in the room because we’re focused on the pattern in the wallpaper.

The stress of it all can take a toll on our health. Speaker Linda Stone described the phenomenon of “e-mail apnea” — how we tend to hold our breath while reading and sending messages. One-third of us stay in this “fight or flight” mode throughout the work day, not ever getting up to take a break. Stone suggested that we make some changes: breathing deeply while staring at the blinking screen, starting and ending meetings with a few minutes of meditation.

The new world of customer service. While the conference focused on trends within the workplace, the conversation turned briefly to the implications for connecting with customers. In response to an audience question, panelists Brad Horowitz, Vice President of Product Management at Google, and Jenn Lim, CEO and Chief Happiness Officer of the Zappos affiliate, Delivering Happiness, discussed their firms’ approaches to customer service and the related costs.

Horowitz noted that Google emphasizes self-service — simply because a more high-touch approach would be enormously costly. In fact, Google even relies on the “generosity of its users” to provide technical support, in form of online forums.Customer service representative

In contrast, at Zappos, where customer service is a core cultural value and a top priority, cost isn’t much of a consideration. Customer service representatives are given considerable independence — they don’t use call scripts, and they are authorized to make on-the-spot decisions about how to handle a given situation. Lim described one CSR who chose to write a note and send flowers to a caller whose husband had just passed away.

Implications for mutual fund transfer agents. My sense is that neither of these models — which are almost at opposite ends of the customer service spectrum — is applicable to the mutual fund industry. A pure self-service (customer autonomy) model would leave too many investors befuddled since mutual funds have so many complex features. At the same time, a high-touch (service rep autonomy) model would increase the chance of compliance failures given the highly regulatory environment that funds operate in.

But exactly where transfer agents strike the balance between the two models will need to change as the technology and customer needs evolve. Tell us what you think. We’ll be exploring the trade-offs at future NICSA events.

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