Shep Hyken on Customer Service Excellence, Customer Loyalty, and Trends for 2022

In our quest to find out what really matters to the customers, what does true customer care mean, and how brands can work towards building customer loyalty, we recently interviewed Shep Hyken, a globally recognized voice in the field of customer service and experience. Shep is the founder and Chief Amazement Officer of Shepard Presentations. Shep focuses on Customer Service, Customer Loyalty, and The Customer Experience, helping companies build loyal relationships with their customers and employees. From keynote speeches and publications to bestselling business books, Shep is a leading authority on customer service, experience, and loyalty in business.

Here are the excerpts from our interview with Shep Hyken where he discusses his inspiration, journey, and learnings. 

What really inspired you to begin your journey in customer service? What has been your why?

It was taught to me at a very young age. Believe it or not, I had my first business when I was 12 years old. I’m an entrepreneur from the very beginning. I started a birthday party business where I would go out and entertain kids. I did a magic show. 

It was after school one day when my mom picked me up. I was only 12 and she dropped me off at this home. I entertained the kids for about an hour and I came back out and they paid me quite well to do that. And my mom said that evening, you need to write a thank you note to these people. I didn’t know that’s what you’re supposed to do.

I mean, I know you’re always supposed to say thank you to your customers, but this was a little bit more of an extra step. And I liked that great idea. My dad said, “Great idea, but here’s what I want you to do a week from now. I want you to call, I want you to say thank you again, call the parents and then ask them, were you happy with the show and then get specific. What tricks did you like?” 

And after you do this for a while, you’ll hear the same tricks over and over again, but you’ll also know that there are certain tricks they don’t talk about. And it doesn’t mean they’re necessarily bad. They’re just not the ones that stand out. He said, get rid of those though, and try to replace them with tricks that they will talk about and you’ll keep getting better and better. Now little did I know that showing appreciation and asking for feedback is really important.

“And this is where a lot of companies fail. They get the feedback, but they don’t act on the feedback. So the goal is to create a better experience than next time and that’s by process improvement. And so I did not realize at age 12, I was being taught the basics of customer service and experience. They didn’t call it that.”

But as I learned, when I got out of college and I started to do my research and study so they can start my speaking and training business, that’s what it was. So, I’m not going to say I was born with it, but pretty close. 

Very interesting story, Shep. What did you really understand about customer loyalty early on?

“I learned to create loyalty by really just delivering exactly what my clients wanted.”

And by the way, I graduated from doing kids’ birthday parties to working for corporate events, while I was in high school and college.

So at a corporate level, what do we do to make customers want to come back and do business with you again and again and again. And I think one of the primary ways of doing it, it instills confidence that every time they interact with you, every time they do business with you, they’re going to have this consistent experience.

And my goal, knowing that if a company called me to do a magic show while I was in college, that they really didn’t have to, there were lots of other details happening at this event. There was catering, managing the room, and making sure it was staffed properly. There are so many things. I’m one tiny little piece of it, but I want to be the piece they don’t have to worry about.

So, this is what I believe drove a lot of loyalty for me. And that was number one. I did a good job. Number two, I created a consistent experience, and number three, they didn’t have to worry about me. They knew what they were going to get. And it was like the last thing they know, he’s going to show up, do what he’s supposed to do. 

We need to create that environment too. I love it. When a client once asked me, how are you going to try to keep people on the phone and teach our agents to keep people on the phone for as long as it takes to make sure they’re happy? Because I don’t want that. We need to be looking at the average handle time.

“And I said, average handle time is great., but a terrible stat because it sometimes drives the wrong behavior, but here’s what I want your people to do by the time the call’s finished. Even if you want to try to shorten the handling time, they need to know that every time they have a problem, it’s okay to call.”

We want them to do that. We’ll give them the answers to what they need. They should be confident and they should use the word always in front of something positive. Like, oh, they’re always so knowledgeable. They’re always so helpful. They’re always friendly. And if they use those words properly, you’re going to start to create a pattern of repeat business and ultimately loyal business.  

Shep, If we talk about building customer loyalty, be it a big or small business, what is the universal element that would stand true for all, according to you?

Yeah. Well, I love the concept of loyalty, but let’s understand what loyalty is not. Because that’s really important. 

“Loyalty is NOT repeat business. It can be indicative of loyalty, but repeat business by itself does not mean the customers are loyal. You must understand why the customer keeps coming back and that ‘why’ is really important.” 

Do they come back because your prices are lower? Do they come, just as an example, if you’re a retail store, is your location closer than the competitor’s location? What happens if that competitor drops their price to be lower than yours or moves in closer to the customer and all of a sudden the customer stops? But wait a minute, for the last two years, they’ve been coming in every month, like a loyal customer, they were loyal, but not to you, they were loyal to the price or the location.

So it’s really important to understand. I know that’s an oversimplification. But keep in mind, we must understand the why behind a customer doing business with us again and again. And if we understand that why is tied to, they love doing business with us because our people are friendly, helpful, knowledgeable, get them what they want. It’s an easy frictionless experience. In other words, we don’t keep people on hold for an hour and a half waiting for them. They know what they can depend on. 

There’s a company here in the US that we use for website and domain hosting. It’s called GoDaddy. What I love about GoDaddy is that I have called them many times for support and often it’s to renew a website or get rid of one and take it off my because I have like 50 URLs, many companies do.

I’ve never had to wait on hold for more than two minutes ever. And I’m thinking, how do they do this? Okay. They’re very efficiently staffed. They understand that is one reason they’ve made life easy for me. And I realized that they are lower price, but they’re not the lowest price. That’s important. 

We have a study, we call it the twenty, twenty-one, by the way, I realize we’re in 2022. Now the new studies coming out in the next month or so, but these are our benchmarks to understand customer behavior. And we go out and interview over a thousand consumers and ask them questions like, you know, and, and one of them is, I want to know what their tolerance level is, how long do they wait before they get frustrated?

And so we give them options as well. Good. Is two minutes too long? Is five minutes too long? You know, same thing. How long if we send an email? Are we willing to wait before we start to lose confidence in the company and have to feel like we email again? 

These are all really important drivers to understand the stats and the facts about how our customers are thinking. And I recognize B2B is different than B to C, but not all that much. 

What would be the differentiating factor here Shep?

Sure. Let’s talk about a business-to-consumer model.

Let’s say it’s a retail store. If I decided to go to a shopping mall, there are probably 20 different malls I can go to in my area. And when I walk in, there are probably 10 stores where I can buy this sweater or these pants or whatever it is I’m wanting to buy. And if I walk into one store and don’t see what it is that I want, I could go to another store if I walk into the store and, and maybe I’m not super happy, I go to another store.

There’s the point is there are lots of options as a consumer for me to get the same products and services, but in the B2B world, oftentimes, and there’s, there may be 10 stores in this one mall, and there are hundreds, if not thousands of malls across the country that sell the same thing, and maybe I can get it online.

But in the B2B world, there might only be 10 companies themselves and the whole world, what it is that we sell. So the point I’m making is in a mall and retail. I may not be happy with what this store offers this time, but I’m going to be back to them all. And they were on the way as I walked through. I may stop in there again, but if I lose a customer in the B2B world, it could be a long time before that customer comes back and buys again, what it is that I sell.

We’ve worked with a company that’s a manufacturer that sells huge pieces of robotic equipment automation. Their customers replace the equipment about once every 12 to 15 years, if the company loses the customer because they failed to follow up properly and on timely basis, in other words, they gave him a bad customer experience.

It could be 12 years before the customer decides to give them a chance to buy again because they don’t need what it is that they sell. So, I mean, I know that’s an extreme example too, but you get the idea. I think the stakes are much higher for B2B than B2C because if you lose a customer, it could be difficult to get that customer.

And at this point, Shep, we would like to know more about your book “I’ll be back”.

Yeah. I love that. How to get customers to come back again and again. And I write every week, I have a forbes.com column that is weekly.

Anyway, this book, I was working with the client and we were talking about, you know, how do you define loyal behavior and repeat business? And by the way, this particular client was in the hair salon business. 

They hired me to speak to a thousand managers and owners of hair salons. I don’t go there. No, there’s no hair on my head anyway. But I do understand what drives their business and what we were talking about was how they measure success. And they have all kinds of typical measurements. Like the net promoter score on a scale of zero to 10.

What’s the likelihood you’d recommend it? How did you like your hair cut on a scale of one to whatever it was? Good, great, whatever. How did you like the service was, and was the facility clean? And then we were talking, and the words that I used is that all of these metrics are history lessons.

It’s what happened yesterday is what happened when the customer came in before, it’s not indicative of what’s going to happen next time. But when the customer tells you all, that was. Does that decide they’re going to come back after that? That’s the behavior, that’s what we want to measure. And that’s what this book is about.

“I realized that behavior is the ultimate metric because they can say they love us, but until they come back again and again, It doesn’t really mean anything. So we want to measure the behavior.”

And specifically, let’s use the hair salon as an industry. 

Do you go somewhere to get a haircut and how often do you go? 

Maybe once in six months. 

Once every six months, do you ever go to get it colored or permed or have any treatments done? 

Ah, yeah. 

Okay. So this hair salon would know you come every six months. You get your hair cut. if you miss that six-month mark and you don’t come in, but then you come in six months after that, they’re going to know you probably went somewhere else though.

We need to be tracking that behavior. And if you did go somewhere else, we need to figure out how to get you back into that doors. So, understand the cadence. A lot of times, you know, people who have hair, they go in once every four to six weeks to get their haircut. If that means you’re going to come in, let’s say, you know, eight times a year, ten times a year. If we notice they’re only coming in twice a year, we got to figure out why.

“So understanding the behavior becomes of the ultimate importance and tracking, not just repeat business, but the ability to move them into loyalty. Now, again, I want to emphasize, that I mentioned this earlier just because they keep coming back, it doesn’t mean they’re loyal. Understand the why behind it.”

I love coming back here. Just so wonderful to work with them. Whenever I call the support center, the contact center, these people are so helpful. I never have to wait. It’s so easy to do business with them. These are the reasons that would compel a person to come here instead of somewhere else. 

And our stats and facts from our study proved that customers love convenience. They’re willing to pay more for convenience. They’re willing to pay more for a better customer experience. And what that it tells me is that, price is less relevant. So from that standpoint, it kind of helps insulate you from the company. 

And in this conversation here, how do you look at the role of empathy?

Empathy! Ah, the word of 2020 and again, 2021, perhaps 22, if we keep this crazy pandemic thing. Customers are frustrated and concerned. They’re scared now. Early in the pandemic, empathy had to do with AR. And this is really fascinating to me. I, I geek out over data like this. We noticed that customers who would never want to use the phone were willing to go to a website to look at our frequently asked questions.

They said, no, no. I want to talk to a human being. They just wanted to talk to anybody. There were stuck at home in quarantine. And so we noticed that all over the world support calls started to escalate. There are numbers. And the reason was, they just wanted people to talk to.

“Customers want to feel a connection and that word empathy is so powerful because that allows that agent to talk to the customer and hear and reflect back on comments and make that person feel good about what’s happening. And if they had a complaint, make that customer feel good about calling. To get this complaint resolved. So empathy becomes really important.” 

Now we’ve always had to have some degree of empathy, but in times of crisis, people fear, the fear manifests itself, in different ways, high anxiety, even anger, and frustration. And these nice people normally wouldn’t be that way. But now they’re fearing for their businesses. They’re fearing for their lives and their loved ones. 

And so we have to be a little bit more open to be understanding. That might mean your average handle time goes up a little bit in order to exhibit the empathy that you need to make the customer feel connected with you back to the idea of loyalty, loyalty involves not just a great experience, but some type of an emotional connection that the customer has with you.

They’re easy to do business with and I’ll use the L-word love. I love doing business with them because you know, somebody like, whoever it is I’m talking to, always takes care of me. They’re so easy and they seem to care so much. That’s emotional. It’s not, you know, I call, I get my answers. I move on. 

There’s also the subject of mental health that has gained so much importance during the pandemic. There has been stress on the agent level. There has been stress on the management level and also on the customer level. How do you suggest companies and top-level management should look into that?

Great. So let’s start with customers. We already know what to do. We’ve already talked about empathy and what we need to do and different companies are going to focus on, you know, if average handle time is really, really important.

You got to recognize that you may not be giving that customer all that they want. I’m going to kind of go down a path and come right back to your question. We were working with a client that said, look, we just want to answer their questions and move on. We can be nice and friendly and that’s fine.

And then I had another client who wanted to say, we want to try to do what we can to make sure they never call us again. Not because we don’t want to hear from them but because we did such a good job that they don’t have to call us again. And that means we’ve got to look at their profile. We’ve got to look at the data, their buying patterns, et cetera, et cetera.

And we got to look for questions that they aren’t asking for on this call that they didn’t think of so we can answer them now. So we can say, oh, by the way, I know this. Isn’t this why you called, but my guess is if you stay on this long enough, you’ll end up calling us back over this. So let’s deal with it right now. So you don’t have to call back sometimes. 

That first client doesn’t want any part of that. They just want to answer the question, and move on. Because that’s going to make the customer happy, but the one that’s going to feel even more connected is when that agent says, ‘let’s take in a little extra moment to make sure we’re answering all the questions and helping you for the future’. That is really important. That’s a customer experience. 

Now let’s talk about the agent experience. Many of them have been moved to a remote situation and have not come back. We’re seeing some contact centers, bringing people back, but a lot of them have learned and adjusted. We’ve paid for the technology and we’ve created the experience where people can work from home. 

To the leadership, your fear of this situation is that your contact center employees who work from home no longer have the connection to the company that they might’ve had. They worked in a company where the manager comes by, pats them on the back, tells them they’re doing a great job, and answers a question that they’re having a difficult time with.

So what we need to do is we need to make sure that employee stays engaged at a level that makes them feel like they’re still working for a company and not just a paycheck. 

All right now, let’s talk about the managers. This is where actually most people don’t think about this.

We’re having a harder time with the remote situation than employees were because they’re used to being able to go around and sit down next to somebody, listen in, have a meeting real quick when it’s needed, they can’t do that remotely anymore. So we needed to work with clients on how to best interact.

We suggested having daily huddles via whatever communication tool they were using. Actually, we suggested more than one. The manager can have a main huddle in the morning or a meeting sometime during the day, maybe check-ins, and then be able to interact with people on a regular basis. That’s their job.

They’re now on the phone, so to speak, or on a video call, connecting with their team as needed, listening in, on calls, watching feedback, coming through on whatever system they have, depending if that’s available to them, they can then reach out. And, that way the employee feels engaged with their managers and supervisors and the supervisors and managers are able to still work with them.

We actually see having what I would call extracurricular events. They don’t have to be long. Hey, everybody, let’s all have lunch tomorrow together. I realize we’re going to take two or three shifts to have lunch, but  I’ll be on all of the lunch calls and this is a crazy thing we came up with during quarantine, but it works really well.

We have an HR person, but it’s not human resource. It’s humor. And their job was every day to go onto YouTube, find a funny video— a minute or two long— that would make us all smile and laugh together, and show that at our lunch meeting, I did that every day. Now you don’t have to do that every day, but you get the idea we’re gauging. 

We’re having coffee breaks at the end of the day, Hey, at the end of our shift, let’s all meet for 10, 15 minutes, and let’s celebrate our day. We’re going to be doing those things now in leadership. That means people at the top, not the people that are running the contact center. They got to recognize just how important this is.

The secret to making that happen is for them to spend time doing exactly what managers and supervisors are doing. And maybe even spend time as an actual support center person, if that’s possible, because that would allow them to get a feel for number one, what customers are saying, but even more important, I believe what employees are going through and what managers are having to do to keep their employees focused on track and feeling like they’re included.

And on that note, Shep, do you really think that contact centers are getting the attention they actually deserve? And if not, what could be done to enhance that experience?

Great question. So in some companies, the answer is absolutely yes, they are getting all the attention they deserve because leadership recognizes that the contact center is the center that is dealing directly. With the customer, they’re on the frontline. 

I actually love the term revenue generation or repeat business department because that’s what these people are doing. They’re ensuring that the customer says I’ll be back. And, so those companies have figured that out and that’s powerful.

But here’s what happens.

Some companies view the contact center as a cost. Something that drives better revenue, shame on them for not figuring that out. So I want the people listening to our interview to understand if you are in a supervisor or management role in your contact center, and you want your leadership to invest into, spending more money and giving you a better, maybe it’s better solution, maybe, you know, software. Context and our solution, whatever it is, more training, the way you go about it is you create a case study. Number one, look at the general stats and facts. There’s plenty of them out there. We have a study. I mentioned the amazing ER, achieving customer amazement study. And that’s giving you stats and facts that will tell you when the typical customer will leave you after these many problems, they’ll, you know, et cetera.

So now we know what the general numbers are and we should take a look at our numbers. What’s our channel? How many customers are we losing? What if we were to eliminate 10% of those customers from defecting and stay, let me say, eliminate what we’re able to keep 10% of the customers that are leaving us.

What would that look like financially to us? Okay. That’s a pretty good number. How much would it cost for us to impose? A new software solution. If it would make the experience better for our customers or maybe make the experience better internally for our agents, which by the way is really important.

We need to make the experiences easy and as frictionless as possible for our internal people as well. And so what would that cost? And if that cost is a fraction of what it is to save even just a sliver of the customers that have been losing in China, well, maybe we should invest in that C suite people or leadership of a company they operate sometimes, you know, by, it’s not really gut feeling, but it’s, they’re really focused on the customer, which is soft, but ultimately they need numbers.

They want hard numbers in order to make good decisions. And that’s what we need to be focused on when we approach that, that leadership level to invest in. 

And Shep, since we’re talking about contact centers, if I am the contact center representative, what are the skills and traits we are looking at?

Okay, great. You know, you already used the word empathy. I think that’s great. So here’s my feeling.

You can train people to move around screens and use the software that’s technical training, but the soft skill of being able to interact with a customer, the way you want them to interact is really important. So based on what you do, I want you to define what your perfect looks like. And one of the ways we suggest doing this is to find a behavioral style assessment.

That could be, many people understand what the Myers-Briggs assessment is. That’s not necessarily what we need, but if you’ve got, like a disc assessment, which is a personality profiling assessment, and you write. Take your agents, put them through this and you say, who are our best agents? Let’s take the top 10%.

Let’s look at their behavioral styles. Interesting. They’re all very similar. Let’s look at our bottom 10 or 20% interesting. There’s some similarities to those profiles. Now as you’re hiring people and you put them through the disc profile or whatever profile you choose to use, you can start to match up their behavioral styles and traits with the best of the best.

Now, this is not a guarantee, but it’s a pretty good indicator that you’re on the right track with the right person. Next is the right training. Training. Isn’t something you did. It’s something you do. So what we want to do is get them onboarded properly. That’s where most of their training is going to happen.

Let’s not talk so much about the technical training. That’s always going to be happening because there’s always going to be something new on your software, a new, you know, program. You’re going to need to educate them on a new product. I’m talking about the soft skills people you need to constantly create what I call service awareness.

What does good service look like? And so on a regular basis. I even suggest, I mean, some companies do it daily, but I would suggest at least weekly spending just a few minutes to share examples of great experiences that your agents have created for customers. And when you start to share these and the way you get them is not by the manager, observing and then sharing it’s by asking the agents, Hey, you’ve got a homework assignment.

It’s only going to take two minutes. What I want you to do is in the next couple of days, I want you to think about the best interaction that you had with a customer and right. Two or three sentences. What did you do to make that magic for them? And then we’ll share some of those at our next meeting next Tuesday, and all your take, take five, six minutes to share several examples.

And what happens if you get everybody to participate, then they start to say, oh, this is the one that I want to use. And now this one’s not good enough. I got a better one. I’m going to find you’ve created this level of what I call service awareness and it’s kind of fun. And as a manager or supervisor, we want everybody to participate.

Everybody sends them in and then the manager calls a few people out to share theirs. And over time, Hey, this time we used yours, but next time we’re going to use somebody else. Some of our clients do this daily. I’d say, and that’s wonderful if you can, but at a minimum, do it weekly again, five minutes.

It’s not long, but it’s a powerful reinforcement of what you’re trying to do.

What is here to stay in customer service, good times or bad? And what are some of the trends that we are looking at going forward in 2020?

“So, I believe nothing has changed in customer service.”

That’s a bold statement. I wrote about that in a chapter in my book. And what I mean by that is since the beginning of time, when a customer has had a problem or a question, they reach out to somebody to help them. And at the end of that interaction, they want to be satisfied with the answer, happy with the resolution.

That’s a hundred years from now. That’s the same. Okay. From the very beginning of time, that’s what customers want and expect nothing has changed. As far as that goes, that said what happens in between from the customer saying, I need help or have a question to when they get it resolved and they’re happy. That has changed. 

We’re using, or we’re seeing more digital automation, chatbots, artificial intelligence, et cetera, et cetera, happening to support the customer and done the right way. It creates a better experience for the customer. So we’re seeing constant improvement. 

Take a look. I remember, oh, it had to be maybe seven, eight years ago. I was working with IBM, a small company worldwide. We know who they are. And they were creating that Watson experience with artificial intelligence. And they actually had me go through something called the cognitive college to learn how to interact with a chatbot. And it may have been even longer than six or eight years ago.

But the idea was, I’m thinking this is fascinating. You know, I’m, I’m typing in, I’m interested in this product, and rather than the response coming back, here are your choices. It comes back with a question about what I just typed, so it’s giving me a better option at getting more and more information to give me a better experience.

That’s improving the intelligent agent experience, which is vocal. It’s like talking to somebody, but you’re really talking to the computer and it’s starting to sound almost like you’re really talking to a human that’s getting better now. I don’t see it in the near future at all. This is not going to replace a human being, supporting a customer.

It’s just creating a better-automated experience. Eventually, the customer in some cases is going to say, oh my gosh, I’m not getting my questions answered. I need to talk to somebody. And if this is getting better too, as I see a trend, this seamless transition from automation to a live agent, that is what they call a multi-channel experiment. Omni-channel experience. Multichannel is just multiple channels. Omni is a seamless experience. So that’s improving. 

“I love how technology is improving and getting better and better. And I love the companies that push the envelope and try to experiment to make this happen because it paves the road for all of us.”

But I’d like to add that, you know, we can’t look at the customer services department as the customer support. 

“The customer support is a department, but customer service is cultural. It happens on the inside of a company and it permeates from the CEO or the leadership’s decision to drive a customer-focused culture throughout the entire organization.”

You’ve got your frontline with your contact centers, but behind the scenes, you have people supporting the front line and you have people involved in a process that supports the experience, even if they never see the customer. Every great company understands that, and that’s why it’s just part of their DNA. It’s part of what they are. 

Here in the US, we have something and I know it’s worldwide. I’m not sure if it’s where all of your customers are, but there’s something called glassdoor.com. And this is a place for employees to rate their employers. We want customers to rate our company.

And if you take a look at the companies that have been rated the highest in customer satisfaction and experience, and you take a look at the companies that are rated the highest for employment experience, it’s not uncommon to see those overlapping. And I see more and more companies joining that higher level of employee experience as they try to create a better customer experience.

In Conversation with Shep Hyken

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