Process again

How process execution is important in Germany, regardless of implications on customer satisfaction, is evidenced by the following examples.  

During a recent taxi ride from the airport home, I asked the taxi driver to take a particular route, which is shorter than the typical one that most taxi drivers take and has usually less traffic. The taxi driver wasn’t pleased with me giving him directions since this apparently didn’t fit with his process. He not only mumbled something unintelligible, but also threw in a nasty comment after dropping me off. When I tried to confront him, he drove away. This shows how deeply embedded the process execution is, where a taxi driver doesn’t realize the impact of his customer unfriendliness on his business.  

This wasn’t unfortunately the only bad experience with unacceptable taxi service. On another occasion the taxi driver was driving so fast through the city that he scared some pedestrians. When I asked him to slow down, he started to argue that it’s not my business how he drives. Although I was able to convince him otherwise and he then drove me home at appropriate speed, he too threw in a nasty comment after dropping me off. 

Another example comes from Edeka, a grocery store chain. Unlike most other stores, Edeka had a policy to require additional proof of identification when paying with electronic cash for purchases over 100 Euros. The cashier had to write down the ID info on the store receipt, which didn’t only slow down the checkout process for the paying customer, but also for all other customers waiting in line. Now the store has a special card reader for purchases over 100 Euros. However, there is only one special card reader to be shared among five checkout stands and one that requires special activation by the supervisor. You can imagine the impact on the checkout time. Edeka simply doesn’t get it.

Importance of the service economy

Most economies go through three stages of economic development: primary, secondary, and tertiary. The primary stage is driven by labor- and natural resource-intensive agriculture, the secondary by capital-intensive industry, and the tertiary by knowledge-intensive services. The economies of the developed nations have been moving from the primary to secondary and to tertiary economies over the past hundred or so years.

The majority of developed countries’ gross national product (GNP) is already derived from services. And the majority of employees work in services businesses. These service businesses span all industry sectors and range from a one-person laundry service, through medium-size retail outlets, to large IT service companies.

The importance of services in developed economies will continue to grow. The outsourcing of agriculture and manufacturing jobs to developing countries will continue, leading to even higher share of services in the overall economy.

As shown in the graph below, the importance of the service sector is significant in developed countries. And since Germany participates in the global economy, it should ensure that its service offerings and service levels are competitive.

Why most German companies will never succeed in the global service economy

Before I continue with examples for poor service levels in Germany, and this blog will unfortunately never run out of them, let me clarify the sub-title of this blog.

“Never” is such a strong word, so determining, so final. When it comes though to describing the German service economy, it is very fitting. The German service economy is namely driven by the mentality of the German population, which cannot be changed in a life time. And since most economic projections seldom span more than a life time, “never” is appropriate for all practical purposes.

Next: Importance of the service economy

Process, process, process

Let’s look today at three examples of how predefined processes are executed in Germany regardless of whether they address customer needs.

The first example shows how German companies are worsening their already low service perception by making it difficult to return a product. Customers at V-Markt, a discount department store chain, are required to deal with four store employees to return a product: (1) signature at the store entrance that the product is being brought in, (2) signature by a department manager that the product is being returned in a new condition, (3) signature by the cashier supervisor authorizing payment return, and finally (4) return of payment by the cashier. And when the customer complains about this ridiculous process, the answer is “this is how it is”.

A disregard for customer needs is reflected in the reimbursement process of private health insurance companies. The customers need to pay upfront for each doctor visit, hospital stay, or prescription and then submit claims for reimbursement to the insurance company. Is this process really customer friendly? Why can’t the health service providers submit the bills directly to the insurance company eliminating this process for the customers, like it’s typical in the
US?

The general lack of customer service also impacts road traffic. At a recent highway construction, two lanes of a four-lane road were closed to enable the construction work. But after 6pm on a Friday when the construction workers went home for the weekend, the two lanes were still closed impacting traffic the whole weekend. In the US or Japan, on the other hand, the construction work happens between 11pm and 5am, the road is then temporarily paved and all lanes are available during the typical traffic hours. In Germany, of course, labor unions have a strong say in activities like these, but decisions makers there have the “customers are last” mindset and this is exactly my point.

In Germany, process comes first, regardless of its impact on customer satisfaction.

A time to make friends … but how about friendly customer service?

The motto of the FIFA World Cup 2006 in Germany is “A time to make friends”. Germany wants to build on this slogan and promote itself as a visitor-friendly country, described as Germany’s new pitch in a TIME article. When it comes to businesses serving these visitors, this would require though decent service levels. And here is Germany’s biggest deficiency.

Customer experience offered by most German companies has a very low priority, if any at all. Customer service is not defined by the company, but depends heavily on the customer-facing employees, which leads to varying levels of customer service with a hit or miss experience for the customers.

In fact, for most German companies the business objective doesn’t seem to be about satisfying customer needs, which then naturally leads to meeting financial objectives. The business objective seems to be to execute predefined processes, regardless of how well they help meeting financial goals.

If a customer request deviates even slightly from the predefined process, the first response you hear is “Es ist unmöglich!” (It’s impossible!). If the customer insists on the solution she or he wants, it turns out many times that it is actually possible. However, it’s simply ridiculous that a customer needs to fight with a company to get things done his or her way. And how many German customers never demand what they actually want?

World Cup visitors can experience the poor service levels with every business they interact, whether it’s a restaurant, a hotel, or a retail store. This poor service experience isn’t always “in your face”, but comes in nuances that may not be obvious at first. However, over time these incidents accumulate and become annoying.

So, what can World Cup visitors expect? For example, when sitting down in a restaurant and asking for a menu after ten minutes they may be greeted with a sigh indicating how bothersome that request is to the server. Or when asking a sales clerk in a store in which aisle to find a particular item, the response will most likely be just a silent arm movement pointing in a particular direction. Some clerks place more importance on unloading merchandise, taking inventory or chatting with their colleagues than on serving customers.

Some World Cup visitors may actually be lucky and interact with service personnel, which took special “customer friendliness” training as preparation for the World Cup. Yes, it’s true; some German businesses are aware of the poor service offerings in comparison with other nations and trained their employees to be more customer-friendly.

Take the Bavarian hotel and restaurant association for example. With Bavaria hosting some of the football games, the association provides information and training to its members on how to act friendly towards international visitors. What will happen after the World Cup? Will consumers be exposed again to the typical “charm” of the Bavarian servers?

Let’s see if attempts to teach customer friendliness will be successful. And let’s hope that World Cup visitors will make friends in Germany, although this may not be with businesses they have to deal with.

Stay tuned for more on poor service levels in Germany, their causes, implications for Germany-based companies, and opportunities for service-friendly businesses.