Customer-Operators: Not Paying Them Doesn’t Mean They’re Free

May 6, 2009

People, it turns out, are desperate to be helpful.  Verizon has discovered this and joined the growing ranks of companies using what I call “customer-operators” to do the work employees used to do, everything from generating new product ideas to servicing other customers when those product ideas fail. Betting on the hope that all these customer-operators need in return are the intrinsic rewards of serving others and the status associated with becoming experts, Verizon is primarily making a cost play by inviting customers to perform routine customer service functions. The company has stumbled on some additional perks of engaging these “super-users,” like their knack for good improvement ideas, but this value is seen as peripheral.

At this point in the experiment, Verizon only sees the upside in recruiting and deploying an army of customer-operators. Before the company doubles down, I want to offer two points of caution:

First, customers are different from employees in ways that matter operationally. In general, they’re more difficult to manage, measure, recruit and fire.  Just because you don’t pay them, doesn’t mean they’re free. The price may be worth it to achieve radically higher levels of quality (Wikipedia) or a radically lower cost structure (eBay), but the tradeoffs aren’t as clear for traditional business models.

New management systems must be designed and maintained once you bring customers into your operations. And the effort may require more than a few “feedback stars” to measure and maintain quality. Reputation is a powerful incentive for good behavior, but it’s not all-powerful (see John Edwards). Have a plan for when the customer you’re relying on to provide good service doesn’t respond to another customer’s inquiry for days.

Second, those feel-good emotions of service and status may not be enough to compensate your most active (and valuable) customer-operators as time goes on. A lesson from many organizations is that when you ask customers to donate their labor, they often feel entitled to a seat at the decision-making table. Back to those feedback stars, I spent some time on the outrage of eBay customers when the color of their own stars was changed in an HBR case. Outrage may be too weak a word. There was an electronic revolt.

I’m with Verizon. I think customer involvement is a tremendous opportunity for many businesses. But I want to add a few caveats — customer-operators aren’t always easy to manage, and they aren’t always willing to stop at the operational boundaries you propose.  You may invite them on to the shop floor, but some of them are taking the elevator up to the C-suite.  Have a plan for what happens next.

iPhoning It In

April 16, 2009

Personal Digital Assistants. Do they still call them that? It sounds like a euphemism for Mommy’s Little Helper, which may be closer to the truth.

My father was a military man, not by choice, but he rose to the occasion. The letters PDA stir memories of stories about the rules against Public Displays of Affection on the West Point campus in the late 1960s. The Army still hasn’t figured out how to police our soldiers’ sexuality, but that’s for another post.

Dad gave me a running start in associating my Blackberry with giving up a certain degree of personal freedom, but even I never paused to consider the true price of obsessively using these incredible tools. And I dismissed anyone who whined about having to “always be available” as not one of us, a member of the productive class.

Then I was deeply provoked by the following paragraph in the NYT’s interview with John Donahoe, the CEO of eBay since 2008:

…I try to only do e-mail first thing in the morning or in the evening, because I find if I check e-mail during the day, I go from being proactive about what I want to get accomplished that day to being reactive, and that’s a bit of a trap. Being reactive is a lot easier than being proactive, and e-mail and the BlackBerry are natural tools to facilitate that.

It’s that “easier” word that got me. My life is easier, but rarely better when I’m strapped to this little machine. In any given moment, quite literally, I can avoid the discomfort of having to focus my thoughts and actions. Instead of determining my destiny, I can let my brain fill up with someone else’s issues or LinkedIn request or cure for erectile dysfunction. Instead of seizing the day, I can submit to being seized.

Yes, John, easier is the word. It doesn’t sound like a big deal until I think of the aggregate number of times that I’ve checked for new messages in the last five years.