Exceptional Service, Exceptional Profit: The Secrets of Building a Five-Star Customer Service Organization (2 page)

Steering a Company Is Easier with a (3-D) Dashboard 78

Volume Is No Excuse: Let’s Get the Process Started 82

Everyone’s an Expert 94

The Passion for Training 95

The Cynics Among Us 103

Leadership Throughout the Ranks 106

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xii

Special Features

Finding Gold in De-Gilding 110

Managing Public Feedback Online 116

The Finishing Touch for ‘‘Perfect’’ Websites: Human Contact 121

Online, the Golden Rule Is
Permission
124

Less Can Be More with Preconfigured Software ‘‘Solutions’’ 129

Which Level of Service Do You Provide? Letting Them Know from

‘‘Hello’’ 133

The Customer May Come in Contact with You Earlier Than You Expect 134

A Good-Bye Gaffe 142

When a Botched Welcome Isn’t Your Fault, You Still Need to Fix It 143

Acknowledgments

I dedicate this book to all those service professionals who provide us with memorable experiences that enrich and brighten our daily lives.

I wish to thank my lovely wife Solange, whose patience and unconditional support have allowed me to pursue my professional goals and aspirations. For the past twenty-three years, Solange’s wisdom and matter-of-fact view of life have kept me grounded on Planet Earth and have provided a sounding board for my ideas and concepts. I wish also to thank my wonderful sons, Gianluca and Niccolo´ (and not least for sharing their unique perspective on what is
cool
and what is
not
!).

I also wish to thank Horst Schulze—my ‘‘boss,’’ friend, mentor, and partner—who taught me
everything
I needed to know about exceptional customer service. Horst’s laser-sharp focus on excellence and his un-matched commitment to being the best have been both an inspiration and a motivation to succeed.

And finally, I want to thank my friend Micah, whose bright and witty style brings a wonderful dimension to the business concepts we present together in these pages; I had a great time writing this book with him.

Leonardo Inghilleri

Atlanta, Georgia

To my beloved and brilliant wife, my family, my friends, my colleagues past and present at Oasis, Tony, Morris, and the team at AVL, and my customers: You have taught me so well and patiently—enduring my failings over the years while I learned what is contained in these pages.

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xiv

To my smarter-than-me brother, Ari Solomon; our wise and accommodating editor Bob Nirkind and the team at AMACOM; super-agent Bill Gladstone; Gareth Branwyn; Tom Burdette; Seth Godin; Richard Isen; Cathy Mosca; Rajesh Setty; the people at ChangeThis/

800-CEO-READ; Rick Wolff and Caryn Karmatz Rudy; Megan Pin-cus Kajitani (for ‘‘Jane Chang-Katzenberg’’ [Chapter 3]); and, most of all, Leonardo: This book would not have happened without you.

Thank you all—so much.

Micah Solomon

Philadelphia, PA

Foreword

So-called Customer Relationship Management prides itself on volume, on speed, on ‘‘efficiency.’’ This might sound good on paper, but what truly matters, what builds strategic value for a business, is loyalty: customer loyalty, employee loyalty. Without knowing the secrets to building these, even innovative companies struggle. They can massage data all they like; they can profile large groups of customers all they like. Do they empower their employees to use judgment in any real sense? If not, the employees will leave when they sense a dead end. Customers, shareholders, and other stakeholders will ultimately prove to be short-timers as well, no matter how innovative and admirable the products and services offered.

Actual service, from someone who offers a caring face and a helping hand, is a universal desire. Learning how to achieve it, though, is far from universally understood. The problem is that these principles are not always easy and often go against the grain of modern business practices, and you need someone to show you the way.

That’s where this book comes in.
Exceptional Service, Exceptional
Profit
is the first book to describe comprehensively the principles that assisted us in winning two Malcolm Baldrige awards at The Ritz-Carlton and now guide us at our Capella and Solis hotel brands. These are the principles we also employ with our West Paces Consulting clients in a wide variety of industries, from food service to auto parts.

Also unique to this volume is the high-tech, bootstrapping twenty-first century perspective of Micah Solomon, known for his unusual achievements in entrepreneurship and service.

The principles on which we base our hospitality approach are xv

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Foreword

pulled from a rich background. Some reflect back to information as old as Adam Smith, most clearly in our feelings about employee relations and training. Many others reference well-established concepts—ideas from Deming, Juran, and Crosby—but in a new framework.

The way these concepts are molded together is groundbreaking.

What you read here will allow you to recalibrate your business, on any scale, to replicate the exceptional but small-scale achievement of the idealized sole proprietor archetype: to truly know your customers and keep them coming back for more.

These perspectives are revolutionary. And they aren’t for everyone.

When we say that the CEO should personally conduct orientation, we mean it. When we say it’s deadly to cheapen your product in ways that matter to your customer, we mean it. When we say you need to take the customer’s position quickly, or you might as well not take it at all, we mean it. When we say that you serve but you are not a servant, we mean it. These are revolutionary statements, and you will benefit from a service revolution in your own management world and in the bottom line. Thank you for reading.

Horst Schulze

Chairman and CEO, The West Paces Hotel Group

President and COO (retired) The Ritz-Carlton Hotel Company Exceptional Service,

Exceptional Profit

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INTRODUCTION

The Only Shop in the

Marketplace

The best thing you can do for your business right now has nothing to do with new technology, economies of scale, or first-mover advantage.

It’s something simpler.

It’s something more dependable.

The single best thing you can do for your business is to build true customer loyalty, one customer at a time.

Everything changes when a customer becomes a loyalist. To the truly loyal customer, you are the only shop in the marketplace. All the other brands and all the other vendors don’t even come into focus. Like someone in love, the loyal customer only has eyes for you.

Few businesses realize how valuable customer loyalty is, and even fewer know how to achieve it consistently. But a company of any size can build great wealth and stability through customer loyalty. Businesses with loyal customers grow faster than others when times are good, and they have the most breathing room when times are bad.

At its root, creating loyal customers is about taking the time to learn about your customers individually and then using simple systems to turn that knowledge into enduring business relationships. In doing so, you 1

2

turn your offering into much more than a commodity—you turn it into a personal relationship.

The primary threat to a business today is the perception by customers that all you offer is a replaceable, interchangeable commodity. This hazard stalks your every move: No matter how unbreachable your business’s advantages may appear right now, whether they are advantages of technology, geography, or branding, eventually your business model
is
going to be knocked off. And, in this era of accelerating change, it will likely happen sooner than you think.

Escape this threat of commoditization by creating enduring, loyal,
human
relationships with customers. It’s the surest way to escape market obsolescence.

The payoff is huge.

Learning to create loyal customers has made all the difference for the companies where Leonardo has been involved, including The Ritz-Carlton, BVLGARI, The Walt Disney Company, and the new hotel brands—Capella and Solis—that Leonardo heads up with his partners.

The principles that lead to loyal customers will work for you, too.

They’re simple, they’re solid, and they’re replicable. You needn’t work in a luxury industry to apply them. Far from it.

As you’ll learn, Micah used the principles of loyalty to transform a tiny manufacturing and entertainment services company he started in a single room in his basement, with financing that consisted of only a credit card, into a renowned and high-growth enterprise. His approach built his company, Oasis, into one of the top players in its field, as well as attracting attention in the business literature, including case studies in such places as
Success
magazine and Seth Godin’s bestseller
Purple Cow
.

Oasis catapulted to success because customers respond with loyalty when you treat them according to the principles and methods we will describe.

Since then, Leonardo and Micah have been able to lend their loyalty-based methodology to a great diversity of industries: from white shoe law firms to restaurants to banks to organic flower farms; from

tour operators to independent music labels to convention centers to hospitals. Loyalty pays off—measurably—for all of them.

The reward for using these principles isn’t only financial. As you begin building customer loyalty, your pride in your profession, your integrity, and your ability to build positive relationships (at work, and even in your own home) will also bloom. This happens naturally, because the process of earning loyalty involves caring about your customers, respecting them, and thinking constantly about their needs.

Spending this time being deeply attentive will tone your personality.

Building customer loyalty will require your hard work and thoughtfulness, but it is a refreshingly straightforward process. While so many aspects of business are out of your control—exchange rates, international tension, technological changes—the single most important process, creating loyal customers, obeys predictable, stable rules that can be mastered and then applied successfully for a lifetime.

We’re pleased to help show the way.

CHAPTER ONE

The Engineer on the Ladder

Reaching for the Highest Level of Service

Suppose you’re the manager of a group of hotels. In one of them, a maintenance engineer is replacing a light bulb in the lobby ceiling. Out of the corner of his eye he notices a woman and her two sons coming from the pool, wrapped in towels but still dripping wet. The woman has her hands full with bags. She fumbles with the door that leads into the lobby, looking exasperated. The man on the ladder becomes alert to her predicament, puts down his tools, climbs down, crosses the lobby, smiles, and opens the door for her.

‘‘Welcome back to the hotel, ma’am,’’ he says. ‘‘Let me help you with your bags. How was the pool? Did your two little guys have a good time? What floor are you going to?’’ He presses the button, exits the elevator, and heads back toward his ladder.

When we spin this story out for executives and managers in our seminars, the most common first reaction is envy: ‘‘I’d be thrilled to have my rank and file achieve this level of customer service,’’ runs a typical response. ‘‘The customer expressed a need, and ‘my’ employee responded energetically,’’ says a manager. ‘‘He got off the ladder rather than saying ‘That’s not my job.’ So what’s not to like?’’

It’s true: We’ve all seen worse. But there’s still plenty to dislike. As 4

The Engineer on the Ladder

5

upbeat as this encounter was, it was reactive: The woman had to fumble with the door, thereby making her frustration known so the engineer would react. Reactive service is a pretty ineffective way to create loyal customers. To get on the fast track to customer loyalty, your company needs something better.

The magic happens when you, your systems, and the employees throughout the ranks of your business
anticipate
the needs of your customers, learning to recognize and respond to the needs of your customers before they are expressed—sometimes before your customers even realize they have a need. That is the difference between providing ho-hum service by merely reacting to customer requests and building loyalty through true
anticipatory
service.

Function Versus Purpose

Picture this instead: What if the moment your fellow on the ladder sees the overburdened mom returning from the pool, he thinks to himself,

‘‘My routine daily
function
is to change light bulbs, paint ceilings, and fix pipes, but the reason I’m here,
my purpose
, is to help create a memorable experience for guests’’? Understanding this, he immediately climbs down and opens the door for her—
before
she has to fumble with the door handle or knock to get attention.

The maintenance engineer—inspired by your leadership—has now provided genuine service that
anticipates
the customer’s needs. The timing of the engineer’s intervention is the only measurable change, but what a difference that tiny change makes! Suddenly this employee has anticipated a customer’s need, a need she has not yet expressed. In doing so, he has honored her idiosyncratic life circumstances—her individual humanity.

This extraordinary kind of service is a highly reliable path to winning customer loyalty. In the chapters ahead we will equip you to make such service encounters the rule rather than the exception, at all levels of your company.

You probably have doubts.

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Exceptional Service, Exceptional Profit

You may doubt that
your
maintenance engineer or other rank and file worker would ever anticipate the needs of customers so masterfully.

We’ll show you how and why he can and will.