Exceptional Service, Exceptional Profit: The Secrets of Building a Five-Star Customer Service Organization (7 page)

My son checks the breakers. ‘‘They’re fine.’’

I double-check the breakers. Yep, fine.

I fiddle with the plug, move the plug, move the TV. Nothing. Ding.

Another ding in my armor.

Finally, I, uh, Sir Shrunkalot, concede defeat: We need to bring the
TV back.

What a nuisance! Put the TV back in the box, load it into the car,
drive to the store. Go to the customer service desk. I don’t know why electronics stores do this, but they often put their most unfriendly, grudging
people at the customer service desk. This one is no exception.

I say to this surly man, ‘‘Good afternoon, I just bought this TV and
it doesn’t work.’’

The man turns reluctantly away from some paperwork, looks at me,
and says, slowly, ‘‘Well . . . did you plug it in?’’

‘‘Plug it in?’’ I ask with mock innocence. ‘‘What do you mean by
that?’’ Customer service clerk: ‘‘You know . . . the plug goes in the wall

. . . did you plug it in?’’ At this point, I admit, I get belligerent: ‘‘No . . .

I just arrived from the depths of the untamed jungle last week. What is
this concept called ‘plugging in?’ I thought this thing would spirit itself to
life!’’ (Pause . . . the clerk is considering his next move—which might be
to call security.) ‘‘Of
course
I plugged it in. What kind of question is
that!?’’

At length, he checks the TV. No life. After this development, he’s
suddenly full of flowery sentences, but they only concern how wonderful and
reliable this brand of TV has always been. Nothing about my predicament.

I was honestly starting to think I
had
made a mistake (had the boys and I
in fact plugged it in?). Finally, he replaces the TV. Before putting it in the
car, I say, ‘‘Now
you
plug it in and see if it works.’’ The thing works; I
take it home.

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Exceptional Service, Exceptional Profit

So they restored the original product. But am I happy with the process?

Am I satisfied? Of course not.’’

This example illustrates how service recovery fails when you don’t follow the principles and steps we outline in this chapter. Think of what is going awry here:

First, did the right staff member deliver the service? An employee in a position like this should have strong empathy, as well as problem-solving ability. The employee Leonardo encountered lacked both.

Were the steps delivered in order? The DYPII question—literally

‘‘Did You Plug It In?’’ in this case—was asked too early. It was asked before an apology was made, let alone accepted.

Did the employee make any attempt to discover Leonardo’s needs?

This service rep failed to understand and solve either Leonardo’s most important loss—the dings in his parental armor—or his secondary losses: time, hassle, frustration, even wear and tear on his car upholstery.

In other words, the service rep failed to figure out what the customer really needed to restore his satisfaction. The rep assumed that replacement of defective goods is enough to satisfy an inconvenienced customer.

It isn’t.

What, if anything,
could
such a store have done to restore Sir Shrunkalot’s shining armor? In fact, they could have satisfied him easily and cheaply.

For example, suppose that the service rep had said, with genuine concern and even a conspiratorial tone: ‘‘Sir, I’m terribly sorry. These are made for us overseas, and they are supposed to be spot-checked before they get in the store. I realize it’s small comfort to know you ended up on the wrong end of a statistic, so if you make another purchase here in the future, please ask for me personally, and I’ll check it out in the store with you before you schlep it home. Today, though, do you have a favorite DVD?’’

Leonardo would have said, ‘‘Well, actually this TV is for my boys, Recovery

39

and they’ve been dying to see the latest live concert video from Swirly Goo and the Goners.’’

The rep would have then replied, ‘‘Sir, may I go through the aisle with you, and see if I can help you find a ‘Swirly’ DVD your boys would want, to show our appreciation for your business and for your patience? We’re really so sorry that this happened to them, and to you.

I hope that you will forgive us and give us an opportunity to serve you well next time.’’

Leonardo would have taken the DVD and felt repaid in some small way for his trouble.

Think about this: What’s the wholesale cost of that DVD? Seven dollars? By investing seven dollars in a customer who’d just spent more than a thousand dollars, what would the store accomplish? They would be taking a serious step toward winning a lifetime customer. Plus, imagine the improvement they’d be making in the story Leonardo and his family would tell if anyone asked about their new TV.

And as for Leonardo, he could have gone home to his kids, head held high, and said, ‘‘Hey, these TVs are all built overseas these days, and some of them don’t quite work right after they’ve bounced around for days in the container ship. But I’ve got it all handled now.’’

Who Should Handle Customer Complaints?

Everyone
should handle customer complaints. Of course, not everybody is going to be equally involved in customer service, nor should each employee be trained in the most specialized service. We do believe it is important that all employees participate to
some
degree—to the extent of their trainability and the extent to which they interact with customers.

But who should handle cases that can’t be resolved by a staffer on the front lines? In other words, who should serve as ‘‘the manager’’ for a customer who demands to ‘‘speak with a manager’’? Here are a couple of guidelines:

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Exceptional Service, Exceptional Profit

? Empower your employees to be able to resolve the issue whenever possible without getting to the ‘‘manager’’ level.

? When unavoidable, you need the designated ‘‘manager’’ to stand out in two areas: as a sharp and eager problem solver
and
as a virtuoso at connecting empathically with people. If you’ve hired and trained appropriately, all of your staff will have some strength in these areas. But only about one in ten will be unusually gifted in both areas. Those ten percent should be your designated service ‘‘managers’’—if indeed you choose to have such a position.

What we’re recommending here is that you avoid anything like an old-style isolated Complaints Department. Instead, teach your staff that Joan in Sales and Jeff in Shipping can themselves initiate a service recovery. Jeff may not be the right person to fix the problem, but if he encounters an unsatisfied customer, he must know how to say much more than ‘‘I can’t help you, I just send boxes.’’

Even Dale, who cleans the toilets, should be empowered beyond helpless reactions like ‘‘
Um, you’d need to ask a manager about that
.’’ Customers hate to hear ‘‘You’ll need to ask a manager.’’

Dale will feel better about himself and your company, his customer will feel better about herself and your company, and service problems will tend to turn out better if Dale has been trained to express confident enthusiasm: ‘‘
Certainly, I am so sorry. I will help you with that
,’’ followed by finding the right person to solve the problem—even if that does happen to be, in fact, a manager.

(Airlines provide a perplexing example here: Why
can’t
you complain to the pilot about a customer service issue—assuming you’re not midflight? Or to the ramp agent? The response should include, ‘‘
I’m
terribly sorry about what happened
’’ followed by assistance getting you to the right person to get your issue fixed.
If you wear the uniform, you
represent the company.)

If you’re going to involve the whole company in customer service, we recommend you involve them fully: entrust them with broad discre-

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41

tionary powers to respond flexibly, creatively, and intensively to service errors.

Probably the most famous example of total customer service empowerment is the carte blanche monetary discretion The Ritz-Carlton has given to staff members for decades: $2,000 per employee per customer, to be used to solve any customer complaint in the manner the employee felt was appropriate. How could so much creative and monetary freedom succeed? It works like this: If you start off defensive, rigid, or withholding, people tend to respond by escalating their demands. It’s a classic vicious cycle. But if you can start from an accepting, flexible, and generous position, people naturally feel inclined to be reasonable in return. The cycle turns virtuous. Indeed, Horst Schulze, who initiated this policy in the 1980s (when, although it’s hard to fathom now, $2,000 would buy more than a dozen nights at the fanciest Ritz), and Leonardo, who has been involved in continuing and expanding it with Horst at The Ritz-Carlton, Capella, and Solis hotels, verify that an employee has
never
had to resort to using all of that discretion. Still, knowing it is there has been a great builder of strength and responsibility for employees. Think about its value as an ongoing training tool: It serves as a reminder of management’s belief in honoring a guest’s potential lifetime value—and is proof that management is willing to put money behind that belief.

So in order to keep customers happy, your people will need to be able to respond in an empowered and immediate way to service failures—without waiting for a manager’s okay. This carte blanche approach has grown even more important in these days of customer rebellions Twittering out of control: Only with immediate and broad discretionary powers is there a chance your frontline employees will be able to defuse complaints
before
they get posted online.

Subtle Is Beautiful: Service Recovery Below the Radar

The most beautiful service failure recoveries can be so small and subtle that a customer won’t notice the failure, only the intimacy the recovery brings.

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Exceptional Service, Exceptional Profit

We enjoy, as much as anyone, the grand, broad-stroke stories that are popular in customer service lore, like the famous story of Nordstrom accepting defective tires as a customer return—even though Nordstrom doesn’t sell tires. These stories are great for training and great for spreading a company’s reputation. But, we also admire service professionals who can discern
small
failures in systems and similarly small dissatisfactions in failed customer interactions—and compensate effectively so the customer can get right back on track.

Last fall, Micah noticed a saleswoman looking for fresh
New York
Times
subscribers at a crafts fair in the Pennsylvania countryside. She had brought along some high-quality
New York Times
gift items as in-centives and she gave her pitch as people passed:

Sales Rep:
‘‘Subscribe to New York Times home delivery, only $X a week.

Get great gifts!’’

Micah: ‘‘Sorry. Already subscribe.’’

Sales Rep:
‘‘Are you getting all seven days delivered currently? I can upgrade
you if you aren’t.’’

Micah (chuckling at her persistence): ‘‘Unless you’re going to start a new evening edition, I don’t think there’s a way we can get more papers delivered than we already do.’’

Sales Rep:
‘‘But these are nice gifts, aren’t they? I’m going to give you something anyway, for being a great customer. What would you like?’’

Let’s look at this encounter. First, some overall observations. Note that Micah was just walking by at a crowded crafts fair. He hadn’t asked the
Times
rep for anything and hadn’t offered her anything in terms of making her numbers. He also hadn’t said anything about wanting the gifts. She could, however, sense the imbalance in the encounter, having nothing to offer one of the paper’s ‘‘full fare’’ passengers.

So she decided to extend exceptional, anticipatory service to someone who wasn’t even the target customer of the promotion.

Now, let’s examine the individual elements of this encounter.

Was there a service failure here? Yes, a very small one. The
New
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43

York Times
, like many companies, was running a spiffy promotion intended to grab
new
customers. Super. But studies show that
existing
customers are the ones who pay the most attention to everything you do as a brand. The
Times
didn’t have a plan for how to treat existing customers who might respond to their representatives’ overtures. This created a socially awkward moment for their loyal customers who were walking by the sales stand: ‘‘I’m a loyal customer, but you can’t sign me up, and so we have nothing more to say to each other.’’

Perhaps this service deficiency was foreseeable. But you can’t foresee every shortfall in your business. Every situation, and every customer, is different.

This is why you need aware, appropriately trained people. The
Times’
sales rep was savvy and empathic enough to notice a service deficiency, even though it was only implicit.

In your organization, when an employee comes back to the office after an episode like this, is she praised for recognizing an issue and supporting an existing customer, who is arguably more important than an impulsive new one? Or is her hand slapped because she came back to the office one gift short? Would she get bragging rights if you noticed her profiled in this chapter, or would you worry that you really couldn’t afford to have your employees improvising in this manner?

More generally: Do you hire the appropriate people, give them the discretionary power they need, and praise them when they fill in the gaps in your systems, thereby catching customers before they fall out?

We hope by the end of this book you will be answering ‘‘yes’’ to all of the above.

Write-Offs Lead to Write-Offs