Does Great Customer Service Still Matter?

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Switch and Shift is dedicated to sharing one undeniable business principle: in our uber-connected, modern world, the human side of business is not just “nice” or “the right thing to do”.

Even more than either of those considerations, a relentless focus on people – inside the company and out – is absolutely essential to a business’s survival. For our February blog series, we invited some of the world’s most admired customer service experts to share their insights on this point from a customer-facing perspective.

 

A relentless focus on people is absolutely essential to a business’s survival

 

Amazing customer service is an area that has been near and dear to me since childhood; something I shared in my first book, Five-Star Customer Service. In Chapter One of that book, I share the story of my kinda-sorta ancestor, George Boldt, the first general manager and eventual owner of the Waldorf Astoria hotel. George’s starting salary (in 1892!) was $1 million a year. Boldt’s unrelenting passion for serving his customers led his employer to tell him, “I would gladly have paid you more.” As you can imagine, Boldt’s story left an impression on my young mind.

 

 Unrelenting passion for serving his customers led his employer to tell him, “I would gladly have paid you more.”

 

When running my first company, I was determined not to lose a single client to our competitors. So my staff and I spoiled them rotten – so rotten they’d be ruined for the competition. It worked, and we thrived.

 

 I was determined not to lose a single client to our competitors. So my staff and I spoiled them rotten

 

Over the years, I have counseled thousands of business leaders on the business case for top-rate service. I’ve also made some remarkable friends along the way – other experts and business leaders who get it, and who are talented at sharing their perspectives with others.

Does great customer service still matter in the Twenty-Teens? Will it get your company where you want it to go, profit-wise? I’m all about real-world examples. Here are just a few.

When you think, “Does service matter…?”

  • Think Nordstrom, which uses the differentiator of phenomenal service to command a high price point. Discounts are rare at this extraordinary retailer: Nordstom doesn’t need gimmicks to inspire its shoppers.
  • Think Chick Fil-A, which uses jaw-dropping service to dominate the fast food market wherever a new franchise is launched.
  • Think Rackspace, whose customers refer to the company as “fanatically customer obsessed”. Rackspace wins tightly-contested B2B sales battles this way every day of the week, all year long.

You could do worse than to emulate these three market leaders. But there are more – so many more. Come back each day over the next two weeks, as extraordinary thinkers in the realm of five-star service share their perspective with you, our community.

 

Want more? The customer service series continues here: On Creating Customer Loyalty

 Graphic by Shawn Murphy

Keynote speaker. Author of A World Gone Social: How Companies Must Adapt to Survive. Three-time CEO. Chairman and Founder of Switch and Shift. Ted Coiné is one of the most influential business experts on the Web, top-ranked by Forbes, Inc., SAP Business Innovation, and Huffington Post for his leadership, customer experience, and social media influence. Ted consults with owners, CEOs and boards of directors on making their companies more competitive by making them more human-focused. He and his family live in Naples, Florida.

  • http://www.frymonkeys.com/blog Alan Kay

    Ted, I agree in principal and in practice. That said, aiming to make every customer a satisfied customer works in environments where there are margins to allow for the cost of bad customers. A great customer service strategy requires that organizations have a means to deal with customers you’ll never satisfy, especially in high volume, low margin businesses.

    When you get a client who disrupts how you serve them and distracts you from looking after the good ones, it simply costs you money. I’ve personally taken the stance that there’s some customers I don’t want. I’ve let them know that they will be better served elsewhere and it’s paid off.

  • http://www.snickn.com Nick Nelson

    Yep – customer centricity is key. Whether you’re serving a client or building a product you absolutely must keep the customer in mind first and foremost.

    • http://www.frymonkeys.com/blog Alan Kay

      Yes. Dollars and cents are only one way of looking at it. Having the customers you want is about providing better value to those customers, doing something unique for them, maintaining quality, etc.

      That said, there’s a lot to be learned from customers don’t reciprocate no matter how well you try to serve them. When that happens I default to the Covey line, ‘In order to change the behavior of others, first change your own’.

  • Gurmeet Singh Pawar

    Hi,

    This is a great post & I would second your view on the matter. I believe Customer orientation is the greatest strategic move that can keep company up & profitably running in the long run.

    About the concern of Alan, I agree with him on the same. But rather than it being a matter about customer orientation, its about target segmentation. What concerns him is more about who are his customer & who not. Once you have clearly defined your target segmentation(Which is your prerogative), its all about how well your organisation adapt to this sound strategy.

  • http://www.pretiumsolutions.com Scott Heitland

    Great post, Ted. Most companies out there can’t compete on price over the long haul, so they must compete on value, but what an opportunity competing on value presents! There are many ways to do it, but exceptional customer service and creating optimal customer experiences is definitely one way to get there – the examples you cite, such as Nordstrom, have made it an art form. When I go into Nordstrom to buy a nice pair of jeans, I know I am going to pay a premium, but they make the experience so easy and pleasant, I don’t even think of going anywhere else, and I know I will keep going back.

  • Pingback: Why Customer Service is a Leadership Issue | Switch and Shift

  • Steven Anderson

    Great post and follow on thread…thank you, Ted! I’m particularly keen on your (and this group’s) thoughts on customer-centrism through product design and implementation as opposed to high touch sales and support. I’m fascinated by companies like 37Signals who are game-changers across entire, global industries signing up thousands of new customers a week and creating Ruby on Rails with less than 20 employees. They embody customer focus through their product design, done quite successfully through spartan esthetics and functionality. This form of product specific customer attention seems to scale infinitely better than operational attention (like Nordstroms).

  • http://www.frymonkeys.com/blog Alan Kay

    Last point from me…some organizations define service by being clear about what you don’t get. The classic is Europe’s Ryan Air. From the CEO on down, there is absolute clarity about the service. The CEO has attempted to charge for in-flight washrooms, tried to get permission for in-flight standing room passengers, etc. Some of this is his absolute mania for getting free press coverage of the obnoxious concepts (by industry standards) he promotes. However, he keeps re-defining the status quo and people still fly his airline. Point is, define your customer service and experience standards and live them.

  • http://www.switchandshift.com Ted Coine

    Alan,

    I love it! This is my number one comment or objection or question in my talks to business audiences during Q&A, as it is on this blog and elsewhere: when is it okay to fire a customer? I’m so enthused to answer that question that I’m going to wait till I write a follow-on post later in this series.

    No surprise at all, but you have outlined the basics of the question, which has everything to do with margins and time investment – in short, you could say “math,” or you could say “dollars and cents.”

    I do have a very straightforward, quite tried-and-true solution, by the way. My clients have gotten a lot of great results over the years implementing it. Please stay tuned!!

  • http://www.switchandshift.com Ted Coine

    That’s dead-on, Nick! Otherwise, why are you doing it?

  • http://www.switchandshift.com Ted Coine

    Gurmeet,

    Very well said! Business people should think of it this way: a Rolls Royce dealer needs to focus on very wealthy people, or she’s wasting her most vital resource, her time. Walmart only makes a few dollars profit on each customers’ visit to their stores, so they need a zillion customers visiting those stores daily. The level of service that each provides must be different – it must! If I’m buying a Rolls, you’d better bring one by my house and leave me the keys for the weekend, or forget it: that’s the level of service I’m used to as a billionaire.* If Walmart were to bring a truckload of stuff to my house to try for a weekend, in the hopes that I buy? Uh… good luck staying in business, guys!

    *Which I soooo am not. I’ve made a little money in my career but spent it, too. All you Rolls dealers reading this: don’t bother. I’m far from your target demographic :)

  • http://www.switchandshift.com Ted Coine

    Thanks Scott. You nailed it there, perfectly. You know you could go elsewhere – they do, too. You know you could pay less than you will at Nordstrom – they do, too. They choose to live and die by their service each time you walk in – and you stick with them because they’ve spoiled you rotten. Everybody wins: you, the staff and management, and absolutely, unquestionably their stockholders.

    Oh, I thought of one constituency that doesn’t win in all of this: their competition.

  • http://www.pretiumsolutions.com Scott Heitland

    Speaking of Nordstrom, this just out from the Washington Post: http://tinyurl.com/b4wr7ph

    Could it really be that extraordinary customer service and rising profits go hand in hand? Hmmm…

  • http://www.switchandshift.com Ted Coine

    Scott, thanks for pointing me to this article – terrific validation. I feel like a fan boy of this one company, which is crazy, since there are so many firms with phenomenal service out there (and SOOOOOoooo many without. Oiy!). But you know what? If loving Nordstrom is wrong, I don’t wanna be right!

  • http://www.switchandshift.com Ted Coine

    Love it. Not everyone is wonderful to work with, of course, and this certainly includes customers. When your business model has thousands or tens of thousands of customers or more, no big deal, right? When your business model gives you one customer at a time, or a dozen customers, or another small amount… life can be pleasant or very unpleasant depending on the personalities of these people.

    I think that’s why some people take up yoga :)

  • http://www.frymonkeys.com/blog Alan Kay

    Customer-centrism is an organization-wide responsibility. In the B2B world they discovered a while ago that the high-touch, relationship-driven sales person is a liability to the organization if the sales effort is not backed up with strong organizational delivery. Having done customer experience work for organizations for nearly 20 years I find that if the organization doesn’t have a cross-functional customer view, resistance to the customer in any part of the operation leads to erosion of any promise made to the customer.

    The question is, how do you align silos behind making the customer a boundless opportunity for a quality experience. My particular approach is to bring co-creation around the customer to the organization, not just marketing and sales.
    http://frymonkeys.com/customer-dialogue-is-your-change-management-strategy/

  • http://www.switchandshift.com Ted Coine

    Steven, thanks for your outstanding questions! 37Signals is on the periphery of my radar. You just moved them closer to center for me. Thanks – I can’t wait to check them out!

    One thing I love about this world is the diversity of models no matter the topic, many of them successful. Building a product that scales beautifully by giving your customer what she needs without a need for human interaction? That’s incredibly rare, but when a firm pulls it off, Bravo! Amazon does that quite well, and completely consciously. Bezos’ whole notion from the start has been to craft a customer experience that satisfies (or better, delights) the customer so well that there is no need for said customer to cry out for help. As a longtime customer myself, he’s pulled that off with aplomb, at least for me.

    Another example (again online: food for thought?) is Craig’s List. It is stripped bare, and there’s a tremendous amount that site doesn’t do for you. But for what you need it for, it seems to hit the mark just fine. Last time I checked, Craig Newmark had only 60 employees (granted, I haven’t checked lately).

    Here’s the thing, though: I’ve come to realize that CEOs and boards see these outliers and think, “Hey, who needs people? Any business can run this way!” Take Home Depot, for instance. When I need something for my house right now, today, I’m going to hop in my car and get it. Time was that I could visit my local Home Depot, get the knowledgable advice I needed, check out with fast, friendly service, and zip home, all in an hour. But something happened. The service is hit or miss by store, I’ve noticed: where we used to live, outside Boston, we had two stores that were equidistant from our house, one with jaw-dropping service, the other with jaw-dropping DIS service! And then there’s the automated checkout lines. You can wait a century for a human to check you out, or do it yourself pretty quickly… so long as you don’t run into any trouble as you do it.

    After numerous frustrating experiences with this firms attempts to ‘scale’ in a human-free way, and some trouble at Lowe’s as well, I’ve become a loyal shopper at Ace Hardware. They don’t have the selection, but their customer care means I’ll find what I need, get my questions asked, and get home with a warm feeling and a smile on my lips.

    Home Depot scaled. I opted out, and went for the human touch. There are a lot of things humans can do that automation probably never will.

  • http://www.switchandshift.com Ted Coine

    Alan, I love it! I’m with you 112% on this. I’ve found that the whole concept of “scale” is more often a liability than an asset, in part for what you discuss in this (great!) post. When we work in silos, the implicit principle we follow is role-segmentation: “I design, those other guys sell,” or “I balance the books, those other guys run the factory;” that type of thing. It’s dysfunctional.

    The greatest strength of little companies – or of savvy big companies such as Gore Associates which act like little companies by consciously limiting the size of their business units – is that everything is everyone’s job, and the customer is never much farther than an arm’s length away.

    I’ve been studying ‘The Enterprise’ in depth for almost four years now. Some do it better than others, of course. But as for the traditional, 20th-Century model of scale, silos, and hugeness? I still don’t see how these firms can compete against nimble little guys who keep their customers close and reject the whole notion of scale as a fallacy.

    (Hmm… if I were smart, I’d drop my current book project and focus instead on this ;)

  • http://www.switchandshift.com Ted Coine

    Alan, I’d love to argue with you about Ryan – his is a way of doing business I love to hate – but you’re absolutely right! As his customer, you know what you’re signing on for.

    Still, I’d hate to ever find myself stuck in a city where it’s RyanAir or walk back home. Hopefully, I’ll avoid that fate…

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