If you want to be successful in any industry, you would do well to emulate those people and organizations that make customer service a priority. Smart leaders understand theyre not in the banking, retail, manufacturing, etc., businesstheyre in the service business. And they drive their companies by focusing on six principles:
1. Understand service is a strategy.
2. Continually change, add or eliminate policies and procedures to make your organization more customer-friendly.
3. Hire the right people and treat them well.
4. Empower employees to make decisions to better serve customers.
5. Train each employee in the art of customer service at least every six months.
6. Measure the impact and results of your customer-service efforts.
Six Principles, Six Companies
The following organizations have set the standard for customer service. They have made the customer king and are reaping the rewards.
Commerce Bank is possibly the most customer-focused bank in the United States. A $35 billion organization with deposits growing 39 percent annually, the company has outperformed Wal-Mart, The Home Depot, Berkshire Hathaway and Microsoft in annual returns. When it opened its first four banks in Manhattan, it interviewed 3,400 people and hired just 42 of them. Today it has 13,000 employees.
Our strategy is to hire outgoing people-pleasers, then train, train and train, says Vernon Hill, company founder and chairman of the board. The bank spends millions of dollars each year to educate all of its employees in customer service. As an example of that service, the banks telephones are answered 24 hours a day, seven days a week by staffnot voicemail with endless optionsand usually by the second ring. Dont believe it? Call 888.751.9000.
Not surprisingly, Amazon.com also makes the list of role models. The company has mastered speed, technology and price, all built around service. In 1995, it had sales of $511,000. As of Jan. 31, 2005, the companys annual revenue hit $6.92 billion, a 31 percent increase over the previous year, and its profits were a whopping $588 million.
Dell is another company that has made customer service a primary focus. Its founder, Michael Dell, sums up his business philosophy this way: Under promise and over deliver. The company does just that and, as a result, is the largest provider of PCs in the world.
No one would argue with the success Wal-Mart has had over the years. The companys numbers are more than a little impressive. Its fiscal 2005 profits were $10.3 billion on revenue of $288 billion, a 12.5 percent increase over the previous year. No retailer in the world has done a better job of understanding customer service or motivating employees.
When it comes to service, The Home Depot is an undisputed leader. Its the second largest retailer in the United States and the worlds largest home-improvement merchant. The company, which employs 325,000, enjoyed $5 billion in profits on $73 billion in sales during fiscal 2005. Home Depot knows its in the service business and empowers employees to do whatever is necessary to assist customers.
About 10 years ago, Northeast Delta Dental had a 20 percent market share in Maine, New Hampshire and Vermont. Today, it enjoys market shares of 43, 60 and 47 percent in those states, respectively. The company had 200,000 members during its first year in business and now has 700,000. In 1995, its revenue was $30 million; by the end of 2004, it had reached $190 million.
Northeast Delta Dental is so sure of its focus on customer service and its employees ability to deliver it that the company instituted a service guarantee that covers several functions, including the accurate and quick turnaround of member ID cards. It guarantees a card will be mailed out within 15 calendar days after an enrollment form is completed, or it will pay that member $50.
In the face of global competition, businesses cant succeed if they focus solely on price and product. Customer service is the distinguishing factor. If youre committed to doing whatever it takes to satisfy customers, youll have a competitive edge to drive your business.
John Tschohl is the founder and president of the Service Quality Institute in Minneapolis and author of several books on customer service, including his latest, Loyal for Life: How to Take Unhappy Customers from Hell to Heaven in 60 Seconds or Less. Described by Time and Entrepreneur magazines as a customer-service guru, Tschohl is an international service strategist and speaker. He has developed more than 26 customer-service training programs that have been distributed and presented throughout the world. His bi-monthly newsletter is available online at no charge. For more information, call 952.884.3311; e-mail [email protected]; visit www.customer-service.com.