Puttin' on the Ritz
Imagine traveling to a foreign land, to a beautiful beach where your company will be holding a team-building session. The airline has lost your luggage and you arrive at your hotel at 1 a.m., tired and a bit aggravated. You complain to a colleague about your missing personal items and minutes later, a hotel employee who happened to overhear and understand your conversation presents you with new clothing, toiletries and other supplies that you'll need.
A fantasy? Actually, this is a true story based on a businessman's experience at The Ritz-Carlton, Dubai--and it's typical of the outstanding service for which The Ritz-Carlton has twice won the Malcolm Baldrige National Quality Award.
Customer service today is the one element that can set companies apart from their competition and lay the foundation for a stronger tomorrow. "Companies really don't have much control over products and prices--anyone can duplicate what you're doing in those areas," says Jerry Fritz, director of sales and customer service management within the Executive Education program in the School of Business at the University of Wisconsin-Madison. "Customer service is what distinguishes your company from the competition."
Customer service practices must extend beyond the basics of common courtesy (although many companies fail even in this area) to more personalized niceties because today's customers have higher expectations than they did in the past.
"Our society has been 'Nordstromized,'" says Rebecca Morgan, a management consultant specializing in customer service and communication and president of Morgan Seminar Group in San Jose, Calif. "Regardless of whether people shop at Nordstrom, they've heard of the superb service it offers, and they now expect that level of service no matter where they are or what they're paying."
Unfortunately, all too often customers are seriously disappointed, says Fritz. "The level of customer service in this country is crumbling," he says. Part of the problem is frazzled, overtaxed employees as a result of the national labor shortage. But companies can set the stage for excellent customer care by first creating an environment that supports customer satisfaction then hiring the "right" people, training them properly, and setting standards for and rewarding excellent service.
The Right staff
"Excellent customer service starts with the people at the top of an organization," says Bill Mattox, supervisor of the industrial engineering group for Memphis Light, Gas and Water Division (MLGW), a municipal utility that won first place in residential customer satisfaction for utilities in the South in a recent J.D. Power and Associates survey. "When a company's leaders stress the importance of customer service and practice what they preach, it permeates the organization and translates into operational programs."
But top managers can't do it alone; it takes highly motivated employees on the front line to deliver exceptional service. BI is a 1,400-employee firm headquartered in Minneapolis that designs and delivers performance improvement programs integrating communications, training, measurement and rewards. The service company won a Malcolm Baldridge Award in 1999--30 percent of the scoring for that honor reflects excellence in customer care.
"Companies need to establish a culture that focuses on customer care," says Mary Ellen Coursolle, senior vice president at BI. "We ask ourselves 'How can we improve our service to our customers?' about everything we do-from how jobs and approval processes are structured to which management information systems we use to how we bill clients."
BI has worked to ensure that its hiring process finds people who will provide the ultimate in customer care. "We believe that for a company to have the ability to delight customers, it must first hire people who have that focus," says Coursolle. "We've always assessed candidates based on their 'emotional intelligence'--how motivated they are to serve others, to listen, to understand others and to solve problems for another person," says Coursolle. "Candidates go through multiple interviews and job simulations and we grade their responses. They also view videos showing how the job is performed and listen to taped phone calls with customers so they can hear the level of service we require. Candidates will self-select. Quite a few have bowed out of the hiring process once they've realized the high standards we've set."
In December, BI instituted use of an "emotional intelligence" assessment survey for job candidates. "Everyone at BI has been tested so we've been able to develop a 'BI employee profile,'" reports Coursolle.
The Ritz-Carlton also puts potential employees through a comprehensive screening process. "We use an outside firm--Talent Plus--to ask potential employees questions targeted to specific positions and we then chart their talent set," says Shelby Taylor, corporate manager of public relations for the luxury hotel organization. "We believe it's important to match employees' measured skills with positions for which they are naturally inclined because they'll be more likely to excel and to draw more inherent satisfaction from what they do every day. For housekeepers, we look for attention to details, exactness and cleanliness. For a front desk position, we score empathy higher. It's a scientific process."
start by Training
Once employees have negotiated the hiring process, the journey to excellent customer care has just begun. Smart companies teach their employees not just technical skills, but people and customer care skills throughout the course of their career.
The Ritz-Carlton sponsors one of the most thorough training programs in the business world. (In fact, they're so good at training employees--as evidenced by their two Malcolm Baldridge wins--that they now offer a course to other companies. See "Teaching Legendary Service," this article.) "Our frontline employees undergo 300 hours of training their first year and 120 hours per year thereafter," says Taylor. "On employees' first two days, they go through an extensive orientation process during which they meet with every division leader in the hotel so that they can understand how all of the areas work together to serve the guests. They learn about our corporate credo, the pyramid, our company vision and the 'gold standards' we aim to achieve with each guest experience. They also eat lunch one day in the guest dining room so that they can experience what it's like to dine there from the guest's perspective.
"On their third day, when they report to their actual job, they're paired with a trainer--one of their more-experienced co-workers," says Taylor. "Then on Day 21 they meet with their orientation class to discuss how they've seen the 'gold standards' in action and what they like and don't like about working at The Ritz-Carlton."
BI sends its new associates through a six-month orientation and certification program, says Nancy Martinson, vice president of human resources. Associates are also encouraged to take several of the more than 300 courses offered through BI University each year, including "Coaching for Success," "Re-igniting Your Purpose and Passion at Work" and "Advanced Negotiating Skills." "Associates are recognized for taking classes and getting certified in different disciplines," says Martinson. "They receive promotional items such as fleece jackets or pen-and-pencil sets and are recognized by their peers."
MLGW also trains its employees in customer care before sending them out to light furnaces or determine why a customer's power is off. "Before employees move into a customer service area, they take a customer contact test that determines their aptitude for problem solving, judgment and interpersonal skills," says Curtis Dillihunt, vice president and chief administrative officer. "For current staff, we have a Mastery of Customer Service certification program, which is a 16-hour curriculum on how to handle difficult customers, communication and problem-solving skills, time management and other crucial skill sets. Field reps also go through a 23-week training program. And managers regularly ride with field reps to make sure they're doing the job well."
Training isn't just for new hires and frontline employees, cautions Morgan. "Too many managers approach training for themselves with a 'been-there-done-that' attitude," she says. "Managers need to be role models for their employees and show them excellent customer service. Managers' attitudes translate into their employees' actions. Nobody's perfect. Managers need to approach their own training with a sense of wonder and excitement about what they may learn that could help them improve their own performance."
Set Gold standards
It seems obvious: Once frontline employees have joined a company, managers must set specific goals and directions for them. "Managers are good at telling people what to do, but not at how well they have to do it," says Fritz. "It's crucial to establish very detailed job descriptions and responsibilities then to assign specific measures and performance standards to those actions so employees know how they're doing. You might set a measure of 'answer the phone within three rings' or 'call a customer within two hours of a job's completion to see if he's satisfied with the work.'"
Once standards have been set, managers then need to coach their employees to ever-higher levels of service. A feat much easier said than done.
"The number-one reason why an outstanding salesperson leaves her company is because her manager didn't coach her properly," says Fritz, citing the results of a Talent Point study. "Managers don't know how to coach, and it's a crucial skill that they'll need throughout their careers. Even the CEO of a company needs to coach the executive vice presidents, who then need to coach directors, who then need to coach managers and so on."
Calling All Coaches
What, exactly, is coaching and why is it so difficult? "Coaching is helping employees improve in a specific area of their job or extending a valuable skill in a new way," explains Fritz. "The greatest part of coaching is reinforcing positive behaviors--catching people doing something right. Amazingly, as easy as this concept is, so many companies still don't practice it. They focus on people's negative behavior."
Often, too, the feedback that managers provide is too general to offer useful information to employees, says Morgan. "Telling someone, 'Customers love you. You're doing a great job' isn't very instructive," she says. "Instead, managers need to discuss a specific action and its effect on customers. For example, when giving positive feedback to an employee, a manager might say, 'Mark, I talked with five of your customers the other day, and they appreciate your returning their calls within two hours. That follow-through increases customer loyalty, which, as you know, is our top priority. Great job!'
"This same specificity helps employees who need to change a behavior as well," continues Morgan. "For example, the manager might say, "Mark, I talked with five of your customers the other day, and they don't feel they're hearing back from you quickly enough. We need to respond to all customer calls within a two-hour window--so you'll need to check your voicemail messages more often and return customers calls so they'll understand how much you value their business."
Fritz outlines four steps to effective coaching:
• Both the manager and the employee must agree that an opportunity for change or growth exists. Employees must buy into a change and see the positive results it will make for them, customers and the organization before they'll be motivated to make a change.
• The manager and employee must design a solution together. Both parties should agree on what the desired result is and then how it will be achieved. Will the employee read several books? Attend conferences? Shadow another employee? The manager needs to commit to how she will help.
• The manager must monitor the employee's behavior and make follow-up suggestions. It takes 27 days for an adult to change a behavior--so managers must look for and note incremental changes and improvements to encourage a new, consistent action.
• The manager must give praise and recognition when the new behavior is established. Managers should recognize how hard the employee worked to make a change and share the employee's achievement with others by praising him through such venues as meetings and the company's newsletter.
More Power to the People
How many times have you called a company and asked the service representative to fix a problem for you only to be placed on hold while the rep asked her manager for approval? Companies that are focused on excellent customer care empower employees--not just in what they can do for customers, but also in how they perform their own jobs.
"At The Ritz-Carlton, employees may spend up to $2,000 on the spot to make sure a customer's need--even if unexpressed--is met," says Taylor, citing an example of a couple who mentioned to their bellhop in passing that they were on their honeymoon. "He sent them champagne and flowers and created a lasting, positive impression."
The Ritz-Carlton also encourages its employees to share ideas about how to change processes or their jobs to better meet guests' needs, then rewards employees for their contributions.
From Good to Great
Of course, a key element in providing excellent customer service is to talk with customers to learn if your company has met or exceeded their expectations.
A first step is asking frontline employees what customers tell them. After all, who better to know what customers are thinking and what trends may be developing than the people who work most closely with them?
Customer service expert Rebecca Morgan recommends that companies call key customers right after they've used a service to ask for candid feedback. "Customers love getting a phone call from a manager or other top executive," says Morgan. "It sends a much stronger message that the company values their opinion than does a mailed survey. And mailed surveys tend to provide more skewed results--people return them only if they're really happy or really dissatisfied so you're losing the sense of the 80 percent in the middle."
Just as important as surveying customers is providing that feedback to employees and acting on findings.
"We've moved away from anecdotal customer accounts to fact-based reporting," says BI's Coursolle. BI's Transactional Customer Satisfaction Index survey is e-mailed to clients after a service is rendered to seek their feedback. "The surveys take about three minutes to complete and we get a high return rate," says Coursolle. "The surveys pinpoint our strengths and areas for improvement. Project teams are e-mailed the survey results so they can meet and determine how to address any issues.
"Each survey question grades BI on a 10-point scale," reports Coursolle. "If a team gets a score of seven or less on the overall satisfaction question, a member of the company's top executive team will call the customer that day, thank them for returning the survey, then ask for more details and explain how BI will resolve any problems."
BI uses any low score as fodder for a BI process improvement team that will meet to brainstorm solutions.
"We address every low score so that a different customer won't experience the same problem at a later date. The survey also lets us spot trends," says Coursolle.
MLGW surveys customers by phone for two purposes. Each month 150 to 200 customers who have received a service call are telephoned by an independent research firm to find out if the customers' needs were met. "We're shooting for 100 percent satisfied customers, of course," says Mattox, "and right now we're around 97 percent." Results of each customer contact are funneled to the affected area (billing, meter-reading).
Each month the utility also cold calls customers who haven't had a service call to gather "customer perception feedback." MLGW's community service contributes to its solid scores.
"Utilities are fortunate to score around 80 percent for positive customer perception," says Curtis Dillihunt. "Utilities are just one of those services you have to have, one of those bills you have to pay every month. Our positive perception rating is now around 89 percent, which is due in part to our work to keep rates low and our community service efforts. Our Project MAX matches employees with local homeowners who may be elderly or physically challenged who need someone to paint their homes, fix plumbing problems, build a wheelchair ramp or help in some other way. Our employees also have contributed more than $600,000 to the United Way campaign."
Build a Magic Castle
Creating excellent customer service may seem like an overwhelming task, but Jerry Fritz offers some advice: "If you're trying to improve your customer service, focus on one area at a time, look at the companies that excel in that area and benchmark from their practices," Fritz suggests. "If you're trying to improve 'the personal touch,' benchmark from Ritz-Carlton. If you're trying to improve your call center, benchmark Lands' End. Take pieces of what other companies excel in, learn how they do it, then adopt it for your own company."
But perhaps most challenging for organizations is to develop a compelling vision for their employees. The Ritz-Carlton focuses its workers on the motto, "Ladies and gentlemen serving ladies and gentlemen."
Fritz tells the story of another great customer-focused organization and its founder: Walt Disney. "When the contractors were building Disneyland, they wanted to build the outlying areas first and work inward," says Fritz. "But Walt Disney wanted Cinderella's magic castle, which would be in the middle of the park, built first. He said it would give the workers inspiration.
"Other leaders and companies must look for what will be the inspiration for their workers and how their employees will be able to personally contribute to that vision," says Fritz. "Ask yourself, 'What is our Magic Castle?'"