WINNING CUSTOMERS THROUGH SERVICE EXCELLENCE
By Ben Henry
What do organizations like Sandals and Beaches Resorts, the Ritz Carlton, Jamaica International Insurance Company, Stew Leonard's Grocery Store, Southwest Airlines have in common? They are world-class service organizations benchmarked by other organizations around the world. What separates these organizations from the rest? What do they do in the area of service excellence to make them so successful? Let's look at some of the reasons.
They are completely customer-driven. Everything they do is with the customer in mind. They believe that what is best for the customer is best for the business. Their CEOs visibly live, as well as verbally support, the organization's mission, vision and values. They constantly benchmark and measure their effectiveness relative to competitors and other "best in class" companies, irrespective of industry. They have "kaizen" cultures, a passion for continuous improvement.
Managers perform as leaders, encouraging, advising and supporting teams. Long-term relationships with customers are emphasized. Customer complaints are regarded as windows of opportunity to do better. Proactive approaches to customer contact are embedded in the culture. Customer contact takes place at all management levels. The entire organization is immersed in the marketplace, with all customer needs, problems, expectations and complaints fully inventoried and understood. Employee training is mandatory. An effective orientation is a given.
Why does it make sense for all companies to embrace service excellence? Well, the research is there to support this. According to Harvard Business School's Jones and Sasser, service excellence turns customers into apostles who become unpaid salespersons for the organization. Ken Blanchard calls these customers raving fans.
According to an American Management Association study, loyalist customers account for 65 percent of the typical organization's revenues. Other studies prove that service is actually more effective at enhancing volume and profit than marketing, promotion, or advertising.
These days, the quality of service has become more significant to a company's success than quality of product. Product quality alone cannot enhance customer value. Service must be part of the equation. And increasingly, there is a level playing field when it comes to the product. It is the service that brings the customer back to repurchase. Because service excellence is an effective selling tool, it is also a long-term competitive advantage.
According to one writer, customer service exerts a multiplier effect - it multiplies results achieved by advertising, market and sales.
Service excellence leads to word-of-mouth recommendation, which often is more effective than product advertising in influencing purchase decisions. Studies reveal that 84 percent of all sales in America (a 13 trillion dollar economy) originate from the recommendation of satisfied customers.
Research conducted by Technical Assistance Research Programme (TARP) concludes that the return on investment (ROI) from service excellence training for makers of consumer durables such as washing machines is 100 percent; for banks it is 170 percent; while in the extremely competitive field of retailing it is as high as 200 percent.
Most Jamaican companies tend to regard employee training as an expenditure rather than an investment. They need to change that mindset if they still want to be around in the next 10-20 years or be swept away into oblivion by enlightened companies.