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Service as if your business depended on it.

Stories of how contemporary customer-service gurus were converted to their avocation are as numerous and varied as the gurus themselves. Here's an example: One evening, close to Christmas, Connecticut grocer Stew Leonard received a call from a woman customer who complained the eggnog she had just purchased was sour. "Bring it back," he instructed her, "and I'll replace it." A short time later the customer entered Leonard's store with the carton in hand. As a cashier totalled the refund, the grocer tasted the offending nog. "You know," he remarked good-naturedly, "I'm happy to refund your money, but I think this eggnog tastes fine." The customer said nothing. But as she left, she turned and coolly said to grocer, "I will never shop in this store again."

Leonard was understandably flabbergasted by the woman's reaction, especially in light of what he thought was a reasonable response to her complaint. Until he realized that his insensitive comment about the eggnog had effectively invalidated her experience. Right or wrong, Leonard reckoned, this customer felt she had a legitimate complain. The epiphany converted him from bystander to zealot in the cause of customer service. He even went so far as to sink a granite slab outside his store with the following inscription carved in its polished face: "Rule #1: The customer is always right. Rule #2: When the customer is wrong, re-read Rule #1."

Today Stew Leonard is not just an authority at keeping the customer satisfied, indeed, he is a wizard at keeping his customers ecstatic. The distinction is as important to understanding the customer service movement as is the customer, herself.

Today one can find slightly more than a zillion books written on the topic of customer service (a somewhat more modest bibliography follows). This includes a number of oeuvres by the acknowledged zen masters of the subject, such as Tom Peters, Stan Davis, Ron Zemke, Karl Albrecht, Robert Greenleaf and Joe Girard. And while all would agree that exceptional customer service ranks right up there on the altruism scale with the golden rule, its current vogue boils down to one truism: customer service provides the practitioner with a distinct edge over the competition. And if businesspeople - here in Utah and elsewhere - hope to survive in this age of global economies and cutthroat competition, they need to act like Mr. Goodwrenches a heck of a lot more than like Mr. Whipples. As Tom Peters writes, "Service-added is becoming the chief battleground for competitive advantage in every industry one can think of."

Let's face it. There would be no need for a customer-service industry in our society were there not a despicable lack of attention to the practice by those we regularly come in contact with. Ah, but there is. Who cannot recount horror stories of standing at a department store counter waiting for help even as two uninterested salespersons stood by chatting to each other? The list of encounters with bored waiters, rude mechanics, illmannered bank tellers, uninformed sales reps goes on.

More and more companies and organizations have discovered that courtesy, compassion, helpfulness, extraordinary service, and attention to detail not only work, but can actually put the competition on the run. In fact, this revolution of enhanced customer service is well underway among enlightened organizations.

Utah companies will excel by remembering five simple tenets.

1. The customer is always right. Stew Leonard didn't just

adopt this motto because it had a nice ring. He postulated

that losing a customer is much worse than losing an

argument. What businessperson wouldn't agree with


2. It's better - and cheaper - to keep a customer than to

get a new one. A company will spend five times more to

bring in a new customer than to keep an existing one.

Leonard projected what his arrogance with one customer

could cost him over the course of just 10 years of doing

business, and it staggered him. Even conservatively, he

calculated that a typical customer

will buy about $100 worth of

groceries, 50 weeks each year. At

an average of 10 years, that adds

up to what Tom Peters refers to

as a Lifetime Value of a

Customer of roughly $50,000.

"When I see a frown on my

customer's face," Leonard said,

life forever."

3. Good customer service is

transparent. Expert. Experts will tell you

it isn't the garden variety of

customer service that makes

Nordstrom famous. It's their

legendary service. Simply

treated with respect and courtesy

isn't something we should

acclaim, it's something we

should expect. On the other hand,

service above and beyond the call

of duty rates special attention and

makes some companies stand out

from their competition.

4. A problem is a gold mine. Tom

Peters cites a number of

systematic studies, such as those

by TARP (Technical Assistance

Research Programs), that indicate

"fixing a customer problem

leaves a positive, lasting

impression that is much stronger

and more lasting than doing it

right the first time." Peters refers

to these opportunities as

"awesome comebacks," and he

notes "$(Stew$) Leonard's, Federal

Express, Nordstrom, et al. are

stellar outfits, because they

routinely perform positive

service. Nonetheless their truly

legendary status derives from

overkill response to a rare, minor


5. Frontline empowerment is vital.

In the current customer-service

revolution, this is where the

rubber meets the road. While it

can be initiated by management

enhanced by technology, and

strengthened by quality control,

customer service is really about

individual relationships - one

person serving another. As more

and more companies institute

sweeping changes, from

hierarchical, vertical, or systems-oriented,

to "flattened," horizontal

or people-oriented organizational

structures, they are

incorporating models that

demand more accountability from

the individual while offering far

more latitude in on-the-spot

problem solving.

The Secret to Keeping Customers

The last principles - that of individual empowerment - is actually the lynchpin that holds the machinery of customer service together. There are literally thousands of consulting firms across the U.S. that offer business a way to redeem themselves through the new religion that is customer service. And all of the good ones consider the capability of the individual to be the No. 1 element for the success of the "new" management model.

One firm that trains Fortune 1,000 companies in the technology of individual empowerment is located in Utah. Innovations Consulting was founded in the early 1980s by Dr. William Guillory, chairman of the University of Utah department of chemistry, who became a student of what was then called the "human potential" movement. He began to apply its principles of individual responsibility and empowerment in his own department. Gradually, Guillory's interest led to the publication of his first book, Realizations, and the founding of a company. Today he and wife Linda Galindo direct a staff of some 17 people, including seven seminar presenters, from the company's headquarters in an office tower in the center of the Salt Lake Valley, Virtually all of Innovations' client companies are located outside Utah and include such household names as Martin-Marietta, Avon, American Airlines, Los Alamos National Laboratories, Sandia National Laboratories, and Electronic Data Systems.

"Empowerment," says Guillory, "is characterized by the commitment to serving an organization and its employees, maximizing the potentials of management and staff, and creating new ingenious ways of delivering quality service and products. This style focuses on human resources as the most valuable element of an organization and the key to growth and profitability."

If Guillory's firm is on the leading edge of developing and teaching theories for implementing individual empowerment in the workplace, there are a number of Utah companies that have discovered how to practically apply it in their own organizations. Not surprisingly, one of those is Nordstrom, which operates department stores in Salt Lake, Murray, and Ogden. While everybody's 10 Most Enlightened management lists invariably includes the Seattle-based retailer, company insiders claim their secret is deceptively simple. "You pay your people well," says Toni Young, store manager of Nordstrom in downtown Salt Lake, "and you treat them as you would want to be treated yourself." Just as simple is the Nordstrom training program. In fact, compared to other companies' massive employee manuals, Nordstrom's consists of just 74 words on a 5-by-8-inch card. The payoff reads, "Rule #1: Use your good judgment in all situations. There will be no additional rules." The "handbook," of course, also contains the corporate goal, which is "outstanding customer service." And it encourages the employee to "set both your personal and professional goals high. We have great confidence in your ability to achieve them."

According to Young, the Nordstrom retail strategy, which runs counter to the traditional department-store management philosophy, is to make each department a specialty store unto itself. Thus, department managers are considered "shopkeepers," who hire their own employees, direct their own merchandising efforts, and work closely with buyers to make the formula click. "I'm just here to turn the lights on in the morning," says Young. "It's the individual employee who really counts." At Nordstrom, empowerment isn't just a buzzword. It is written into the company's mission statement. "Nobody's ever been reprimanded for going a bit overboard to give the customers what they need," Toni Young says. "They know they've got the backing of the store manager. I, in turn, will never get reprimanded for satisfying customer. Ever."

While that policy originated with the first Nordstrom store in 1887, it is not something the airline industry has always been noted for. "We're one of the few industries that measures our success by the infrequency of our failure," notes Ron Reber, vice president of marketing, SkyWest Airlines, based in St. George, Utah. Rebek speaks's about the in-time performance rating each airline receives on a regular basis. Until well after deregulation ended in 1978, airlines were treated in much the same way as utilities, where decisions were made in purely operational terms. But rarely in terms of customer service.

Early last year, however, SkyWest began to make major changes in its management structure, shifting most customer-service responsibilities away from operations and into the domain of marketing. According to Reber, "We went through our entire manual and eliminated or rewrote everything that didn't sound like it originated with the customer." One of the areas that received particular attention, says Reber, was frontline empowerment. "Our people want to do the right thing. For whatever reason, they wee never given the policies, procedures, and specific things that empower them to do the right thing." That thinking gave way to a Sky West campaign called "Destination Excellence," a program dedicated to excellence in customer service. "Then we told our people at the frontline that we would support them, and we've continued to develop the tools they need to do their job."

If there is any element of Sky West's new campaign that strikes even the non-flyer as truly revolutionary, it is the airline's overbook policy. Sky West turned the traditional "last passenger on gets bumped"policy upside-down. In the process, they recognized that every ticket is the property of the passenger who holds it. As such, reasons Sky West, a passenger has the right to sell it back to the airline at his or her cost -- not the airline's. "We've had to buy back hundreds of tickets," says Reber, "but usually at no more than twice face value." And while one passenger did manage to command $ 600 for a one-way ticket that cost him roughly $80, the lesson is a valuable one for the airline. "If we have to buy back a seat for $1,000, that gives us a new sense of the value of that seat."

The list of SkyWest's other service innovations is just as startling. It includes: a liberalized check-in policy that says, "if you can get here before the plane leaves, you fly"; guaranteed luggage retrieval within a set period of time; gradual introduction of new aircraft that will permit customers to carry nearly twice the luggage weight they now carry; greater accessibility for handicapped passengers; and more carry-on luggage.

In addition, notes Reber, Sky West frontline employees receive three times the initial customer-service training they used to, including a full week of techniques in resolving problems at "point of failure." The result? In less than a year, complaint letters have plummeted, and complimentary letters from passengers have soared. The airline has recently introduced one more innovation called the "High Five" program, which allows passengers to reward deserving employees with $5 vouchers, good at the company store. The program, in effect, is a way for passengers to tip employees at the airline's expense. Overall, according to management, employees now see themselves as the single most important element in determining whether a customer will be dissatisfied or delighted.

Customer service has never been a problem for Franklin International Institute Inc., developer and manufacturer of personal productivity and time-management programs and products, headquartered in West Valley City. Not yet a decade old, personal empowerment was a company hallmark from the beginning. With a customer list that includes Apple Computer, CitiCorp, Dow Chemical, General Electric, and a million individuals worldwide, Franklin had no choice but to practice what it preached - about organizations, productivity, quality and responsiveness. "At Franklin, employee training is an on-going part of the culture," points out Trine Lyman, director of sales training. "Our employees go through an extensive initial training program that is structured around three questions: |how can I help you?' |Here's what I want,' and |I can do that.'"

As with Nordstrom and Sky West, Franklin employees are empowered to make decisions and solve problems without interference from superiors. They are not just expected to perform, they are given the tools and training to rise to that level of expectation. "We guarantee 100 percent satisfaction," says Lyman, "and the only person who can define that is the customer. It is good advertising, but above and beyond, it is the right thing to do."

It is no coincidence that Franklin, Nordstrom, SkyWest - indeed all the companies who have incorporated customer service into their missions - have referred to it as "the right thing to do." Read between the lines, and you'll see it goes deeper than simply a concept or a trend. Because; as Tom Peters suggests, "Superb service is not merely an |excellence' strategy but a basic survival strategy."

Bill Cutting is a partner with Penna, Powers, Cutting and Haynes, a Salt Lake City advertising and public relations firm.
COPYRIGHT 1992 Olympus Publishing Co.
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Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Title Annotation:tips for improved customer relations, including advice from Connecticut grocer Stew Leonard; see related article on customer service and quality bibliography
Author:Cutting, Bill
Publication:Utah Business
Date:Apr 1, 1992
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