Does the quality of service you receive actually have a direct link to the time, loyalty and ultimately the money you spend with an organisation? Customer Service has always been an area of business that intrigues us, frustrates us and done properly can inspire us, but can it make profits? The following organisations achieved a high rating of customer service according to the Institute of Customer Service.
The Institute of Customer Service 2012 top 10 highest scoring organisations and services:
- Amazon (92)
- Marks & Spencer (food) (87)
- Ambulance Service (87)
- First Direct (86)
- John Lewis (86)
- Fire Service (86)
- Virgin Holidays (85)
- SAGA Holidays (85)
- Boots (85)
All of them are established brands and organisations that are recognised as sector leaders in customer service. In the last 12 months two of those high ranking companies have demonstrated how good service can be linked to profitability. The John Lewis Partnership reported a 17% rise in profits, despite what many commentators would describe as a tough year on the high street. John Lewis was “Britain’s favourite electricals retailer
2012” (Consumer Satisfaction Index). While Boots UK illustrate the benefits of retaining customers and maintaining profits. The company reported a 6.1% rise in trading profits, while it’s customer loyalty scheme saw a boost in numbers, with over 60% of its retail transactions now made by Boots Advantage Card holders.
Customer loyalty drives retention and referrals. It’s a subject that is key to every CEO concerned with profitability. In a recent interview with Virgin boss Richard Branson, Carmine Gallo asked “What business is Virgin in?” “The experience business, he replied. “Anybody can sell a cup of coffee. Anyone can buy an airplane and we all buy planes from the same manufacturers (Boeing or Airbus), but there the difference stops. If you fly on a Virgin plane…you know you’re going to have a completely different experience.”
Branson went on to explain that the features and amenities Virgin America offers such as mood lighting, leather seats, newer planes and seat-back entertainment systems are all part of the package, and while the package might entice customers to give the product a try, the quality of the interaction they have with Virgin’s employees encourages them to return.
Branson also says quality interactions between leadership, staff, and customers separate the average company from the exceptional one in any category. Branson told Gallo, “When we started Virgin Atlantic thirty years ago we had one 747 and we were competing with airlines that had an average of 300 planes each. Every single one of those airlines have gone bankrupt because they didn’t have customer service. They had might, but they didn’t have customer service. Customer service is everything in the end.” (Gallo, Forbes, 5/9/13)
Chief Executive Nick Wood, Pets At Home, is implementing the same ethos. Not resting on previous success, he recently explained why he believed that customer service was the key to their current success and rise in profits. In an interview with Retail Week he explained their strategy “We’re focusing fundamentally on delivering service to customers every day. We’ve had a lot of growth from new stores but core like-for-likes are also up, which has been about focusing on the customer.” Wood believes the services provide customers with a “complete offer” and reasons to “keep coming back”. As a result, like-for- likes rose 2.2% while turnover soared 10% to £598.3m in the 52 weeks to March 28 2013. EBITDA jumped 10% to £100.8m. (RetailWeek, August 2013)
Ryanair, traditionally seen to defy the model that a good reputation for service equates to profits, may be about to refocus their business on good service. According to Harry Wallop, feature writer at The Telegraph, the treat ‘em mean, keep ‘em keen (as long as its cheap) way of doing business may be coming to an end. As one of the worlds most profitable airlines, Ryanair shocked the stock market in September 2013 with its first profit warning in almost a decade. The company’s share price plummeted as a result. The notorious Chief Executive once infamously told his “stupid” customers they could “bugger off” if they didn’t like the extra fees and levies. It seems their approach to customer services may be wearing thin with its customers and some experts believing that the company’s list of ancillary revenues is driving customers away. Interestingly, one of their main competitors, EasyJet, has announced record customer levels. In 2012 the airline made a simple change to policy and immediately raised their customer levels. By tending to basic customer service needs, i.e. reintroducing allocated seating, immediately attracted more customers at no extra cost to the business. In the week when Ryanair announced their profit warning, EasyJet showed record monthly passenger numbers, as a result its shares jumped 10.5 %
The emphasis is on building relationships and encouraging loyalty by meeting and occasionally exceeding customers needs. The company leaders we have highlighted recognise the challenge and are responding strongly. However, you don’t have to be the CEO of a multinational to make a difference to your business.
The experience of the customer can be very different in a very diverse market place. However, there is always an opportunity to impress. Take a recent experience of mine when I witnessed a high level of exceptional service in an unexpected place. A case of customer amazement from quite possibly the busiest places in the world. With over 350,000 pedestrians on an average day, nearer to 460,000 on busy days, Times Square, NY is an incredible hub of humankind.
Known as ‘the crossroads of the world’ in midtown Manhattan, Times Sq is not renowned for it customer service. When asked most people are quoted as saying the opposite, often citing New Yorkers as rude and offhand. A recent survey in the Business Insider (Aug 2013), New York was described as a having the most arrogant people in the United states.
But that’s not the whole story, and after a recent trip to New York I have learned that there are exceptions, you just have to look closely. After all, precious gems are meant to be rare, but if you look hard enough, you will find them. Like digging for diamonds in the depths of the Diavik mines, if you know where to look and you have an eye for treasure, you’ll find that rare moment of service you are searching for.
I was wandering around Times Sq, passing time before we had to leave later for JFK Airport. Just before lunch, at around 12:30 it started to drizzle. In the distance the gathering clouds were dark and ominous. A rumble of thunder told everyone there was a storm on the way. In just a few short minutes the storm descended on Times Sq, as drizzle turned to heavy rain, people ran quickly for cover or hastily looked to buy rain gear.
Of course the land of opportunity, shops and street sellers are fast to react to make a quick buck from the stranded tourists looking for an umbrella or poncho. I took shelter under a shop front on the corner of 46th & 7th. On the pavement nearby was a street seller who’s normal retail was baseball caps and T-shirts. He was a young man in his twenties, dressed in a vest and shorts, with a close cut afro. As the rain came in, he put on a poncho and started to sell umbrellas. With an array of cheeky sales pitch comments, he teased the passing pedestrians into stopping to purchase an umbrella. His style was enough to make me stop for a while and enjoy patter.
What he did next was what Shep Hyken would describe as “A Moment of Magic” and captures the essence of ‘amazement’ in his book “The Cult of the Customer”.
46th street crossing 7th Avenue is extremely busy, with a never ending flow of traffic and people. With the rain falling heavily pedestrians were scuttling across the road and vehicles were waiting impatiently for the lights to change. As the rain continued to fall, an elderly man was slowly crossing the road. He was a little unsure on his feet and careful to tread his path. When the light’s changed, he was the only person left on the road and only half way across, the vehicles began to encroach on the designated crossing zone. He was struggling to go more quickly to reach the other side. The umbrella seller was quick to react. He immediately saw that the grey haired old man needed help and without a second thought shouted to his ‘assistant’ who was sheltering a few feet away from me. “Yo, go and help that man cross the road” he shouted in a strong Brooklyn accent, gesturing towards the stranded pedestrian. His assistant duly ran to the gentleman’s aid, offered his arm and escorted him safely to the pavement and onto level ground. The gent nodded to the seller, thanked his assistant and continued on his way. Just a few seconds in a busy, chaotic day in Times Sq that made a huge impression on me and a few others that noticed. What did I learn? First of all I learned that I am not always as quick to react to someones needs as I’d like to think. Nor did anyone else in that split second and I suspect several others would have checked themselves for not helping. I also learnt that in all my experiences of being a customer in New York, my amazement experience came from a most unexpected source. There are many companies, retail outlets, food outlets, shops and stores in the city that I visited this week. Many of whom did impress me as a customer and did a great job. However, out of all the big brand names, chains, franchises and business, the one that most impressed me beyond any doubt was a man whole buys and sells goods from a street stall. A micro business by anyones definition. And I wasn’t even his customer, until that moment. Guess who I bought a $5 umbrella from before I moved on?
To many, like our hero in this story, customer service comes naturally. While others need a little more inspiration and guidance. Many of us need a help along the way, after all some people take to swimming in minutes, “like a fish to water” while some need water wings and a little encouragement. You wouldn’t leave them bobbing around without giving them a few pointers would you? (maybe for a little while, but then the fun wears off and you need to get them moving!) The same goes for Customer Service Skills. If you don’t show people how to paddle they won’t be able to swim upstream so well. Teach them the basics and they will forge ahead. Leave them bobbing around and they’ll sink (or your customers will).
Customer Service training is not only about learning new techniques and fancy acronyms, it is also about motivation and inspiration towards improving attitude and performance.