Many years ago (I’m starting to sound old!) I worked in luxury hotels. There are many luxury hotels and all offer similar levels of comfort and are priced similarly (although low price usually isn’t a good selling point when it comes to luxury). What really distinguishes the top hotels from the rest is great customer service. The importance of customer service becomes part of the hotels culture as formulated in a Customer Service Strategy and all employees are trained continuously in this key differentiator. A one time slip of service can result in thousands of dollars in lost future revenue and the inverse is also true, where great service can mean attaining a new customer or increased spend by customers. Basing customer service decisions on potential future revenues is a great means of gaining a sustainable competitive advantage over competitors and a good means of understanding what an organization should be doing regarding customer service is to have a Customer Service Strategy. What follows are two examples of customer service that illustrate the importance of every employee being empowered to provide great customer service whilst understanding the potential future value of the customer.
A Customer isn’t worth $1.50 at this hotel
In most countries, no fee is charged by the seller when the customer pays by credit card (Visa, MasterCard, Amex, Diners etc.). The Australian government allows for retailers to charge an amount when people pay by credit card. Although this is favorable for retailers, consumers are against this premium charge.
- Image by BigBeaks via Flickr
A while back I attended a convention at a premium hotel. On one of the nights a few of us had dinner at the hotel restaurant. It was a quick dinner and so as we sat down we each ordered a pizza without taking too much notice of the menu. When the bill arrived, and a Visa card was provided for payment the waiter advised that 1½ % premium would be charged for payment. We felt ‘ripped off’ as we’d spent considerable sums of money at the hotel during the convention and now the hotel was trying to take an additional $1.50 off us which, we felt, was totally petty. We mentioned our displeasure to the waiter and he advised that even all service stations charge a premium for use of a credit card which is blatantly incorrect (I always pay for fuel by credit card and have never been charged a credit card premium). I then spoke to the restaurant manager who pointed to a small sign near the POS which noted the additional charge and he also mentioned that at the bottom of the menu was the notice of the additional charge (note however that people pay from their tables therefore don’t see the tiny sign at the POS and many people order by glancing at the menu rather than reading the tiny notice at the bottom of the menu). Was profiteering by $1.50 really in the best interests of the hotel? Shouldn’t the waiter (or the manager) have been empowered to waive the $1.50 in the best interests of future business?
What was interesting is that many people at the convention had many similar gripes about the hotel so there is clearly a large customer service problem.
Retailer’s Time is more important than the Customers.
We recently went to buy a leather lounge sofa. We found one we liked at one of Australia’s biggest furniture, computer and white-goods retailers. I sat down with the salesman and gave him my name, address and so on and he stated that it would cost $65 to deliver. Then however came the deal-breaker … by now I have agreed to purchase the sofa worth over $2000 and am sitting with the salesman, with him already having entered my details into the computer system. He then asks for a required delivery date so I advise that an afternoon on a certain date is preferable. The salesman then says that he can only give a date for delivery and not an approximate time (i.e. the customer has to be available at the delivery address for a whole day). I explained that I cannot be expected to spend a whole day waiting for a sofa to be delivered and that I wouldn’t purchase the sofa if neither a morning nor afternoon for delivery can be agreed. Anyway, the salesman said that I’d have to accept that I’d have to be at my house the whole day for delivery so the sale was lost by the retailer and I’ll be spending my $2000 somewhere else.
Why couldn’t a half-day time slot for delivery be provided by the retailer? Why couldn’t the salesman give a small discount to keep the sale and perhaps then I’d agree to the whole day delivery waiting time (the salesman had the sale and just had to make me feel like I was getting a good deal)? There are so many things that the salesman could have done from a customer service perspective to both get the sale and ensure that I’d feel positive about the purchase. The retailer has lost a customer because they do not value their clients’ time.
A Customer Service Strategy
A person expects far more than ‘just’ a product when they buy something. They are expecting a certain level of service too. Of course, the amount and quality of service expected varies according to customer expectations (e.g. a person spending $150 on a haircut expects better service than having a haircut at a budget hair salon). It is critical that a Customer Service Strategy is formulated and communicated within the organization. Your employees must know what they are empowered to do relating to customer service as well as what customer service expectations are.