HSM E-briefing Series
on Customer Retention and Loyalty

"HOLDING ONTO YOUR CUSTOMERS"

The HSM Group, Ltd. provides the following information in the hopes that it will help you, our valued clients and friends, in your efforts to build better relationships with your customers.

July 2005

Big Lessons from Legendary Service Leaders
by Stephen W. Brown, Ph.D.

Health care is perhaps the most insular industry in the world.  Yet, in holding onto its customers, health care has much to gain by overcoming its myopia.  Much can be gained from applying best practices from leaders in other industries.  Over several months, we will be sharing big lessons gleaned from legendary service leaders like Disney, Southwest Airlines, Marriott and others.

Lesson 4: Hire and reward people who can effectively build relationships with customers.

The traditional organization and its bureaucracy spends considerable time and money insulating the production core – the people and equipment making the product that fulfills the organization’s mission.  Rules, regulations, and systems are in place to make sure that nothing disturbs those who are busy cranking out autos, PCs, refrigerators, or any other product. Legendary service leaders learned long ago that it can’t protect its production core and, furthermore, it may not even want to.  Its production core is the man and woman who are making the customer experience happen.  Since many services are consumed or used at the moment of production, leading service organizations rely extensively on hiring and training their people to create an experience instead of a product.

Job performance in services is complicated to define.  Employees not only have to make the hamburger, check in the patient, or handle a bank deposit, but they must do so with a customer asking them questions (“What time is my lab appointment?”), getting in the way (“Let me steer the boat”), and generally being a part of the consuming experience (“Who wants to volunteer to be a part of our show?”).  Thus, they not only need the skills to do the job, but also the skills to manage the customers, who are often co-producing the experience.  They may have to train customers in how to enjoy or benefit from the experience they’ve paid for.  If customer problems arise, they must be able to figure out how to fix them, even those caused by the customers themselves.  Legendary services organizations seek out and hire associates who can not only provide basic services, but who can also relate well to customers and solve their problems when they arise.  One of the greatest testimonials to the managerial effectiveness of this sector of the economy is that many of these organizations achieve their goals with people relatively young, inexperienced in both life and work life, low paid, uncommitted to a lifelong career in the organization, and generally more challenging to manage.  And yet, the benchmark organizations hire and manage these people very well.

A good example of effectively building relationships with customers is seen in the following incident.  A young family was visiting Disney’s Magic Kingdom.  They had saved for some time to come to Orlando from their home in the Midwest and had planned carefully to make this trip truly memorable.  They were spending the week in the Grand Floridian, the most expensive resort on the property, and were enjoying their vacation fully.  One day toward the end of their visit, when they were on the Haunted Mansion ride, the little boy in the family lost his Mickey ears hat.  At the exit, the father displayed his obviously distraught son and asked the ride operator to look through the cars to see if the ears might be there.  This wasn't just a hat to this little boy; this was his prized possession, purchased on the first day of the visit and worn faithfully ever since.  The ride operator looked, but the ears were nowhere to be found.  The operator watched as hope died in the little boy's face and the father's concern grew.  Seizing the moment, the ride operator went across the walkway to a souvenir stand, took two Mickey hats, put one on dad's head and one, triumphantly, on the boy's.  Management got a letter of thanks from the family a few weeks later.  The family spent a lot of time and money on famous rides and attractions at the theme parks, but this one simple act by a truly committed employee made the trip memorable for this family.

A second legendary example of customer problem solving by a well-trained and committed employee is seen in this story from “Service Breakthroughs” about a bellman at a Sheraton Hotel.[1] When confronted with an unusual problem, the bellman solved it with both outstanding interpersonal skills and an ingenious solution.  A departing guest had locked his car keys in his trunk while checking out.  The car was parked in the middle of the driveway that handled all the arriving and departing traffic and, if not immediately moved, would bring the entire check-in/check-out process to a halt.  The bellman called for a floor jack that he had had the foresight to store away nearby, jacked the car up, and rolled it away from the middle of the driveway.  He informed the guest that he had called for a locksmith, estimated when the locksmith would arrive, and promised to keep the guest informed as events unfolded.  The traffic problem was solved, the guest's car problem was promptly addressed, and the guest was spared the embarrassment of being the cause of everyone else's delay.  Teaching such resourcefulness to new employees is difficult, but every employee in the area learned from the bellman's example what a Sheraton employee is expected to do to solve a guest's problem.  The bellman had the big picture, knew that a creative solution was expected of him, and he delivered one.

Legendary service businesses have long been aware of the need to make jobs fair and interesting.  If the goal is to not only produce an experience but to do so while building a positive relationship with the customer and being flexible enough to handle the inevitable problems that arise, people need to be managed from the neck up as well as the neck down.  In an increasingly tight labor market for top talent that all organizations face, the successful firms are those that not only hire and train for the job requirements but also seek employees with a positive attitude.  All organizations have customers, whether they are internal or external, and the organizations that deliver an excellent, seamless experience are those who understand the importance of having everyone not only doing their job tasks but also doing the other things that make a difference in creating an excellent customer experience.[2]

 

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To discuss how HSM can help your organization better understand what your customers want, call Jim Hendrix, Vice President of Research and Economics, at 800-776-8078, ext. 310

[1] Heskett, J. L., Sasser, W. E. Jr. and Hart, C.W. 1990. Service Breakthroughs: Changing the Rules of the Game, (New York: Three Free Press), p. 109.

[2] Berry, Leonard L. 1999. Discovering the Soul of Service: The Nine Drivers of Sustainable Business Success, (New York: The Free Press), p. 45.

*Dr. Brown holds an endowed chair, is a business professor, and serves as executive director of the Center for Services Leadership at Arizona State University’s W.P. Carey School of Business. He is also a co-founder and senior advisor of The HSM Group. These lessons are updates from the article “Delivering Excellent Service” co-authored by Dr. Brown, Robert C. Ford, and Cherrill P. Heaton in the California Management Review.

Big Lessons From Legendary Service Providers
Lesson 1  |  Lesson 2  |  Lesson 3  |  Lesson 4  |  Lesson 5

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