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.

November 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.  This is the last in the series of big lessons gleaned from legendary service leaders like Disney, Southwest Airlines, and Marriott.  We have developed a brief survey to help us know what topics you would like to see from HSM in the future.

Lesson 5: Empower employees to make it right for customers.

If the right employees are hired, the organization can and should empower them to find and fix problems, on the spot if possible, and in fact to do anything else necessary to provide customer satisfaction.  When you work in an industry that can't create a rework pile on which to store defects before they leave the plant, and can't catch errors before the customer ever sees them, then you can see the importance of employee empowerment.  If the customer experience isn't right, then the customer-contact person should be empowered to fix problems and make it right if the customer is to leave satisfied.

People on the front line are often the first to notice or be informed of system faults or failures.  A British Airways baggage handler at London's Heathrow Airport noticed that some passengers waiting for their luggage at the carousel were asking him a strange question: How can I get a yellow and black tag for my bags? These passengers had noticed that bags with those tags arrived first, so they wanted the special tags.  The baggage handler realized that because the passengers asking him the question were the first ones to arrive at the carousel, they had to be first-class passengers, who deplaned first.  And yet these highly profitable customers had to wait 20 minutes on average for their bags, while some other passengers were getting "first-class" luggage service.

The baggage handler's inquiries revealed that the stand-by passengers were getting their bags first.  Since they were the last to board, their luggage was loaded last and unloaded first.  The baggage handler made a simple suggestion: load first-class luggage last.  Although the idea was simple and had obvious merit, implementing it meant that British Airways had to change its luggage-handling procedures in airports all over the world.  The average time of getting first-class luggage from plane to carousel dropped from 20 minutes to less than 10 worldwide, and less than seven minutes on some routes.  A dedicated, motivated, observant employee saw a way to improve the system and got it done.  He had no idea he was going to receive a service award of $18,000 and two free round-trip tickets to the United States.

The service management lesson learned is that problems occur, customers want them fixed now, no manager can be everywhere at once to fix them or authorize solutions to them, so those closest to the problem site – the front-line customer-contact employees – must be empowered to fix problems if customers are to receive the quality of service they expect.  The Ritz-Carlton hotels teach everyone that if they see or are presented with a problem, they own it until it’s solved.  What a refreshing change this would be for the customers of other industries who talk about their frustration with finding no one to help them, no one to complain to when they have problems, and no quick and easy solutions to errors that they didn’t cause.  As a matter of fact, the demise of several e-tailers (online retailer) can be attributed to inadequately trained front-line employees.  Organizations in most industries could dramatically improve their customer relationships and retention by empowering their employees to fix problems within stated parameters without seeking approval from a difficult-to-find manager.  The research is clear in services that the best way to get customers to like what you do and come back for more is to fix the inevitable failures in the experience quickly and fairly.[1] Only empowered employees who recognize the importance of quick solutions and who are empowered to provide them can achieve this end.

 

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[1] Tax, Stephen and Stephen W. Brown, “Recovering and Learning From Service Failures,” Sloan Management Review, Vol. 40, No. 1 (Fall 1998), 75-88.

Brown, Stephen W. “Practicing Best-in-Class Service Recovery,” Marketing Management, Spring 2000, 10-11.
 

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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

*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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