The Leadership Experience
Top-flight companies take charge of customer relationships
By Stephen W. Brown

This column is the third in a series of three in which we are exploring the best practices of truly excellent service companies like Disney, Southwest Airlines, Marriott, and Harley-Davidson Motor Co. The first article, which appeared in the January/February 2003 issue, focused on "The Customer Experience," and the second, which appeared in the March/April 2003 issue, focused on "The Employee Experience."

These best practices represent the business fundamentals of firms that are masterful at exceeding customer expectations. Deceptively simple yet highly effective for attracting and retaining customers, these practices can be applied to both service and non-service firms alike. The columns are derived in part from the recent article, "Delivering Excellent Service: Lessons From the Best Firms," by Robert Ford, Cherrill Heaton, and Stephen Brown, which appeared in the Fall 2001 issue of California Management Review.

In order to build an organization that carefully considers the customer's experience and builds a strong employee base to shape that experience, benchmark service firms have learned to think differently about leadership, strategy, and policymaking. These top-flight companies provide us with several lessons on how to give a company the direction it needs to stay customer focused.

They base decisions on what the customer wants and expects. Services leaders have long known that if their customers don't like the experience provided, value it, and think it meets their needs and expectations, they won't come back. They know how much value a customer can return to the organization over repeated visits. Leading services organizations also know that if the customer doesn't like the experience, it doesn't matter what the people in engineering, production, quality assurance, or anywhere else in the organization say or believe. It all starts with the customer, and it's the customer, not the organization, who defines quality and value.

Thinking in terms of the entire customer experience is best exemplified by Disney's term "guestology." Guestology turns traditional management thinking on its head. Instead of focusing on organizational design, managerial hierarchy, and production systems to maximize organizational efficiency, it forces the firm to look systematically at the customer experience from the customer's point of view. The goal is to create and sustain an enterprise that can respond to the customer's needs and expectations and concurrently make a profit. The Magic Kingdom systematically searches for key drivers of customer satisfaction-such as cleanliness-and develops these drivers into core competencies that their customers reward with repeat business.

They get managers to lead from the front, not from the top. One of the more important lessons learned by the benchmark service organizations is the value of a visible leader. As discussed earlier, leaders help define the organizational culture by what they do or don't do, say or don't say, and reward or don't reward. They know they are always on stage for organization members and customers alike. Chair of the Board at Southwest Airlines, Herb Kelleher, has been a premier example of quite literally walking the walk through airports, planes, and service areas to show employees his concern for the quality of each customer's experience. Even today this tradition lives on as all Southwest managers are expected to spend time in customer-contact areas, both observing and working in customer-service jobs. These actions send a strong message to all employees that everyone is responsible for maintaining the high quality of the Southwest experience.

Bill Marriott Jr. provides another good example of how a leader leads from the front. He is a constant teacher, preacher, and reinforcer of the Marriott values of customer service. He stays visible. He flies many miles every year to visit his many operations and to carry the Marriott message visibly and personally to as many people as he can. He stops by hotels unannounced and chats with everyone he sees. His intense interest in Marriott employees and in the detail of hotel operations is well-known throughout the organization, and he's a living symbol of the Marriott commitment to service quality.
Too often in traditional hierarchical organizations, the people who make the product never see the people "upstairs" who manage. They can't feel the passion of their leaders, understand their commitment to quality, or see their dreams for excellence because they are not visible. Unlike managers in the benchmark service organizations, these traditional top managers don't take the time to walk around the store or shop floor to make visible to everyone what they believe in and what they are concerned about.

They avoid failing your customers twice. One area that clearly distinguishes the benchmark service organizations is their emphasis on the cost of failure. Increasingly, firms are recognizing the importance of repeat customers to organizational success. If the local hotel disappoints a family, they will not return and, perhaps worse, also are likely to tell their friends about their unhappy experience. For a branded hotel like Marriott, retelling one bad experience will jeopardize all other properties wearing the same brand. The customer who remembers a bad room at the Marriott in Phoenix may well avoid a Marriott in Chicago and may recommend that acquaintances do the same. Because of the gap between some organizations and their ultimate customers, they have not been as concerned about the customer's buying experience as the benchmark organizations have.

The Disney Co., Marriott, Harley-Davidson, and Southwest Airlines have spent considerable effort discovering the price they pay when a customer leaves unhappy. Because the price is so high, their leaders do whatever they can to make sure each customer's expectations are met or exceeded. They survey their customers constantly, use focus groups and mystery shoppers to evaluate the quality of the customer experience, and train their employees to solicit both verbal and nonverbal feedback regarding customer satisfaction levels and assessment of quality. These leaders know that a happy customer typically tells five or six other potential customers about a happy experience, and an unhappy customer tells 10 to 15 others. They also know that in this era of email and proliferating Web sites, truly unhappy customers can and will share their unhappiness with countless potential customers all over the world. So organizations must work hard to identify the customer's problems and quickly find satisfactory solutions for them.

This lesson has become increasingly important in all industries. As organizations become more aware of the cost of an angry or dissatisfied customer who never comes back to repurchase a new car, groceries, or a computer, they are spending more time and energy listening to their customers and discovering their dissatisfactions. The impact that an angry customer can have on a manufacturing organization like Ford is every bit as great as the impact of anger on organizations like Marriott or Disney. An angry customer switching loyalty from Ford to Mercedes could cost the corporation hundreds of thousands of dollars over the person's life. Other industries are learning that failing the customer once by producing a faulty product is a serious enough concern. But not fixing the problem is even worse as it can lead to zealots in the marketplace telling everybody they know to avoid that failed product and everything else the company makes. For more information on service failure and how to recover see "Practicing Best in Class Service Recovery" in the Summer 2000 issue of this magazine.

I hope these lessons serve as a reminder that providing an excellent service experience is a tough job and deserves the full attention of all employees from top management to the guest contact worker. The benchmark organizations have one overarching lesson to teach us: if you do these things, you will succeed.

About the Author
Stephen W. Brown holds the Edward M. Carson Chair in Services Marketing and is a professor of Marketing at Arizona State University and director of ASU's Center for Services Leadership. Steve is also senior advisor and founding partner of the health care consulting and research firm, The HSM Group, Ltd. For more information on The HSM group go to www.hsmgroup.com. He may be reached at stephen.brown@asu.edu. For more information on ASU's Center for Services Leadership visit http://www.cob.asu.edu/csl.

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