Great Service: The Ultimate Competitive Advantage

Dec. 21, 2004
Loyalty of customers worth the cost

How long has it been since you've had a great service experience? Most times when I ask this, the response is a long silence. Great service experiences are rare. When they do occur, we resolve to tell others about them and to use that organization's or individual's service forever. Price is often not a factor. Have you ever had car trouble or leaky plumbing? If you found a mechanic or a plumber who provided rapid, high-quality, dependable service, I'll bet you didn't squabble about price. When service is really terrific, the price is often a minor issue. Somehow, we learn to associate a reliability in service with fairness in other parts of the value equation. Think about what makes a great service provider: rapid delivery, courteous treatment, information that's easy to obtain and use. Do the names FedEx and UPS come to mind? These two companies have built multi-billion dollar businesses on great service. Of course, they must also be operationally sound and innovate, but service is the name of their game. Many have written about the power of a service advantage, but there is a catch. Great service can be costly up front. Low cost is usually the first competitive weapon of choice, followed by innovation. Only then does service make the competitive cut. Perhaps that is inevitable; perhaps not. Making service a competitive advantage requires cultural, structural, and process changes in a business. The place to start is with the culture. People in a business seldom treat customers much better than they are treated. If workers feel valued and appreciated, they pass it on. All the banners and programs in the world will not make an under-appreciated, poorly supported group of employees take care of customers well. On the other hand, employees who are appreciated, supported and treated with dignity and respect will usually behave the same way with customers, whether internal or external. What are some of the fundamentals of launching a superior service initiative?

  • Be sure you mean it when you promote "great" service. Nothing will sink service efforts quicker than lack of commitment.
  • Begin creating a "service culture" that understands and believes that satisfying customers is not enough--delighting them is the goal.
  • Make sure the infrastructure is there. Busy phone lines and poor information will make customer-service employees seem defensive and unprepared.
  • Involve customer-service employees in the planning and ask for their input on how various problems might be handled best. They are on the front line and know more about the problems than any manager could. Develop a menu of "how tos" and empower workers to go the extra mile (economically) to delight an unhappy customer
. Finally, aggressively develop the service awareness in the entire organization by role-modeling it. Ultimately you should be able to obtain a price premium for such awareness, or at least create a competitive edge over less-service-conscious competitors. If all this doesn't convince you of the power of service, think about the last time you had a problem, and your supplier took great care of you. I bet you are still doing business with them. Great service recovery after a problem has been proved to be one of the best customer-building opportunities in business. But don't take my word for it; talk to your friends and associates about good and bad service experiences they have encountered as consumers. The value of a "great service" initiative will be evident in what they tell you. John Mariotti, a former manufacturing CEO, is president of The Enterprise Group. He lives in Knoxville, Tenn.

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