SUCCESS SERIES Curtis McNeill 512-335-6601
by Ken Blanchard
Create Devoted Customers Cultivate Customer Loyalty from the Bottom Up C
ustomer loyalty is a powerful driver of organizational success, and losing a customer is highly detrimental to a company’s bottom line. It can cost six to seven times more to gain a new customer than to retain an existing one. One of best ways that leaders and frontline employees can improve their organization’s customer loyalty numbers is by looking at the customer service “moments of truth” that occur daily within their work teams and departments. “Moments of truth” was first coined by Jan Carlzon when he set out to create a customer-focused culture as president of the Scandinavian Airlines System (SAS). For Jan Carlzon, a “moment of truth” was “Any time a customer comes in contact with anyone in our organization in a way that
they can get an impression. How do we answer the phone? How do we check people in? How do we greet them on our planes? How do we interact with them during flights? How do we handle baggage claim? What happens when a problem occurs?” For Carlzon and other great service providers like him, “moments of truth” included every detail — even coffee stains. For example, former People Express Airlines chairman Donald Burr contended that if the flip-down trays were dirty, customers would assume that the plane’s engines were not well maintained either. Both of these leaders knew that everyone in their organizations — in each and every role — contributed to a customer’s perception of the overall quality of the service that the airline was providing.
SUCCESS The Leader’s Role How can you encourage and empower people to serve customers at a high level and realize that they can — and do — make a difference? Begin by focusing everybody’s energy on making customers the first priority. Jan Carlzon and his company, SAS, serve as a good example of what an organization committed to providing legendary service can do. Carlzon sought to make SAS the top business airline in Europe. To achieve this, he focused on clearly establishing and communicating the vision, values, and direction he wanted everyone in the company to have. In this sense, he established expectations and then used the “traditional” organizational pyramid to communicate that information to all employees in the company.
Invert the Traditional Pyramid When it came time to implementing the vision, however, President Carlzon turned the pyramid upside down so that the employees were on the top and management was on the bottom. By inverting the pyramid, top management became responsible for facilitating support and providing encouragement for the employees who were serving and working for the customer. The traditional pyramid hierarchy must be turned upside down so that the frontline people who are closest to the customers, are at the top. In this way the frontline people can be responsible — able to respond to their customers. In this scenario, the leaders serve the frontline people and are responsive to their frontline people’s needs.
Take Care of the People Who Take Care of Your Customers If the leaders in an organization do not respond to the needs and desires of their people, these employees will not take good care of their customers. But when the frontline customer-contact people are treated as responsible owners of the company’s customer service vision, they can serve customers at a high level.
The experience of a large U.S. bank The Ken Blanchard Companies recently partnered with exemplifies this concept. In working to maintain employee engagement, build customer loyalty, and execute revenue growth strategies, leadership at the firm decided to focus on the two key assets — their employees and their customers. For the bank’s leadership this meant committing to a leadership and coaching model that “promoted two-way dialogue to enhance the relationship between leader and employee.” Special emphasis was placed on Partnering for Performance, which opens up communication between managers and direct reports by increasing the quality and frequency of conversations. Leaders adopted the philosophy that leadership is not something you do to people, but something you do with people. The result? Managerial skills effectiveness ratings improved from 63% before training to 99% after training. Leaders began to realize that employees who had their needs met more effectively responded by serving customers at a higher level. And earnings increased across the board: a 50% increase in small business loans; 44% increase in commercial deposits; 25% increase in consumer deposits; 21% increase in consumer loans; and 21% increase in net income.
Ken Blanchard is the author of numerous books including “The One Minute Manager” and his latest, “The One Minute Entrepreneur.” Learn more at www. kenblanchard.com.
Take Care Or Someone Else Will If you don’t take care of your customers today, somebody else is ready, willing, and able to do it. The only thing your competition can’t steal from you is the relationship your people have with your customers. Organizations that have excited and passionate people are more likely to provide great customer service. In order to create a passionate, customer-focused workforce, organizations must treat their people well so they, in turn, will treat the customer well. Empowering people and allowing them to act as owners of the customer service experience is an essential step for leaders. When leaders take care of their customers and create a motivating environment for their people, profits and long-term financial strength follow. ■
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