Excellent Customer Service and Service Culture are Differentiators for Small and Medium Businesses

Article by Paul Godfrey, CPI Media Group

Service is simply the most important differentiator your SME has. It’s the DNA that permeates everything you do – and it can either make your business the unmissable provider of choice, or a company that’s perpetually struggling to retain customers. Is your business a service champion, rich with sparkle, flair and the resonance of repeat orders? Or one of thousands that simply does the basics and hopes to get by? If it’s the latter, we can help – SME advisor had an exclusive meeting with Ron Kaufman, the world’s premier thought-leader, educator and motivator for uplifting customer service and building service cultures. Here are some of his thoughts and recommendations for building an unforgettable service culture.

One of the difficulties that almost every business faces when it tries to improve customer service is the fact that the whole concept of ‘service’ seems to be so arbitrary and relative. It’s all a bit ‘fuzzy’ and inconsistent –  linked to all kinds of qualitative experiences that don’t seem to add up to replicable entries on the balance sheet. Yet go for an expensive meal and find that it’s served cold, or wait for an eternity (with no explanations) for a flight that’s been re-routed and the whole issue of customer service is far from fuzzy or intangible.

So how can a business implement effective customer service in a way that supercharges loyalty and repeat purchases? Especially given the fact that what constitutes good service in one environment might well be construed as second-rate and shoddy in another: for example, what passes muster in a fast food outlet is very unlikely to stand up in a five-star hotel. It’s no accident that it is this very contrast (the need to compare ‘apples and oranges’) which is the starting point for Ron Kaufman’s view that service is actually underpinned by very specific actions and decisions, which can be viewed quite objectively and follow a clear structure and working template.

For example, Ron says that: “Service depends on a partnership: we must understand that it not only takes place in relation to someone else, but the interaction between these elements involves certain expectations. For instance, the customer in MacDonald’s will have a certain set of expectations that it will be mission of the brand to meet and exceed; but these will indeed by very different from those of a guest entering, eg, the Mark Hopkins Hotel and expecting a very personalised, ‘boutique’ style of service. Understanding that the service expectation and delivery will vary from environment to environment is very important.

“So how can we actually define what service is? Again, the clue here is that it always involves a third party. So I define service as – Taking action to create value for someone else.

“Understanding this is the first building block in developing your own outstanding service and seeing it as a strategy you can use to grow the business. As our ability to understand what good service actually consists of has grown, we’ve seen our service aspirations become more and more important. So, for example, we’ve seen the following transition –

Customer satisfaction > Customer delight > Customer loyalty > Customer partnership

“Note that again here we see the ‘partnership’ angle as fundamental to unlocking the benefits of what lies at the core of good customer service. The really great service-driven organisations direct all their efforts towards seeing the business itself as a partnership – and that fact underlies all their advertising and branding. This is the case with Singapore Airlines: everyone knows that you will have terrific service if you travel with them – it’s known globally that service is their ‘thing’. This in itself has great knock-on value for the organization in terms of how it works internally, too: while the same airline doesn’t pay more than its competitors, it’s seen regionally as the place to work – because if you spend time there, you’ll learn exactly how to provide great service, and you’ll take that skill with you for a lifetime. So the service values of the business actually mean that you can boost staff loyalty without spending more on the bottom line.”

Identifying what you need to do

Ron Kaufman’s approach is fundamentally about perceiving service as a science – a science that can be learnt and applied by every organisation that aspires to create value for someone else. When it comes to an organization wanting to improve its service culture, the role of the business’ leaders is paramount.

True leaders in any areas of life don’t just tell people what to do – they live the example. This is never truer than in the domain of customer service where CEOs, MDs and CFOs (to name just a few examples) have to exemplify the change paradigm and empower their workforce to want to do the same – embedding the quality remit until it’s an organic and fundamental part of how the organization functions. The question is, how can leaders – of organizations of any size or shape – go about making that change in practical terms? What is the actual sequence of steps that they need to follow? Ron Kaufman again provides a working, generic paradigm for this process: it’s something he calls ‘The Seven Rules of Service Leadership’. They work as follows:

Rule One: Declare service a top priority

Declaring service a top priority means senior leaders understand that focusing on service improvement leads to commercial results. Profit is the applause you receive for serving your customers well. When middle managers declare service a top priority, the message to everyone is clear: procedures and budgets surely count, but creating value for others counts the most. When frontline employees declare service their top priority and delighting others becomes their goal, they uplift customer satisfaction – and job satisfaction too.

Rule Two: Be a great role model

Leaders are the people who others choose to follow, not those who simply tell other people what to do. By their own example, leaders inspire others to want to do what they do, too.

If you and the C-level team are fully committed to creating and implementing a service culture – and then truly walk the talk – this is the best way to ensure that the rest of the organisation will also make service the absolute top priority. They will do so because they see service as being part of the DNA of what committed employees manifest across every aspect of their career with the business.

Rule Three: Promote a common service language

It’s no good trying to spread your message if everyone has a different out-take on what that message is, or a different set of terms for defining what service is.

Everyone talks about better service from a perspective that makes perfect sense to him or her. What’s missing is a common language to enable listening and understanding, clear distinctions to understand what other people want and value. To build a culture of uplifting service throughout an organization, leaders must promote a Common Service Language everyone can apply.

Rule Four: Measure what really matters

Many people get confused when it comes to measuring service – understandable, because there are so many different aspects that it’s possible to measure. Elements like complaints, compliments, expectations, levels of engagement, relative importance, recent improvements, performance to standards and customer satisfaction are just a few of the factors that come to mind.

It’s one of the roles of the service leader to cut through this confusion to measure what really matters. Remember the definition: Service is taking action to create value for someone else. Then, it follows that the two most important questions to ask are –

  • Are your actions creating value?
  • Are you taking enough new actions?

The second point is so important because compliments happen when someone has an idea to serve someone else better and then takes action to make it real. But this will only happen when there is a continual emphasis on new thinking and new learning about customers, service and value. This new learning about service leads to new ideas for giving better service to others, which in turn leads to new actions.

If you measure according to the true benchmarks of creating value and applying new actions, you will have the security of knowing that you are measuring using the criteria most relevant to the essence of service values.

Rule Five: Empower your team

Empowerment is a buzzword in business, and many leaders and employees seem to fear it. What they really fear is someone who is empowered masking a bad decision. If a leader is not confident in her people, she doesn’t want to empower them with greater authority or a larger budget. And if an employee is not confident in his abilities and decisions, he often does not want the responsibility of being empowered.

In both cases what’s missing is not empowerment, but the coaching, mentoring and encouraging that must go with it. If you knew your people would make good decisions you would be glad to give them the authority to do so. And when your people feel confident they can make good decisions, they will be eager to have this freedom. Empowering others cannot and should not be decoupled from the responsibility to properly enable those you empower.

Rule Six: Remove the roadblocks to better service

Most frontline staff members are taught to follow policies and procedures. Often they are hesitant to ‘break the rules’. Yet some rules should be broken, changed, or at least seriously bent from time to time. What roadblocks to better service lurk inside your organization? What gets in your people’s way? What slows them down? What prevents them from taking better care of your customers? What stops them from helping their colleagues? Service leaders ask these questions and remove the roadblocks they uncover.

Rule Seven: Sustain focus and enthusiasm

It’s not difficult to declare service a top priority. What’s challenging is keeping service top of mind when other issues clamour for attention. It’s not hard to use a new language for better service; what’s hard is using that language day after day until it becomes a habit. It may not be hard to track new service ideas and actions, but it can be difficult to keep them top of mind in the thinking of your team.

Sustaining focus and enthusiasm is critical – in business, in life and in service. This is not something leaders should view as a soft and therefore less important rule. Nor should it be entirely delegated to others. In fact, overlooking Rule Seven could be the mistake that derails all your plans and programmes. How many companies suffer after starting down a great path, but ultimately view the endeavor as a failure, simply because they couldn’t sustain it?

The local dimension: a need for speed?

One of the key factors in Ron Kaufman’s approach to service culture is that literally any business can set about building its own model of service excellence, using the generic, modular building blocks and understanding the key essentials of what needs to be done in a way that’s relevant to the business and the customer alike (ie, keeping an awareness of the ‘partnership’ angle). Typically in the GCC, it’s the larger businesses – hotels belonging to international chains are a classic example – who have wholeheartedly pursued the belief in customer service. For instance, the greater availability of staffing in the hospitality sector in the GCC means that most hotels can work to a staff/guest ratio about 30 per cent higher than in Europe or the USA. But what about SMEs?

The reality is that when SME Advisor organised the ADCB Stars of Business Awards in November 2013, the entry form – which was completed for 4,974 nominations – specifically requested details about any ‘recent customer service initiatives undertaken’. While only 5 per cent of all applicants bothered to complete this section, of these, all except a handful of entries listed discounts in price as their customer service USPs. Indeed, it was a hallmark of most of the winners (across all 26 business categories) that they actually has sophisticated service strategies, quite unlike the vast majority of applicants. It is very much the case that this emphasis on price remains the one and only factor by which SMEs in many sectors – especially, for example, financial services – define their approach to customer service. But this in itself, as has been proven time and time again, is no guarantee of loyalty, since there can only ever be one ‘cheapest’ in market. Moreover, that price saving is so often given as a result of a reduction in the level of customer service (which, it is argued, makes the reduced price possible!).

Surely, then, it’s time for the region’s SMEs to take a long, hard look at Ron Kaufman’s definition of what service is actually about. Namely, it is – Taking action to create value for someone else.