The Customer Rules: The 14 Indispensible, Irrefutable, and Indisputable Qualities of the Greatest Service Companies in the World (BUSINESS BOOKS) - Hardcover

BEEMER

Hardcover

ISBN 10: 0071603654 ISBN 13: 9780071603652

Publisher: McGraw Hill, 2008

Synopsis

Whether you run your own company or work for a large corporation, establishing customer loyalty is a prerequisite for business growth. In The Customer Rules, C. Britt Beemer, a leading consumer research and marketing consultant, and bestselling business author Robert Shook offer practical advice on how to build a robust company culture based on the concept of unsurpassed customer-service designed to increase your market share.

A combination of extensive market research unprecedented in scope, as well as close studies of fourteen companies that excel in the area of customer service, The Customer Rules distills profitable lessons on how to achieve strong customer loyalty. Referencing specific research findings, Beemer and Shook examine the obstacles that too often distract a company's focus from its most important task--providing preeminent service and creating a unique customer experience. The authors then supply fourteen workable solutions to ensure the return of customers time and time again, including:

• Instill the importance of customer service in every employee
• Use a “small-town” approach to meeting customers' needs no matter how big your company is
• Develop a unique identity your customers will seek out
• Maintain a focus on the customer before, during, and after the sale

Success in retail, service, manufacturing, or any other business always boils down to the customer experience. Beemer and Shook use in-depth interviews with high-level managers from such companies as Chubb, NetJets, Edward Jones, Lexus, Johnson & Johnson, and Four Seasons Hotels to illustrate the best ways for creating exceptional customer service. The Customer Rules gives you the tools you'll need to become the undisputed leader in your industry.

About this title

About the Author

Robert Shook is the author of 43 books, including bestsellers such as Mary Kay, Mary Kay on People Management, and The IBM Way. He is also the author of McGraw-Hill's Greatest Sales Stories Ever Told and I'll Get Back to You.

Excerpt. © Reprinted by permission. All rights reserved.

THE CUSTOMER RULES

The 14 Indispensable, Irrefutable, and Indisputable Qualities of the Greatest Service Companies in the WorldBy C. BRITT BEEMER ROBERT L. SHOOK

The McGraw-Hill Companies, Inc.

Copyright © 2009 Ram Charan
All right reserved.
ISBN: 978-0-07-160365-2

Contents

Chapter One

Everyone's Job

It's a simple premise. Everyone in the workplace has the same job—serving the customer. The sad thing is that many employees, and even their managers, don't understand it. Of course, if managers don't get it, their subordinates probably won't.

America's Research Group (ARG) conducted a survey in 2008 that asked, "Have you ever considered the notion that everyone has a job at your company that involves the customer?" We find it astonishing that four out of ten working Americans think that neither their nor their coworkers' jobs have anything to do with customers.

Sticking to the same theme, the survey dug deeper. Employees were asked, "Does your supervisor talk to you about how your personal efforts affect the customer?" Of those who responded, 51.5% answered "No." This is a sad commentary on the management of the American workforce.

To get more employees thinking about customers during their workday, it would help if management arranged some conversations between the two. Hearing customers' needs and problems firsthand might allow employees to rethink their jobs. But mostly, this is not happening. In fact, 46% said that they never talked to customers.

Making the Transition

Typically a business owner starts out caring for customers. Running a one-person operation, the owner is devoted to making sales calls, realizing that the best use of his or her time is being in front of customers. This is what generates revenues. Yes, the owner sweeps the floor, takes out the trash, and does the bookkeeping and inventorying—and does these chores in the evenings and on weekends when he or she can't call on customers. Hard-driven entrepreneurs don't need to take Marketing 101 to understand that the customer comes first.

When businesses grow, the owners must assume managerial responsibilities that make demands of their time and take them away from their customers. Some customers feel neglected. They complain that they miss the personal attention they used to receive. It is often difficult for a small business owner to make the transition to run a larger organization. It requires different skills. Hence, the single-minded focus on the customer, once the owner's strong suit, becomes less of a customer-winning advantage.

Often the newly hired staff has little or no contact with customers. While the business owner and sales force continue to make sales calls, others in the company are isolated from the customer. They have never been taught that their work too is customer related.

The owners who are able to make a successful transition from small to large are those who emphasize to their employees that the customer is the reason for the company's existence. These entrepreneurs have learned that taking exceptional care of the customer generates repeat orders. And most satisfied customers are the best source of referrals that generate still more business. Spending a good amount of their time in the field, these owners maintain firsthand knowledge of their customers' whims and needs. Their dedication to serving customers can become deeply ingrained in their company's culture, spreading into the consciousness and working habits of its employees. In a well-managed company, no matter its size, the sole proprietor's job, catering to the customers, becomes everyone's job.

To see how this works firsthand, visit a Four Seasons hotel and ask an employee where the coffee shop is. Ask a housekeeper, bellhop, or even a maintenance worker who's on a ladder changing a lightbulb. If the maintenance worker is asked, it's likely that he'll climb down and give you a friendly greeting. But he will not give you directions. He'll do better. He'll escort you to the coffee shop. "Just come with me," he'll politely say.

"Why does he do it?" you may ask. "Isn't his job to do maintenance and fix broken things?" Of course that's his job. But like all other Four Seasons employees, he knows that serving customers is his main job.

In many hotels, it's uncommon that a room attendant even says "hello" to a guest. That's because she's been trained to clean rooms. That's her job. A Four Seasons room attendant knows better. She's been trained to know that her job is to serve customers, and this obligation includes extending hospitality in the form of a warm greeting to guests.

Serving Others

The people at the companies we visited are driven by a desire to serve others. These women and men go to work every day with a desire to do good for their customers, employees, and communities. So where does such an attitude start? Our research has shown that the founder first aspired to these lofty goals.

David Steward is the chairman of World Wide Technology (WWT), a company he founded in 1990 with an initial investment of $250,000. Headquartered in St. Louis, WWT is now the largest African American–owned business in the United States, with sales in excess of $2.4 billion. A man of faith, Steward set out to run a company based on teachings from the Bible. He says that, like Jesus, his mission is to serve others.

"My serving starts with the 1,200-plus people associated with my company," Steward explains. "This means I must place the needs of our employees above my own. I am here to help them succeed. Consequently, a high percentage of my time and energy is spent coaching, advising, and supporting our people."

Steward disagrees with managers who believe their chiefdom entitles them to be served by subordinates. "They think that because they've worked their way up and have a corner office, they've earned the right to sit back and savor the perks they believe come with the job," he points out. 'I've paid the price,' they say. 'Now it's my turn to get what's due me.' They think their role in management is to be served. It's the other way around. It's a sign of trouble when a company has senior managers who expect to be placed on a pedestal while obedient subordinates scramble to serve them. Good leaders understand that their role is to serve their people. Serving others is not only the best way to get to the top, it's the best way to stay there. Once you've been promoted up the corporate ladder, your avenues to serve others are multiplied.

"My number one priority as chairman is to serve my people," Steward maintains. "If I am able to do this, it will permeate the organization and carry over to the customer. We believe that when this happens, our company will succeed."

World Wide Technology employees are reminded of their role in serving customers every time they receive a paycheck. On the check, the message is inscribed, "A satisfied customer made this check possible."

Harrah's, founded in Reno in 1936 by Bill Harrah, is one of the oldest casinos in Nevada. Today, it is known as Caesars Entertainment and is the largest gaming company in the world. Other well-known casinos that were once landmarks such as the Desert Inn, the Dunes, El Rancho, and the Sands are long gone. Harrah's survival and success are due in part to the high regard its people have for the customer. Its customer-focused policies trace back to Harrah himself, a man who, unlike David Steward, spent little time in church. Still, he too cared about treating customers well. Harrah is once known to have said to one of his senior officers, "I want you to understand this. The bottom line is the most important thing to most corporations. I still own 70% of this company, and the bottom line isn't that important to me. I do want shareholders to appreciate and join in our profits, but the three things I want done are: I want the customer treated properly; I want the employees treated properly (if we do that, we won't have to worry about the unions); and I want the place maintained and clean at all times. If we make money after that, fine. That's my philosophy."

Starting with his early days, Harrah put a system in place whereby each employee was rated especially for the attention he or she gave to pleasing the customer but without hurting the business. A perfectionist, Harrah constantly emphasized paying attention to the details. It was a big deal if a lightbulb was out; you had to change it. Adhesive tape was forbidden in public areas at Harrah's—no memos, licenses, or notes could be taped anywhere. "He was a nut for cleanliness," one long-time employee said. "You couldn't have an ashtray on a table for five or ten minutes before somebody came by, emptied it, washed it, and put it back. You couldn't have cigarette butts or stuff like that on the floor for a few minutes before some guy came around and swept it up. The keno girls and all the girls that wore the short skirts, they'd better have their seams straight on their stockings or they were in trouble. When you went to work, you wore black slacks, a white shirt, and a tie, and your pants had to be pressed. You walked on the floor and you'd better be in good shape or you weren't going to be on the floor for very long. You were going to be sent home."

When he built his first casino-hotel, the Lake Tahoe property, it was the world's first hotel with two bathrooms in every room. "I want to have two bathrooms so that when a gentleman and his wife are in the room, he can use one bathroom and get ready for dinner, and she can use her bathroom." Where did he get the idea? He said that it was what he would have personally wanted if he were a guest. Harrah died in 1978, but his emphasis on taking superlative care of his customers became his legacy. Thirty years after his death, his insistence on great customer service is still mandatory in the casinos that bear his name.

Put It in the Job Description

Don't keep it a secret. Spell out in every employee's job description how the job relates to the customer. This way, starting on day one, every employee knows that serving the customer is the company's top priority.

To our dismay, however, a survey conducted by ARG revealed that only 59.2% of all working Americans have a written job description. And yes, if a job description isn't in writing, it's not worth the paper it's written on! This research tells us that American industry is allowing 40% of its workforce to work as free agents.

At those companies where management has communicated to the workforce that everyone's job is customer related, there is a vast difference in the level of service. However, it's not the employees' fault when they don't know their job is to serve customers if nobody has ever told them that it is their first priority. It cannot be assumed that someone in the accounting or legal department would consider his or her job to be to take care of customers. It's not something taught in an accounting or law class. Unless it's specifically spelled out, people think that it's the marketing and salespeople's job—they are the ones who are on the firing line and in direct contact with customers. So in order to make it perfectly clear, it must be put in the job description. Let everyone see it in writing—at his or her time of employment.

Guiding Principles and Beliefs

Great companies have certain guiding principles and beliefs, or a mission statement that plays an everyday role in how people conduct their daily business. The best we've come across is Johnson & Johnson's. Founded in 1887, its credo was created in 1943 by CEO and chairman Robert Wood Johnson, the son of one of the cofounders. Introduced the year before the company became publicly traded, the document has been revised several times in accordance with Johnson's belief that it should evolve with the language as well as with the growth and development of the company. Here's the current version:

Our Credo

We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services. In meeting their needs everything we do must be of high quality. We must constantly strive to reduce our costs in order to maintain reasonable prices. Customers' orders must be serviced promptly and accurately. Our suppliers and distributors must have an opportunity to make a fair profit.

We are responsible to our employees, the men and women who work with us throughout the world. Everyone must be considered as an individual. We must respect their dignity and recognize their merit. They must have a sense of security in their jobs. Compensation must be fair and adequate, and working conditions clean, orderly and safe. We must be mindful of ways to help our employees fulfill their family responsibilities. Employees must feel free to make suggestions and complaints. There must be equal opportunity for employment, development and advancement for those qualified. We must provide competent management, and their actions must be just and ethical.

We are responsible to the communities in which we live and work and to the world community as well. We must be good citizens—support good works and charities and bear our fair share of taxes. We must encourage civic improvements and better health and education. We must maintain in good order the property we are privileged to use, protecting the environment and natural resources.

Our final responsibility is to our stockholders. Business must make a sound profit. We must experiment with new ideas. Research must be carried on, innovative programs developed and mistakes paid for. New equipment must be purchased, new facilities provided and new products launched. Reserves must be created to provide for adverse times. When we operate according to these principles, the stockholders should realize a fair return.

This credo is cast in stone at Johnson & Johnson. Literally. As soon as you walk into the company's world headquarters in New Brunswick, New Jersey, you'll see this credo engraved in the limestone wall. The letters that spell "Our Credo" are 2¼ inches high; and underneath, the size of each individual letter is slightly larger than one inch. It's big and bold enough that you don't need your glasses to read it. The engraving makes it clear to employees and visitors that the credo is taken very seriously at Johnson & Johnson. The company goes much further than casting it in stone. To make sure that it's being adhered to, the company conducts annual surveys with its employees around the world addressing the important question: "How do you rate the company against the Credo?" So far, employees report that they and their coworkers follow it, and it plays a role in the decision making on day-to-day activities as well as major long-term plans.

There's still more to tell about the Johnson & Johnson credo. When we first sat down to interview the company's CEO, Bill Weldon, he immediately started off the conversation talking about the company's credo. Weldon spoke with passion, and in regards to the credo, he repeated the various responsibilities that the company has. "It's about treating people with dignity and respect," he emphasized. "Even if it means the company is reducing its workforce and has to let somebody go. You still treat them properly.

"We spend a lot of time making sure our employees have good working conditions," Weldon said. "But it goes beyond the employee; it's also about the employee's family, which includes paying good wages and good health benefits so they live well. This reflects the business we're in, which is providing products and services to people around the world that enhance their lives. The people who work here understand this, and they feel good about the commitment that we have to others as well as our commitment to them. The two feed off each other. This is why we talk a lot about our value system, which is embodied in our credo. We are here to do the right thing. That's a responsibility we have."

Ray Jordan, Johnson & Johnson's vice president of corporate communications, said that the company conducted some external research in 2007 to find out what people thought about the company. "What the study revealed," Jordan says, "is that they talked a lot about putting the needs of others first. When I read the report, I said, 'Wait a minute. That's the way the credo is written.' It's not about what we do but about our responsibility to patients, doctors, and nurses. We also have responsibilities to shareholders. I thought it was an interesting link that people outside the company were echoing what's reflected in our mission."

Today, having a mission statement is in vogue and most companies have one, but few place as much importance on theirs as does Johnson & Johnson. A 2007 ARG study reveals that only 20.9% of American workers were ever told about the company's mission statement during a job interview. Knowing this, it comes as no surprise that only 21% of employees are able to recite their company's mission statement. If a mission statement isn't important enough to be discussed during a job interview, why should it be expected to be made known after employment? Companies that are truly customer focused could never allow this to happen. They couldn't tolerate having four out of five of their employees not being united in the quest to achieve the company's goals.

In the same study, only 47.4% of all working Americans have ever even seen their company's mission statement. Of those who have, 75.5% of them believe their employer truly adheres to its mission statement. Compare this number to a survey reporting that 98% of all Japanese workers are familiar with their employers' mission statements. One manager of a major Japanese company was dismayed because 2% of his company's employees were unfamiliar with its mission statement. To him, 2% was a failing grade. "It means we have employees who think we're not working as a team," he sighed.

While it's important to have a written credo (mission statement), one company that goes beyond this is Four Seasons, where the unwritten credo of the Golden Rule (to treat others as you would want to be treated) is very much a part of its company culture. "Our founder, Isadore Sharp, has abided by the Golden Rule since the company was founded in 1961," says Ellen du Bellay, who is vice president of learning and development of the high-end hotel chain. "Mr. Sharp has always advocated treating our guests as we ourselves would want to be treated. Of course, this is what the Golden Rule tells us. Well, we talk about the Golden Rule so much that it is deeply engrained in the Four Seasons culture. Consequently, every employee knows that the Golden Rule should be applied at all times to the way our guests are served. Sure, it's a 2,000-year-old philosophy, but as far as we're concerned, it still works."

(Continues...)

Excerpted from THE CUSTOMER RULESby C. BRITT BEEMER ROBERT L. SHOOK Copyright © 2009 by Ram Charan. Excerpted by permission of The McGraw-Hill Companies, Inc.. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Edition details

• Publisher: McGraw Hill
• Publication date: 2008
• Language: English
• ISBN 10: 0071603654
• ISBN 13: 9780071603652
• Binding: Hardcover
• Number of pages: 351