Management Today article

January/February 2004: Feature

It's all about the customer service

Innovative and smart Australian companies know that the customer is always right and they are proving it with policies that ensure that the customer comes back for more. By Cameron Cooper.

They are the bane of customers' lives. The robotic cash register operator who can't divert from the script: "You can upsize that to a large fries for 50 cents". The glib mantra of "your call is important to us" as the call centre operator leaves you on hold. Or the snooty waiter who manages to avoid your gaze as you try in vain to get some service.

The endemic of poor customer service crosses all industries. Research by the Customer Service Institute of Australia - an alliance of executives, business owners and government representatives - reveals that 81 per cent of customers say service from Australian organisations is below expectations. And a survey by International Customer Service Professionals (ICSP) shows that only 45 per cent of businesses adopt the maxim that the customer is always right. Almost half the respondents say anger is a common reaction to dealing with difficult customers.

Some businesses are getting service right - a financial imperative given that companies know it can cost three or four times as much to acquire a new customer as to make a repeat sale to an existing one.

Denis Littleford, the Customer and Stakeholder Relationship Manager at the fast-growing franchise business Bakers Delight, says staff must take the view that the customer is right - always.

"We believe customers have needs," he says. "They are king. That comes first in everything we do."

The central planks of the Bakers Delight customer service platform are so-called "delightful sessions" with staff in stores across Australia and New Zealand.

The two-hour motivational sessions, conducted at head office or a bakery, reinforce the Bakers Delight culture and teach staff the importance of greeting and service routines, smiling and dealing with angry customers. Role plays are included in the sessions.

Littleford says the Bakers Delight service ethic is built around "listening to the customer, being empathetic with the customer, always treating them with respect".

Since its foray into franchising 12 years ago, Bakers Delight has grown into a business with 650-odd bakeries, about 90 per cent of which are franchises.

The training sessions and a three-month internal certificate course are essential to ensure the Bakers Delight blueprint is replicated from store to store.

"It's all part of our culture," Littleford says. "Every franchisee that comes into the system will have to do training in an existing bakery. This is the basis of how we spread our culture."

Complicating service ethics in business today is the emergence of customers who are often more aggressive and rude. Staff must be prepared for the onslaught.

ICSP says Australian businesses, on average, give staff just 3.28 days a year of customer service training. Perhaps as a result, 72 per cent of those who deal with customers say they believe the customer is not always right - and, in fact, is usually wrong.

It is an attitude that won't be tolerated at trusted eye care and eye wear provider OPSM, which has 400 stores across Australia, New Zealand, Hong Kong, Singapore and Malaysia.

General Manager Sarah Paykel says the notion that the customer is king is a "good guiding principle".

"In the first instance, I like to take the point of view that the customer is always right," she says. "[We know] that in 99 per cent of cases it is a genuine complaint, so let's not penalise the 99 genuine ones for the one exception who is out to rip us off."

The only exception might be if a 'repeat offender' consistently returns glasses that have been abused.

"[The policy] makes it easier for everyone," Paykel says. "It certainly makes it easier for the person dealing with the customer. They don't have to make that moral judgment for everyone who comes in with a concern." And it cuts down on angry customers.

To protect a reputation built up over 70 years, OPSM trials, modifies, rolls out and retests any new customer service programs.

For two years in a row, travel retailer Flight Centre has been named the nation's best employer for large companies with more than 1000 staff.

General Manager Sue Rennick appreciates the accolades but says the company's key challenge - to attract and retain customers - must complement its standing in the Best Employer to Work for in Australia awards.

"We are working very hard to keep our existing customers and attract more because it's a big marketing expense when you have to keep acquiring new customers," she says.

Flight Centre says customers are "paramount", as distinct from always being right. This means all dealings with customers internally or externally must be done with "integrity and honesty", according to Rennick.

Despite a tough travel market in the aftermath of the 11 September terrorist attacks, Flight Centre continues to prosper. The company, which has more than 1200 outlets across Australia, New Zealand, the United Kingdom, South Africa, Canada, the United States and Hong Kong, recorded after-tax profits of $18.2 million in the first quarter of the 2003-2004 fiscal year, up 17 per cent.

Rennick says Flight Centre has a number of customer service imperatives - it promises that it won't be beaten on any airfare to any destination; it uses customer focus groups to monitor performance; and it has a regular customer survey system in place in all shops.

One potential business complication is that Flight Centre on-sells airfares, accommodation and other travel packages. As a consequence it can be at the mercy of its suppliers.

"As an agent a lot of that is beyond our control," Rennick says. "We have to make sure that our relationships with key suppliers are open and honest and that we know what we are selling is going to deliver the goods for the customer, because it reflects on us if it doesn't."

Technology is an important part of getting customer service right. Flight Centre uses Customer Relationship Management (CRM) software and has installed a new IT system for travel consultants.

"But at the end of the day it's still up to people," Rennick says. "It doesn't matter how good your CRM is. The people in the front line who are speaking to the customers have to deliver the goods."

A newcomer to the Australian fast food market, Krispy Kreme Doughnuts won't be boasting about its superior customer service.

A feature of the marketing success of the US doughnut chain - which operates more than 300 stores in the US and has been selling doughnuts since 1937 - is its reliance on word of mouth endorsements, not advertising.

Christine Edwards, Marketing Manager of Krispy Kreme in Australia, says customer interaction is the company's main means of communication.

"You try to communicate with the customer on many levels, but really the face-to-face experience is the one the customer is going to remember," Edwards says.

Krispy Kreme plans to open 30 stores across Australia and New Zealand over the next five years.

Edwards says staff training promotes the importance of a complete customer experience through traditional service. Training is broken into 20 per cent theory (study through training manuals, check lists and quizzes) and 80 per cent practical (hands-on coaching in stores).

The right staff culture is also an increasingly important business element job for Barb de Corti, the Managing Director of Perth-based dynamo Enjo, which imports environmentally friendly cleaning products.

De Corti, who set up the business in 1994, has an estimated wealth of $60 million, and BRW magazine has labelled her the richest female entrepreneur under the age of 40 in the country.

Today, Enjo has about 2500 independent sales consultants and de Corti expects to boost that number to 4000 by the end of the 2004. Managers at Enjo emphasise education, not sales. "Our training is not just about selling," de Corti says. "It's about educating the public."

Public demonstrations of Enjo products are the key to sales, but staff must avoid the risk of "overkill".

The Enjo philosophy is to serve and protect regular customers.

"We have specials for them because we believe the customer should get the product at the best price the company can afford," de Corti says. "Customers that are loyal are rewarded. They're like VIPs."

Modern companies have a range of IT aids to help them manage customer relationships: vast databases, sophisticated CRM software and intranets and extranets.

The belief has been that customers living in fast-paced world, will want service to match.

So far, however, most businesses have found it hard to use such technology effectively. And the likes of Enjo, Bakers Delight and Krispy Kreme say old-fashioned customer service values - rather than CRM-driven initiatives - are the key.

Krispy Kreme maintains that while speed of service is important, the customer's in-store experience is most crucial and can't be dictated by a software program.

"We don't like to be robotic in our approach to customers," Edwards says. "If customers take their time choosing a mixed dozen of doughnuts while watching the production line, that signifies our customer is enjoying the whole Krispy Kreme experience.

"It is a difficult balance because it is critical to ensuring that customers have that special moment in-store. But in saying that [we are conscious of] not irritating our customers by being too slow."

While current business systems are paying dividends for Bakers Delight, OPSM, Virgin Blue, Krispy Kreme and Enjo, there is always room for change.

Paykel says OPSM is reviewing the "whole customer journey", including service aspects, to assess the company's interaction at every point with customers. This follows a new majority ownership of OPSM by the Luxxotica Group, a global optical company.

"I think in the past we tended to be fairly process oriented . . . whereas now there's much more emphasis on looking at it from a customer's point of view - to see if it's understandable and friendly and all the things that we want to be," Paykel says.

At Enjo, it is becoming harder for de Corti's famous personal touch to be experienced by all customers as the business grows. She says recruiting and training more passionate Enjo consultants overcomes the problem.

"The customers don't expect 'Barb' to be there, but they know that it will be another person who is just as passionate about the company. It's just another voice for Enjo."

At Bakers Delight, Littleford says management will continue to take its cues from the shop floor in determining new customer service initiatives.

"Everything is born and bred in the bakery," he says. "All our ideas come from our bakeries. So if there is any customer service strategy that we are looking at, it would have been instigated by a franchisee."

The companies contacted by Management Today represent a disparate range of businesses that tackle customer service in different ways. From selling bread, doughnuts and glasses to cleaning products and air travel, the strategies are, by necessity, different.

What is consistent, however, is that the strategy must work for the business and, just as importantly, the customer.

Cameron Cooper is a Sydney-based business writer.

The golden rules

The crucial customer service rules, according to International Customers Service Professionals, are:

• Always greet a person within three seconds of entering your business
• If there is a complaint, ensure it is addressed
• Do not argue with customers
• Make eye contact during conversation
• Keep smiling!

Further information

• Customer Service Excellence by Brett Whitford (Beaumont Publishing House) examines building long-term customer relationships, the key factors for customer service, and creating a world-class call centre.
• Raving Fans: A Revolutionary Approach to Customer Service by Kenneth H. Blanchard (William Morrow & Company), argues that customers are only satisfied because their expectations are so low. If you really want a booming business, you have to create 'raving fans'.

AIM provides a variety of customer service related courses. Contact your state AIM branch or visit the Institute's website.

Other resources:

• www.customerservicetrainingcourses.com.au
  
• www.adm.monash.edu.au/sss/sdu/quality_customer_service
• www.actionpeople.com.au

Enjoyed this article? Subscribe to Management Today