[ Volume Thirteen ]

Article Overview: Customers are fickle...your bottom line is only as secure as your last customer service interaction. Recent research suggests that happy and well-trained customer service staff operating in customer-centric business cultures results in superior bottom line performance. This is a sustainable competitive advantage and can be gained by adopting a competency-based hiring and training methodology to identify customer service champions … and chumps.

In 2003 the Commonwealth Bank of Australia launched a new initiative called 'Which New Bank' aimed at making the bank more customer-focused and generating annual net benefits of $900 million by 2006. Specifically, the bank was (and still is) endeavouring to improve performance by focusing on faster service delivery and better quality advice - achieved by enhancing training for staff, simplifying processes and reducing bureaucracy.

Has it paid off?

If the Commonwealth Bank's share price is any indicator, the bank's increased focus on service is helping. At the beginning of 2003 the share price was around $27. By the end of 2006 it had risen to $49 - an 81% gain in 3 years.

A recent Fortune Magazine article written by Larry Selden and Geoffrey Colvin compared shareholder returns from a handful of North America's most customer-centric companies such as Dell, Best Buy and Royal Bank of Canada - all companies where customer service is actually far more than a throw away line in a corporate brochure. The results support what common sense suggests - truly customer-focused organisations achieved shareholder returns that outperformed the S&P 500 index by as much as 200%.

Further supporting this finding is research conducted by ACSI (American Customer Satisfaction Index) which shows that the share price performance of companies in the top half of the customer service index far outperform those in the bottom half. David Van Amburg, managing director of ACSI concludes: "There is a very strong connection between firms that do a good job of satisfying customers and their performance in the stock market."

So, how do you create a 'customer-first' culture?

Your people, of course, are the key. So what tactics should you employ to get your staff heading in the right direction? Treat them well? Train them in gold standard customer service practices? Continually recognise their efforts? Ensure senior Management 'walk the talk'? Solicit constant feedback and measure your success? The answer lies in mix of all of these measures.

An excellent way to understand how to develop a customer-centric culture is to learn from and then emulate those organisations that are already doing it well. The Hilton Hotel chain offers a great starting point.

The Hilton Hotel Experience

"Quite frankly, whatever product we have, a competitor can copy," says Jim Hartigan, senior vice president for customer quality and performance for Hilton Hotels - a Corporation that consistently sits at the top of the ACSI's index for the best customer service companies in the accommodation category. "A certain kind of bed, a television, a shower head - that can be copied. What can't be copied is the genuine, personal service."

Hilton's position at the top of the customer service heap stems from a combination of hiring and training systems, regular feedback and customer polling to track satisfaction:

• Hiring. Hilton relies heavily on referrals from existing employees. The interview process also includes competency and behavioural-based screening in which, for example, prospective employees are asked how they dealt with a confrontational situation. Managers are trained in using and assessing behavioural screening.
  
  
• Developing a BluePrint for Top Performers. Hilton is testing a new screening system at some of its hotels where it tries to build a clear profile of its best employees by mapping their desirable qualities. Last year, for example, employees rated as top performers were given a written test designed to assess their aptitudes and preferences. The answers were used to produce a snapshot of the 'model employee'.
  
  
• Training. Once hired, new employees across the Hilton chain must go through 1.5 hours of customer-service training before they even start. New managers, must undergo 40 hours of training in customer service designed not only to drill into them the basics of customer service but also to give them the means to encourage and promote it with their staff. There are also periodic updates of customer-service training throughout the year to keep skills finely honed.
  
  
• Rewards. To reinforce the idea that good service is important, Hilton regularly rewards employees through two programs used at both owned and franchised hotels. One, called 'Catch Me at My Best', gives customers the opportunity to nominate employees who provide especially good service. Winners get cash awards and merchandise. A second program, called 'Spirit of Pride', has employees nominating other employees for customer-service recognition. Winners get a $350 cheque and a celebration in their honour, complete with banners, music, cards and a congratulatory call from the corporate office. The company selected 350 winners this year and expects to increase that total to 700 next year.
  
  
• Tracking. Finally, Hilton runs its own customer satisfaction tracking to keep tabs on whether its efforts are producing results as reflected in what customers say. Hilton surveys about 60,000 customers each month by mail and e-mail, then makes the results available online to its managers so they can see exactly what customers have to say on a variety of customer-service issues. Hilton spends more than $1.5 million each year conducting the surveys.

In developing a customer-first program amongst employees you are, first and foremost, teaching a philosophy. You need to develop an organisational culture in which your employees really believe that their customers are the reason they have jobs, and the message needs to be sent from the top layer of Management down. The benefits of having customer-service staffers who are well trained and empowered to 'do the right thing' for the customer are many. Perhaps the Seattle Sonics' head of guest relations, Pete Winemiller sums it up the best when he said that employees who feel frustrated and powerless will not serve customers well, but when you have 500 problem solvers in the building - that's magic.

And remember, customer-first programs don't always have to be expensive. If you treat your employees well and train them to do the right things, they'll work hard, other staff will be 'infected' and ultimately your customers will benefit. In most cases, it doesn't cost employers a thing.

References:

- Hilton Tries to Clone the Model Employee - http://www.workforce.com/section/06/article/23/80/35.html
- 5 Rules for Finding the Next Dell - http://www.fortune.com/fortune/subs/article/0,15114,657937-1,00.html
- Customer Loyalty Management - Finding the connection between loyal employees, loyal customers, and profit - http://www.schneidercg.com/portfolio/loyaltysummary

About Regent Recruitment Regent Recruitment is a recruitment consultancy that assists leading Australian employers to attract and retain talented staff on a contract, temporary or permanent basis. Whether we are filling one permanent role or recruiting contract staff for a 400-seat call centre, we deliver an exceptional recruitment service. Unlike other recruitment consultancies, Regent Recruitment is unique in that it combines the capabilities of a large-scale multinational recruitment operation with exceptional service levels typically only associated with small boutique agencies. How can we assist you? We would welcome the opportunity to have a confidential meeting to discuss your staffing needs in more detail. If you are interested, in the first instance please call Howard Mereine, General Manager, on (03) 9909 7150 or e-mail Howard at hmereine@regentrecruitment.com.au. We look forward to speaking with you.

This article was licenced by Regent Recruitment for the Regent Recruitment client newsletter.
Written by Victoria Small and edited by Paul Quinn, Quinntessential Marketing Consulting Pty Ltd.


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The views and opinions expressed in this document are those of the authors and do not necessarily reflect the view of Regent Personnel Pty Ltd.