The service power of fully engaged employees

My wife, Sally, and I recently spent a few days relaxing at a resort hotel in Phoenix. One of our best customer service experiences came from an unlikely source: an associate named Darryl who was doing construction work to help renovate some of the hotel's rooms.

Businesses often focus customer service initiatives on employees whose customer service role is obvious. At a hotel that might be a front desk agent, bellman, or valet. However, anyone who comes into contact with your customers, whether directly or indirectly, is in the service business. Darryl was a great example of how one person can make a big difference.

We ran into Darryl while walking through the hotel. He greeted us with a warm smile and asked us if he could help us find anything. When we told him we were touring the hotel, Darryl told us about some of the renovations they were working on. He spoke with obvious pride about how the hotel was working to make itself even better.

Darryl then asked us if we were enjoying our stay. We told him we were, especially the time spent lounging by the pool. Darryl gave us a few tips on which pools were best at different times of the day.

Finally, Darryl asked if there was anything he could do to make our stay more enjoyable. We told him no, but Darryl encouraged us to let him or another hotel associate know if there was anything we needed.

Darryl created a positive experience for us because he knew he was in the service business. Do all of your employees know they are in the service business, even if "service" isn't in their title? Are they fully engaged with your organization? Try to imagine what you could achieve if you had more Darryls!

How Netflix should have handled their price increase

Netflix alienated a lot of customers when they announced a 60% price increase on July 12. They had previously offered a plan where customers could stream unlimited movies online and rent unlimited DVDs one at a time by mail for $9.99 per month. Starting in September, Netflix will offer a DVD-only plan for $7.99/mo and an online only plan for $7.99.

Subscribers found out via email but the story soon took on a life of its own online. Netflix was flooded with angry Tweets, Facebook posts, and blog posts. Several news outlets conducted informal polls of Netflix subscribers and reported that as many as 70% were thinking of cancelling or reducing their subscription. Investors haven't been too happy either as Netflix's stock price has dropped more than 15%.

Now that I have had a few weeks to calm down and weigh my options, I can see why Netflix raised their prices. I can also think of three things they should have done that they didn't. 

Be honest and open.
It's important to be honest and open when you make a business decision that will adversely impact your customers. The economics behind the Netflix price increase actually make sense. so why not come clean? They chose to ignore the issue entirely by essentially telling customers, "Hey - here are your new prices." I still don't think many customers would be happy with a 60% price increase, but they might have been more forgiving if they knew why. (There's a great overview on Yahoo that explains the business drivers behind this decision.)

Share something positive.
Netflix should have timed their price increase around some exciting news, like an agreement to add more movies that are available for streaming online. Their strategy includes moving more customers online since streaming movies is much cheaper than shipping DVDs. Making more titles available online would let customers know where some of that price increase was going and get more customers to use the streaming service. A bit of misdirection? Yes, but we customers tend to focus on what you put in front of us. All I have to look at right now is an email says I'm have to pay 60% more for the same service.

Emphasize your strengths.
Netflix missed a chance to emphasize that they are still the best deal in town. Their announcement caused many customers like me to shop for alternatives, but the alternatives either cost more money or offer a much smaller selection. Why not point this out? Heck - why not save us the time and put a nice little chart together that illustrates how Netflix offers the best selection, service, and price even after a 60% price increase? Everyone likes to think they are getting a good deal and Netflix should have made this clearer in their announcement.

Assuming the price increase was a foregone conclusion, what else could Netflix have done better?

3 things small business owners must know about service

Most small business owners face an enormous customer service challenge when they start adding even a few employees. How can you build the capacity to continue growing while preserving the customer-focused culture that fueled your growth in the first place?

If you own a small business, here are three things you should know about customer service.

1. Your employees don’t think the way you do
A small business often becomes part of the owner’s personal identity, so it’s no wonder that business owners take customer service personally. The tough part is realizing your employees don’t look at things that way. Even if they have exceptional customer service skills, it's extremely difficult for them to view customer service through the eyes of a business owner. It's up to you to ensure your employees clearly understand your customer service expectations.

2. Experience and talent are not the same thing
Small businesses all have their unique cultures, so it is important to hire employees who will fit with that culture. A talented employee may or may not have a lot of experience, but they should have a strong desire to work in a company like yours. Perhaps more importantly, they must have the right attitude to work with an owner like you.

3. You need to get out of the way, but don't stop leading
Your employees aren't going to handle every customer interaction exactly the same way you would. Some owners waste time and stifle productivity by over-managing their employees. Other owners risk poor customer service by being too hands off. A good small business owner finds the right balance of leadership and empowerment to get the most out of their employees while still offering the proper coaching and guidance to help their employees grow.

What else should a small business owner know about customer service?

New show Bar Rescue is full of customer service gems

I’m a sucker for just about any TV show that provides an inside glimpse at how companies really work. Bar Rescue on Spike is the latest show in this category. If the first episode is any indication of what’s to come, this show will be a customer service gold mine.

Bar Rescue’s premise is simple. In each episode, bar expert Jon Taffer tries to turn around a struggling bar. Taffer and his team work with the bar owner to quickly build profitability and increase customer loyalty.

Episode one featured a bar called Angels. It was run-down, the food and drinks were terrible, and the service was poor. Unfortunately, the owner and her employees had come to accept these conditions and did nothing to change or improve them.

Enter Taffer. Over the course of the episode, the fiery Taffer and his team whip the bar and its employees into shape. The owner’s biggest problem was she didn’t see the bar from her customers’ perspective. Taffer was able to change this by showing her how even simple changes can improve the customer experience. A better customer experience leads to more revenue, more referrals, and more loyalty in just about any business.

Visit the Bar Rescue website to see for yourself.

Why customer service training is essential for younger workers

Businesses who tend to employ younger employees are doing themselves, their customers, and their employees a disservice if they fail to provide training on basic customer service skills.

Here are three reasons why:

Young employees lack experience
Much of our customer service know-how comes from the experience of seeing what works and what doesn't. Unfortunately, young employees are gaining less and less experience. The Bureau of Labor Statistics estimates that only 48.9% of of Americans ages 16 - 24 had a summer job in 2010. That figure is closer to 30% in my home town of San Diego according to Mark Cafferty, the CEO of the San Diego Workforce Partnership. 

All of this means that young employees will be gaining their customer service experience courtesy of your company. If you don't provide them with training they'll likely learn most of their skills from trial and error. I don't think your customers would appreciate the error part.

Young employees find it harder to empathize
A core customer service skill is the ability to empathize with a customer. This allows employees to see things through their customers' eyes and prevent or resolve problems quickly. Empathy comes from having a similar or relatable experience, but younger employees simply lack many of the life experiences that could allow them to empathize. 

Employees can be taught to empathize through training and coaching. Ironically, one of the qualities younger employees need from their supervisor or customer service trainer is the ability to empathize with being young and inexperienced.

Great customer service isn't obvious
Businesses often fail to provide customer service training to their frontline employees because great customer service seems obvious to business owners, managers, and supervisors. Unfortunately, the steps to providing great customer service may not be obvious to your employees. (Check on my previous post on the subject.)

Younger employees who lack on the job and life experience may have the most difficult time figuring out the right thing to do. Leaders should set clear expectations for customer service and then provide all employees with the required training, tools, and resources to meet those expectations. They should also be especially patient with younger employees who are learning on the job.

Service recovery from Heitz Cellars

Earlier this week, I wrote a post about three wineries that all handled a missing or delayed wine shipment in different ways. (See Good, Bad, and Ugly ways to handle the same problem.) Since then, Heitz Cellars has made a bit of recovery.

Heitz Cellars was my "ugly" example in the post because I had called three times to check the status of some missing wine and they had short shipped my order twice. Yesterday, the last two missing bottles finally arrived. The modest recovery came from the refund they issued to my credit card. This means the end result was I finally had my delicious wine ('07 Zinfandel) and I didn't have to pay for it. Heitz Cellars makes some terrific wine and this gesture was enough to keep me as a customer.

This also serves as another installment in my collection of stories that prove the longer you take to solve a customer service problem, the more expensive recovery will be.

Related posts on expensive service recovery:

• The rising cost of recovery at the Sir Francis Drake
• Cox vs. Brinks: The cost of incompetence
• Avis service recovery

Good, bad, and ugly ways to handle the same problem

My wife, Sally, and I recently returned from a tour of several of California's wine regions. We are huge wine enthusiasts (check out our wine blog!) and used the trip as an excuse to stock up on wine.

Most of our wine was delivered without a hitch but we did experience a problem with orders from three wineries. Each winery chose to handle the problem in a different way. Only one succeeded.

The experience proves that mistakes can and will happen, but it's how you solve them that counts.

The Good - Van Ruiten Family Vineyards
I called the winery to check on our order after a shipment didn't arrive as expected. The person I spoke with explained that the order was delayed because it took extra time to locate two bottles that were in limited supply. She was very apologetic for not contacting us about the delay and promised to get our shipment out immediately. Just as promised, our wine arrived a few days later. The winery included an extra bottle of their delicious Chardonnay along with a handwritten note thanking us for our patience. Just like that, disappointment was turned into delight.

The Bad - Anglim Winery
Like Van Ruiten, I called the winery to check on a shipment that hadn't arrived. I was told that the wine hadn't been shipped yet because it had been hot and there was concern that the heat would hurt the wine. The definition of poor service is failing to meet expectations. I would have been grateful if I had received a call or email asking if it was okay to delay shipment so the wine wouldn't get too hot. Instead, I was disappointed that I had to wait and then had to call. No apology was offered which disappointed me even more. Fortunately, the wine was finally delivered about a week overdue.

The Ugly - Heitz Cellars
I called Heitz after I received a shipment with only one of the four bottles I had ordered. The person agreed to send the missing bottles but a week went by and they hadn't arrived. I called a second time and was told the missing wine had been shipped a couple of days before and would be delivered the next day. A delivery was made the following day, but the package contained only one of the three missing bottles. I called a third time and calmly explained the situation to someone who clearly seemed annoyed. Finally, she agreed to overnight the missing bottles to me. (We'll see if I actually receive them.)

Anyone can make a mistake, but here are all the errors that Heitz made after the initial problem.

• They waited five days to ship the missing wine. It should have been shipped the same day.
• I had to call a second time when the wine still hadn't arrived a week after my first call.
• The second shipment didn't contain all of the missing bottles.
• I had to call a third time to check the status of my missing wine.
• The person I spoke with on the third call was rude.

Van Ruiten provided a great example of how to strengthen customer loyalty by handling a problem with grace and style. Anglim exhibited a lack of caring that hurt their chances of a repeat order. Heitz demonstrated a mind boggling level of incompetency that is almost certainly driving up costs and losing future business.

Is there such thing as the "United Airlines Effect"?

Just over a year ago, United Airlines and Continental Airlines announced they were merging. At the time, I predicted that the combined company would get bigger, ruder, and less efficient. 

The American Customer Satisfaction Index has just released their latest airline passenger satisfaction index and it appears my ruder prediction is coming true. The index is still tracking United and Continental as individual airlines, so you can see an interesting trend. I call it the "United Airlines Effect" where you take something bad (United Airlines customer service) and merge it with something mediocre (Continental Airlines customer service) and end up with something bad.

I've thrown in industry service leader Southwest Airlines for the sake of comparison.

Source: The American Customer Satisfaction Index

You can see that United Airlines hit rock bottom in 2009. Service at both United and Continental went up in the 2010 index, which was released just after the merger was announced. Since the merger, service at United Airlines has risen slightly while the service rating for Continental Airlines has tanked. The "United Airlines Effect" appears to be real.

Some of my friends and colleagues regularly fly both United and Continental. Some have even reported a few instances of unusually good service when flying United. Is there a newly discovered service spirit within United? Are they motivated by a desire to prove themselves during the merger? Or, is service at both airlines simply heading towards a mid-point that reflects their newly combined operations?

Whatever it is, I'll stick with Southwest Airlines whenever I can.

Frequent software updates = poor customer experience

It's getting harder and harder to imagine a world without all the cool apps and software programs that help run our daily lives. At the same time, I wonder if software companies are paying attention to the frustrating consumer experience of the app update?

Here's an example.

I sat down for a quick lunch the other day and fired up my iPad to read the Wall Street Journal. The current edition didn't open. Apparently, I needed to update the Wall Street Journal app on my iPad before I could read the paper. Didn't I just do that a few weeks ago?

Apple's App Store required me to login and then acknowledge an updated user agreement before continuing. I like to read what I sign so I know what I'm getting into, but I noticed the agreement on the screen said "Page 1 of 41".

Sheesh - 41 pages? Really? Call off the lawyers, Apple. It's not like I'm buying a house or setting up ponzi scheme. I just want to download an update for an app.

I just clicked "Agree". Hopefully, there wasn't a murder confession or a promise to pay Apple $1 million buried in that voluminous user agreement. 

Finally, the Wall Street Journal app started to update. Slowly. It finished up just as I ate the last bite of my lunch.

Here's what I wish software companies like Apple would consider.

• It's aggravating when you can't use your software immediately because of a required update.
• The amount of legalese in these user agreements is ridiculous. Seriously, do your lawyers get paid by the word? Trim it down and make them simple.
• The annoyance factor has exponentially multiplied as more and more companies launch frequent updates with horrendously long user agreements. 

Ignoring little red flags is a big red flag

Someone who is passionate about customer service should always be on the lookout for red flags in their organization. Here’s a red flag from a hotel that I recently stayed in:

This room service basket sat in the hall for two days.

Specifically, this is a room service basket that sat in the hallway for two days. It was a little surprising that it sat there for that long, but it didn’t do a lot to diminish the quality of my stay. 

However, the more I thought about it, the more I realized it was one of many small signs of poor service. A front desk agent breached etiquette by verbally announcing my room number when she checked me in. The bellman passed me in the hall several times without making eye contact or saying hello. The housekeeper made up my bed with a duvet that had a stain on it.

In the big picture, all of these red flags combined told me the hotel's staff wasn't passionate about service. And to think, I probably wouldn't have thought about all of this if I didn't have to pass by that basket everytime I left my hotel room.