Indifference Doesn't Pay

According to the American Society for Quality, 68% of customers who stop buying from a company do so because of employee indifference or the failure of employees to resolve a problem. It's a scary statistic that suggests many companies are missing out on a lot of revenue. Not because they don't have great products, or a killer strategy, or charismatic leaders, but because they don't have a clear and compelling vision for customer service that employees buy into.

Here's an example:

I like shopping at Macy's because they typically have reasonable prices and a good selection of the clothes I like. However, I often find myself wandering around the store trying to find what I came for. Most of the time, their sales people don't greet me when I walk into their department. They're usually too busy chatting with each other or walking in the other direction. The people don't have a customer-focused vision, so they focus on tasks, their co-workers, and themselves.

The last time I visited Macy's, I was surprised to encounter a very helpful sales person. (He must have been new!) He answered my questions and even made a few suggestions, including showing me a sport coat that was on sale for $150. I hadn't planned on buying a sport coat, but the sales person made a great recommendation, so I bought it.

Can you imagine what would happen if all the salespeople at Macy's had a vision to help customers make great purchases? If just 10 people a day spent $150 extra because a sales person spent a few minutes helping them, that one store would bring in more than $500,000 in additional revenue per year. This store has 3 floors and countless departments, so I'm pretty sure adding an additional $1,500 in revenue per day from simply helping people is a conservative estimate.

The Rising Cost of Recovery

A few months ago, I wrote a post about a service recovery related to my stay at the Sir Francis Drake Hotel in San Francisco. (Read the post here.) Well, the epilogue to that story is quite interesting and also a great reminder that service recovery becomes increasingly expensive the longer you let the problem continue.

To bring you up to speed, the short version of the story is I experienced some minor problems while staying at the hotel in May. A few days later, I filled out an online survey noting the good and bad aspects of my visit. Not long after I submitted the survey, the hotel's Front Office Manager called me to follow-up and promised to send me a certificate for a free night's stay as an apology for the poor service. Unfortunately, the certificate never arrived.

The Story Continues
A week or so ago I received a phone call from the Front Office Manager. "Mr. Toister," he said, "I understand you never received that certificate we promised you."

"Yes, that's true," I said.

"Well, I don't know what happened, maybe my assistant forgot to send it. I'll have my assistant send one out to you first thing next week."

I got off the phone and thought about the conversation. It was great to get the follow-up phone call, but the manager was deflecting ownership. The certificate would have been nice to receive in May, but now it was not enough to entice me to return. So, I called the manager back and laid it out for him. I told him I was planning to visit the area again later this year and stay for three nights. I was also meeting a friend, so I'd need two hotel rooms for three nights apiece. One free night wouldn't get me to stay there, so was there anything else he was willing to do?

The manager offered to comp one of the rooms for the three nights and give me a good rate on the other room. Yes, that was enough for me to make a reservation and give the Sir Francis Drake another try.

Cost Escalation
If you look carefully at this situation, you can see how recovery got increasingly expensive.

1. An apology. I was impressed the manager called me to follow-up on the survey and apologize for the poor service. That was enough to make me consider his hotel the next time I traveled to San Francisco.
2. A free room night. The offer of one free night was very generous and I was even more impressed. Had the certificate arrived in a timely fashion, it is likely I would have made a reservation at the hotel for my upcoming trip.
3. Three free room nights. Of course, the promised certificate never arrived, so the manager had to up the offer to three free room nights to get me to stay there.

The purpose of service recovery is to retain the business and maintain the organization's reputation. In this case, the cost of service recovery escalated from a simple phone call and an apology to three free nights. The lesson here is the faster you can recover, the less it is likely to cost you.

Job Applicants Are Customers Too

It's amazing how so many companies fall all over themselves to serve their paying clients but fall well short when it comes to serving less obvious customers like job applicants. Job applicants not only represent potential great hires, they may also be current or future customers. Companies can serve candidates well by following a few simple steps.

1. Make a good first impression. Go to an office where people are warm, friendly, and having fun and you may want to work there. On the other hand, an unpleasant atmosphere and unpleasant people can make your organization a lot less desirable.
2. Respect their time. I once went to an interview where the hiring manager made me wait for an hour before meeting with me. On top of that, she seemed put off when I explained I only had 30 minutes to meet rather than our agreed upon 60 since I had another appointment. Hiring managers may get busy with other things, but job candidates are often busy themselves and may even be sneaking in from another job.
3. Sell your company. Yes, candidates should tell you why they are so great, but you should do the same. Your company is much more likely to attract great people if interviews feel like a courtship and not an interrogation.
4. Follow up. OK, show of hands, how many of you have been promised a phone call at the end of an interview, only to never hear from the company again? Recruiters may not want to share unpleasant news or they simply don't have any news yet to give, but not following-up as promised makes your company look unfriendly and disorganized.
5. Be honest, but be tactful. If you interview 10 people for 1 job opening, 9 people will probably end up disappointed. That doesn't mean they deserve to be ignored or treated rudely. Be honest and tell them they weren't selected, but also tell them how much you appreciate their interest. In some cases, you may even know of another opening in your company or someone else that may be a good fit.

Flying the Angry Skies

Have you flown lately? Not that flying has been a picnic for sometime, but it seems to have gotten even worse. Sneaky fees, frequent delays, and surly airline workers are all conspiring to make us give Amtrak and Greyhound another look.

Failure Breeds Failure...

Lack of success can be contagious. Among the major carriers in the United States (American, United, US Air, Delta, and Continental), all posted large operating losses in the first quarter this year. Losing money doesn't feel good for employees and it will probably get worse. There are painful mergers, cut-backs, contract concessions, and the doom and gloom of an uncertain by probably negative future hanging over the employees at these airlines. Those are the lucky people. Employees at Aloha Airlines and ATA abruptly found out they didn't have jobs this past April. In short, there's nothing to be excited about.

Unfortunately, these employees are increasingly disengaged with their employers and their customers. On a recent cross-country trip, I encountered one rude employee after another. One gate agent was typing on her computer while I approached the counter so I waited patiently. She said, "Yes" in my general direction, so I held out my boarding pass that required a seat assignment. Without looking up she said, "Can I help you?" in an exasperated manner. "It's right in front of you," I said, "but I didn't want to interrupt you." "Oh, I can multi-task." Great, lucky me.

Not to be a fear monger, but I really hope the mechanics and pilots don't get too angry. This happened last week at United Airlines when a pilot reportedly became too upset to fly. Fortunately he was self-aware enough not to fly the plane anyway. Check out this bizarre story here.

Self-Reinforcing Circle

When the employees on the front lines are disengaged and providing poor service, the customers begin to get angry too. Angry travelers are a notoriously difficult, impatient, and potentially dangerous bunch. They also make it that much harder for airline employees to do their jobs. So, the airline employees get more and more frustrated and provide poorer and poorer service and the passengers get angrier and angrier. I witnessed this self-reinforcing circle time and time again throughout my travels over the past several months.

United Against, Well, United (et al)

The problem as I see it is the airlines are becoming their own worst enemies. They are making air travel less pleasant through rude employees, ticky-tack fees ($25 to check a bag, $5 for a snack pack, $2 additional to check a bag curbside), cancelling popular routes, and frequent whining about the high cost of oil. (Southwest hedged their bet on fuel prices awhile back and had an $88 million operating profit last quarter.) Even the loyalty programs breed less loyalty with fewer options, higher mileage requirements, more blackout dates, and expiring miles.

There's nothing here to root for. No passion behind the brand. And customer service ratings prove it. Epinions has the big five carriers at 3 out of 5 stars (Continental is 3.5 out of 5) and JD Power's rankings leave even more to be desired with United bringing up the rear with a 2 out of 5 rating. Yikes!

Yes, times are tough for the airlines, but what they ought to do is invite employees and passengers alike to be a part of the process. Do something to make travel easier, less stressful, even pleasurable. Create a price structure that allows you to make a fair profit, but do it in such a way that customers see the value of what they are paying for, rather than making passengers feel penalized. Stop the doom and gloom conversation with employees and invest in employee engagement initiatives.

We Need a Hero

Southwest Airlines still stands out in my mind as a positive example. Their employees are typically much more energized and friendly than other airlines. Their fares and flights are usable reasonable and convenient. They have even taken recent steps to address their Achilles heal, the boarding process, but implementing a system that virtually eliminates the dreaded cattle call. And, get this, they are still profitable.

Fumble, Recovery, and Fumble Again at the Sir Francis Drake

A well-executed service recovery can go a long to towards cementing a positive reputation in a customer's mind. On the other hand, a poorly-executed recovery can make a bad experience that much worse. My wife, Sally, and I recently experienced both after staying at the historic Sir Francis Drake Hotel in San Francisco. Here's a quick re-cap of what went right, what went wrong, and something just for fun.

The Stay
We decided to stay at the Sir Francis Drake hotel on a recent trip to San Francisco because of its proximity to Union Square, the fact it is a Kimpton hotel (we like Kimpton), and above all else the historic, but quirky image it projects. Overall, the stay was good and in line with our expectations, but we did experience a small problem at check in.

We arrived early, so our room wasn't yet ready. This wasn't a big deal, so went out for a bite to eat. We checked back after an hour and a half and were told the room would be ready in 20 minutes, so we continued waiting in the lobby. Another 45 minutes went by before we checked with the front desk agent again (who knew we were waiting) and she admitted she had forgotten about us. Finally, we got checked in, but then had to wait another 30 minutes for the bellman to bring our bags to the room (after being told they would be right up). None of this was major news, but it wasn't as high a level of service as we would expect.

The Recovery
Like many hotels, Kimpton sends out a survey to guests after they stay at one of its properties. I took a few moments to complete their survey, giving full credit for the exemplary service we received in several areas and also mentioning the small service problem at check in. To my surprise, the front desk manager called me a day or two later to ask for additional feedback. He was very polite, very apologetic, and offered to send me a certificate for a free night's stay to make amends for the problem. This was much more than I expected, so I was very happy. The manager's actions also caused Sally and I to rethink our decision to try another hotel the next time we visited the area.

The Fumble
The promised certificate never arrived. Maybe my neighbors received it instead, or maybe the mailman's dog ate it, or maybe the front desk manager never sent it. The reason it never arrived doesn't really matter at this point, and I don't plan on calling to ask for it. Yes, it would be nice to have a free night's stay, but the issue was great service (or lack of), not getting compensated. What is really too bad is Sally and I felt the front desk manager had worked so hard to recover our future business before this disappointing turn of events.

A Final Surprise
Did I mention 'quirky' was one of the reasons we decided to stay at the hotel in the first place? Our room was very small, but it did have a walk-in closet. In the closet was a set of leopard-print pajamas for sale. Simply open the plastic and enjoy, and a small charge of $30 will be added to your room bill. Nice.