Learning From The Ritz-Carlton Customer Service Philosophy

We can learn much from the Ritz-Carlton Gold Standard and their exceptional customer service philosophy and orientation. “Putting on the Ritz” has always meant top-quality, the best of the best. Where did they acquire this reputation? From their customers – and it is well deserved.

The Ritz-Carlton focuses on taking care of their customers and employees and this creates an amazing standard of customer service. In a recent independent survey, 99 percent of guests said they were satisfied with their Ritz-Carlton hotel experience and over 80 percent stated they extremely satisfied. The key to impressive customer service is to create loyal customers. Loyal customers return again and again to spend there money and are less price sensitive. Satisfied customers might return, but are equally likely to go anywhere else and seek out the lowest price. Therefore, satisfaction is virtually meaningless and only customer loyalty truly counts.

The Ritz-Carlton approach to employee and customer relations can teach us a lot about exceptional customer service. How could you apply these within your company?

o Ritz-Carlton lets customers know that they are valued and encourages them to make the client and customer service their top priority. Trainers and managers focus on making sure the staff is well versed in the Ritz-Carlton Gold Standards. For the Ritz-Carlton these Gold Standards are not a procedure, they are philosophy and a way of life.

o The Ritz Carlton provides managers and employees with 250 to 300 hours of training in their first year

o The Ritz-Carlton philosophy is that any employee who receives a complaint from a guest owns that complaint. First-line employees such as desk clerks, bellboys and housekeepers are empowered to spend up to $2000 to handle any customer complaints and managers can spend up to $5,000 without additional authorization.

o The Ritz-Carlton has a manual for quality improvement and problem-solving procedures. The manual contains approximately 1000 potential problems that a client could have during their stay and the appropriate procedure(s) for dealing with each of these challenges so that the client is exceptionally pleased with the outcome.

With businesses typically losing 20% of their customers each year, we should clearly be spending more time, money and energy on customer service and retention than we are on marketing to new customers. The typical business spends 90% or more of their funding and focus on marketing to new customers and 10% or less on retaining old customers. These numbers from a profit-perspective should look a lot more like 50-50 if you want to have the best reputation and the largest increase in customers and profits year-over-year.

Recommendations:

– Make sure your managers and leaders are teaching, practicing, promoting and living a customer service oriented philosophy/lifestyle.

– Clearly define your customer service standards and train your employees to follow through at the highest level

– Make exceptional customer service an important item on employee evaluations.

– Make sure your staff has the ability to resolve small customer complaints/challenges on their own – and train them to do this well.

– Identify specific problem areas that you are having in your company, brainstorm solutions and then provide additional training and support.

– Edward Deming once said “What doesn’t get measured, doesn’t get done.” How do you measure your results?

– Customer questionnaires and surveys are key. Make sure you are asking open-ended questions that focus on customer Loyalty – Not satisfaction.

The Ritz-Carlton senior management knows that when employees are well trained they do a great job. And when employees feel they are doing a great job – they feel great at their job. This results in lower staff turnover, creates a positive environment and is a win-win for employees, management, clients, and keeps profits climbing. The Ritz-Carlton is a wonderful example of what a well run customer service focused organization can do when they create a customer service mindset and win-win philosophy at every level of the organization.

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Customer Service: Reconsider Who Your Customers Are

I was party to a discussion once where a supervisor was complaining that she had problems getting face time with her manager. The manager responded, defensively “Well the customer comes first and when I’m busy with a customer everything else just has to wait.” Fair enough, on the face of it, but does everything mean everybody too? And who exactly is the customer?

Most of us understand “customer” to mean the person who pays us to provide a service to them. We all realize that great service is one of the enticements to keeping our customers happy. But whose job is that, yours alone? If you work with a team, the responsibility rests with the entire team to provide great service to your external customers. This becomes patently impossible if the team are not serving one another effectively internally.

There could be many reasons why our supervisor may need face time with her manager. It may be advice, awaiting approval in order to proceed, essential feedback, disciplinary issues or a multitude of other things. What is critical here is that the manager does not view his supervisor as his customer, and certainly not as a priority.

Why is it important to view your colleagues as customers? For starters, you spend more time with them that you do with your external customers. Secondly, you rely on them to perform certain vital functions that will lead to customer satisfaction. This is because you yourself can not do everything – that’s why there’s the team.

In a work sense the internal customer should be regarded as more important than an external customer. Yes, you read that right. Everyone in your organization needs to understand that the external customer is very important, but that the internal customer is even more important. You may not have chosen to work with your colleagues – they were hired for their talents and expertise, not because they’re your friends. In a successful work environment we learn to work with a diverse group of people whom we may not naturally gravitate towards as friends – but we need them anyway. They are critical to our success. And therefore we need to set aside enough time for them so that they have the tools, the authority and the confidence to do what is expected of them. That includes, of course, dazzling the external customer with superb, friendly and efficient service.

There is of course the benefit too that people who feel acknowledged tend to be more helpful, friendly, cooperative and… yes, productive. This is because acknowledgement is addictive.

Without our external customers our organisation has no need to exist. But without a team to ensure that those customers are served properly, you have no mechanism to provide that service. So, your team members are your core customers. Your immediate team is your personal responsibility. If you are part of a team, you need to nurture and protect your relationships within that team.

“A customer is someone with whom one has dealings”.

This definition is very simple, but it’s also also quite profound, and has broad implications. So before making the noble statement “The customer comes first”, first reconsider who your customers are and who may be coming second or last as a result of putting a particular customer first.

There’s only so much that you can do on your own. Your internal customers are the people who will ensure that the job gets done.

Internal Customer Service Is Herb Kelleher’s and Southwest Airlines’ Strategy for Success

One of the seven strategies in “The Amazement Revolution” is Walk the Walk. That means that you don’t say one thing and do something else. You are genuine and what you see is what you get. One of the role-models in this strategy is Herb Kelleher of Southwest Airlines.

If you’ve read my Shepard Letter or any of my past books, you know there has always been an emphasis on internal service. The Employee Golden Rule, as I call it, is to treat employees the way you want the customer treated – maybe even better. Herb Kelleher and Southwest are model examples of that rule in action.

From the very beginning, Kelleher believed in an employee-first approach which, at the time, was considered an extremely controversial first principle as management philosophies go. But Kelleher really meant it, and he insisted on it for sound strategic reasons. When you build a company around the idea of taking care of employees, taking care of customers becomes easier for everyone. As Kelleher himself put it:

“Years ago, business gurus used to apply the business school conundrum to me: ‘Who comes first? Your shareholders, your employees, or your customers?’ I said, ‘Well, that’s easy,’ but my response was heresy at that time. I said employees come first and if employees are treated right, they treat the outside world right, the outside world uses the company’s product again, and that makes the shareholders happy. That really is the way that it works, and it’s not a conundrum at all.”

This was Kelleher’s “mantra.” He lived and breathed the strategy that the success of the Southwest Airlines starts with service to employees. It became embedded within the working culture of the company. Kelleher’s insistence on this point is, I believe, the real reason that airline has succeeded so memorably at a time when so many of its competitors have faltered. Following this philosophy, Kelleher built a community of employees who walked the walk, and he eventually handed the company over to executives who walked the walk. The transition was seamless-one of the reasons why Southwest is still an amazing organization!