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Service Excellence: Why Businesses Should Embrace It

A recent survey* points out that as consumers value companies that provide great service, they’re willing to reward or punish them with their pocketbooks. Why fostering a service excellence culture matters and how the quality of your customer service can make (or break) the bank.

From my studies as an Executive MBA student and my professional experience, I have cultivated a genuine interest in understanding how a service excellence culture impacts an organization. Indeed, as backed up by current literature and research on the subject, fostering and implementing a service culture within an organization has an amazing positive impact on various aspect of a business.

Three reasons why service culture matters

Customer service excellence culture equates business success

Today you find abundant literature on customer service excellence. Two books that I have read and can recommend are The Zappos Experience and Outside In.

According to Outside In authors Harley Manning and Kerry Bodine, companies who lead in  customer experience and truly "put customers at the center of their businesses" benefited from tremendous gains early on: over a 5-year period when the S&P 500 was flat, these businesses grew their stock portfolio by 22%. An amazing number in a time of recession, showing that companies who took early steps to efficiently embed a culture of "doing well" not only positively influenced their stock prices performance, but also reduced their debt costs and overall increased their revenues. The whole premise of Outside In lies in far more than just creating the artifacts of customer service via enhanced friendly communications towards consumers, it is about creating a complete company culture revolving around servicing them.

The Zappos Experience book goes a step further and concretely dives into how the company became not only a standard in customer service and online shopping experience, but truly became a household name because of its revolutionary take on servicing customers and tapping into employees - or Zapponians - to make it happen. Zappos' company culture has been able to do something few companies can achieve: permeating the walls of its corporation to become universally acclaimed among its customers, further leveraging this momentum into its marketing efforts. From an employee standpoint, things are pretty clear: either you belong to the Zapponian culture or you get a few thousand USD to leave voluntary the company. That means those who stay take their service excellence extremely seriously.

Service excellence equates business viability

You might have heard already that only 12% of Fortune 500 companies survived between 1955 and 2015. Most companies were acquired, some completely defaulted and big names such as Nokia or Kodak  nearly disappeared. This trend is still valid nowadays, with volatile markets and new players such as Uber, Airbnb or Tesla who have gained more market value in a decade than traditional big businesses. By means of innovation and disruption, companies can boom or go totally bankrupt, very fast, these days. 

Coming back to service excellence culture: I have read hundreds of business cases on different companies, across a variety of industries, and one common ground for business success lies in an organization's ability to establish a strong culture of service excellence. One great example is South West Airlines, the largest low cost airline in the world operating in an industry with very low margins and where going bankrupt is not an exception. As a customer, you can really experience the firm's customer-centric approach: among big changes in the industry, they continue to allow two free checked bags per passenger, do not charge last minute flight changes and overall, equip their flights with free wifi and movie streaming and can consistently claim the lowest number of complaints across all US airlines. They are still a low cost airline - just as Ryanair - but does the latter carries the same image to you?

Build your Service Culture: Learn more about EHL Advisory Services

Becoming a reference in service excellence

I used to work for one of the biggest online travel agents, very successful in terms of market shares. While the reasons why the company reached a dominant position greatly vary depending on who you ask, I personally experienced their constant focus on the customer. One of the values that was considered as most important is to place the customer first. If there was an issue with any traveler, no matter what was on your to-do list, this needed to be solved first.

Likewise we find this approach at Amazon. With Christmas period, even the directors and senior management help to package the goods to deliver the companies’ promise. All hands on deck! Somehow, this is an inspiration to be the industry reference and to show leadership by example.

To conclude, remember this: whenever a project comes, a winning approach is to set the customer always at the very centre. You may build an expensive five star hotel but what if the service level is not adequate? You lose. You may make a fantastic feasibility study with the greatest numbers, but what if the customer does not come? You lose.

 


*2018 Customer Service Expectations Survey, Gladly

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Jochen de Peuter
About the author

Jochen de Peuter - Consultant at EHL Advisory Services, Lausanne Office.

Jochen puts the customer at the center of his approach. With efficient use of resources and well-determined activities, Jochen commits to creating significant added value for the customer and therefore a positive return on investment for the business. He is convinced that digital transformation, constant innovation, employee education and customer focus are fundamentals for a successful business.

Prior to joining EHL Advisory, Jochen worked in the online hotel distribution and hotel technology industry. He has proven outstanding results in customer acquisition, business development in new markets and relationship management across various markets in Europe. Jochen operated in demanding and fast evolving work environments. This setting helped him to collaborate and think with the team so as to stay ahead of competition.

Jochen holds an academical degree in economics and business administration, a post graduate degree in hospitality operations and an Excecutive MBA from IESE business school. He is a native Dutch speaker, business fluent in English, German, French and can communicate in Russian.

Areas of Focus: Customer service design, Online hotel distribution, Digital transformation, Business development, Digital marketing, Business analysis of SME and start-ups.