Practical methods to address this situation successfully have been known for a long time. Whether TQM, Six Sigma, ISO 9000, or Baldrige Criteria, they are all largely based on the same time-tested principles that put processes, measurable results and the customer at the core of an organization.
However, many service companies have shied away from them on the ground that those management techniques "do not apply to us." In search of a solution, some thought that CRM would deliver miracles in spite of -- or perhaps because of -- its doubtful claims of financial reward. As it emerged, CRM mirrors a corporate culture without changing it. If the culture is self-centered, the technology in itself cannot change it.
CRMs are fascinating information systems, but even when they work, they are not meant to turn every customer into a king. At best, the technology helps manage data and distance in a way that humans cannot possibly do. CRM does not create the "relationship" -- only humans do.
For instance, the Ritz-Carlton makes an extensive use of technology to help employees share information on their customers' habits. But what makes the customer feel special is neither the technological nor the organizational prowess; it is the human touch of the doorman who, without a computer terminal, greets customers by name.
In a 1990 survey, a European office of Price Waterhouse asked its employees to vote for the most valuable member of the firm. To the surprise of many partners and high-flying consultants, the receptionist was elected (and received a pay raise in the days following). In everything but title, the receptionist was truly the "Director of First Impression" -- a critical position in a service organization.
In those two organizations, a large account is likely to receive priority over smaller ones. Some unprofitable customers might not even be desired. Nonetheless, the attitude that employees display is: respect your customer like a king.
"Employees joked cynically and resisted change"
In practice, displaying the slogan on a banner will not do much for the customer. It can even backfire, as a Belgian distributor of pharmaceutical products experienced. Its management concluded that hanging banners (e.g., "The customer is #1") and repainting the walls in a light green would enhance the quality of customer service. Cynically, the employees joked at the slogans and became resistant to further change. Management can certainly instill and reinforce the positive attitude expected from all the personnel, but there are obvious limits to this approach. This kind of simplistic management technique will not stop the quality of service from regularly diving and fluctuating.
Nevertheless, hiring people with a positive attitude is a good start. In his previous career, General Colin Powell often insisted that a positive attitude was more important than raw knowledge. With the right people, quality customer service is then delivered consistently and profitably through processes (including a hiring process). In most organizations, the chances are that it is the only way to deliver the brand promise consistently at every contact point with the customer over time.
The underlying principles of this concept have been promoted by Dr. W. Edwards Deming since the 1950s. By all accounts, Deming's work is not a fad and its applications are well known at companies such as Bosch, Dell, Ford, GE, Toyota, and Xerox, all manufacturing companies. On the service side, American Express, FedEx, Merrill Lynch, Ritz-Carlton, or the University of Wisconsin-Stout are also noteworthy examples of organizations applying Deming’s principles.
Several of those organizations have been honored with the Malcolm Baldrige National Quality Award in the US, the Deming Prize in Japan, and the European Quality Award. The application form to those awards provides in itself an excellent roadmap to put a company on the path to quality excellence.
Although those methods foster a culture of continual improvement, past results are not a good proxy of future returns: Delivering on the brand promise requires everyday leadership. If management lowers its guard, the organization will most certainly drift away from its path.
Once again, the car industry abounds with examples (Note: Toyota received its Deming Application Prize as early as 1965). Wholesale layoffs of veteran engineers, plant layout, fast turnover of managers, tensions in industrial relations, shifts in the supply chain, mistrust among car dealers, can all contribute to make quality fluctuate.
The situation of the service sector is even more sensitive to changes, whether internal or external. A product along a value chain will most likely be checked several times before reaching the final customer. But a large proportion of services are rendered directly between a front-line employee and the final customer, which leaves little allowance for fluctuating quality. Although everybody is entitled to have a bad day, displaying a hint of negative attitude might be costly for any service business. Unfortunately for the brand, research has shown that the story of a bad experience circulates five times farther than a good one.
In conclusion, quality must be delivered in a systematic way, regardless of the product, service or customer. Systematic means that the key activities of the business -- including recruiting and personnel development -- follow a customer-driven, predictable and self-improving process. For service companies -- from law firms to call centers -- there is therefore no alternative to implementing those "old fashioned" management techniques that have made cars and TV sets reliable. Among the benefits, the customer -- as the business' raison d'être -- will durably stand at the core of the company's organizational design. Long live the king.