Service is Not a Strategy; It’s an Ethic
Published August 2001 – Transaction World Magazine
Written by David Lapin (CEO) and Desi Rosenfield (President)

Customer Fidelity
Why, after investing so much effort in customer service, is your company still not achieving customer loyalty?  Why, after rating the service standards at a Hilton hotel as "satisfactory," will Thomas Stewart probably not return to the hotel chain?  Why has Nordstroms, acknowledged retail king of service, suffered two years of dismal results?  Accessing products and services has never been as easy as it is today.  Customer convenience has never been so prolific.  Yet customers wander from one supplier to the next in an endless search for that elusive quality they call service.  You, on the other hand, are confounded by your customers' fickleness:  What more could you be doing for them?

In desperation, you incentivize loyalty and penalize infidelity.  At great cost, you offer discounts, bonuses, and vouchers.  Your competitors do the same. Your margins narrow, as do those of your competitors.  To remain efficient, you downsize, working your remaining staff a little harder.  Amidst shrinking margins and expanding workloads, you pursue customers as relentlessly as they pursue a service offering they can't quite define.

Valuing Your Customers vs. Valuing Their Money
Customers may not quite be able to define what specific service they seek, but they can most definitely identify the service they reject.  You see, customers have uncovered the insincerity of "customer service excellence:"  Companies project themselves as "caring for the customer," and "putting the customer first."  However, customers do not feel that they are treated with dignity. Even the most unsophisticated customer knows that vendors do not really value customers.  They value their customers' money!

Being called a "customer" rather than a "passenger" or "patient" may give you a sense of having more rights, but not of being more cared for.  Airline captains often bid farewell to their passengers by telling them "how much our airline values your business," but note the subtle difference:  They don't say how much the airline values YOU.  Most Asian airlines never tell you how much they value you, your business, or your money.  They don't need to.  They greet you with respect and serve you with honor, so you feel valued and valuable every moment of the flight.  That is the difference.

Compare those airlines that have mastered the service ethic to those that have not:  Those that have not, for example, tend to throw food, packaged much like a child's school snack, at their coach class passengers.  Flying now, say customers, is "like a cattle haul."  Those that possess a service ethic present meals with a touch of elegance and a lot of dignity.  This goes beyond the porcelain, silver, and linen to an efficient graciousness present throughout.  Airline attendants that have mastered the service ethic anticipate your needs with an apparent delight, rather than respond to your requests with noticeable irritation.  All of this differentiates those that offer convenience from those that truly serve.

Coupons, discounts, vouchers, and bonuses alone do not buy loyalty.  On the contrary, the most effective strategy to achieve customer loyalty entails no financial cost at all.  It only requires that all employees learn to view service not as a corporate strategy of expedience, but as central to a genuine corporate ethic.  The art of the service ethic is the willingness to truly value and sincerely serve ordinary people who have the means to pay for your product. Serving customers whom you truly value expands way beyond a strategy to encourage them to part with money.  Service of this kind becomes a moral imperative; customer spending is its outcome. When customers are made to feel worthy of the service they receive, they delight in spending and will return to do so again and again.

Technology:  Convenience or Service?
Technology does not provide service, it provides convenience.  Service is an ethic that conveys the feeling of being valued; convenience is a strategy to retain and expand a customer base.  Convenience can be mass-produced and delivered identically to every customer.  Service must be customized.  Technology, superb at communicating information, is also an outstanding instrument with which to deliver convenience.  An efficient voice-mail system is highly convenient, but since its instructions are expressed in a way that is intelligible to the least intelligent person likely to use it, it hardly makes its customer feel valued! Technology does not care, and thus, it cannot serve.  Only humans who honestly care can truly serve.

The “No Frills” Service
This does not mean that a company cannot do well offering a "no-frills" service.  Consider the success of Southwest Airlines, which rests on the integrity with which it is upfront with the customer about its limited service standards and the reasons for them.  The company then maintains consistent integrity in the way its staff communicates openly and with warmth.  The frills are cut, but not the caring.  Caring doesn't need to cost a whole lot; it does need an ethical commitment though, one which Southwest has successfully cultivated.

Customer convenience differs from customer service:  Customer convenience simplifies customers' lives; it saves them time and money.  Customer convenience is vital for retention and growth of market share, but it fails to enthuse customers with a feeling that they are valuable as individual people.  Service engages the customers.  Convenience is disengaging. Service is an ethic that conveys a genuine sense of peoples' worth.  When service is faked, your customer knows it.  Give him the real thing, and he will be yours forever.