Tips for Effective Leadership
Tip #3: Don’t Satisfy Customers
by Wolf Rinke

Effective leaders have the guts to look at what others do …
and do something different.

Don’t satisfy your customers! Wait, you say, I thought customer satisfaction is the key to business success? Yes, it’s the ticket to get into the ball game, but it won’t insure that you are going to win!

Think about a recent service encounter that they remember --- What do you remember? I’ll bet you recall the extremes --- service providers who messed up and those that exceeded your expectations. Seldom does anyone recall a service provider who has met their expectation, that is, satisfied them. That means only if you and your team members consistently exceed your customers’ expectations will customers remember you and your organization. And if they forget your organization often enough, you’ll feel the impact on your bottom line very soon.

How much of an impact? Researchers who analyzed the buying behavior of 1,500 PNC Bank customers found clear evidence that customers who ranked themselves as “highly satisfied” (the highest level of satisfaction) maintained a bank balance of nearly 20% greater than those customers who were “satisfied” (the second highest level of satisfaction).

The researchers also compared the impact of different levels of satisfaction on profitability by dividing 400 PNC branches into three tiers. The top tier contained the 15% of the branches who had the highest percentage of highly satisfied customers. The middle tier comprised the middle 70%, and the bottom tier consisted of the 15% of the branches who had the fewest highly satisfied customers. Using revenue per employee --- a key indicator of bank profitability --- researchers found that the top tier branches had 23% higher than average revenue, while the middle fell 3% and the bottom tier fell 9% below average revenue.

The researchers concluded: “Those [customers] displaying the highest level of satisfaction are, in economic terms, significantly more attractive than those showing only moderate levels of satisfaction. And a customer who stays highly satisfied becomes steadily more attractive over time.”

So, what can you do to exceed your customer’s expectations?

  • Treat all employees as if they are winners. At the Ritz Carlton employees are told: “We are all ladies and gentlemen, serving ladies and gentlemen.” Never forget, over the long run you get what you expect!

  • Provide meaningful and ongoing job related continuing education and training. If you don’t, your excellent employees will leave you, because they know that unless they are learning and growing they are falling behind.

  • Adhere to an aggressive internal promotion policy. Help your team members succeed and grow and they will more likely stick with you for the long term.

  • Collect and publicly display detailed customer satisfaction data. Do this in a manner that is understood by all team members.

  • Tie rewards to performance — reward customer service champions differently than your average service provider.

  • Publicly celebrate customer service heroes. When you celebrate be sure to tell stories about the specifics of team members exceeding customers’ expectations. It lets team members know what’s important around here.

  • Catch your team members doing things right. It builds service providers’ level of self-esteem. And only people who feel good about themselves, their organization and their boss will be able to consistently exceed the customer’s expectations.

  • Make taking care of customers fun! Remember if it’s fun, it gets done!


Dr. Wolf J. Rinke is a management consultant, executive coach and keynote speaker dedicated to helping organizations and individuals maximize their potential. In addition to his new book Don't Oil the Squeaky Wheel … and 19 Other Contrarian Ways to Improve Your Leadership Effectiveness (McGraw-Hill, May 2004), he is the author of several other best-selling books including Winning Management: 6 Fail-Safe Strategies for Building High-Performance Organizations. Rinke can be reached at 800-828-9653, WolfRinke@aol.com or www.WolfRinke.com .

Don't Oil the Squeaky Wheel:
And 19 Other Contrarian Ways to Improve Your Leadership Effectiveness
by Wolf J. Rinke
McGraw-Hill
May 2004

Media Contact: Cindy Kazan: 414.352.3535; cindy@communik-pr.com .

Many more articles in Customer Service in The CEO Refresher Archives

   


Copyright 2004 by Wolf J. Rinke. All rights reserved.

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