Tales of Customer Service

This week on Under The Influence, an encore broadcast of one of our most requested episodes from last season: "Tales of Customer Service."

We're on the hunt for great companies that went out of their way to treat their customers well. We'll look at an amusement park that delivered such superior customer service that other corporations asked for lessons, a shoe company you can order a pizza from and a store that actually accepted a returned product they didn't even sell just to keep their customer happy.

Join us as we search for companies that go the extra inch.

In 1997, one of my favourite books was published.

It was called, Letters From A Nut. The author was listed as Ted L. Nancy (a pseudonym for comedian Barry Marder).

What makes Letters From A Nut so unique is its premise. Ted L. Nancy writes letters to companies and prints their responses. But not just any letters.

Hilarious, preposterous ones.

For example, he writes a hotel in Washington to make reservations, and asks if he can bring 2200 red ants with him. He assures the hotel that while the ants are in fact, loose, none will leave the hotel room.

The hotel responds in a very courteous letter saying they cannot accommodate Mr. Nancy or his red ants because they regularly fumigate the carpets and rooms.

Both letters are printed side by side.

He writes to another hotel to ask if he can bring his own five-foot ice machine. (Answer: No) In another letter, he asks a different hotel if he can bring his own bathtub, asking if they could take the hinges off his hotel room door so he can get the tub inside. (Answer: Sorry, we're fully booked).

He writes to restaurants, amusement parks and various companies, and the story we tell about the Baseball Hall Of Fame in today's show is maybe the best. The letters get funnier and funnier.

Some replies are earnest and gracious. Some are terse. Some are one-line brush-offs. And others are just plain surprising.

Letters From A Nut went on to sell more than a quarter of a million copies.

Not only does the back-and-forth correspondence make you cry with laughter, it gives you a good insight into the level of customer service at each corporation.

How they respond, the tone they take, the language they use, and the kindness they choose to exhibit, or not exhibit. Customer Service is one of the most important factors in the success of any company. Most companies in the world provide terrible customer service at worst, or basic customer service at best.

Yet customer service = profit.

Welcome to "Tales of Customer Service." We'll explore some of the companies that do it best, the affect it had on their customers, and the remarkable stories about how those companies did it.

Customer service is marketing.

It's astounding how many companies never fully grasp this point. But the best companies do. And the ways they express great customer service is a lesson for all of us.

There is a famous story about Macy's Department store back in the 1950s. One day, a customer walked in to return an item she had purchased.

Macy's took it back with a smile, refunded the full purchase price, and the lady left happy.

Now, you may not think that's a remarkable story. But it is. Because Macy's didn't even sell the product the lady returned.

They simply wanted to do everything in their power to have that lady leave the store happy, because a happy customer is a repeat customer.

They gave her a refund, even though she had bought the item at another store.

Yes, memorable customer service means going above and beyond the call.

It's 1 a.m. and it's freezing in New York City.

A father and his kids are camped out in front of the Radio City Music Hall, hoping to get wristbands for the NFL Draft.

But the ticket window won't open for another five hours.

Suddenly, a taxi pulls up, doorman jumps out, drapes the family in blankets, hands them all cups of hot chocolate, then speeds off.

As AdWeek Magazine notes, it wasn't an act of random kindness, it was caring customer service. The family had checked into the Ritz-Carlton before heading out to Radio City, and the night manager there just wanted to make sure they were comfortable as they waited in the cold - even though they were on a sidewalk four miles from the hotel.

The Ritz-Carlton is a smart company, and they know exceeding customer expectations can't just be a marketing campaign, it has to be an operating platform.

David Ogilvy, one of the legends of the advertising business, and the founder of Ogilvy & Mather New York, had high customer service expectations for his staff.

I always remember one of the things he insisted upon.

He said, "We don't walk our clients to the elevator, we walk them to the street."

In other words, after meetings, he expected his staff to walk their clients - not just out to the elevator - but all the way down to the street, and help them hail a cab. And in the skyscrapers of New York, that is no small courtesy.

I would venture to guess they were the only agency in town that did that. But Ogilvy & Mather believed in hiring people not just for their intelligence, but for their manners.

Why do so few companies do that? Because the philosophy is so rare.

In his superb book, titled, Small Giants, Bo Burlingham writes about 14 small companies that rejected the pressure of endless growth, and chose instead to stay small but be great at what they do.

He tells the story of restauranteur Danny Meyer, who owns several restaurants in New York, including the Gramercy Tavern.

Meyer believes that all successful companies must have a soul.

He regards traditional customer service - like being prompt, getting the food to the table while it's still hot, and cleaning up quickly afterwards - as a technical skill.

He believes you can teach people those skills, but Meyer wants his people to deliver something more. He wants them to make the customer feel like the staff is on their side.

And that is an emotional skill.

It means Meyer has to hire people who already have that capacity. You can't instill empathy. You can't make people sensitive to the way their actions affect other people. You can't give staff the desire to bend over backwards for customers.

So he hires for those innate emotional skills, and trains for the others.

How does Meyer's philosophy look in action? Often, waiters see customers having trouble deciding between two deserts - so they'll bring the second one for free.

One of his managers recently returned a handbag a customer had left behind, but chose to send it Federal Express, instead of just holding it for her at the restaurant.

One of his Maitre D's recently put a rose on Table 27 for a couple, knowing they always sit there on their anniversary, because that's where he proposed to her.

None of these acts of customer service are earth-shattering. Just beautifully unusual.

Danny Meyer realized the difference customer service makes way back in 1995. In a restaurant survey, the Gramercy Tavern was ranked 10th for food quality, and didn't even make the ranking for dcor.

But it was voted as the third best restaurant in Manhattan.

Clearly, people were coming for another reason. And that reason, as it turned out, was the incredible attentiveness and humanity of the staff.

As writer Burlingham points out, you don't want customers to leave just satisfied, you want them to be happy. That's a step beyond service. It requires the company to develop an emotional connection with their customers through individual, one-on-one contact.

My wife and I have patronized some restaurants for years, and the staff has never bothered to learn our names. Think about how often you feel like you're just another number at a store or a restaurant. I would venture to say we all feel that way, more often than not.

It takes an obsessive company to deliver standout service.

The Magic Kingdom at Walt Disney World is a model of customer service.

This attention to detail comes, not surprisingly, from the founder.

Walt Disney's mantra was, "Give the public everything you can give them." From that simple statement, everyone at Disney strives to exceed customer expectations every day.

MSNBC.com did an interesting article on Disney World titled, "What time is the 3 o'clock parade?"

I'll explain that title in a moment.

Customer service at the Magic Kingdom is both an art and a science. For example, Disney houses its lockers and wheelchairs to the right of the park's entrance, because they have long observed the majority of the visitors go to the right when they come through the gates.

A Disney study showed people who bought hard candy with a wrapper took about 27 steps before tossing the wrapper on the ground. So Disney placed a garbage can every 25 steps.

Another of their key philosophies is, "It's not my fault, but it's my problem" - which means even though visitors may approach a Disney employee with a random question or a predicament, the employee is taught to "own" the problem, and stay with the customer until it is solved.

And when visitors ask, "What time is the 3 o'clock parade?" Disney employees are never sarcastic, but answer instead by saying:

"The parade starts at 3pm at Frontierland, but it will be at Main Street USA by about 3:20. You can wait here in the shade if you like."

Disney staff are trained to be "assertively friendly" - in other words, they are encouraged to seek contact with visitors. For example, they will actively approach someone who looks confused instead of waiting to be asked for directions.

Disney's grasp of customer service was so exemplary, their customer satisfaction ratings so high, that other companies began approaching Disney for instruction.

So, in 1986, the Disney Institute was born.

It's a Florida-based division of the Walt Disney Company that teaches other companies how to exceed customer expectations. Those companies have included Delta Airlines, IBM, General Motors, Chrysler, and even the IRS.

The basic message at the Disney Institute is something that Walt Disney himself discovered decades ago:

That people remember people, not products.

The key is to encourage employees to be consistently attentive, without seeming overly-rehearsed or robotic.

For example, the Miami International Airport came to the Disney Institute for help. Surveys ranked its customer service among the nation's worst.

Now, you might think an airport and Disney World don't have anything in common. But, when you think about it, both companies have millions of people waiting in line for a ride every day.

400 Miami Airport staff learned to put "It's not my fault, but it's my problem" into action.

The Disney Institute's lessons are transferrable to any industry.

A Chevy dealership in Massachusetts watched as customer satisfaction levels jumped to 90% after studying with Disney. A staffing service company took the course and saw their revenues double in one year's time. A hospital in rural Wisconsin took Disney's customer service lessons to heart, and its employee turnover dropped by half.

The list is endless. When customer service soars, so does profit.

One of the most legendary customer service companies is Zappos.

It's an online retailer that began as a shoes-only site. And it goes to extraordinary lengths to keep their customers happy.

It all begins with their hiring practices. During their four-week training course, the company offers people $1,000 to quit.

It's unheard of. But there's a reason - they want to weed out people who don't share their philosophy of empathy, kindness and humility.

In 2007, 3% of the candidates took the money.

In 2008, 1% did.
In 2009, no one took the money.
So Zappos upped the offer to $2,000.

At every step of the job training process, Zappos is trying to determine if their values line up with the applicants. It's the same philosophy Danny Meyers uses in finding people for his restaurants. They are searching for untrainable skills.

Most companies who rely on phone centres to do business have time limits - they want their staff to process a certain number of calls per hour. But not Zappos - they field over 5,000 phone calls per day, and there no time limits.

As CEO Tony Hsieh (pronounced Shay) says, they actually want to talk to their customers. He believes the telephone is one of the best branding devices out there. The way he looks at it, you have your customer's undivided attention for 5 or 10 minutes - and what smart marketer doesn't want that??

He also firmly maintains that every phone call is an opportunity to WOW their customers.

First of all, there is a 365-day return policy. That's right, you have a year to return items.

Zappos is also okay if you want to order 10 pairs of shoes, try them all on, and return the nine you don't want. All returns are free. No questions asked.

If you're not sure of your fit, order a size 7 and a 7 , try them both on, then send back the other pair.

Zappos also knows how to deliver. Not only is shipping free, it's often done overnight. That means if you order up to midnight, your shoes will be on your doorstep eight hours later when you wake up in the morning. * (NOTE: Zappos is not available in Canada because the company could not guarantee quick delivery because of customs and border slowdowns)

That kind of service creates that WOW FACTOR. More importantly, it creates emotional impact.

As a matter of fact, people are so amazed their purchase arrives so fast, many of them literally scream when the package arrives.

UPS delivery people said they had to get used to that reaction when it comes to Zappos.

If an item is out of stock, Zappos staff will search out three other competitor's websites and direct customers there.

Even though they will lose that sale. (P.S. Zappos no longer ships to Canada. Difficulties shipping across the border didn't allow the company to maintain or guarantee their high level of service)

But there is a reason they do that: They are not trying to maximize the transaction, they're trying to build a lifelong relationship.

I can't stress this enough. In the end, excellent customer service doesn't cost money, it makes money.

One last Zappos story. CEO Tony Hsieh took some clients out for a night on the town once. After the bar closed, they all went back to their hotel. One of his clients had a yearning for a pizza, but it was 2am, the hotel kitchen was closed.

So Hsieh suggested she call Zappos and see if they could find her a pizza.

You have to understand what he just suggested - he told his client to call his company - a fashion retailer - at two in the morning - and ask for a pizza.

So Hsieh's client called Zappos and asked for a pizza. There was a short pause on the other end of the line, then the Zappos operator found three pizza stores near the hotel that were still open, and ordered the pizza.

That moment floored the clients, but I bet it didn't surprise Tony Hsieh. Because he has instilled in his company an overwhelming desire to make customers happy.

That's why Zappos reached $1 billion in sales in only their eighth year of business.

There's another lesson here. 75% of Zappos customers are repeat customers. They call more often, and they spend more money.

And they keep shopping at Zappos because they've never been treated better in their lives.

Customer service is marketing.

It breeds more customers, because it fuels the most powerful form of advertising: Word of mouth.

Most companies can't afford to find a new customer every day. That means they have to rely on repeat customers. And the best way to ensure repeat customers is by exceeding customer expectations.

As almost every example showed today, customer service doesn't cost money, it makes money.

None of these companies were out to create a transaction, they were out to create a relationship.Companies have to care about their customers to want to exceed their expectations. That's why customer service is like taking the ultimate temperature of a company.

Because it reveals exactly what a company thinks of its customers...

...when you're under the influence.