Years ago, I sat next to an executive on a flight home to Denver. When he learned that I worked for Marriott, he mentioned that he had achieved Marriott Rewards Platinum Elite status after spending more than 75 nights in Marriott hotels around the world the previous year.

He began to praise the company and, specifically, the consistency of the product and service quality from location to location. While positive feedback is always welcome, I questioned him about problems he may have experienced or any areas in which we could improve.

He thought about it for a moment and replied, “Now that you mention it, there is one thing you can improve.”

He went on to rail against the inconsistency of Marriott’s package delivery process at its hotels. I can still recall the frustration in his voice as he recounted arriving late at night ahead of a morning presentation at the hotel and the staff being unable to account for the packages containing materials for his meeting that had been shipped in advance.

Invariably, after researching and providing tracking numbers and an hour’s worth of phone calls, denials, and finger pointing, the packages would surface in some corner of the hotel. Most of the time, they were being stored in the Shipping and Receiving holding cage and other times they were being held in the bell closet, behind the front desk, or in a sales manager’s office.

“Why can’t your hotels figure this out?” he asked. “It’s not rocket science.”

Fortunately, this conversation coincided with Marriott’s implementation of the GuestWare customer relationship management system and At Your Service® pre-arrival planning and “virtual concierge” program. These initiatives, among other benefits, improved the tracing of guests’ packages and prompted personalized, reassuring, and timely communication with hotel guests.

But this is not a post about process improvement. This post is about the importance of listening—REALLY listening—to your customers. If your goal is to differentiate your company based on customer service quality, consider these takeaways:

1. Solicit feedback from your customers. Most companies solicit feedback from their customers in ways that are more formal and less frequent (e.g., intercept surveys, focus groups, satisfaction surveys, etc.). I’ve found that there’s more integrity to customer feedback that is less contrived and more spontaneous. Look for opportunities to engage your customers that are less formal and more frequent.

2. Seek contrary evidence. While we all appreciate positive feedback, it’s difficult to elevate our performance without realizing the inevitable (and, in some cases, prodigious) opportunities we have for improvement.

3. Listen to your customers. This is not the same as soliciting feedback. It’s one thing to request feedback. It’s another to listen to the feedback in a non-defensive, non-prejudicial way with the intent to truly understand your customer’s perspective.

Here’s a memorable illustration of this lesson:

Part 1: Stew Leonard, Sr., of the renowned supermarket chain bearing his name, once received a written customer suggestion that his store should sell fresh fish. At the time, he was sending a van to Boston each morning to buy fresh fish. As soon as the van returned to the store, the fresh fish was prepared, sealed in plastic wrap on Styrofoam trays, and displayed in the seafood case for shoppers’ perusal.

He could have easily dismissed the suggestion but instead called the customer to inquire further. During that call, he learned that the customer defined fresh fish as being laid loose on ice (rather than sealed in plastic wrap on a Styrofoam tray). He thanked the customer for her feedback and decided to conduct a little experiment at the store.

4. Act on the feedback you receive from customers.

Part 2: The next day, he instructed his seafood department to display half the fresh fish wrapped in plastic as usual. The other half was to be laid loose on ice. One week into the experiment, he found that the fresh fish that had been laid loose on ice outsold the fish wrapped in plastic by a margin of 3:1 and that his gross sales of fresh fish had doubled!

In summary, be intentional about gathering feedback from your customers. Look for untraditional opportunities to engage them in conversations about their experiences (both positive and challenging) with your company’s products and services.

When you really listen to customers, you are expressing genuine interest in them. And by acting on their feedback, you are validating their perspective, reinforcing the relationship, and acknowledging their contribution to the success of your business.

This post is the sixth in a series that will identify 10 different obstacles that have emerged from my analysis of customer satisfaction data. Maybe you will have encountered one or more of these obstacles in your own business? The sixth obstacle is a low-trust service culture.

A low-trust service culture is evidenced by disempowered frontline employees, restrictive policies (especially warranties and returns), and overt skepticism in employees’ approach to problem resolution.

In the fall of 2004 I purchased a to-go order of lasagna from Armando’s, a local Italian restaurant. At home, after eating about one-third of the entrée, I discovered a dead fly in the pasta sauce and quickly lost my appetite. I sealed the remaining lasagna (including the dead fly) in a Ziploc bag and placed it in the refrigerator with plans to return it to the restaurant for a refund.

Within a day or two I stopped by Armando’s with the bag of partially eaten lasagna, shared my story with the employee manning the register, and requested a refund. Instead of demonstrating empathy, the employee suggested that it was not possible for the fly to have originated there, claiming, “We don’t have flies in our kitchen.”

Oh, really?

The implication was that if the fly had not come from his kitchen, then it must have come from mine. Or perhaps I had deliberately planted the fly in order to recoup the $9 cost of the lasagna—although I’d only eaten a portion of it. While he reluctantly agreed to the refund, it was quite obvious that he didn’t trust me or appreciate my feedback.

As I stood at the counter, instead of issuing my refund, the employee accepted another customer’s order, processed the transaction at the register, and then walked over to the oven, removed a pizza, sliced and boxed it, and delivered it to another waiting customer. Only then did he begrudgingly process my refund. It’s as though he was trying to punish me in some perverse way by making me wait a few extra minutes to receive my cash.

After frequenting Armando’s at least monthly for nearly three years, I made a decision that day to never return. And I haven’t.

Since that time, I’ve had two more children and, as a family, we’ve instituted “Family Fun Fridays” which consist of a pizza dinner followed by a movie and popcorn. Due to work schedules and kids’ activities, we miss some Fridays but I estimate that we order about 68 pizzas a year (34 weeks x two pizzas) from competitors of Armando’s: Papa Murphy’s and Anthony’s.

Our average pizza bill is $20 or $680 per year. Since the fall of 2004, we’ve spent about $4,760 on pizzas. If I were to guess, I’d say that Papa Murphy’s has earned about 80% of that total ($3,808) and Anthony’s has received the balance ($952). While these are estimates, I can say with certainty that Armando’s share has been zero.

Armando’s has forfeited its share of $4,760 because an employee exhibited low-trust by questioning the legitimacy of a customer’s feedback and request for a $9 refund.

This is not a unique story. Everyone reading this post has a similar experience to share—perhaps many. The valuable lesson to be learned is this: Be intentional about fostering a high-trust service culture. This commitment should be reflected in the policies of a business and the behavior of its employees.

Will every customer be trustworthy? No. There are unscrupulous customers who will take advantage of liberal return policies and other gestures of high-trust.

But it’s a mistake to scrutinize the motives of 100% of your customers in order to identify the 3% who are trying to take advantage of you. Not only is it a poor use of time and energy, if you offend a customer in the process, it may cost you dearly.

Just look at what it’s costing Armando’s…

This post is the fifth in a series that will identify 10 different obstacles that have emerged from my analysis of customer satisfaction data. Maybe you will have encountered one or more of these obstacles in your own business? The fifth obstacle is adversarialism.

Adversarialism is an attitude that conveys hostility, opposition, or competition. Have you ever sensed an adversarial (us vs. them) disposition from a service provider?

Perhaps you were on the receiving end of what you would describe as rude or disrespectful behavior? Or perhaps it was more subtle—like dismissive body language or a contemptuous sigh? Maybe it did not involve you directly but was an altercation that you observed?

I once witnessed a supermarket employee chastise a customer in the store’s parking lot. After the customer failed to return his shopping cart to a designated cart collection area, the employee called out sarcastically, “Excuse me. That’s not where the cart goes!”

The offending customer either didn’t hear the reprimand or chose to ignore it.

I get it. I know that supermarkets provide signage and make it relatively easy for customers to return their shopping carts to designated areas throughout the parking lot. And most customers cooperate and return the carts as requested. But a few customers do not for a variety of reasons: They have young children in the car, it’s raining, they’re in a hurry, etc.

Why is this employee competing with his customer regarding whose responsibility it is to properly secure the shopping cart? That’s an argument he will never win. After all, it’s his job to collect and return the shopping carts. That’s what he’s paid to do!

The customer’s only obligation is to pay for his groceries. And we can assume he’s done that. Instead of being admonished, he should be appreciated.

Always compete for customers, not against them. You have probably heard the saying: “You never win an argument with a customer.” It’s true. Even if you have signage to point to or a policy to reference, if you offend a customer then you lose—maybe a little or maybe a lot.

The next time that you draw a line in the sand between you and your customers, consider inviting them to cross the line. That way, you can be on the same side.

Yesterday, I received the message below in an email from a blog reader:

Ever since I passed your blog to my store manager… I have gotten the vibe that (my interest in improved customer service) is viewed like a puppy…cute but meaningless to the Corporation’s ideals… Profit for the shareholder is the requirement of all actions… The image I see is the company has a system it says works. As much as I would (or even my Store Manager would) like to improve Service, unless there is a clear vision of profit in doing so, it’s only a cute puppy…

I understand what he’s saying. I have experienced it personally as an employee, as I suspect most of us have.

Too often, managers with P&L responsibilities see customer service as a soft skill with little impact on the bottom line. Instead, these managers tend to rely on hard data such as revenue, profit margins, and forecasts to influence the operation’s financial success.

This becomes a self-fulfilling prophecy whereby managers tend to consistently value and critique “the numbers” while neglecting soft skills like customer service. Employees receive mixed messages: “The posters in the cafeteria tout the company’s commitment to World Class Customer Service but the only feedback I receive pertains to labor and productivity figures.”

It’s as if managers are operating with a day-to-day or week-to-week mentality as opposed to considering the long-term impact of their decisions. And when managers manage this way, employees usually follow their lead.

Just last night at my local Safeway, I witnessed the following confrontation between a cashier and a customer:

As I waited in line, the customer ahead of me was attempting to obtain a rain check for a sale item that was out of stock.

The cashier refused to issue the rain check on the grounds that the sale had ended the previous day. The customer, clearly frustrated, maintained that the sale was valid according to the date published in Safeway’s sales circular.

A line of customers had formed behind me and, as we waited, the customer left the checkout lane in search of a circular to prove his case. About the time he obtained a copy of the ad, a store manager approached him and together they scrutinized the ad’s fine print. As it turned out, the customer was right. The sale was scheduled to expire the following day.

The enlightened cashier then validated a rain check for the out of stock sale item but the damage was done.

I’m not sure what Safeway’s total cost will be to honor the rain check but I can tell you this with certainty: It will be a drop in the bucket compared to the lifetime value of this customer.

I’ve read that the average lifetime value of a supermarket customer is $250,000 (source: V. Kumar, University of Connecticut). This customer looked to be in his mid-40s, presumably with plenty of grocery store purchases in his future. This particular Safeway store is located directly across the street from a competing supermarket, King Soopers, and about a mile away from a second competitor, Albertsons.

This customer has to eat—and within about a five-mile radius he has multiple options to buy groceries that, in addition to the stores listed above, include Walmart Supercenters and SuperTargets as well as specialty grocers like Sprouts and Sunflower Market.

Why on earth would anyone want to jeopardize tens of thousands of dollars in future sales by refusing to issue a rain check for an out of stock sale item? This makes absolutely no sense—regardless of whether or not the sale had expired.

It is well-documented that one of the most effective ways to boost a customer’s lifetime value is to increase customer satisfaction. Research has shown that a 5% increase in customer retention can increase profits by 25% to 95%. The same study found that it costs six to seven times more to gain a new customer than to keep an existing one (source: F. Reichheld, Bain & Company).

Hard data and soft factors do not have to be mutually exclusive. They can be complimentary elements of the same goal: To maximize profitability.

In addition to hard data such as profit margins, market share, and customer retention rates, managers must recognize the influence of soft factors such as customer satisfaction, loyalty, and word-of-mouth testimonials from delighted customers.

They also need to look beyond the near-term operating statement in order to make decisions that will benefit the long-term success of the organization.

When they do, these managers will come to realize that even cute puppies have teeth.

This post is the fourth in a series that will identify 10 different obstacles that have emerged from my analysis of customer satisfaction data. Maybe you will have encountered one or more of these obstacles in your own business? The fourth obstacle is nonchalance.

Nonchalance is defined as having an air of easy unconcern or indifference.

Why is it that employees frequently behave indifferently towards customers, yet snap to attention in the presence of the division president? Specifically, why do employees anxiously prepare for a planned visit by the corporate brass by making repairs, waxing the floors, and pressing their uniforms, but feel comfortable texting friends, smoking near store entrances, and complaining or bantering in the presence of customers?

I have a theory about this: Familiarity breeds contempt.

Most employees rarely come into contact with and, thus, are not familiar with the division president. Oh sure, they may know his or her name but they are generally not familiar to the point of lowering their guard or relaxing in the executive’s presence.

Not so with customers. Customer-facing employees come into contact with customers all the time. And whether or not they recognize a particular customer, there is a sense of familiarity with customers in general. And where there is excessive comfort and familiarity, there is contempt—a lack of respect—and a tendency to take the relationship for granted.

It’s not that employees don’t know what exceptional service is or how to deliver it. They do. And they consistently showcase this behavior in the presence of the division president. The issue is that many employees seem disaffected by customers as if to say: “Oh, you’re just a customer. For a minute there I thought you were someone important like the division president.”

Earlier, I listed three behaviors that I regularly observe in retail settings: texting, smoking near store entrances, and complaining or bantering in front of customers. These behaviors are chronic. They occur frequently. However, when the division president is on-site these behaviors are exceptions.

When executives grace the operation with their presence, the floors are spotless, there are plenty of employees scheduled, uniforms are pressed, there are lots of smiles, and there is a tangible sense of urgency—even a bit of giddiness and extra pressure to perform.

The best operations do not distinguish between a scheduled site visit by a division president and the scheduled opening of the store to service customers. Sure, there may be a bit of anxiety associated with the presence of a company executive—that’s natural—but the company’s standards don’t wane in the absence of headquarters staff.

Nordstrom comes to mind as an example of a retailer who shines whether a customer or Blake Nordstrom is entering the shoe department. The last time I was in Nordstrom, an employee from the men’s department walked me to the women’s department in search of an umbrella for my wife. When we returned to the men’s department, I decided to buy a bottle of cologne too. It was an impulse buy—in the moment. I had not planned to buy it and, in the absence of his exceptional service, I would not have.

Here is an assignment for division presidents everywhere: If you really want to see how your operations run, stop by unannounced in a ball cap and jeans over the weekend. Don’t embarrass anyone. Just observe and take mental notes about what you see—both assets and liabilities.

Then, assuming there is a gap (or chasm) between what you observed during your last official visit and this one, take action.

Establish or reinforce credible standards to guide employees’ behavior. Make sure that every manager is aware of the standards and actively uses them to manage their employees’ performance. And, perhaps most importantly, hold managers accountable to model these standards at all times. If they don’t, the standards are no longer credible and become unenforceable.

When employees see their managers modeling established standards of service and procedure, they will perform similarly. When this happens, employees will no longer appear aloof or nonchalant towards customers. They will stop texting friends, smoking near store entrances, and complaining or bantering in the presence of customers.

Instead, they will treat customers with the same courtesy, respect, and urgency with which they treat the division president. And their customers will notice.

This post is the third in a series that will identify 10 different obstacles that have emerged from my analysis of customer satisfaction data. Maybe you will have encountered one or more of these obstacles in your own business? The third obstacle is customer-unfriendly policies.

I recently stayed at a full-service hotel in Scottsdale, Arizona that offered a nice workout facility with treadmills and stationary bikes facing a set of wall-mounted flat screen televisions. The audio for each television was accessed individually at the exercise equipment in order for each guest to listen to his/her preferred channel. To access the audio, one needed headphones that could be obtained at the front desk.

One evening, while I was awaiting a colleague in the lobby, I overheard a conversation between a front desk agent and a hotel guest. The guest had gone to the workout facility and realized that he needed headphones in order to access the television channel’s audio. When he asked for a set of headphones, the representative said, “I’ll need a photo ID in order to hand out the headphones.”

Now, think about the realities of this situation. You have a guest who is paying about $200 a night to stay in the hotel, who has likely spent the day working and/or traveling to Scottsdale, and who is probably looking forward to a workout before facing another long day in the morning. The guest has changed from his work clothes into shorts and a t-shirt and has left his car keys, driver’s license, and wallet in his hotel room.

The guest explains that, under the circumstances, he does not have a photo ID with him and offered his name and room number in addition to showing the representative his room key. The rep held firm to policy saying, “Our policy requires a photo ID in order to give out headsets. We’ve lost a lot of them in the past.”

Now examine her response. Several things caught my attention:

1.) The word “policy” is contradictory to good service. Customers do not want to hear about policies that stand between them and what they want. Sure, there are necessary policies. For instance, those that address certain legal, ethical, and safety concerns. It is also advisable to have policies in place to protect the company’s assets (as in this case, involving the headphones).

That said, let’s consider the math in this illustration and see if we can identify the real asset. How much for a set of headphones—like the ones the airlines offer free of charge? I just checked on-line and found a set of Coby Ultra-Lightweight Stereo Headphones for $4.99—and that’s if I only bought one set. In quantity they are even cheaper.

Now, let’s try and get past how difficult customers are when they fail to adhere to our policies and take an objective look at what this customer represents in financial terms:

At $200 per night (assuming no ancillary revenue from in-room services, food and beverage, gift shop sales, etc.), after you deduct the costs of preparing the room, in-room amenities, etc., you can figure the hotel captured around $125 in gross profit which may dwindle to around $15 per guest room per night in net profit for the company.

Obviously, the real asset in this example is not the headphones—it’s the customer. Managers (who devise these policies) and front-line employees (who get stuck—and, over time, comfortable—enforcing them) need to understand this. Policies must take into account the customer’s perspective and reinforce the value that the company places on its customers. Doing so will create more opportunities to satisfy customers, gain their loyalty and referrals, and grow the business.

2.) Requiring a photo ID in these situations is inconvenient and insensitive. Most customers making this request will be standing there in their workout clothes and will have left their wallets containing photo IDs back in their rooms. Knowing this reality makes the requirement of showing a photo ID impractical for hotel guests who do not want to hassle with returning to their rooms, waiting on elevators, and perhaps waiting a second time at the front desk if a line forms in their absence.

3.) Saying that “we’ve lost a lot of them in the past” implies that customers are irresponsible or dishonest. It is critical to never offend customers by implying that they are irresponsible or dishonest. If we offend customers, then we are disrespecting them. Most customers will make allowances for a lapse in service. Few will make allowances for disrespect. When disrespected, customers will go out of their way to change providers and will share the negative story with anyone who will listen.

The guest in this situation was appalled at the desk clerk’s reply and lack of empathy. He did not want to spend the next 6 or 8 minutes returning to his room to access his photo ID only to find that the equipment he intended to use was now being used by another guest. His body language told the story: palms flat on the counter, heavy sigh, followed by an abrupt turn away from the rep in the direction of the workout facility.

This guest decided not to joust with the employee who was standing firm on “policy.” Instead, he resigned himself to an audio-less workout—content to read lips on CNN and make his best guess at what the correspondents were reporting.

As service is my business, I find myself observing lots of situations like this one and, on occasion, advocating on behalf of customers. In this case, I offered my photo ID to the rep and requested a set of headphones. She promptly handed them to me and I said, “Great. Now that gentleman will be able to listen to the programming in the fitness center.”

Realizing my intentions, she reverted back to “policy” stating that if the headphones were not returned to the desk, then my room account would be charged $80!

When I approached the guest in the fitness center a minute later and handed him the headphones, he smiled in appreciation and thanked me. It made my day. And to think, the gal at the front desk could have also had a positive exchange with this guest but instead dutifully enforced a customer-unfriendly policy.

Look around your own business. Are there any customer-unfriendly policies in need of revision or, better yet, elimination?

If you’ve been following my blog for a while, you may recall my 2009 and 2010 posts that were critical of Customer Service Week (October 3-7, 2011).

While I have no issue with celebrating customers, I do take exception to the hypocrisy of those companies who participate in Customer Service Week and trumpet customer service by ordering cupcakes, wearing buttons, and hanging posters for one week in October only to revert to their typical subpar customer service levels for the remaining 51 weeks of the year.

For many companies (You know the ones…), to participate in Customer Service Week would be similar to British Petroleum (BP) sponsoring an Earth Day event. There’s simply no credibility.

These are the companies that rely on promotions and staged events to demonstrate their commitment to customer service: “Of course we’re committed to serving customers. Didn’t you see the posters we hung during Customer Service Week?”

The very best customer service providers (You know the ones…) don’t need an arbitrary week in October to demonstrate their commitment to serving customers. They already do that—consistently—throughout the year.

These are the companies whose employees: express genuine interest in their customers, demonstrate initiative, anticipate customers’ needs, pay attention to detail, display a sense of urgency, provide pleasant surprises, and leave lasting positive impressions on customers.

So even while the cupcakes are tasty, the buttons are flashy, and the poster slogans are catchy, the real test of a company’s customer service commitment is not what happens during Customer Service Week but what happens during the rest of the year.