Moments of Magic
by Dr. Tony Alessandra
Differentiation is the key to survival and success in any business. There are three key fronts on which you can fight the differentiation battle: Price, quality, and service. Your ability to compete on price is limited. You can cut your margins just so far without jeopardizing your operation. It's difficult to compete on quality too.
Modern technology has caused most products to become commodities; hence, there is often little difference between Brand A and Brand B. Service is, therefore, the best strategy for competing in the marketplace. Being on par in terms of price and quality only gets you into the game. Service wins the game.
Moments of Magic or Misery In 1981, Jan Carlzon took over as chairman of one of Europe's most poorly rated airlines, Scandinavian Airline Systems (SAS). Carlzon quickly implemented many changes, the most important of which was to manage the interactions that SAS employees had with its customers.
In 1987, Carlzon wrote a book entitled, Moments of Truth, in which he said, "Last year, each of our 10 million customers came in contact with approximately five SAS employees, and this contact lasted an average of 15 seconds each time. Thus, SAS is 'created' in the minds of our customers 50 million times a year, 15 seconds at a time. These 50 million 'moments of truth' are the moments that ultimately determine whether SAS will succeed or fail as a company."
Carlzon hit upon a concept that is simple yet profound. Every single contact between any employee and a customer is an important contact, regardless of its length or content. The term "Moment of Truth" describes a contact that is neutral in nature.
As we all know, however, there are other kinds of interactions between employees and customers. "Moments of Misery" describe interactions that have negative outcomes. A "Moment of Magic" is an interaction that exceeds the expectations of your customer and leaves him/her with a positive impression.
Moments of misery are a fact of life because people and companies are not perfect. Mistakes happen, which is unfortunate, because research has shown that customers tell an average of 20 people about moments of misery; but they tell only ten people about moments of magic. To break even, therefore, you have to create twice as many moments of magic. Of course, the point is not to stay even; it is to stay ahead by managing interactions and making them moments of magic.
How are moments of magic consistently achieved? The bottom-line answer is that a company has to be customer-driven versus operations-driven, where it puts the needs of its customers first. An operations-driven company puts its needs, policies, and procedures first. A customer-driven company may bend its own rules to please its customers. An operations-driven company uses its policy manual as its Bible and will, if necessary, disappoint customers by invoking the most ignorant excuse on the face of the earth: "I'm sorry, it's against company policy."
How To Become Customer-Driven Since the middle of the 1980's, a lot of companies have talked about becoming customer-driven. Everyone aspires to becoming the next Nordstrom, Federal Express, or L.L. Bean. The transformation has worked for some, but for others it has been only talk. Talking the talk does not transform a company. Real change takes a concerted effort that requires Commitment, Communication, and a system for Conflict Resolution.
The Foundation: Commitment Without commitment, customer-driven service will be just another flavor-of-the-month training that will sharpen the skeptics' barbs. Customer-driven service requires a 100 percent commitment throughout the organization, starting with the CEO. This top-down company strategy must include people who interact with customers, and employees who serve in support positions. The reason is simple: customers must be defined broadly, and that definition must include "internal customers." Interactions between departments are analogous to interactions with external customers--they are subject to moments of magic and moments of misery.
The commitment to customer-driven service requires four very important steps:
One of the goals of customer-driven service is to change the service-provider's focus from individual transactions to long-term relationships. Effective communication is the key to building and maintaining long-term relationships and can be looked at from two perspectives: the macro and the micro. The macro level is the communication strategies used to stay in touch with customers. The micro level is the communication skills used when interacting with customers.
Customer-driven companies encourage communication in which customers feel comfortable giving feedback on how well the company is doing its job. This feedback should be solicited on a regular basis.
Conflict Resolution System
The third major building block of customer-driven service is a system for turning moments of misery into moments of magic. We have already conceded that moments of misery are bound to happen. Every company must, therefore, have a set of guidelines that helps employees "right the wrong." Customers do not expect companies to be perfect. They do, however, expect imperfections to be corrected quickly, painlessly, and fairly.
Every moment of misery is different, but there are some general guidelines that will give you insight into turning them around. When a problem occurs, listen actively, ask questions, and mentally trade places with your customer. Then determine the severity of the problem and a fair solution.
Incorporate the following steps into your conflict resolution system:
Copyright Dr. Tony Alessandra. All Rights Reserved.
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