The business landscape is brutally competitive today. For anything we need there is a wide array of choice and options available. Deciding which one to choose is often a dilemma. Let us look around; If you want to travel, you have a choice of multiple airlines. In every city there are numerous hotels available. If you want to go to a supermarket to do your grocery shopping you have multiple choices in almost all locations of any metropolitan city. If you want to buy an apartment, there are numerous projects being developed in almost every location. So what should be the strategy for businesses competing in this extremely challenging environment?
The simplest and most effective strategy in the short run for any company in any industry is to be the cheapest as long as you can deliver what you promise. The largest segment of the market for almost any product or service is the one looking for the cheapest option. Therefore, if a company can be the cheapest in the market and deliver what it promises and still be profitable, there is no better strategy. It is a strategy used by budget airline like Ryan Air, budget motel like Microtel, economy car like Nano. The list goes on. The trouble with this formula for the businesses is that it is difficult to keep your customers happy if you are constantly looking to cut costs and therefore generally speaking, customer retention is very low. This makes the business struggle in the long run because customer retention is a lot cheaper than acquiring new customers. The other problem is that since price is the only USP of the businesses going for this strategy, as soon as there is a new kid on the block offering even cheaper, the game is over. Your customers do not have any loyalty to you; their loyalty was only to the price. And you knew this all along.
Today almost every business has become “commoditized”; meaning there is a plethora of competing companies offering the same product or service. Having a unique product or service that no one else offers is very rare. There are only a handful of companies like Apple and Tesla that command this rarefied exalted status. Therefore, in my opinion the best strategy for a business is to focus on its customer service. If you can win your customer’s heart with your service, she will always be loyal to you. Charge what you need to charge as long as it is a fair price but deliver a service that will wow your customer. Go out of your way to give the customer what is beyond her expectation. Make customer service the most important pillar of your business. In bti we live by a set of 6 Core Values and the most important core value of our company is “Win the customer’s heart”. In this article let me share some remarkable stories of customer service.
1. On 26 November 2008, Mumbai was attacked by terrorists in which about 174 people were killed. The iconic Taj Hotel in Mumbai was one of the targets of the terrorists. In each and every restaurant of the Taj Hotel, the employees serving the guests asked the guests to take cover and formed human chains to protect the guests. In the process, as many as 11 of the hotel employees were killed trying to protect the guests. In the Taj Mumbai there is an upscale Japanese restaurant called Wasabi. There were 50 guests dining in the restaurant at 9.30pm when the attack happened. There was a spiral staircase which offered an exit route. The staff made sure that each and every guest was evacuated before they themselves came down. Thomas Varghese the head waiter decided that he would be the last one to leave after all the guests and his staff were safe but unfortunately, he was too late. The terrorists had come to the restaurant by the time he attempted to go down and shot him dead.
2. Nordstrom is a departmental store famous for its customer centricity. I bought a pair of expensive shoes from a Nordstrom outlet in Toronto. I was excited about my new purchase and wanted to put them on immediately. I came out of the store wearing my new pair of shoes. After walking back to my hotel which was about a mile away, I realized that the shoes were not the best fit for me. The next day I returned to the store and asked to buy an inner sole to make the shoes more comfortable. The inner sole did not solve my problem. Disappointed, I got up to leave but sensing my gloom, the store attendant asked me if I would like to try a different pair of shoes in exchange or take a full refund. I was surprised by his offer. I had walked a mile with these shoes and they were not just a cheap pair of shoes. But the culture of Nordstrom is to never let a customer go unhappy. They refunded me the full amount and since then I have become a loyal customer of Nordstrom and singing their praise in this article.
3. Fred Steingraber the CEO and Chairman of a major global strategic consulting firm A.T. Kearney and his wife were at a charity fund raising dinner at the Four Seasons Hotel in Chicago. All the elites of Chicago were at that event which was being hosted by the President and First Lady of America. Upon arriving at the event Mr. Steingraber realized that he was the only one who was not wearing a tuxedo and a black tie. The trained eyes of Hans Willimann the Banquet Manager of the Four Seasons Hotel noticed that a guest was looking uneasy and he quietly came over to ask Mr. Steingraber if there was anything wrong. When Mr. Steingraber told him the problem, Hans asked Mr. Steingraber to follow him. Hans called the hotel seamstress to immediately come to his office and then took off his own tuxedo and asked her to urgently alter it the size of Mr. Steingraber. The job was done in 15 minutes and Mr. Steingraber never forgot this experience. For the next 15 years while Mr. Steingraber was the Chairman of A.T. Kearney, all of the company’s functions were held at the Four Seasons generating revenues of millions of dollars for the hotel.
4. I was at a very busy McDonalds restaurant in Chicago. I saw an elderly gentleman in a wheelchair come into the restaurant with great difficulty and finally place his order at the counter. There was a long line of customers but the person serving at the counter closed his register and requested the customers to go to the next counter. He then washed his hands, personally collected the items that the elderly gentleman had ordered, took the food to the table where the customer was sitting and then helped the customer eat his meal.
5. Bti completed a project in Moghbazaar and handed over the apartments to the buyers. There is a standard clause in the deed of agreement we sign with the buyer that says that if the area of the apartment increases or decreases by more than 5% then, in case the area is found to be less, the developer will compensate the buyer and vice versa if it is found to be more, the buyer will pay the developer the pro-rated amount for the extra space. Upon completion of the project it was found that the apartment size had increased by about 125sft which was more than the 5 % allowance and therefore as per the said clause in the deed of agreement, all the customers were invoiced the extra amount and they all paid the due amount.
Several months later a widow wrote to bti that she was very happy in her new home but the extra amount levied on her was causing her financial distress. On grounds of compassion we waived the extra amount for her. But then we ran into a moral dilemma. What about all the others who had paid the extra amount? Maybe there was another widow who was facing a similar difficulty or maybe there was family who had run into financial distress and now found it painful to pay this extra amount? In all there were about 50 apartments in that building and this happened sometime in the mid 1990s when bti was a much smaller company than it is today. The amount levied on the buyers due to the extra space was about Tk 3crore which in those days was a lot of money for us. But if we were to remain true to our core values and walk the talk then we had to do what had to be done. No other customer demanded a waiver but we voluntarily refunded the extra amount we had collected to all the buyers in that project. To this day I am convinced that the goodwill we earned from the customers of that project and the word of mouth that they spread could never be earned no matter how much we spent on advertising.
A great customer service is one of the best investments that a company can make. Every successful company understands this and lives by this mantra. To quote Mahatma Gandhi, “A customer is the most important visitor on our premises, he is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favor by serving him. He is doing us a favor by giving us an opportunity to do so.”