Hospitality: Achieving a Competitive Advantage Through Customer Service

By: Northwest Indiana Small Business Development Center Last Updated: August 1, 2011

Written by Kelly Will

nwi-sbdcEvery entrepreneur aspires “to provide the best customer service”. I’ve seen it… It’s in nearly every business plan and typically addressed in the mission statement. So why does it not always work out that way? No one ever said it was easy to compete on service, however, the expectations of service are often so low that today’s businesses have an opportunity to gain a competitive advantage.

Lackluster customer service is often caused by declining people skills. Most people enter the workforce with low service skills, but with proper training, it can increase dramatically. Often companies spend their training on the technical side, but the companies that are competing on service understand and provide training in customer service skills.

This training does not necessarily come in the form of an event or inspirational meeting, but a commitment – a long-term commitment to creating measurable standards and accountability through hiring, training and execution that builds over time. By creating a service brand promise, together employers and employees can create a shared vision that is written, understood and implemented. A service brand promise doesn’t have to be something that you advertise to the public, but it must be unique and compelling and should be used as an internal marketing tool to reinforce your vision to your employees. If you create and foster brand loyalty on the inside, you can sell it on the outside.

There are a number of things to consider when creating your service culture. Walt Disney, with the support of his brother, Roy, created an effective organizational model and efficient work environment through culture building. Disney’s tips for building a dynamic internal culture:

  1. Keep it simple. Make everyone feel comfortable and leave room for individuality.
  2. Make it global. Everyone must buy into it.
  3. Make it measurable. Create specific guidelines that are part of the performance assessment process.
  4. Provide training and coaching. Incorporate the culture in the training and encourage peer-to-peer coaching.
  5. Solicit feedback and ideas from the team.
  6. Recognize and reward performance. Build employee motivation through reward and recognition.

Without execution, systems are nothing more than ideas. Consistent execution and a solid process must be the responsibility of each employee. Employees must be empowered and inspired to exceed customer expectations. Create an awareness of common opportunities where employees can deliver exceptional service. Many service oriented companies use customer data to build relationships with their customers. Customer data can include buying habits, personal preferences, where they live and work, referrals, purchasing history, etc. Using this data builds emotional capital and often tends to make price less relevant. But when employees can really be a hero is through follow-up after a service defect.

“A complaint is a gift. A complaining customer is willing to tell you for free what’s wrong with your business…” Unknown CEO

Analyze your most common customer service defects-the ones that may not be your fault, but happen frequently. Ask your employees for a list of alternatives and recovery processes and execute the best ones. When you foresee problems and are prepared for them, it is easier to deliver exceptional customer service.

Take opportunities to measure customer service. Consider calling at least one of your customers every week and asking them:

  • How are you doing? What’s your focus, challenges, priorities?
  • What’s going on in your industry/neighborhood?
  • What do you hear about our competitors?
  • How are we doing?

Consider measuring customer metrics such as: retention/resign rate of new customers, average ticket, customer satisfaction, number of complaints (resolved/unresolved), customer referrals, employee turnover and training hours dedicated to customer service. Determine: What is the lifetime value of each of your customers? Perhaps a single customer spends $80 in your business each month. Over a ten-year period they will have spent nearly $10,000 with you. What are you doing to ensure retention? A satisfied customer is an economic asset with high return and low risk.

Studies show that organizations that deliver exceptional customer service typically enjoy more repeat business, less price elasticity, higher price points, more cross-selling opportunities, greater marketing efficiency and a host of other factors that lead to earnings growth. A shift in focus from profit to gaining a competitive advantage results in cultural changes that bring the objective closer.

Kelly Will is a Business Advisor for the Southeast Indiana Small Business Development Center, an organization with the mission of having a positive and measurable impact on the formation, growth, and sustainability of small businesses in Indiana, and to develop a strong entrepreneurial community. Kelly can be reached at