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You are the Customer You are the Company

Two years ago, uncommon courtesy offered a two-day course called "Business as Service." Its premise was simple: All business is service regardless of whether it manufactures, produces, or distributes. The distinction between the "service" sector of the economy and the "goods" sector is an artifice. In reality, no such distinction exists. What does exist is the relative tangibility of products, goods, and services. Some are measurable in units, and some are not. Some businesses make products that can be palletized, and some create products that slip into envelopes. Despite the materia involved in an economic process, it is important for business owners to realize that all business is service based, that the intangible precedes the tangible, the invisible the visible.

This has always been true. As you analyze and break down economic processes, you enter a labyrinthine world of human interaction and endeavor. The analysis reveals an endless relational process that is primarily intangible. This seems to be common sense, but it is also theoretical.

In our business, Smith & Hawken, we sell garden products through a catalog. Because of the distance between ourselves and the customer, we saw early on that we had to overcompensate for the seeming lack of convenience or control that a customer across the country might perceive in ordering from us, as opposed to buying locally. Over the years, we have developed a set of guidelines and maxims to guide us as we have grown simple, sometimes mnemonic phrases that become an oral transmittal of company "culture."

Recently, Lewis Richmond, who heads our customer service, wrote them down for the first time. We are not a company of goals, principles, standards, cliches, and exhortation. We keep the company rah-rah stuff to an absolute zero and do not try to infuse our employees with a patented credo. Instead, we have concentrated on hiring people who embody the qualities we are striving for. It is hard to teach someone to assist and serve others if they are misanthropic to begin with. Thus, one of our first principles is that we hire people, not positions heart over mind. Resumes do not cut much weight here. Nevertheless, when Lew did codify our underlying customer service principles, they surprised us all in a way. As you will read, they are not flowery. They are terse, straightforward, and no-nonsense. But they also work for us.

They are:

1. Our goal as a company is to have customer service that is not just the best, but legendary. 
There is only one mail-order company that I know of that has "legendary" status when it comes to customer service and that is L.L. Bean. There are companies that do as well, but they are either too young, too small, or too unknown to have reached that status. "Legendary" may sound grandiose, but its intention is to give a goal that is ever expanding rather than merely attainable. There is always a disappointment in reaching a goal. You need a new goal, for one. And 'legendary" gives us all the psychic room anyone could ask for. It also gives each person who relates to a customer a rich and imaginiative sense of possibilities. A person called once who had damaged their teak garden bench while they were assembling it. They lived a thousand miles from our offices. We called a carpenter friend who lived there and sent him over to fix it, no charge. The point being that good service is part of an overall company approach. Just as the term "giving good weight" in the produce business reflects an "uneconomic" act, giving good service is not "economic," either. You lose money . . . but you don't.

2. You are the customer.
I think that sometimes companies demand too much identification from their employees. Many managers are Softball coaches in disguise, and their primary motivational technique is teamwork, winning, and goals. When this happens, something is lost. For a person to be a good customer service person, they have to have permission to say "the heck with the company" without fear. When a customer is upset, you are that person and feel their upset. You should have permission to do whatever you feel will make that person feel good again about their relationship to the company. Corny? You bet. But absolutely necessary. The most important barrier to be removed in this process is the thought of profit. As soon as you see a problem, a return, or an irate customer as a source of fiscal loss, the opportunity for meaningful resolution is cut off. Why do so many companies become tightwads when something goes wrong? Chances are that sometime in the past, a customer took "advantage" of the company. The company got fleeced or snookered. So a policy was instigated to make sure it never happened again.

As soon as an employee utters the words " It is our policy to . . ." your business has problems: 1) your unsatisfactory product, and 2) your unsatisfactory company. The fact is that most customer service policies are based on mistrust. Accumulated deceits on both sides of the ledger ossify into a rigid unfeeling "policy" of fraud prevention. Both company and customer lose, proving demonstrably that it is unwise to punish the many for the few. To avoid this, don't be the company. It doesn't even exist. It is just a group of people engaged in an activity at a given place in time. Far "realer" than your company is your customer. At the same time . . .

3. You are the company.
You don't have to be servile to serve. Each person of the company carries the company. authority, dignity, and bearing of ownership. To really help someone who has a problem does not require groveling on your part to convince them you are sincere. Ideally, it means that you do not have to go "higher up" to get permission to be kind, sensitive, or yielding. Frugality need not include meanness, nor should economy exclude sharing. The problem with business is not business, but character, its presence or lack.

My suspicion is that companies owned by passive stockholders with no employee ownership are dinosaurs. I doubt if any company can truly thrive in the coming decades without some form of equitable and fair employee ownership. We have employee stock ownership plans in our company for very practical reasons: Dave Smith and I are too lazy to be bosses. We can have the responsibility of management, but we are not interested in the top-down control required to maintain sole ownership.

4. There is no such thing as taking too much time with a customer.
You cannot measure service by any standard of productivity so it's best not to try. Our business lives, breathes, and dies according to one simple activity: repeat business. Without it, we could grow for a certain number of years, but we would be like an emphysemic running to higher altitudes. The core of our business is a customer base that is satisfied and that will turn to us for needs and wants as they arise. Thus, no amount of activity is wasted when it comes to making sure that every transaction is right, regardless of size or scope. Our best, most fiercely loyal customers, the ones who create the most word-of-mouth business, are ones who had a problem.

5. The phone is mightier than the pen.

This is a new one. We were writing a lot, trying to save money, and even using form letters for routine inquiries and problems (invalid credit card numbers, for example, would be sent a form letter).

Two months ago, we came across one of our form letters that had been batted back and forth between "customer service" and our customer concerning an invalid American Express card. After investigating, we discovered the error was ours, the customer was an old and dear one, and her order had been held up two months because of crossed correspondence. A true mail-order nightmare come true. We had screwed our own customer. We did two things. We sent her the order free and ate $90. And we stopped using $.22 stamps. Now, if there is a question, concern, nag, or doubt, we call. I do not think it costs more money but less. It collapses the time between problem and solution, as well as eliminates paperwork.

6. If it doesn't feel right, make it right.
No resolution is a good resolution unless you feel good about it. For example, we could have sent the delayed order on and told her to send a check later. But we didn't feel good about it. We wanted to show her that we take our mistakes seriously, and that her pride and dignity as a customer is esteemed, not taken for granted. Not only did she feel that we were serious about making up for our mistake, but everyone on staff knew about it and acknowledged the impact as well.

7. A job isn't done until it is checked.
Redundancy, redundancy, redundancy. If our work is 99 percent error free, then done until it we can theoretically reduce that 1 percent error rate to less than 1/10 percent if we is checked. do the work twice. In other words, each successive level of error-free performance costs a lot. But it is worth it. We process too many transactions per day, and people are too bombarded by the complexities of our work for us to expect error-free work. If we don't build in redundancies, the customer will do our error checking for us and they will not be so forgiving.

8. Do it once and do it yourself.
Sounds like a contradiction to item 7. What it means is this. A customer calls and says "I did not receive my pencil with my flower markers." Right. You take the information, march out to the warehouse, grab the pencil, and put it in the envelope and address it. Whenever possible, one person follows through on the entire customer service situation. We try not to paperize our way by creating layers of hirelings that shuffle instructions to each other. We have a very lateral organization where each person has a broad scope of skills and duties in a given day. Thus, we try to eliminate delegation and encourage integration of multi-faceted skills into each person.

9. When in doubt, ask.  When not in doubt, ask.
Do not assume you know. We get a bewildering variety of customer service questions. And rather than bluff our way we would rather have an atmosphere where it is OK not to know. The second, ask when not in doubt, is a subtler principle. It means we are a learning-based company, and that a spirit of inquiry is intrinsic to that goal being realized. In terms of company processes, it means that we constantly inquire of each other, informing and sharing constantly. People do not want to work in hierarchical organizations. They want to work in cooperative atmospheres where people are assisting each other towards a mutual goal. This does not work when someone embodies the cult of the expert, appearing or actually possessing great amounts of information that is parceled out according to office politics. If you are not in doubt, you may be kidding yourself.

10. A mistake is not a mistake. It is a chance to improve the company.
Opportunity arises from confusion, not certainty. A mistake is where the predicted doesn't happen. We were making a normal error rate in our shipping department. We had a one percent rate of mis-ships or short-ships. That may sound high to you and me, but that is not high for the industry. High or not high, it was unacceptable. How to change it? We invented the cookie jar. We figured every order shipped that involved a subsequent problem cost us at least $10 in out-of-pocket expenses. Not to mention indirect costs of lack of re-orders, etc. So we instigated a policy where we paid in 10* to a cookie jar for every order. And for every order where there was a short-ship or mis-ship, we took out $10 from the mythical cookie jar. Anything better than that would leave money in the jar. That money was divided amongst the packers. Packers do not stay for long periods. There is constant turnover, and few (only one) have stayed long enough to become part of the profit-sharing and ISOP plan. So we needed a way to motivate short-term employees. Essentially we said that they could receive the monetary benefits of any improvement they made. As a company, we just wanted to improve our service. What happened? Our error rate dropped to approximately three tenths of one percent.

Basically, mistakes and problems can cause two different modes of being: one is cope-and-grope, the other is innovation. To innovate, mistakes are taken as cues and no one is made wrong.

One more thing could be said. We couldn't do this, or afford to do this, if we did not sell high-quality products. Our returns policy is simple. If at any time for any reason or no reason you are not satisfied, you can return an item purchased from Smith & Hawken and get a full refund or replacement. It is the same policy in essence that made L.L. Bean so successful. (The apocryphal story always told is about the thirty-year-old sweater that developed holes and was replaced for no charge.) The restrictive return policies and parsimonious attitudes of some companies stem from a deeper reality. Their goods are not so good. They are "bads." And bad-quality products cost a lot. The most frugal thing we can do is have high quality products. It is never a waste to make it right to a customer. If it costs so much to do so that we go out of business, then we ought to. In other words, a no-holds-barred returns policy is the litmus test of our claims of quality.



Customers-as-service Guidelines

Good customers are alive. They do not roll over and play dead. They talk, write, praise, and criticize. They cultivate. They weed out products and companies as one would tend a garden. The economy is the most democratic institution in the world, and like any democracy, it fails without voter participation. When you buy a product, or do not buy another, you vote for the first time with your dollars. If you love it or hate it, and tell the maker so, you have voted a second time. The second is as important as the first. Here are a few suggestions on how to be a good customer:

1. Complain.
If you don't say it, who will? Use post cards, letters, or the phone. It takes a minute, you will feel better, and the company will benefit. Most companies are extremely sensitive to criticism. In fact, the bigger they are, the more sensitive they can become. As a company manager, I can only tell you that criticism has an extraordinary effect.

2. Praise.
This is just as important. When a job is well done, a service well rendered, say it. Strokes reinforce good people doing good things, and help large companies reward creative and constructive behavior. I would say that praise letters have an even bigger effect than complaints, simply because they are rarer. We read the ones sent to us aloud at daily staff meetings. 

3. Be redundant, redundant, redundant.
You know what you want, the company doesn't.
When something isn't right, be as specific as you can about what you want, and spell it out simply, plainly, clearly.

4. Demand quick service.
There is no excuse for slow service nowadays. Existing technologies allow any company to process orders and problems within 24 hours. After that, it is circumstance, sloth or poor management.

5. Be quick yourself.
If something is wrong, pounce. Do not wait four months or procrastinate. Say it or state it promptly. You will get it off your chest and the company will probably have an easier time believing you.

6. Be kind.
The squeaky-wheel theory of getting attention isn't fair to you or the company. When you contact the company, assume the person on the other end is as good a person as you and your friends. Try being a person someone else would like to assist. Let the company have the pleasure of helping you. If that doesn't work, then . . .

7. Be persistent.
If you do not get satisfaction, go upstairs. Keep going to higher levels. In so many companies, the top does not know the mayhem the bottom is committing. Let them know. Tell them civilly, but tell them.

In the end, the economy can be no better than its buyers. It is buyers who sent Detroit reeling to redesign their cars, improve on quality and recreate labor/management relations. You caused it. Not the Japanese. And you can do it to any industry you so desire. Who's next?