The new rules for companies and customers

by Peter Gurney and Lisa Goodman
June 2005

Service isn’t what it used to be. But then, it never was. Customers have always complained that service was better in the old days, and a hundred years from now, they’ll still be saying the same thing.

Nevertheless, it is certainly true that the service we receive is changing, often in dramatic and fundamental ways. Where once we were helped by humans, we now interact with machines. The live assistance we do receive is often from rented staff located half a world away. Airline meals have shrunk to a bag of peanuts, and even the bags are getting smaller.

Who’s responsible? We are, of course. As Pogo used to say, “We have met the enemy, and he is us.”

Over the past 20 years, we customers have taken most cherished notions of loyalty and the value of good service and turned them on their heads. Even as businesses built strategies around customer intimacy, loyalty and delight, customers were proving themselves to be fickle, unfaithful and cheap. It isn’t that we don’t want good service. We love it, so long as it’s free. The fact is, customer service could improve overnight. Just get out your wallet.

So, if these changes are simply a matter of market forces at work, it’s all for the best, right? Maybe. The problem is that neither customers nor businesses are being honest about the situation. Customers continue to complain about service quality and dream about the good old days, when flight attendants fluffed pillows and no one had to enter a 16-digit account code to reach a recording.

In the meantime, companies continue to tell themselves fairy tales about loyal customers who stick with them through thick and thin, like trusty pets. Worse, they send mixed messages, both to their customers and to themselves. Read just about any corporate Web site, annual report or strategic plan, and you will see pages of flowery language about “exceeding expectations every time” and “creating a superior customer experience.” In the meantime, these same companies are busy finding new ways to reduce services and tack on charges every time a customer makes eye contact.

This phenomenon is particularly evident in the world of travel and hospitality. A popular hotel chain proclaims on its Web site, “Our goal is to deliver in every interaction an experience that builds positive, long-term relationships with you, our customer.” It does not mention the complaints from guests about undisclosed charges, from jaw-dropping fees for local calls to “resort amenity” surcharges for maintaining the swimming pool.

What we have here is failure to communicate. In the spirit of restoring goodwill to the marketplace, we would like to help customers and companies see eye to eye. To that end, we offer a few honest disclosures from both parties.

A message from customers to companies

1. Forget about loyalty.

We’re not talking about the type of loyalty that companies pay for through air mileage and travel award programs. You’re welcome to that kind of loyalty, so long as you don’t mind our giving it to all your competitors at the same time.

What we’re talking about is the kind of feel-good loyalty that is so attractive to service experts and management consultants. In their view, loyalty is an emotional bond that causes customers to stay with the company longer, buy more, pay higher prices and recruit their friends.

Loyal customers are special because they stick with a company through thick and thin. The operative word here is “thin.” There is no virtue in sticking with something through thick. It’s only in the face of thin—temptation or failure—that we get to prove our loyalty.

For customers, temptation comes when a competitor offers a better value. Failure comes when the company makes a mistake. Therefore, loyal customers are people who stick with a company when they can get a better deal elsewhere or when the company does a bad job.

For a business traveler, or in fact any customer, this makes no sense whatsoever. We may harbor the occasional fond feelings for a company, but in the long run, our relationship is economic, not emotional. Why should a rational customer be willing to sacrifice for the sake of a corporation? It’s a fantasy invented by consultants, who, at the end of the day, are no more loyal than anyone else.

Nevertheless, companies consistently overestimate our loyalty while underestimating our ability to make rational business decisions. Sorry to disappoint you, but we’re in it for the best deal. If you really want loyalty, invest in the Chicago Cubs.

2. Delight us in moderation.

Some years ago, the word went out that customer satisfaction is passé. Satisfied customers, it seems, are apt to slip off to the competition at any moment. The only to way to be sure of keeping our business is to delight us.

Many companies took this to mean that they should exceed customer expectations every time. Like the town of Lake Wobegon, where all the children are above average, these companies never simply meet expectations. Instead, they have to create a memorable event in the mind of every customer who walks through the door. Sounds nice. Unfortunately, it’s preposterous. If you always exceed expectations, then expectations will simply rise. Eventually, the employees will be dancing in the aisles to get our attention.

Despite the silliness of the idea, an untold number of companies have jumped on the customer delight bandwagon. The results have ranged from comical to horrifying: persistently perky restaurant staff, perpetually grinning grocery clerks, car rental employees who beg us to give them perfect marks on customer surveys. Legions of service workers are determined to become every customer’s close, personal friend.

The fact is, we don’t want to be delighted all the time. It’s exhausting—not just for customers, but for employees as well. Every consumer receives service dozens of times a week from a wide range of companies, and most of those service interactions are, and should be, routine. We want service workers to be efficient, helpful and pleasant—but please, back off.

The key to achieving customer delight is not excess, but opportunity. While most service is routine, every once in a while a situation arises that is out of the ordinary: a complaint, a question, a special request or a chance for an employee to go the extra mile. If employees are trained to look for these opportunities and empowered to act on them when they appear, we will be delighted at the right time. These experiences will furnish us with stories about the company’s exemplary service, and eventually, the word will get out. But when it comes to delight, a little goes a long way.

3. Focus on our bottom line

OK, so we customers are unfaithful and maybe a little grumpy. Just what do we want? We want the same thing companies want: profit (or call it “value” if you wish; it comes to the same thing). That means reducing our perception of cost or increasing our perception of revenue.

Companies can do this with service. First, lower our cost of doing business with you by saving us money, time, effort or risk. Find us a cheaper option. Solve our problem on the first call. Educate us, so we know how to take advantage of your services. Make a recommendation and back it up with facts. All of these things improve our bottom line and make it more likely that we’ll come back.

You can also increase our perception of revenue. Give us an instant upgrade into first-class or a suite once in a while. Give us a free glass of wine or extra points. It doesn’t have to be much. Like yours, our margins are razor-thin nowadays. Watch out for our bottom line, and we’ll start looking very much like loyal customers. But don’t be fooled. For us, it’s just business.

A message from companies to customers

1. Expect more automation.

We have all watched enough episodes of The Twilight Zone to know that replacing humans with machines is evil. But automation and self-service are not going away, so long as you keep pushing us on price. And let’s be honest—machines really aren’t that bad. They’re never rude, they’re pretty predictable and they’re often more convenient than dealing with people.

Customers typically resist automation at first, then come to accept it and eventually to demand it. Who doesn’t like Web check-in for flights? Or express check-out at hotels? Or ATMs?

We admit that phone trees and voice response units are annoying. But consider the alternative. Years ago, you could only call during office hours, and even then you got busy signals and unanswered lines. Was that really more pleasant or convenient than navigating through a phone tree? As much as customers complain about the quality of service nowadays, the fact is that the quantity of service has been increasing for years. Customers have far more opportunities to be served than they had in the past, which may be a fair trade-off for a little less human contact.

2. No more free rides.

Service is going to cost you. It always has, of course, but now you’re going to see the line items on every bill. Travelers are already getting hit by service charges at every step of their trip. Book your flight with a live agent. and you’ll pay extra. Order room service. and you’ll be charged a delivery fee, a service fee and a premium for the food (and you’ll still feel obligated to leave a tip). You’re charged a stocking fee if you use the mini-bar and a surcharge for the workout room.

This practice will continue to grow, although we will fine-tune the specifics based on how loudly you complain. It may be painful now, but as customers get used to service à la carte, they will realize that it gives them more control over what they pay for. And it will also allow us to stay in business, which is better for everybody.

3. Learn to be profitable.

You will be happy to know that all the personal information you’ve been giving us over the years hasn’t gone to waste. We’re finally getting the hang of these Customer Relationship Management systems we were sold, and we’re putting them to good use. Through data mining, statistical modeling and fairy dust, we can now predict your Lifetime Customer Value, which tells us how you ought to be treated.

It’s as if we took a sample of your blood, ran a DNA test, and figured out what you will be when you grow up. The drawback is that you don’t get to see the lab results.

You may be the one who always gets the upgrades. On the other hand, your life may be a series of middle seats. When you call us, you may be instantly connected to someone with a Ph.D. in customer service. Or you may be sent to phone-tree Siberia, where hold times are measured in decades. It all depends on your statistical potential.

If you want to change your classification, you’ll need to learn how to be a good customer. The better you understand our profit model, the more success you’ll have upgrading your profile. Eventually, we companies may figure out that it’s not to our benefit to keep you in the dark. In the meantime, you’ve got your work cut out for you.


There you have it: Some honesty to help us get along better. With a little more understanding, we can all profit in the end.

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Peter Gurney and Lisa Goodman are customer service consultants in Seattle, Washington. Email Peter and Lisa at editor@executivetravelmag.com.


See also...

• Service by the numbers
• Executive Travel reader service survey results

Have a question or comment? Email Executive Travel at editor@executivetravelmag.com.