Superb service is the key for high-end brands
Dubai, October 4, 2007
The relationship between quality of service and the luxury touch is often noticed, but its significance is rarely understood.
A recent Booz Allen Hamilton study suggests that with luxury brands, the excellence of the underlying product is merely a starting point. Interviews with 40 executives at a broad spectrum of high-performing luxury brand companies confirm that what makes these luxury products truly stand apart is the superb level of service in which they are wrapped.
Indeed, the services surrounding each of these brands can be viewed not only as an intrinsic part of the products themselves, but also as an important differentiator of the brand.
Companies like Ritz-Carlton, Nordstrom and Lexus can guarantee service that goes the extra mile because, in effect, they've programmed their organisations to foster customer-centered behaviour in employees at all levels. Although there's no single process for achieving high levels of customer satisfaction, four principles are common to nearly all top-performing luxury brand companies, says the study. They are:
1. They create a customer-centered culture that identifies, nurtures, and reinforces service as a primary value.
2. They use a rigorous selection process to populate the organisation with superior sales and support staff. The impulse to care about accommodating customers cannot be taught to people who are not predisposed to it.
3. They constantly retrain employees to perpetuate organisational values and to help them attain greater mastery of products and procedures.
4. They systematically measure and reward customer-centric behavior and excellence in sales and service to enforce high standards and reinforce expectations.
"When these four principles are at work, the result is a highly integrated business model that combines a superior product line with outstanding sales and service quality, driving strong growth and profitability in the process," said Gabriel Chahine, Booz Allen Hamilton, a global management consulting firm with offices throughout the Mena region.
Over the past five years, for example, Ritz-Carlton sales have grown at a rate of 12.7 per cent per annum, compared with a rate of 1.8 per cent for the rest of the luxury hotel industry. Nordstrom's US sales have grown at a rate of 8.3 per cent, while sales for other non-discount department stores have declined 1.6 percent. And Lexus sales have grown by 7.8 percent, compared with just 0.9 percent for other luxury auto brands.
"Companies that achieve high levels of customer satisfaction display a zeal for superior service from the very top of the organisation chart. This dedication constitutes the foundation of customer-centricity. Without the values and culture that leaders inspire, none of the other principles can be effective for long," added Chahine.
Customer-centric values and culture inform the hiring process and animate the systems of training and rewards. Instilling values of this sort may be the ultimate test of leadership. Leaders of customer-centric companies clearly articulate what kind of organizational culture they want and consistently sell employees on its key principles, leaving no doubt about the significance that members of senior management attach to customer-centricity.
Ritz employees are constantly schooled in company lore and company values, spelled out in a credo that the company calls its "Gold Standards," printed on a card that employees carry at all times. The credo begins with the statement: "We are ladies and gentlemen serving ladies and gentlemen," and continues with principles such as these:
• I am always responsive to the expressed and unexpressed wishes and needs of our guests.
• I continuously seek opportunities to innovate and improve the Ritz-Carlton experience.
• I immediately resolve guest problems.
• I ha